Title 15. Vehicle Laws -- Licensing of Businesses and Occupations — Subtitle 2. Manufacturers, Distributors, and Factory Branches

New motor vehicles constructed or assembled outside of the United States; or

New two–stage vehicles completed outside of the United States by a second–stage manufacturer.

Sells or promotes the sale to dealers in this State of a particular brand or make of new motor vehicles, or new completed two–stage vehicles;

Directs and supervises its representatives in this State; or

Supervises or contacts its dealers or prospective dealers in this State.

A manufacturer of new motor vehicles constructed or assembled in the United States;

A second–stage manufacturer of new two–stage vehicles completed in the United States; and

In the case of trucks, a person engaged in the business of manufacturing truck component parts.

The preparation and delivery obligations referred to in item (3) of this subsection; or

Any outstanding express or implied new vehicle warranty.

1 to 50 vehicles – $25,000 surety bond;

51 to 500 vehicles – $50,000 surety bond;

501 to 10,000 vehicles – $100,000 surety bond; and

Over 10,000 vehicles – $300,000 surety bond.

“Coerce” means to compel or attempt to compel by threat of harm, breach of contract, or other adverse action or consequences, including the loss of any incentive or other benefit made available to other dealers of the same line make in the State.

“Coerce” includes to act in a manner that violates § 15–206.1 of this subtitle.

“Coerce” does not include to argue, urge, recommend, or persuade.

Whether or not uniformly applied to other similarly situated dealers, an assigned market area or a performance standard, sales objective, or program for measuring dealership performance that may have a material effect on a dealer, including the dealer’s right to a benefit or payment under any incentive or reimbursement program, and the application of the standard, sales objective, or program by a manufacturer, distributor, or factory branch shall:

A dealer that claims that the assignment of a market area or application of a performance standard, sales objective, or program for measuring dealership performance is unfair or unreasonable due to the manufacturer, distributor, or factory branch failing to reasonably consider demographic characteristics of the population in the dealer’s assigned market area, including car and truck preferences of consumers, or due to the geographic characteristics, such as natural boundaries, road conditions, and terrain, that affect car and truck shopping patterns in the dealer’s assigned marketing area, may file a claim in a court of competent jurisdiction to determine whether the design of the assigned market area or the application of the performance standard, sales objective, or program is unfair or unreasonable under this paragraph.

A manufacturer, distributor, or factory branch has the burden of proving that the design of the assigned market area, or the performance standard, sales objective, or program for measuring dealership performance is fair and reasonable under this paragraph.

If the performance standard is based on a survey, it must be shown that:

The manufacturer, distributor, or factory branch shall establish the objectivity of the survey process and provide this information to any dealer of the same line make covered by the survey on request.

If the dealer is an entity other than an individual, the dealer shall designate an individual to represent the dealer to do business with the manufacturer, distributor, or factory branch.

Approval of the individual may not be withheld by the manufacturer, distributor, or factory branch unless the individual is unfit due to lack of good moral character or fails to meet reasonable general business experience requirements.

Designate a representative or a successor if a change is required for any reason; and

Obtain approval of the representative or successor designated under item (i) of this paragraph, including time for a hearing, in the event of any objection by the manufacturer, distributor, or factory branch.

Any consumer rebates, dealer incentives, price or interest rate reductions, or finance terms that a manufacturer, distributor, or factory branch offers or advertises, or allows its dealers to offer or advertise, shall be offered to all dealers of the same line make.

Any manufacturer, distributor, or factory branch that denies the benefit of any consumer rebates, dealer incentives, price or interest rate reductions, or finance terms to a dealer on the basis that the dealer failed to comply with performance standards has the burden of proving that the performance standards comply with the provisions of this section.

Require a dealer to alter or replace an existing dealership facility; or

Deny, or threaten to deny, any benefit generally available to all dealers for a dealer’s failure to alter or replace an existing dealership facility.

Maintain an exclusive sales or service facility;

Build or alter a sales or service facility; or

Participate in a floor plan or other financing arrangement.

The purchase or procurement of:

Optional programs;

A program, or the renewal or modification of a program, in existence on October 1, 2014; or

An agreement between the manufacturer, distributor, factory branch, or affiliate and the dealer that is directly related to the dealer’s completion of a program if separate and valuable consideration has been offered to the dealer and accepted.

Subject to subparagraph (ii) of this paragraph, a manufacturer, distributor, factory branch, or one of its affiliates may not, directly or through an agent, an employee, an affiliate, or a representative, require or coerce by agreement, program, or incentive provision, a dealer to purchase goods or services from a vendor that is selected, identified, or designated by the manufacturer, distributor, factory branch, or one of its affiliates.

