SB364 Alabama 2015 Session

Summary

Primary Sponsor

Greg J. Reed

Republican

Session

Regular Session 2015

Title

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

Summary

SB364 would require powersports vehicle manufacturers, distributors, and dealers in Alabama to use a signed dealer agreement before selling vehicles and would regulate the agreement’s terms, termination rules, inventory repurchase, ownership transfers, and warrantor obligations.

What This Bill Does

It prohibits selling powersports vehicles without a signed dealer agreement and requires the agreement to define the rights and responsibilities of both sides. It sets rules about how the agreement can be terminated, canceled, or nonrenewed, requiring good faith and proper notice with the manufacturer bearing the burden of proof. It requires fair compensation on termination, including repurchase of inventory, parts, and tools, and it covers transfer of dealership ownership, including rights of first refusal. It also amends the Motor Vehicle Franchise Act to exclude powersports dealer agreements related to sales, and it becomes effective for agreements entered after June 1, 2015.

Who It Affects

• Powersports vehicle dealers and their owners in Alabama, who must obtain and adhere to a signed dealer agreement and are entitled to fair compensation and inventory repurchase if the agreement ends.
• Manufacturers, distributors, and warrantors of powersports vehicles, who must provide dealer agreements, follow fair trade practices, and fulfill warranty and compensation obligations.

Key Provisions

• Prohibits selling powersports vehicles without a signed dealer agreement between manufacturer or distributor and dealer.
• Defines key terms such as dealer, manufacturer, distributor, warrantor, line-make, and relevant market area.
• Requires dealer agreements to spell out rights, duties, and prohibited practices; bans coercive actions and unfair trade practices by manufacturers or distributors toward dealers.
• Sets standards for termination, cancellation, and nonrenewal with good cause, notice requirements, and the manufacturer's burden of proof.
• Requires fair compensation upon termination, including repurchase of inventory, supplies, and tools, and compensation for dealership value if termination is without good cause.
• Allows voluntary termination by a dealer with notice and without requiring the same compensation requirements.
• Establishes transfer rules including right of first refusal, notice and cost requirements, and restrictions on transfers to disqualifying persons; courts may review reasonableness of new franchise appointments.
• Gives warrantors obligations to specify dealer obligations, compensate for warranty work, provide warranty claims schedules, and conduct warranty audits with defined timelines.
• Carves powersports dealer agreements from the broader Motor Vehicle Franchise Act to the extent the agreement relates to sales of powersports vehicles.
• Effective date and applicability: applies to dealer agreements entered into on or after June 1, 2015.

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