H.B. No. 3859 seeks to amend 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. The bill establishes definitions for terms such as "goodwill repair," "part," and "routine maintenance," and mandates that manufacturers or distributors provide dealers with reasonable and enforceable current requirements related to warranties and recalls. It ensures that dealers are fairly compensated for their work, with specific formulas for calculating labor and parts rates based on retail customer charges. Additionally, the bill requires manufacturers or distributors to respond to dealer requests for adjustments to warranty work rates within a specified timeframe and to provide written reasons for any disapproved reimbursement claims.

Moreover, the bill introduces regulations that prevent manufacturers or distributors from recovering any portion of the compensation due to dealers through separate charges or surcharges, and it prohibits additional charges for obtaining technical information or repair assistance. Compensation for parts used in recalls must be based on the price listed in the manufacturer's current parts catalog or a catalog issued within the last 24 months, whichever is more favorable to the dealer. The bill also ensures that special part numbers established by manufacturers or distributors do not result in lower compensation than what is calculated under existing law. These changes will take effect for work commencing on or after September 1, 2025, while work that begins before this date will continue to be governed by previous law.

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