A manufacturer, distributor, factory branch, or one of its affiliates may offer a dealer the option to obtain goods or services under this subsection of substantially similar quality and design from a vendor chosen by the dealer subject to the advanced approval of the manufacturer, distributor, factory branch, or one of its affiliates.

Directly or indirectly eliminate or impair in any way a manufacturer’s intellectual property, trademark, or trade dress rights; or

Erect or maintain signs that do not conform to the intellectual property usage guidelines of the manufacturer, distributor, factory branch, or one of its affiliates.

A manufacturer, distributor, factory branch, or one of its affiliates may not penalize a dealer for failure to participate in an optional program.

Withholding the benefits of an optional program in which the dealer failed to participate may not be construed to be a penalty imposed by the manufacturer, distributor, factory branch, or affiliate.

“Consumer data” means nonpublic personal information, as defined in 15 U.S.C. § 6809(4), collected by a dealer and provided by the dealer directly to a manufacturer, distributor, or factory branch, or its agent.

“Consumer data” does not include the same or similar data that is obtained by a manufacturer from any other source.

Is owned, leased, or licensed by a dealer, including a system of web–based applications;

Is located at the dealership or hosted remotely; and

Stores and provides access to consumer data collected and stored by the dealer.

Claims for warranty parts or repairs;

Sales and deliveries of new or certified pre–owned vehicles of any line make of the manufacturer, distributor, or factory branch;

Safety or recall obligations; or

Validation and payment of customer or dealer incentives; and

Gives the dealer at least 90 days’ prior written notice of the termination, cancellation, or nonrenewal and of the specific grounds for the action; and

Provides the Administration with a copy of that notice.

Gives the dealer at least 90 days’ prior written notice of the termination, cancellation, or nonrenewal and of the specific grounds for the action; and

Provides the Administration with a copy of that notice.

Gives the dealer at least 90 days’ prior written notice of the termination, cancellation, or nonrenewal and of the specific grounds for the action; and

Provides the Administration with a copy of that notice.

A member of the dealer’s immediate family;

A qualified manager with at least 2 years management experience at the dealer’s business;

An existing dealer in good standing; or

A business entity controlled by a person described in item (i), (ii), or (iii) of this paragraph.

Give consent to the transfer; or

Provide a written statement of the specific grounds for its refusal to consent to the transfer, consistent with the requirements under subsection (k) of this section.

A member of the dealer’s immediate family;

A qualified manager with at least 2 years management experience at the dealer’s business;

An existing dealer in good standing; or

A business entity controlled by a person described in item (i), (ii), or (iii) of this paragraph.

A member of the dealer’s immediate family;

A qualified manager with at least 2 years management experience at the dealer’s business;

An existing dealer in good standing; or

A business entity controlled by a person described in item (i), (ii), or (iii) of this paragraph.

The sale, assignment, or transfer of the ownership of a dealership by the sale of the business, stock transfer, or otherwise;

The sale, transfer, or assignment of a dealer franchise; or

A change in the executive management or principal operator of the dealership.

An existing dealer denied the sale, assignment, transfer, or change under this section may request that the Administrator conduct a hearing to review the denial or the imposition of a condition in violation of this section.

If the Administrator finds that the action leading to the denial or the imposition of a condition was in violation of this section, the Administrator may order the sale, assignment, or transfer to be approved by the manufacturer, distributor, or factory branch without imposition of the condition.

An applicant for approval of a sale, assignment, or transfer of ownership of a dealership or an existing dealer denied the sale, assignment, or transfer may institute an action for damages in the circuit court for the county in which the dealer’s principal place of business is located, if:

An action for damages under this section must be instituted within 2 years of the violation of this section.

Gives the manufacturer, distributor, or factory branch written notice of the designated family member’s intention to succeed to the dealership within 120 days after the dealer’s death or incapacity;

Agrees to be bound by all of the terms and conditions of the franchise agreement; and

Meets the current criteria that the manufacturer, distributor, or factory branch generally applies in qualifying dealers.

Cooking;

Refrigeration or ice box;

Self–contained toilet;

Heating, air–conditioning, or both;

A potable water supply system including a faucet and sink;

Separate 110–125 volt electrical power supply; or

An LP gas supply.

The vehicle preparation and delivery obligations of the dealer; or

Any outstanding express or implied new vehicle or truck component parts warranty.

The dealer’s obligation for vehicle preparation, delivery, warranties, and recalls on its products;

The schedule of compensation to be paid to the dealers for parts, including parts assemblies, and labor, including diagnostic labor and associated administrative requirements, in connection with the service obligations established under item (i) of this paragraph; and

A time allowance for the performance of labor described in this paragraph that is reasonable and adequate.

With respect to labor for warranty or recall repairs, the dealer’s current labor rate for nonwarranty repairs of a like kind for retail customers; and

With respect to any part, the dealer’s cost plus its current retail mark–up percentage charged to retail customers for nonwarranty repairs of a like kind.

