Assembly Bill A8773

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8773
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 2, 2025
                                ___________
 
 Introduced  by  M.  of  A.  MAGNARELLI  -- read once and referred to the
   Committee on Transportation
 
 AN ACT to amend the vehicle and traffic law, in relation  to  procedures
   relating to warranties and sales incentives
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1.  Subdivision 1 of section 465 of the  vehicle  and  traffic
 law,  as  amended by chapter 301 of the laws of 2024, is amended to read
 as follows:
   1. Every franchisor, INCLUDING ITS AFFILIATES AND  SUBSIDIARIES  shall
 properly  fulfill  any  warranty  agreement  and/or franchisor's service
 contract AND SHALL COMPENSATE EACH OF ITS FRANCHISED MOTOR VEHICLE DEAL-
 ERS FOR WARRANTY PARTS AND LABOR,  including  but  not  limited  to  all
 warranty  repairs,  extended SERVICE CONTRACT REPAIRS, EXTENDED warranty
 repairs, CAMPAIGNS, SERVICE BULLETINS, POLICY  REPAIRS,  COMPONENT  PART
 WARRANTIES, factory compensated repairs, recalls, diagnostics, parts and
 other  voluntary stop-sell repairs, AND ANY OTHER FRANCHISOR COMPENSATED
 REPAIRS and shall compensate each of its franchised motor vehicle  deal-
 ers  for  all  warranty,  recall,  diagnostic labor operations and parts
 where applicable in amounts which reflect  reasonable  compensation  for
 such  work.  For purposes of this section, reasonable compensation shall
 be the reasonable labor time allowances defined by the retail labor time
 guide reasonably utilized by a franchised motor vehicle dealer for  non-
 warranty  customer  paid labor operations.  WHERE SUCH THIRD PARTY GUIDE
 IS UNAVAILABLE, DOES NOT CONTAIN A PARTICULAR REPAIR OR NEW VEHICLE,  OR
 A  DEALER  IS OTHERWISE UNABLE TO UTILIZE SUCH GUIDE, REASONABLE COMPEN-
 SATION SHALL BE EQUAL TO THE FRANCHISOR'S TIME ALLOWANCE FOR THE  REPAIR
 MULTIPLIED  BY  1.5.  WHERE THERE IS NO TIME ALLOWANCE IN EITHER A THIRD
 PARTY GUIDE, NOR IN ANY MANUFACTURER GUIDANCE,  REASONABLE  COMPENSATION
 SHALL  BE  THE  ACTUAL TIME TAKEN TO PERFORM THE REPAIR AS DOCUMENTED BY
 THE MOTOR VEHICLE DEALER.    SUCH  DOCUMENTATION  SHALL  NOT  BE  UNDULY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13159-01-5
              

