HB186 Alabama 2018 Session

Summary

Primary Sponsor

Ron Johnson

Republican

Session

Regular Session 2018

Title

Motor Vehicle Franchise Act, unfair and deceptive trade practices, coercion of dealer to change or modify premises when unreasonable, further provided for, Sec. 8-20-4 am'd.

Summary

HB 186 would broaden Alabama's Motor Vehicle Franchise Act to expand what counts as unfair and deceptive practices by manufacturers or wholesalers, especially around forcing dealer relocations, with added dealer protections.

What This Bill Does

It adds a detailed list of acts that are considered unfair and deceptive if a manufacturer coerces a dealer before terminating a franchise, including forcing unwanted orders, price terms, or agreements that harm the dealer. It prohibits unreasonable relocation or alterations to dealership premises and restricts exclusive facilities unless justified. It creates notice requirements and a court review pathway for adding new franchises or changing franchise terms, and it expands protections around incentives, price reductions passed to customers, and other dealer safeguards. It also introduces protections related to executive management changes, succession, indemnification, and other practices to deter anti-competitive behavior.

Who It Affects

• New motor vehicle dealers in Alabama and their owners/managers/employees (receiving clearer protections from coercive practices and new avenues to challenge unreasonable franchise actions).
• Manufacturers, factory branches, distributors, and wholesalers (subject to additional prohibitions, notice requirements, and potential court oversight of certain franchise decisions).

Key Provisions

• Provision 1: Amends Section 8-20-4 to add a broad list of unfair and deceptive acts, including coercing dealers to buy or accept items not requested, to accept non-public price terms, or to enter harmful agreements.
• Provision 2: Prohibits unreasonable relocation or substantial alterations to a dealership's premises and limits exclusive sales facilities unless justified by business reasons.
• Provision 3: Requires notice to dealers before granting an additional franchise (60 days) and allows dealers to seek court review of whether such appointment is reasonable; includes a speedy trial and burden on the manufacturer to prove reasonableness.
• Provision 4: Adds requirements and timelines for changes in executive management, ownership succession, or transfer of dealership interests, including reasons if a transfer is rejected and disclosure of information about proposed successors.
• Provision 5: Requires indemnification by manufacturers for certain dealer losses and grants audit rights over incentive payments, with rules about timely payment and acceptable claim processing.
• Provision 6: Addresses pricing and incentives, including protections against unjust price increases on orders already placed and mandates pass-through of price reductions to customers; governs use of incentives and related adjustments.

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