Senate
File
2293
-
Enrolled
Senate
File
2293
AN
ACT
RELATING
TO
MOTOR
VEHICLES,
INCLUDING
PROVISIONS
CONCERNING
RECORD
RETENTION
AT
ESTABLISHED
PLACES
OF
BUSINESS
OF
MOTOR
VEHICLE
DEALERS,
ELECTRONIC
TITLING
AND
REGISTRATION
OF
MOTOR
VEHICLES,
AND
WARRANTIES
AND
RECALLS
OF
MOTOR
VEHICLE
FRANCHISES.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
Section
321.1,
subsection
23,
Code
2018,
is
amended
to
read
as
follows:
23.
“Established
place
of
business”
means
the
place
actually
occupied
either
continuously
or
at
regular
periods
by
a
dealer
or
manufacturer
where
the
dealer’s
or
manufacturer’s
books
and
records
are
kept
and
a
large
share
of
the
dealer’s
or
manufacturer’s
business
is
transacted.
If
a
dealer
has
designated
one
established
place
of
business
for
purposes
of
keeping
all
the
dealer’s
books
and
records
pursuant
to
section
321.63,
“established
place
of
business”
also
includes
any
place
actually
occupied
either
continuously
or
at
regular
periods
by
the
dealer
where
a
large
share
of
the
dealer’s
business
is
transacted
but
not
where
the
dealer’s
books
and
records
are
kept.
Sec.
2.
Section
321.20,
subsections
2
and
4,
Code
2018,
are
amended
to
read
as
follows:
2.
Notwithstanding
contrary
provisions
of
this
chapter
or
chapter
326
regarding
titling
and
registration
by
means
other
than
electronic
means,
the
department
shall,
by
January
Senate
File
2293,
p.
2
July
1,
2018
2019
,
develop
and
implement
a
program
to
allow
for
electronic
applications,
titling,
registering,
and
funds
transfers
for
vehicles
subject
to
registration
in
order
to
improve
the
efficiency
and
timeliness
of
the
processes
and
to
reduce
costs
for
all
parties
involved.
The
program
shall
also
provide
for
the
electronic
submission
of
any
statement
required
by
this
section
,
except
where
prohibited
by
federal
law.
4.
Notwithstanding
this
section
or
any
other
provision
of
law
to
the
contrary,
if
the
program
required
by
subsection
2
is
not
implemented
by
January
July
1,
2018
2019
,
an
owner
of
a
vehicle
subject
to
registration
may
apply
to
the
county
treasurer
of
a
county
contiguous
to
the
county
designated
for
the
owner
under
subsection
1
for
registration
and
issuance
of
a
certificate
of
title.
Sec.
3.
Section
321.63,
Code
2018,
is
amended
to
read
as
follows:
321.63
Different
places
of
business.
1.
If
a
transporter
or
dealer
has
an
established
place
of
business
in
more
than
one
city,
the
transporter
or
dealer
shall
secure
a
separate
and
distinct
certificate
of
registration
and
number
plates
for
each
such
place
of
business.
2.
If
a
dealer
has
more
than
one
established
place
of
business,
the
dealer
may
designate
one
such
location
in
this
state
for
purposes
of
keeping
all
the
dealer’s
books
and
records,
regardless
of
the
line-make
of
motor
vehicles
to
which
such
books
and
records
pertain,
by
submitting
a
written
certification
to
the
department
in
a
manner
approved
by
the
department.
Sec.
4.
Section
322A.5,
Code
2018,
is
amended
to
read
as
follows:
322A.5
Warranties
and
recalls
.
1.
Every
franchiser
and
franchisee
shall
fulfill
the
terms
of
any
express
or
implied
warranty
concerning
the
sale
of
a
motor
vehicle
to
the
public
of
the
line-make
which
is
the
subject
of
a
contract
or
franchise
agreement
between
the
parties.
If
it
is
determined
by
the
district
court
that
either
the
franchiser
or
franchisee,
or
both,
have
violated
an
express
or
implied
warranty,
the
court
shall
add
to
any
award
or
relief
granted
an
additional
award
for
reasonable
attorney
fees
and
Senate
File
2293,
p.
