S-3721.1  _______________________________________________

                         SENATE BILL 6301

          _______________________________________________

State of Washington      55th Legislature     1998 Regular Session

By Senators Schow, Horn, Franklin and Heavey

Read first time 01/15/98.  Referred to Committee on Commerce & Labor.

Regulating franchise agreements between motor vehicle manufacturers and dealers.

    AN ACT Relating to franchise agreements between motor vehicle manufacturers and dealers; and adding a new section to chapter 46.96 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  A new section is added to chapter 46.96 RCW to read as follows:

    (1) Each manufacturer shall specify in its franchise agreement, or in a separate written agreement, with each of its dealers licensed in this state, the dealer's obligation to perform warranty work or service on the manufacturer's products.  Each manufacturer shall provide each of its dealers with a schedule of compensation to be paid to the dealer for any warranty work or service, including parts, labor, and diagnostic work, required of the dealer by the manufacturer in connection with the manufacturer's products.

    (2) All claims for warranty work for parts and labor made by dealers under this section shall be paid by the manufacturer within thirty days following receipt, provided the claim has been approved by the manufacturer.  The manufacturer has the right to audit claims for warranty work and to charge the dealer for any unsubstantiated, incorrect, or false claims for a period of one year following payment.  However, the manufacturer may audit and charge the dealer for any fraudulent claims during any period for which an action for fraud may be commenced under applicable state law.

    (3) All claims submitted by dealers on the forms and in the manner specified by the manufacturer shall be either approved or disapproved within thirty days following their receipt.  The manufacturer shall notify the dealer in writing of any disapproved claim, and shall set forth the reasons why the claim was not approved.  Any claim not specifically disapproved in writing within thirty days following receipt is approved, and the manufacturer is required to pay that claim within thirty days of receipt of the claim.

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