ENROLLED
Senate Bill No. 516
(By Senators Wooton, Minard, Ross, Yoder, Dittmar, Wagner,
Humphreys, Wiedebusch and Dalton)
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[Passed March 9, 1994; in effect ninety days from passage.]
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AN ACT to amend and reenact section ten, article six-a, chapter
seventeen-a of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to prohibited
practices of automobile manufacturers and distributors.
Be it enacted by the Legislature of West Virginia:
That section ten, article six-a, chapter seventeen-a of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 6A. MOTOR VEHICLE DEALERS, DISTRIBUTORS, WHOLESALERS AND
MANUFACTURERS.
§17A-6A-10. Prohibited practices.
(1) A manufacturer or distributor shall not require any new
motor vehicle dealer in this state to do any of the following:
(a) Order or accept delivery of any new motor vehicle, part
or accessory thereof, equipment or any other commodity not
required by law which was not voluntarily ordered by the new
motor vehicle dealer. This section shall not be construed to
prevent the manufacturer or distributor from requiring that newmotor vehicle dealers carry a reasonable inventory of models
offered for sale by the manufacturer or distributor.
(b) Order or accept delivery of any new motor vehicle with
special features, accessories or equipment not included in the
list price of the new motor vehicle as publicly advertised by the
manufacturer or distributor.
(c) Participate monetarily in any advertising campaign or
contest, or purchase any promotional materials, display devices
or display decorations or materials at the expense of the new
motor vehicle dealer.
(d) Enter into any agreement with the manufacturer or
distributor or do any other act prejudicial to the new motor
vehicle dealer by threatening to terminate a dealer agreement or
any contractual agreement or understanding existing between the
dealer and the manufacturer or distributor. Notice in good faith
to any dealer of the dealer's violation of any terms or
provisions of the dealer agreement shall not constitute a
violation of this article.
(e) Change the capital structure of the new motor vehicle
dealership or the means by or through which the dealer finances
the operation of the dealership if the dealership at all times
meets any reasonable capital standards determined by the
manufacturer in accordance with uniformly applied criteria.
(f) Refrain from participation in the management of,
investment in, or the acquisition of any other line of new motor
vehicle or related products, provided that the dealer maintains
a reasonable line of credit for each make or line of vehicle,
remains in compliance with reasonable facilities requirements,and makes no change in the principal management of the dealer.
(g) Change the location of the new motor vehicle dealership
or make any substantial alterations to the dealership premises,
where to do so would be unreasonable.
(h) Prospectively assent to a release, assignment, novation,
waiver or estoppel which would relieve any person from liability
imposed by this article or require any controversy between a new
motor vehicle dealer and a manufacturer or distributor to be
referred to a person other than the duly constituted courts of
the state or the United States, if the referral would be binding
upon the new motor vehicle dealer.
(2) A manufacturer or distributor shall not do any of the
following:
(a) Fail to deliver new motor vehicles or new motor vehicle
parts or accessories within a reasonable time and in reasonable
quantities relative to the new motor vehicle dealer's market area
and facilities, unless the failure is caused by acts or
occurrences beyond the control of the manufacturer or
distributor, or unless the failure results from an order by the
new motor vehicle dealer in excess of quantities reasonably and
fairly allocated by the manufacturer or distributor.
(b) Refuse to disclose to a new motor vehicle dealer the
method and manner of distribution of new motor vehicles by the
manufacturer or distributor.
(c) Refuse to disclose to a new motor vehicle dealer the
total number of new motor vehicles of a given model, which the
manufacturer or distributor has sold during the current model
year within the dealer's marketing district, zone or region,whichever geographical area is the smallest.
(d) Increase prices of new motor vehicles which the new
motor vehicle dealer had ordered and then eventually delivered to
the same retail consumer for whom the vehicle was ordered, if the
order was made prior to the dealer's receipt of the written
official price increase notification. A sales contract signed by
a private retail consumer and binding on the dealer shall
constitute evidence of each order. In the event of manufacturer
or distributor price reductions or cash rebates, the amount of
any reduction or rebate received by a dealer shall be passed on
to the private retail consumer by the dealer. Any price
reduction in excess of five dollars shall apply to all vehicles
in the dealer's inventory which were subject to the price
reduction. A price difference applicable to new model or series
motor vehicles at the time of the introduction of the new models
or the series shall not be considered a price increase or price
decrease. This subdivision shall not apply to price changes
caused by the following:
(i) The addition to a motor vehicle of required or optional
equipment pursuant to state or federal law.
(ii) In the case of foreign made vehicles or components,
revaluation of the United States dollar.
(iii) Any increase in transportation charges due to an
increase in rates charged by a common carrier and transporters.
(e) Offer any refunds or other types of inducements to any
dealer for the purchase of new motor vehicles of a certain line
make to be sold to this state or any political subdivision of
this state without making the same offer available upon requestto all other new motor vehicle dealers of the same line make.
(f) Release to an outside party, except under subpoena or in
an administrative or judicial proceeding to which the new motor
vehicle dealer or the manufacturer or distributor are parties,
any business, financial or personal information which has been
provided by the dealer to the manufacturer or distributor, unless
the new motor vehicle dealer gives his or her written consent.
(g) Deny a new motor vehicle dealer the right to associate
with another new motor vehicle dealer for any lawful purpose.
(h) Establish a dealership which would unfairly compete with
a new motor vehicle dealer of the same line make operating under
a dealer agreement with the manufacturer or distributor in the
relevant market area. A manufacturer or distributor shall not be
considered to be unfairly competing if the manufacturer or
distributor is:
(i) Operating a dealership temporarily for a reasonable
period.
(ii) Operating a dealership which is for sale at a
reasonable price.
(iii) Operating a dealership with another person who has
made a significant investment in the dealership and who will
acquire full ownership of the dealership under reasonable terms
and conditions.
(i) Unreasonably withhold consent to the sale, transfer or
exchange of the dealership to a qualified buyer capable of being
licensed as a new motor vehicle dealer in this state.
(j) Fail to respond in writing to a request for consent to
a sale, transfer or exchange of a dealership within sixty daysafter receipt of a written application from the new motor vehicle
dealer on the forms generally utilized by the manufacturer or
distributor for such purpose and containing the information
required therein. Failure to respond to the request within the
sixty days shall be deemed to be consent.
(k) Unfairly prevent a new motor vehicle dealer from
receiving reasonable compensation for the value of the new motor
vehicle dealership.
(l) Audit any motor vehicle dealer in this state for
warranty parts or warranty service compensation, service
compensation, service incentives, rebates or other forms of sales
incentive compensation more than two years after the claim for
payment or reimbursement has been made by the automobile dealer:
Provided, That the provisions of this subsection shall not apply
where a claim is fraudulent.
(3) A manufacturer or distributor, either directly or
through any subsidiary, shall not terminate, cancel, fail to
renew or discontinue any lease of the new motor vehicle dealer's
established place of business except for a material breach of the
lease.