3
other
necessary
expenses
for
maintaining
the
litigation.
2.
a.
A
franchiser
shall
specify
in
writing
to
each
of
the
franchiser’s
franchisees
operating
in
this
state
the
franchisee’s
obligations
for
preparation,
delivery,
and
warranty
services
related
to
the
franchiser’s
products.
The
franchiser
shall
compensate
the
franchisee
for
the
warranty
services
the
franchiser
requires
the
franchisee
to
provide,
including
warranty
and
recall
obligations
related
to
repairing
and
servicing
motor
vehicles
of
the
franchiser
and
all
parts
and
components
authorized
by
the
manufacturer
to
be
installed
in
or
manufactured
for
installation
in
such
motor
vehicles.
b.
The
franchiser
shall
provide
to
the
franchisee
a
schedule
of
compensation
that
specifies
reasonable
compensation
the
franchiser
will
pay
to
the
franchisee
for
such
warranty
services,
including
for
parts,
labor,
and
diagnostics.
(1)
In
determining
the
schedule
of
compensation
for
parts,
the
franchiser
may
multiply
the
price
paid
by
the
franchisee
for
parts,
including
all
shipping
costs
and
other
charges,
by
the
sum
of
one
and
the
franchisee’s
average
percentage
markup.
The
franchisee’s
average
percentage
markup
is
calculated
by
subtracting
one
from
the
result
of
dividing
the
total
amounts
charged
by
the
franchisee
for
parts
used
in
warranty-like
repairs
by
the
total
cost
to
the
franchisee
for
the
parts
in
the
retail
service
orders
submitted
pursuant
to
subparagraph
(3).
(2)
In
determining
the
schedule
of
compensation
for
labor-related
warranty
services,
the
franchiser
may
calculate
the
franchisee’s
retail
labor
rate
by
dividing
the
total
amount
of
retail
sales
attributable
to
labor
for
warranty-like
services
by
the
number
of
hours
of
labor
spent
to
generate
the
retail
sales
in
the
retail
service
orders
submitted
pursuant
to
subparagraph
(3).
(3)
(a)
The
franchisee
may
establish
its
average
percentage
markup
for
parts
or
its
labor
rate
by
submitting
to
the
franchiser
copies
of
one
hundred
sequential
retail
service
orders
paid
by
the
franchisee’s
customers,
or
all
of
the
franchisee’s
retail
service
orders
paid
by
the
franchisee’s
customers
in
a
ninety-day
period,
whichever
is
less,
for
services
provided
within
the
previous
one-hundred-eighty-day
Senate
File
2293,
p.
4
period.
The
franchiser
shall
not
consider
retail
service
orders
or
portions
of
retail
service
orders
attributable
to
routine
maintenance
such
as
tire
service
or
oil
service.
(b)
Within
thirty
days
of
receiving
the
franchisee’s
submission,
the
franchiser
may
choose
to
audit
the
submitted
orders.
The
franchiser
shall
then
approve
or
deny
the
establishment
of
the
franchisee’s
average
percentage
markup
or
labor
rate.
If
the
franchiser
approves
the
establishment
of
the
franchisee’s
average
percentage
markup
or
labor
rate,
the
markup
or
rate
calculated
under
this
subparagraph
shall
go
into
effect
forty-five
days
after
the
date
of
the
franchiser’s
approval.
If
the
franchiser
denies
the
establishment
of
the
franchisee’s
average
percentage
markup
or
labor
rate,
the
franchisee
may
file
a
complaint
with
the
department
and
a
hearing
shall
be
held
before
the
department
of
inspections
and
appeals.
The
franchiser
shall
have
the
burden
of
proof
to
establish
that
the
franchiser’s
denial
was
reasonable.
If
the
department
of
inspections
and
appeals
finds
the
denial
was
not
reasonable,
the
denial
shall
be
deemed
a
violation
of
this
chapter
and
the
department
of
inspections
and
appeals
shall
determine
the
franchisee’s
average
percentage
markup
or
labor
rate
for
purposes
of
calculating
a
reasonable
schedule
of
compensation.
In
making
such
a
determination,
the
department
of
inspections
and
appeals
shall
not
consider
retail
service
orders
or
portions
of
retail
service
orders
attributable
to
routine
maintenance
such
as
tire
service
or
oil
service.
