HB90 Alabama 2022 Session

Summary

Primary Sponsor

Reed IngramRepresentative

Republican

Session

Regular Session 2022

Title

Motor vehicle dealers, warranty service by dealers paid by manufacturers, reasonable compensation to be paid, determination procedures, Sec. 8-20-7 am'd.

Summary

HB90 would require manufacturers to determine and pay reasonable compensation to motor vehicle dealers for pre-delivery and warranty service, and lets dealers sue if they disagree.

What This Bill Does

It amends Alabama law to specify how reasonable compensation for pre-delivery and warranty work is determined and paid. It requires warranty compensation schedules, ensures payments within 30 days, and permits claims audits and charge-backs up to 12 months. It gives dealers a formula-based process to calculate labor rates and parts markups using repair orders, with a 45-day effective window and potential retroactive adjustments if a court rules in the dealer's favor. If parties can't agree, dealers can file a civil action within 120 days; the warrantor bears the burden of proof.

Who It Affects

• Motor vehicle dealers, who would have a defined process and safeguards for receiving compensation for pre-delivery and warranty work, plus the option to sue if an agreement can't be reached.
• Motor vehicle manufacturers, distributors, and warranty warrantors, who would be required to provide compensation schedules, pay timely, and defend claims in court if disputes arise.

Key Provisions

• Amends Section 8-20-7 to specify how reasonable compensation for pre-delivery and warranty service is determined and allows a dealer to sue if no agreement is reached.
• Defines key terms (pre-delivery service, repair order, qualified repair, warranty work, warrantor) and requires written obligations and compensation schedules from warrantors.
• Requires compensation to cover reasonable diagnostic work, service, labor, and parts, and to be at least the dealer's prevailing non-warranty rates unless unreasonable; lists specific exclusions.
• Claims for labor and parts must be paid within 30 days after approval; warrantors may audit and charge back fraudulent claims for up to 12 months.
• Establishes how to determine reasonable compensation: dealers may use 100 sequential repair orders or 90 days of closed orders to calculate labor rate and parts markup.
• Allows dealers to submit repair orders to establish or modify rates no more often than once per 12 months; provides options for submitting repair orders for combined or separate calculations.
• Specifies exclusions from rate calculations (e.g., promotional discounts, dealer-owned vehicles, routine maintenance, tires, body shop repairs, certain parts without numbers, etc.).
• If the dealer and warrantor cannot agree, the dealer may file a civil action within 120 days; warrantor bears the burden of proving rates were incomplete, inaccurate, or unreasonable; court decisions can be retroactively applied 45 days after submission.
• Effective date: first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Motor Vehicles