Georgia House of Representatives - 1995/1996 Sessions

HB 1089 - Motor vehicle franchisors; audits; time limitation

Page Numbers - 1/ 2/ 3

1. Powell  23rd           2. Parham  122nd           3. Porter  143rd


House Comm: MotV       /                Senate Comm:            /                                   
House Vote: Yeas       Nays             Senate Vote: Yeas     Nays                                  
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               House          Action         Senate                                                 
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              3/17/95  Read 1st Time                                                                
              1/8/96   Read 2nd Time                                                                
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Code Sections amended: 10-1-641, 10-1-662                                                           


HB 1089                                           LC 16 3893






                        A BILL TO BE ENTITLED
                               AN ACT


  1- 1  To amend Article 22 of Chapter 1 of Title 10 of the Official
  1- 2  Code of Georgia Annotated, relating to motor vehicle
  1- 3  franchise practices, so as to prohibit franchisors from
  1- 4  conducting audits based on activity or transactions more
  1- 5  than two years old and warranty transactions more than one
  1- 6  year old; to provide an effective date; to repeal
  1- 7  conflicting laws; and for other purposes.

  1- 8       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

                         SECTION 1.

  1- 9  Article 22 of Chapter 1 of Title 10 of the Official Code of
  1-10  Georgia Annotated, relating to motor vehicle franchise
  1-11  practices, is amended by striking subsection (c) of Code
  1-12  Section 10-1-641, relating to the requirement that the
  1-13  dealer's predelivery preparation, warranty service, and
  1-14  recall work obligations be in writing, in its entirety and
  1-15  inserting in lieu thereof a new subsection (c) to read as
  1-16  follows:

  1-17    "(c) All such claims shall be either approved or
  1-18    disapproved within 30 days after their receipt on forms
  1-19    and in the manner specified by the manufacturer,
  1-20    distributor, or warrantor, and any claim not specifically
  1-21    disapproved in writing within 30 days after the receipt
  1-22    shall be construed to be approved and payment must follow
  1-23    within 30 days; however, the manufacturer, distributor, or
  1-24    warrantor may retain the right to audit such claims and to
  1-25    charge the dealer for false, incorrect, unsubstantiated,
  1-26    or fraudulent claims for a period of not more than two
  1-27    years one year following payment."

                         SECTION 2.

  1-28  Said article is further amended by striking subsection (a)
  1-29  of Code Section 10-1-662, relating to prohibited activities
  1-30  by a franchisor, in its entirety and inserting in lieu
  1-31  thereof the following:



                                 -1- (Index)

                                                  LC 16 3893

  2- 1    "(a) It shall be unlawful for any franchisor:

  2- 2      (1) To delay, refuse, or fail to deliver new motor
  2- 3      vehicles or new motor vehicle parts or accessories in a
  2- 4      reasonable time and in reasonable quantity if such
  2- 5      vehicles, parts, or accessories are publicly advertised
  2- 6      as being available for immediate delivery.  This
  2- 7      paragraph is not violated, however, if such failure is
  2- 8      caused by acts or causes beyond the control of the
  2- 9      franchisor;

  2-10      (2) To obtain money, goods, services, or any other
  2-11      benefit from any other person with whom the dealer does
  2-12      business, on account of, or in relation to, the
  2-13      transaction between the dealer and such other person,
  2-14      other than as compensation for services rendered, unless
  2-15      such benefit is promptly accounted for and transmitted
  2-16      to the dealer;

  2-17      (3) To release to any outside party, except under
  2-18      subpoena or as otherwise required by law or in an
  2-19      administrative, judicial, or arbitration proceeding
  2-20      involving the franchisor or dealer, any business,
  2-21      financial, or personal information which may be from
  2-22      time to time provided by the dealer to the franchisor,
  2-23      without the express written consent of the dealer;

  2-24      (4) To resort to or to use any false or intentionally
  2-25      deceptive advertisement in the conduct of his business
  2-26      as a franchisor in this state;

  2-27      (5) To make any false or intentionally deceptive
  2-28      statement, either directly or through any agent or
  2-29      employee, in order to induce any dealer to enter into
  2-30      any agreement or franchise or to take any action which
  2-31      is prejudicial to that dealer or his that dealer's
  2-32      business;

  2-33      (6) To require any dealer to assent prospectively to a
  2-34      release, assignment, novation, waiver, or estoppel which
  2-35      would relieve any person from liability to be imposed by
  2-36      law or to require any controversy between a dealer and a
  2-37      franchisor to be referred to any person other than the
  2-38      duly constituted courts of the state or the United
  2-39      States if such referral would be binding upon the
  2-40      dealer, provided that this Code section shall not
  2-41      prevent any dealer from entering into a valid release
  2-42      agreement with the franchisor;



                                 -2- (Index)

                                                  LC 16 3893

  3- 1      (7) To fail to observe good faith in any aspect of
  3- 2      dealings between the franchisor and the dealer;

  3- 3      (8) To deny any dealer the right of free association
  3- 4      with any other dealer for any lawful purposes;

  3- 5      (9) To engage in any predatory practice or
  3- 6      discrimination against any dealer; or

  3- 7      (10) To propose or make any material change in any
  3- 8      franchise agreement without giving the dealer written
  3- 9      notice by certified mail of such change at least 60 days
  3-10      prior to the effective date of such change.; or

  3-11      (11) Except as provided in subsection (c) of Code
  3-12      Section 10-1-641, to conduct an audit, investigation, or
  3-13      inquiry of any dealer or dealership as to any activity,
  3-14      transaction, conduct, or other occurrence which took
  3-15      place more than two years prior to such audit,
  3-16      investigation, or inquiry or to base any decision
  3-17      adverse to the dealer or dealership on any activity,
  3-18      transaction, conduct, or other occurrence which took
  3-19      place more than two years prior to such decision."

                         SECTION 3.

  3-20  This Act shall become effective upon its approval by the
  3-21  Governor or upon its becoming law without such approval.

                         SECTION 4.

  3-22  All laws and parts of laws in conflict with this Act are
  3-23  repealed.



















                                 -3- (Index)