(c)
A
franchiser
shall
not
require
a
franchisee
to
establish
an
average
percentage
markup
or
labor
rate
by
a
methodology,
or
by
requiring
the
submission
of
information,
that
is
unduly
burdensome
or
time-consuming
to
the
franchisee,
including
but
not
limited
to
requiring
part-by-part
or
transaction-by-transaction
calculations.
(d)
A
franchisee
shall
not
request
a
change
in
the
franchisee’s
average
percentage
markup
or
labor
rate
more
than
once
in
any
one-year
period.
(4)
The
compensation
to
the
franchisee
for
warranty
parts
and
labor
shall
not
be
less
than
the
rates
charged
by
the
franchisee
for
like
parts
and
services
to
retail
customers,
provided
the
rates
are
reasonable.
Senate
File
2293,
p.
5
3.
A
franchiser
shall
not
do
any
of
the
following:
a.
Fail
to
perform
any
warranty
obligation.
b.
Fail
to
compensate
any
of
the
franchiser’s
franchisees
operating
in
this
state
for
repairs
relating
to
a
recall.
4.
a.
A
claim
made
by
a
franchisee
for
warranty
services
pursuant
to
this
section
shall
be
paid
within
thirty
days
after
the
claim’s
approval.
A
franchiser
shall
either
approve
or
deny
a
claim
within
thirty
days
after
the
franchiser
receives
a
claim
if
the
claim
is
submitted
on
a
proper
form
generally
used
by
the
franchiser
and
the
claim
contains
the
information
required
by
the
franchiser.
If
a
franchiser
does
not
deny
a
claim
in
writing
within
thirty
days
after
the
receipt
of
the
claim,
the
claim
shall
be
deemed
to
be
approved
by
the
franchiser
and
payment
shall
be
made
to
the
franchisee
within
thirty
days.
b.
A
franchiser
may
deny
a
franchisee’s
claim
for
compensation
for
warranty
or
recall
services
if
the
franchisee’s
claim
is
based
on
a
repair
not
related
to
warranty
or
recall
services,
the
repair
was
not
properly
performed,
the
franchisee
lacks
the
reasonably
required
documentation
for
the
claim,
the
franchisee
fails
to
comply
with
the
terms
and
conditions
of
the
franchiser’s
warranty
or
recall
compensation
program,
or
the
franchiser
has
a
bona
fide
belief
based
on
factual
evidence
that
the
franchisee’s
claim
was
submitted
containing
an
intentionally
false
or
fraudulent
statement
or
misrepresentation.
A
franchiser
may
reject,
but
shall
not
deny,
a
claim
based
solely
on
a
franchisee’s
unintentional
failure
to
comply
with
a
specific
claim
processing
requirement,
such
as
a
clerical
error,
that
does
not
otherwise
affect
the
legitimacy
of
the
claim.
If
a
claim
is
rejected
for
such
a
failure,
the
franchisee
may
resubmit
a
corrected
claim
in
a
timely
manner
to
the
franchiser.
c.
The
requirement
to
approve
a
claim
within
thirty
days
or
to
pay
an
approved
claim
within
thirty
days
as
provided
in
this
subsection
shall
not
be
construed
to
preclude
denials,
reductions,
or
chargebacks
not
otherwise
prohibited
under
section
322.3,
subsection
13.
5.
The
obligations
set
forth
in
this
section
shall
apply
to
any
franchiser
as
defined
in
this
chapter
and
any
franchiser
of
Senate
File
2293,
p.
6
new
motor
vehicle
transmissions,
engines,
or
rear
axles
that
separately
warrants
such
components
to
customers.
______________________________
CHARLES
SCHNEIDER
President
of
the
Senate
______________________________
LINDA
UPMEYER
Speaker
of
the
House
I
hereby
certify
that
this
bill
originated
in
the
Senate
and
is
known
as
Senate
File
2293,
Eighty-seventh
General
Assembly.
______________________________
W.
CHARLES
SMITHSON
Secretary
of
the
Senate
Approved
_______________,
2018
______________________________
KIM
REYNOLDS
Governor