75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2367
A-Engrossed
House Bill 2739
Ordered by the House May 1
Including House Amendments dated May 1
Sponsored by Representative ESQUIVEL
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Modifies motor vehicle inventory for which dealer may be
allowed fair and reasonable compensation upon termination,
cancellation, nonrenewal or discontinuance of franchise.
Increases amount of damage to new motor vehicle requiring
disclosure to prospective purchaser.
A BILL FOR AN ACT
Relating to motor vehicle dealerships; creating new provisions;
and amending ORS 650.145 and 650.155.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 650.145 is amended to read:
650.145. (1) As used in subsection (2) of this section, ' fair
and reasonable compensation' means the amount originally paid by
the dealer minus any incentive payments, model close-out
allowances or any other programs applicable to the vehicles.
(2) Upon the termination, cancellation, nonrenewal or
discontinuance of any franchise, the dealer shall be allowed fair
and reasonable compensation by the manufacturer, distributor or
importer for the following:
(a) All new { - current model year - } { + vehicles
manufactured in the current calendar year and any subsequent
calendar year in the + } motor vehicle inventory { - with a
gross vehicle weight rating of less than 8,500 pounds - }
purchased from the manufacturer, distributor or importer that
{ - has - } { + have + } not been materially altered,
substantially damaged or driven for more than 300 miles;
(b) All new { + vehicles in the + } motor vehicle inventory
that
{ - has - } { + have + } not been materially altered or
substantially damaged, provided that the vehicles:
(A) If motor vehicles with a gross vehicle weight rating of
less than 8,500 pounds, were not driven for more than 300 miles,
were purchased directly from the manufacturer, distributor or
importer within 120 days of the effective date of the
termination, cancellation, nonrenewal or discontinuance and were
either paid for or drafted on the dealer's financing source; or
(B) If motor vehicles with a gross vehicle weight rating of
8,500 pounds or more, were not driven more than { - 4,000 - }
{ + 3,500 + } miles, were purchased directly from the
manufacturer, distributor or importer within one year of the
effective date of the termination, cancellation, nonrenewal or
discontinuance and were either paid for or drafted on the
dealer's financing source;
(c) Supplies and parts inventory purchased from the
manufacturer, distributor or importer and listed in the
manufacturer's, distributor's or importer's current parts
catalog;
(d) Equipment, furnishings and signs purchased from the
manufacturer, distributor or importer and required by the
manufacturer, distributor or importer that have not been
materially altered, or substantially damaged or depreciated over
50 percent of the original value; and
(e) Special tools purchased from the manufacturer, distributor
or importer within three years of the date of termination,
cancellation, nonrenewal or discontinuance and required by the
manufacturer that have not been materially altered, or
substantially damaged or depreciated over 50 percent of the
original value.
(3) Nothing in this section is intended to modify the
manufacturer's, distributor's or importer's contractual right of
setoff.
(4) Upon the termination, cancellation, nonrenewal or
discontinuance of a franchise, the manufacturer, distributor or
importer shall also pay to the dealer a sum equal to the current,
fair rental value of the dealer's established place of business
for a period of one year from the effective date of termination,
cancellation, nonrenewal or discontinuance or the remaining
period of any lease, whichever is less.
(5) Subsection (4) of this section shall apply only to the
extent that the dealer's established place of business is used
for performance of sales and service obligations under the
manufacturer's, distributor's or importer's franchise agreement.
(6) In the event that termination is by the dealer, the payment
required by subsection (4) of this section is not required.
(7) This section shall not relieve a new motor vehicle dealer,
lessor or other owner of an established place of business from
the obligation of mitigating damages.
SECTION 2. ORS 650.155 is amended to read:
650.155. (1) Notwithstanding the terms of any franchise, the
manufacturer is liable for any and all damage to new motor
vehicles before delivery to a carrier or transporter.
(2) Whenever a new motor vehicle is damaged in transit, the
dealer shall:
(a) Notify the manufacturer of the damage within three business
days from the date of delivery to the dealer or within any
additional time as specified in the franchise; and
(b) Request from the manufacturer authorization to replace the
components, parts and accessories damaged or to otherwise repair
the damage.
(3) If the manufacturer refuses or fails to authorize repair of
any damage within 10 days after receipt of notification under
subsection (2) of this section, or within any additional time as
specified in the franchise, ownership of the new motor vehicle
shall revert to the manufacturer, and the new motor vehicle
dealer shall have no obligation, financial or otherwise, with
respect to the motor vehicle.
(4) A manufacturer shall disclose in writing to a dealer, at
the time of delivery of a new motor vehicle, the nature and
extent of any and all damage and post-manufacturing repairs.
(5) If the total value of repairs to a new motor vehicle by the
manufacturer's authorized agent and a dealer equals or exceeds
the amount specified under subsection (6) of this section, the
manufacturer may either repurchase the motor vehicle from the
dealer, or provide reasonable and adequate compensation to the
dealer to assist in sale or disposition of the new motor vehicle,
as long as the dealer has complied with all other contractual
agreements with regard to damaged vehicles. If the manufacturer
repurchases the motor vehicle, the dealer shall have no
obligation, financial or otherwise, with respect to the motor
vehicle.
(6) A dealer shall disclose, in writing, to a purchaser of the
new motor vehicle prior to entering into a sales contract that
the new motor vehicle has been damaged and repaired if the damage
to the new motor vehicle exceeds { - $500 - } { + $1,000 + },
as calculated at the rate of the dealer's authorized warranty
rate for labor and parts. Replacement of glass, tires, bumpers or
any comparable nonwelded component is not considered damage and
repair for purposes of this section. For purposes of this
subsection, ' comparable nonwelded component' does not include a
fender, hood, trunk lid or door.
SECTION 3. { + The amendments to ORS 650.145 and 650.155 by
sections 1 and 2 of this 2009 Act apply to motor vehicle
transactions occurring on or after the effective date of this
2009 Act. + }
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