House Bill 581 Summary

• Creates Section 63-17-118 requiring manufacturers or distributors to pay motor vehicle dealers reasonable compensation upon termination, cancellation, or nonrenewal of franchise, including net cost of unsold inventory vehicles and parts, plus 5% handling charge and shipping costs, payable within 90 days.

• Requires additional compensation for franchise discontinuation including 12 months of facility rent or fair market value, equipment and sign costs, and fair market value of the franchise itself unless manufacturer offers a replacement franchise with substantially similar terms.

• Prohibits manufacturers from requiring dealers to materially change business methods, conditioning franchise renewal on site-control agreements, arbitrarily changing market areas, establishing unfair performance standards, or coercing dealers to sell specific extended service contracts.

• Restricts manufacturer access to dealer customer lists and prohibits sharing nonpublic customer information with other dealers except when franchise is terminated, customer relocates outside market area, or customer explicitly consents.

• Allows dealers to submit amended or supplemental claims for sales incentives and rebates for up to 60 days and changes audit periods for incentive compensation from 24 months to 12 months; repeals prior Section 63-17-141.