HF 395 – Motor vehicle dealer’s area of responsibility
FLOOR ACTION:
HF 395 establishes a review process when an auto manufacturer wants to alter a motor vehicle dealer’s area of responsibility. The manufacturer must give a 60-day notice to a dealer about the proposed change. If the dealer does not like the proposed change:
1) The dealer can request an explanation for the change within 30 days (or another date stated in the notice);
2) After receiving the explanation, but before the effective date, the dealer may object to the proposed change. The manufacturer must provide an internal appeal process if they have not already allowed the dealer to provide information in objection to the change prior to issuing notice;
3) Within 15 days of completion of the internal appeal process, a dealer may request a hearing as allowed under current law. Other dealers in surrounding communities affected by the proposed change may participate in the hearing. Through the hearing, the Department of Inspections and Appeals may affirm, deny or modify the proposed change in the dealer’s area of responsibility, ensure the change is reasonable and assess the costs of the hearing to the parties. There will be no cost to the state or to taxpayers. The manufacturer has the burden of proof because they are altering the status quo.
No change in a dealer’s area of responsibility may occur during the internal appeal process or the hearing, which may take longer than 60 days to complete. A manufacturer may not take any adverse action against a dealer as a result of a change in the dealer’s area of responsibility for at least 12 months after the effective date. The bill makes conforming changes in Code sections 322A.7 and 322A.9. [4/8: 50-0]