SB322 Alabama 2014 Session

Summary

Primary Sponsor

Greg J. Reed

Republican

Session

Regular Session 2014

Title

Motor vehicles, to regulate manufacturer's and dealer's agreement, Sec. 8-20-2 am'd.

Summary

SB322 would require written manufacturer, distributor, and dealer agreements for powersports vehicles in Alabama, set rules for dealer areas and terminations, require inventory repurchase and ownership transfers, define warrantor obligations, and narrow the Motor Vehicle Franchise Act for powersports sales.

What This Bill Does

If enacted, the bill would prohibit selling powersports vehicles without a signed manufacturer and dealer agreement, establish defined areas of sales responsibility, and require terms for termination, nonrenewal, or alteration of the agreement. It would also provide for repurchase of inventory, transfer of ownership in a dealership, and obligations of warrantors, while outlining enforcement and remedies for dealers through court actions and injunctions. Additionally, it amends existing law to exclude certain powersports dealer agreements from the Motor Vehicle Franchise Act when the agreement relates exclusively to powersports sales.

Who It Affects

• Manufacturers and distributors of powersports vehicles in Alabama — must enter and adhere to written dealer agreements, designate areas of sales responsibility, and comply with good-faith and other protections.
• Powersports vehicle dealers — must sign dealer agreements to sell new vehicles, operate within assigned areas, may seek termination protections and compensation on wind-down, and gain rights to challenge unreasonable franchise actions.
• Warrantors (manufacturers or distributors providing warranties) — must specify dealer warranty obligations, compensate dealers for warranty work, and follow defined warranty claim and audit processes.
• Consumers/public (indirectly) — receive stronger protections against unfair practices and more predictable dealer-manufacturer relationships.

Key Provisions

• Requires all manufacturers/distributors to have a signed manufacturer and dealer agreement before selling powersports vehicles to a dealer after June 1, 2014.
• Creates definitions for terms such as area of sales responsibility, dealer, warrantor, line-make, and powersports vehicle to standardize relationships.
• Designates each dealer's exclusive sales area and restricts unilateral changes or overlapping line-make sales within that area for at least one year after agreement.
• Prohibits unfair and deceptive trade practices by manufacturers or dealers, including coercion to buy, discriminatory pricing, excessive control over dealership operations, and forced exclusive facilities or display space without justification.
• Adds grounds and process for termination, cancellation, nonrenewal, or modification of a dealer agreement, including notice requirements, good-faith standard, and dealer compensation for inventory, supplies, equipment, and facilities upon wind-down.
• Specifies warrantor obligations to dealers, including clear warranty duties, compensation for warranty work, parts reimbursement, and audit rights.
• Provides procedures for damaged vehicles in transit and ownership reversion if damage is not promptly addressed.
• Authorizes civil action and injunctions for dealers and sets a four-year statute of limitations for violations, with venue in the dealer's location county.
• Amends 8-20-2 to state the Motor Vehicle Franchise Act does not apply to dealer agreements that relate exclusively to powersports vehicle sales.
• Effective date and applicability: June 1, 2014, with applicability to agreements existing, entered into, amended, or renewed on or after that date.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Motor Vehicles