Your association concluded another solid legislative session in May with the enactment of HB445 sponsored by Rep. Barry Usher. The law became effective upon signing by Gov. Gianforte on April 29, 2021. HB445 addresses the following subjects:
- Update to Warranty Legislation. MTADA successfully obtained a complete modification of the provisions governing the manufacturer’s obligation to reimburse the dealer for warranty repair parts and labor during the 2019 session. Since 1991, Montana law provided that a dealer was entitled to use the same labor time guide for both warranty and retail customer work. Inadvertently that provision was omitted in the 2019 bill. The 2021 revision gives the dealer the option to use either the factory labor time guide or the guide the dealer uses for retail customers. General Motors has already indicated it will honor the dealer choice option.
- Update to Add Point Legislation. Changes to threshold requirements manufacturers must meet to add another franchise in a dealer’s market area were enacted in 2019. In addition, HB445 adds the requirement of good faith action by the manufacturers.
- Permits Registration of a Vehicle with Multiple Owners. DMV guidance to county treasurers resulted in a Montana resident vehicle owner who had non-resident co-owners unable to register the vehicle in Montana. As a result, HB445 modified the statutory language to allow such registrations. MTADA and DMV cooperated in drafting the revised language.
- Loaner Plates. Under prior law, most dealers used demo plates for their loaner vehicles. Those plates have a 72-hour usage limitation when used as customer service loaners. HB445 creates a “loaner plate” that a dealer will obtain from DMV for $25.00 per plate per year. Authorized for new vehicles on an MSO, dealers provide plates to customers with vehicles in the service department or body shop. No limit is set on the time of customer use. The plates are transferable to any new vehicle in inventory still on an MSO, and no registration or titling of the vehicle is required.
Since 1991, Montana law provided that a dealer was entitled to use the same labor time guide for both warranty and retail customer work. Inadvertently that provision was omitted in the 2019 bill. The 2021 revision gives the dealer the option to use either the factory labor time guide or the guide the dealer uses for retail customers.
- Administrative Remedy for Dealer/OEM Disputes. HB445 creates a mandatory mediation process as the first step to resolving any dispute between a manufacturer and a dealer. After a demand for mediation is served, the parties jointly appoint a mediator and conduct the mediation within 20 days of the demand. The mediator must be a Montana attorney with some knowledge of the car business. If the parties cannot agree on a mediator, either party can have one appointed by a state district judge. The language and information – obtained from Wisconsin law – indicate 90% of all dealer/OEM disputes are resolved in mediation. If the mediation is unsuccessful, the aggrieved party will have the right to file a petition with the DMV under the Montana Administrative Procedures Act. The decision of the hearing officer is still subject to appeal to the state district court and the Montana Supreme Court.
- Authority for MTADA to Bring Suit on Behalf of the Dealer Body as a Whole. HB445 provides statutory “standing” to allow MTADA to bring suit in its name on behalf of members under certain defined circumstances, generally when the issue applies to dealers across the board statewide.
Along with a panel comprised of members of the Legislative Committee, Bruce and I dived deeper into the details of HB445 during the June 2021 MTADA Convention. We plan to provide a more detailed explanation of the legislation, hear your comments and answer your questions.
