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House adopts revised franchise law aimed at protecting dealers after extended debate
Summary
After extended floor debate and negotiated amendments with manufacturers, the House passed a second substitute of HB 414 to change franchise protections and board makeup for motor vehicle dealers; final House vote recorded 71-0 and the bill goes to the Senate.
The Utah House passed a substantially revised Franchise Act for vehicle dealers (second substitute HB 414) on Feb. 22 after extended debate and several negotiated amendments with manufacturers and dealer groups.
Sponsor Representative Christine R. Fox said the bill addresses "unequal bargaining power between dealers and manufacturers," and described changes that shift the burden of proof in franchise disputes to franchisees who petition the board. The substitute also expands board membership to include representatives of manufacturers associations and provisions addressing warranty service for recreational vehicles.
Floor debate focused on board makeup and fairness. Representative Hatch proposed amendments to broaden consumer and geographic representation and voiced concern that a board dominated by dealers could be perceived as "the fox guarding the hen house." Hatch's amendments to alter the makeup were brought to a roll-call division and failed. Supporters said the heavier dealer representation is deliberate to rebalance bargaining power and that many provisions were negotiated between parties.
Representative Fox described several technical and agreed amendments added on pink sheets, including limits on the number of franchisees appointed to two-year terms and language permitting franchisers to authorize warranty service for recreational vehicles. The sponsor said many changes were the result of direct negotiation with industry representatives.
The substitute passed by recorded vote, 71-0, and will be transmitted to the Senate for further consideration.
What to watch next: The bill alters administrative and adjudicative procedures for dealer-manufacturer disputes and will require Senate consideration before becoming law.