For purposes of paragraph (2) of this subsection, the dealer’s labor rate or parts mark–up percentage shall be established by a submission to the licensee of whichever of the following produces fewer repair orders closed, as of the date of submission, within the preceding 180 days:

With respect to parts, a schedule of compensation established under this subsection shall be equal to the parts mark–up percentage as reflected in qualifying repair orders, calculated by dividing the total charges for parts in the repair orders by the total dealer cost for the parts minus one.

Accessories;

Repairs for manufacturer, distributor, or factory branch special events, promotions, or service campaigns;

Repairs related to collision;

Vehicle emission or safety inspections required by law;

Parts sold, or repairs performed, at wholesale or for insurance carriers, or other third–party payors;

Routine maintenance not covered under any warranty, including maintenance involving fluids, filters, and belts not provided in the course of repairs;

Nuts, bolts, fasteners, and similar items that do not have an individual parts number;

Tires;

Vehicle reconditioning;

Goodwill or policy repairs or replacements; or

Repairs on vehicles from a different line–make.

The schedule of compensation submitted under paragraph (3) of this subsection shall be presumed to be accurate and reasonable.

The licensee shall approve or rebut the dealer’s submission within 30 days of receipt.

If the licensee approves a dealer’s submission, the licensee shall begin compensating the dealer under the schedule within 30 days after the date of approval.

In the absence of a timely rebuttal by the licensee, the schedule of compensation submitted by the dealer shall go into effect on the 31st day following the licensee’s receipt of the schedule.

Any rebuttal of the schedule of compensation by the licensee shall:

In the event of a timely rebuttal, on resolution of the matter by agreement of the parties or by administrative, judicial, or other action, a licensee’s payment obligations under the resulting schedule of compensation shall begin on the 31st day following a final order unless otherwise provided for by the fact finder.

Calculate its own labor rate or parts mark–up percentage on a warranty reimbursement rate submission by the licensee’s dealer under this section, or require a dealer to calculate a labor rate or parts mark–up percentage, by any method not required under this section, including a method that is unduly burdensome or time–consuming or that requires information that is unduly burdensome or time–consuming to provide such as:

Establish or implement a special part or component number for parts used in warranty fulfillment, if the special part or component number results in reduced compensation for the dealer unless the part is used for specific, limited repair situations;

Require or coerce a dealer to change the prices for which it sells parts or labor for retail customer repairs;

Take adverse action against a dealer because the dealer seeks compensation under this section, by:

Conduct any warranty or retail customer repair audit, or other service–related audit, solely because the dealer makes a request for warranty reimbursement at retail rates in the ordinary course of business; or

Establish, implement, enforce, or apply any policy, standard, rule, program, or incentive regarding the compensation due under this section other than in a uniform manner among the licensee’s dealers in the State.

A claim filed under this section by a dealer with a manufacturer or distributor shall be:

A claim not approved or disapproved within 30 days of receipt shall be deemed approved.

Payment of or credit issued on a claim filed under this section shall be made within 30 days of approval.

If a claim filed under this section is shown by the manufacturer or distributor to be false or unsubstantiated, the manufacturer or distributor may charge back the claim within 9 months from the date the claim was paid or credit issued.

This paragraph does not limit the right of a manufacturer or distributor to:

An audit under this paragraph shall be conducted according to generally accepted accounting principles.

Purchased the vehicle for which the information pertains from the dealer; or

Had the vehicle for which the information pertains serviced by the dealer.

For resolving a condition covered by the licensee’s original warranty;

For remedying a safety–related defect that is subject to an outstanding recall under federal law;

If the dealer properly performed the repairs and submitted the claims; or

If the dealer discovered the need for repairs:

In the manner and form prescribed by the manufacturer, factory branch, or distributor; and

Approved or disapproved within 30 days of receipt.

Conduct an audit of any claim filed under this section; or

Charge back for any claim that is proven to be fraudulent.

An incentive payment, a reimbursement payment, cash, a gift, or a thing of value to be given by a manufacturer, distributor, or factory branch to an employee of a dealer may be given:

An incentive payment, a reimbursement payment, or cash given to a dealer for distribution to an employee under this paragraph shall be distributed to the employee as part of the payroll process after the appropriate payroll deductions have been made by the dealer.

Still in the original, resalable merchandising package and in unbroken lots; or

In the case of sheet metal, in the original packaging or a comparable substitute for the original packaging;

The total net inventory invoice costs;

Any charges by the manufacturer for distribution delivery; and

Any inventory related taxes paid by the dealer.

Are new and untitled;

Were acquired from the manufacturer within 18 months before the effective date of the notice of termination or cancellation;

Have not been used, other than for demonstration purposes; and

Have not been altered or damaged.