Existing law provides that it is an unfair act or practice for any manufacturer of motor vehicles, trailers or semitrailers to fail to compensate a dealer fairly for labor, parts and other expenses incurred by the dealer under the manufacturer's warranty agreements or any recall service or repair. (NRS 482.36385) Section 22 of this bill removes this provision. Sections 2-16 of this bill set forth new requirements for calculating the compensation that a manufacturer must pay a dealer for such purposes. Section 8 of this bill provides that it is an unfair act or practice for a manufacturer to: (1) fail to compensate a dealer fairly for labor and parts for warranty work or a recall service or repair; or (2) violate any of the provisions of sections 9-15 of this bill. Section 8 further provides that it shall be deemed that a dealer has been fairly compensated by a manufacturer for warranty work if the manufacturer compensates the dealer for: (1) labor for warranty work at the dealer's prevailing retail labor rate; and (2) parts used in warranty work in an amount that is equal to the dealer's cost for the parts, pursuant to section 12 of this bill, multiplied by the prevailing retail parts markup. Section 9 of this bill sets forth the process for a dealer to establish or modify the prevailing retail labor rate and prevailing retail parts markup of the dealer. Specifically, section 9 requires the dealer to submit in writing to the manufacturer the prevailing retail labor rate and prevailing retail parts markup, which must be based on certain qualifying repair orders of the dealer. Section 9 further requires the dealer to submit certain qualifying repair orders to the manufacturer. Section 10 of this bill authorizes a manufacturer to contest the material accuracy or reasonableness of the prevailing retail labor rate and prevailing retail parts markup of a dealer not later than 30 days after receiving the qualifying repair orders from the dealer. If a manufacturer contests the material accuracy or reasonableness of any such rate or markup, section 10 requires the manufacturer to provide the dealer with the manufacturer's calculation of the prevailing retail labor rate and prevailing retail parts markup of the dealer and any additional applicable information. If a manufacturer contests the material accuracy of the prevailing retail labor rate or prevailing retail parts markup based on a dealer's submission of inaccurate or nonqualifying repair orders, section 10 authorizes the dealer to correct any inaccuracy with an updated submission of accurate or qualifying repair orders and update the prevailing retail labor rate or prevailing retail parts markup calculation based on the replacement repair orders, as applicable. Such a submission by a dealer will not be considered a modification for the purposes of section 9 and will be deemed submitted as of the date of the updated submission. Section 11 of this bill authorizes a dealer to file a protest with the Director of the Department of Motor Vehicles if the dealer does not agree with the manufacturer's calculations of the prevailing retail labor rate and prevailing retail parts markup. If the Director receives such a protest, the Director is required to hold a hearing to decide the prevailing retail labor rate or prevailing retail parts markup of the dealer, as applicable. Sections 18-21 of this bill make conforming changes to apply existing provisions of law relating to conducting discovery and hearings held by the Director relating to certain other actions between a dealer and a manufacturer to the protests provided for in section 11. Section 12 provides that if a manufacturer furnishes or causes to be furnished parts to a dealer at no cost for purposes of performing warranty work or a recall service or repair, the manufacturer may compensate the dealer for a reasonable handling fee instead of the dealer's prevailing retail parts markup. Section 12 further provides that if a manufacturer furnishes parts to a dealer at a reduced cost for purposes of performing warranty work or a recall service or repair, the manufacturer is required to compensate the dealer for the dealer's costs for the parts plus an amount that is equal to the dealer's prevailing retail parts markup multiplied by the cost of the parts in the current or previously established price schedule of the manufacturer, whichever is greater. Section 13 of this bill prohibits a manufacturer from requiring, influencing or attempting to influence a dealer to implement or change the price for which the dealer sells parts or provides labor for any retail repair by taking certain action. Section 14 of this bill prohibits a manufacturer from taking or threatening to take adverse action against a dealer on the sole basis that the dealer has requested compensation for warranty work or a recall service or repair at the dealer's prevailing retail labor rate and prevailing retail parts markup by taking certain actions. Section 15 of this bill prohibits, with certain exceptions, a manufacturer from recovering or attempting to recover any portion of its costs for compensating a dealer for warranty work or a recall service or repair. Section 16 of this bill authorizes a dealer to file a protest with the Director of the Department if the manufacturer does not compensate a dealer for warranty work or a recall service or repair that is based on the dealer's prevailing retail labor rate and prevailing retail parts markup. Sections 18-21 make conforming changes to apply existing provisions of law relating to conducting discovery and holding hearings held by the Director relating to certain other actions between a dealer and a manufacturer to the protests provided for in section 16. Sections 2-7 of this bill, respectively, define the terms “parts,” “qualifying repair,” “qualifying repair order,” “repair order,” “warranty agreement” and “warranty work.” Section 17 of this bill makes a conforming change to indicate the proper placement of sections 2-16 in the Nevada Revised Statutes.

Statutes affected:
As Introduced: 482.36311, 482.363575, 482.36361, 482.36366, 482.36368, 482.36385
Reprint 1: 482.36311, 482.363575, 482.36361, 482.36366, 482.36368, 482.36385
BDR: 482.36311, 482.363575, 482.36361, 482.36366, 482.36368, 482.36385