The bill amends the Occupations Code to improve the reimbursement process for motor vehicle franchised dealers by manufacturers and distributors concerning warranty, recall, over-the-air, and preparation and delivery work. It introduces new definitions, such as "goodwill repair," and clarifies the obligations of manufacturers and distributors to provide reasonable requirements for dealers. The bill mandates fair compensation for these services and outlines methods for calculating compensation based on labor and parts rates. Additionally, it establishes a structured process for dealers to request adjustments to their rates, prohibits manufacturers from charging back payments unless specific conditions are met, and restricts unnecessary prerequisites for payment claims.

Moreover, the bill introduces regulations that prevent manufacturers or distributors from recovering compensation due to dealers through separate charges or reduced return reserves. It also prohibits additional charges for obtaining technical information or repair assistance and ensures that compensation for parts used in recalls is based on the greater price listed in the manufacturer's current parts catalog or a catalog issued within the last 24 months. The bill clarifies that manufacturers cannot create special part numbers that would lower dealer compensation, although they can do so for federal recall tracking. These changes will take effect for work commencing on or after September 1, 2025, while work that begins before this date will remain under existing law.

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