 A. 8773                             2
 
 BURDENSOME  AND  SHALL BE CONSISTENT WITH EXISTING METHODS FOR RECORDING
 TIME WITHIN THE MOTOR  VEHICLE  DEALERS'  WARRANTY  REPAIR  SYSTEM.  All
 warranty claims and/or claims under a franchisor's service contract made
 by  franchised  motor  vehicle  dealers shall be paid within thirty days
 following their approval. For diagnosis work, parts reimbursement, other
 than components, systems, fixtures, appliances, furnishings, accessories
 and features of a house coach that are  designed,  used  and  maintained
 primarily   for   nonvehicular   residential  purposes,  and  for  labor
 reimbursement, reasonable compensation shall not be less than the  price
 and  rate  charged  by  the  franchised  motor  vehicle  dealer for like
 services to non-warranty and/or non-service contract customers AND SHALL
 BE FOR THE TIME RECORDED BY THE MOTOR VEHICLE  DEALER  TO  COMPLETE  THE
 REPAIR  OPERATION INCLUDING BUT NOT LIMITED TO POST STRATEGY-BASED DIAG-
 NOSIS, FRANCHISOR-MANDATED  DOCUMENTATION  OF  REPAIRS  BEYOND  WHAT  IS
 NORMALLY  REQUIRED,  ROAD TESTING, REMOVAL AND RE-INSTALLATION OF FLEET-
 VEHICLE EQUIPMENT TO MAKE WARRANTY REPAIRS, TECHNICAL  ASSISTANCE  DIAG-
 NOSTIC PROCEDURES AND OTHER MITIGATING REPAIR VERIFICATION OR COMPLETION
 PROCEDURES.  For purposes of this section, the price and rate charged by
 the  franchised  motor  vehicle  dealer  for parts may be established by
 submitting to the franchisor one hundred sequential nonwarranty  custom-
 er-paid  service  repair  orders or the number of sequential nonwarranty
 customer-paid service repair orders written within a ninety day  period,
 whichever is less, covering repairs made no more than one hundred eighty
 days  before the submission, and declaring the price and rate, including
 average markup for the franchised motor vehicle dealer as its reimburse-
 ment rate. The reimbursement rate so declared shall go into effect thir-
 ty days following the declaration and shall be presumed  to  be  reason-
 able,  however  a  franchisor may rebut such presumption by showing that
 such rate so established is unreasonable in light of  the  practices  of
 all  other franchised motor vehicle dealers in the vicinity offering the
 same line make. The franchised motor vehicle dealer shall not request  a
 change  in  the reimbursement rate more often than once in each calendar
 year. In establishing the labor reimbursement rate AND  TIME  ALLOWANCE,
 the  franchisor  shall  not require a franchised motor vehicle dealer to
 establish said rate OR TIME by a methodology, or by  requiring  informa-
 tion, that is unduly burdensome or time consuming to provide, including,
 but  not  limited  to, a transaction by transaction calculation. For the
 purposes of this section, the following parts or types of repairs  shall
 be   excluded   from   the  parts  and/or  labor  calculations  and  the
 franchisor's reimbursement requirements under this section: [(a)]  parts
 sold  at  wholesale;  [(b)] tires; [(c)] routine maintenance not covered
 under any retail customer warranty such as fluids, filters and belts not
 provided in the course of repairs;  [(d)]  vehicle  reconditioning;  and
 [(e)]  batteries replaced as part of a routine maintenance operation. If
 the franchisor rejects the declaration or attempts to rebut the declara-
 tion because of an error in  the  dealer's  submission,  the  franchisor
 shall  identify  with  specificity the reason for rejection and identify
 the error or errors within the submission. In the event  the  franchisor
 rejects  or  rebuts  the  dealer's initial declaration, the dealer shall
 have the opportunity,  within  sixty  days  to  resubmit  the  full  and
 corrected  declaration addressing the alleged error or errors identified
 by the franchisor. The franchisor shall respond within sixty  days.  The
 one hundred eighty day requirement for the repair orders shall be stayed
 from  the  date  of initial submission. In any action or proceeding held
 pursuant to this subdivision, the franchisor shall have  the  burden  of
 proving  that  the  rate  declared  by  the  dealer  was unreasonable as
 A. 8773                             3
 
 described in this subdivision and that the proposed  adjustment  of  the
 average  percentage  markup or rejection of the submission is reasonable
 pursuant to the provisions of this subdivision.  A warranty claim timely
 made  shall not be deemed invalid solely because unavailable parts cause
 additional use and mileage on the vehicle.  IF A MOTOR VEHICLE  FRANCHI-
 SOR,  OR  ITS  AFFILIATES  AND  SUBSIDIARIES,  SUPPLIES, OR CAUSES TO BE
 SUPPLIED, A PART OR PARTS AT NO COST OR AT A REDUCED  COST  FOR  USE  IN
 PERFORMING  WARRANTY  REPAIRS,  EXTENDED  WARRANTY  REPAIRS,  CAMPAIGNS,
 RECALLS, DIAGNOSTICS, PARTS, VOLUNTARY STOP-SELL REPAIRS  OR  ANY  OTHER
 FACTORY-COMPENSATED  REPAIR,  THE  FRANCHISOR SHALL COMPENSATE THE MOTOR
 VEHICLE DEALER IN THE SAME MANNER  AS  THE  FRANCHISOR  COMPENSATES  THE
 DEALER  UNDER THIS SECTION BY PAYING THE MOTOR VEHICLE DEALER  AN AMOUNT
 EQUAL TO THE DEALER'S PARTS MARKUP MULTIPLIED BY THE WHOLESALE VALUE  OF
 THE  PART.  THE WHOLESALE VALUE OF THE PART SHALL BE THE GREATER OF: (A)
 THE AMOUNT THE DEALER PAID FOR THE PART  OR  A  SUBSTANTIALLY  IDENTICAL
 PART;  (B)  THE COST OF THE PART IN A CURRENT OR PRIOR ESTABLISHED PRICE
 SCHEDULE ISSUED BY THE FRANCHISOR OR ISSUED BY A THIRD  PARTY  THAT  HAS
 PREVIOUSLY  SUPPLIED  THE PART TO THE MOTOR VEHICLE DEALER; (C) THE COST
 OF A SUBSTANTIALLY IDENTICAL PART IN  A  CURRENT  OR  PRIOR  ESTABLISHED
 PRICE  SCHEDULE ISSUED BY THE FRANCHISOR OR BY A THIRD PARTY; OR (D) THE
 REASONABLE WHOLESALE PRICE FOR THE PART.
   § 2. This act shall take effect immediately.