HARRISBURG – Today, the House Professional Licensure Committee unanimously approved legislation drafted by Rep. James R. Santora (R-Delaware) that would better protect both people purchasing vehicles and auto dealers.
The bill was passed as amended. It would require car manufacturers to reimburse dealers when manufacturers prohibit the sale of vehicles that have been recalled until corrective measures are taken at a rate of 1.5 percent monthly. Originally, the bill called for a rate of 1.75 percent monthly.
“I may not have been as generous with the amendments as the chairman was, but I am pleased that the bill has been passed and now advances to the full House for consideration,” Santora said.
Another change contained in the amendment is providing manufacturers with 30 days, instead of 15, to make recall repair parts available before they would be required to make payments to dealerships.
Certain recalls prevent vehicles from being sold, and the bill would minimize dealership losses when parts to correct the issue are unavailable.
The bill would also prohibit manufacturers from requiring franchisee dealerships to significantly modify their facilities unless a decade has passed since construction or the last major renovation. The prohibition would not apply if the modification is necessary to comply with a health or safety law, or technology requirement that is necessary to sell or service a vehicle.
In a hearing held on the bill last week, a representative from the Alliance of Automobile Manufacturers asked that the timeframe be reduced to seven years so manufacturers would have more control, but Santora chose not to change the bill.
“I refuse to jeopardize the small business owners who work to make a living selling cars in the Commonwealth,” Santora added. “While paying for the changes – which can easily amount to $1 million or more – is not a challenge for large companies, it would place a hardship on the men and women who own a dealership or two. It’s important not to hurt the people who help to drive our local economies.”
Lastly, the bill would establish a temporary license for new vehicle dealers to allow them to conduct business for up to 60 days while the request to do business is considered. The change would help dealers, sales people and mechanics to get to work up to two months sooner. It would also permit the sale of vehicles sooner, therefore resulting in the collection of accompanying taxes for the benefit of the state budget.