§ 31-16-117 — Payment for delivery preparation, warranty, sales incentives and service incentives

(a) Each new vehicle manufacturer shall specify in writing
to each of its new vehicle dealers licensed in this state the
dealer's obligations for predelivery preparation and warranty
service on its products, compensate the new vehicle dealer for
service required of the dealer by the manufacturer and provide
the dealer a schedule of compensation to be paid the dealer for
parts, work and service in connection therewith, and the time
allowance for the performance of that work and service.
(b) No schedule of compensation shall fail to include
reasonable compensation for diagnostic work, repair service and
labor. Time allowances for the diagnosis and performance of
warranty work and service shall be reasonable and adequate for
the work to be performed. The hourly labor rate charged by the
dealer for warranty service shall not exceed the hourly labor
rate charged to nonwarranty customers for nonwarranty service
and repairs, provided that rate is reasonable and complies with
the requirements of this section. Reimbursement for parts
purchased by the dealer for use in performing work pursuant to a
manufacturer's express warranty shall be dealer cost plus the
dealer's retail parts markup rate, provided that rate is
reasonable and complies with the requirements of this section.
(c) No new vehicle manufacturer shall fail to perform any
warranty obligations, fail to include in written notices of
factory recalls to new vehicle owners and dealers, the expected
date by which necessary parts and equipment will be available to
dealers for the correction of those defects or fail to
compensate any of the new vehicle dealers in this state for
repairs affected by recall.
(d) All claims made by new vehicle dealers for predelivery
preparation, warranty, sales incentives or service incentives
shall be paid or credited within thirty (30) days following
their approval. The manufacturer may audit claims and charge the
dealer for unsubstantiated or incorrect claims for a period of
one (1) year following payment except where the manufacturer
reasonably suspects fraud. A manufacturer that reasonably
suspects fraud may audit claims for a period of four (4) years
and charge the dealer for fraudulent claims as otherwise
provided by law. All claims shall be either approved or
disapproved within thirty (30) days after their receipt, on
forms or by computerized communication and in the manner
specified by the manufacturer including a computerized
communications system. Any claim not specifically disapproved in
writing or through electronic communication within thirty (30)
days after receipt is construed to be approved and payment shall
be made within thirty (30) days. A dealer whose claim has been
denied for failing to comply with a specific claim processing
requirement, including a clerical error or other administrative
technicality that does not question the legitimacy of the claim,
may resubmit the corrected claim in accordance with this
subsection.
(e) This section shall apply to each manufacturer or
distributor of motor vehicles, medium duty or heavy duty truck
components or engines who provides integral parts of vehicles or
major components by selling directly to dealers or enters into a
contract with a motor vehicle, medium duty or heavy duty truck
dealer which authorizes the dealer to perform warranty or other
services on products produced or distributed.
(f) A new vehicle dealer may establish an hourly labor
rate or a retail parts markup rate charged for warranty repairs
to be included in the manufacturer's schedule of compensation by
mutual agreement with the manufacturer or by submitting to the
manufacturer, in accordance with the manufacturer's reasonable
procedures, the following:
(i) The consecutive repair orders charged to
nonwarranty customers for nonwarranty service and repairs made
within one hundred eighty (180) days before the dealer made its
submission under this subsection that includes one hundred (100)
sequential repair orders reflecting qualified repairs or all
repair orders closed during any period of ninety (90)
consecutive days, whichever is less; and
(ii) The dealer's proposed hourly labor rate or
retail parts markup rate based on the repair orders submitted
under paragraph (i) of this subsection and as calculated under
subsections (h) through (k) of this section.
(g) A new vehicle dealer shall not establish an hourly
labor rate, a retail parts markup rate or both under subsection
(f) of this section more than one (1) time every twelve (12)
months unless the rate is established by mutual agreement with
the manufacturer. Any rate established under this section shall
remain in the manufacturer's schedule of compensation until
changed in accordance with this section.
(h) A new vehicle dealer's hourly labor rate shall be
calculated by dividing the total amount charged for labor for
the qualified repair orders submitted pursuant to subsection (f)
of this section by the total number of hours worked for the
qualified repair orders.
(j) A new vehicle dealer's retail parts markup rate shall
be a percentage amount calculated by dividing the total amount
charged for the parts in the qualified repair orders submitted
pursuant to subsection (f) of this section by the total cost of
the purchase of the parts, subtracting one (1) from that amount
and multiplying by one hundred (100).
(k) The following work shall not be included in the
calculation of a new vehicle dealer's hourly labor rate or
retail parts markup rate:
(i) Repairs that are the subject of a manufacturer's
discounts including special events, specials, promotions,
coupons and service campaigns;
(ii) Repairs of vehicles owned by the dealer;
(iii) Routine maintenance, including but not limited
to routine replacements of fluids, filters, batteries, bulbs,
belts, nuts, bolts or fasteners;
(iv) Installations of accessories;
(v) Vehicle reconditioning;
(vi) Safety or emission inspections as required by
federal or state law;
(vii) Repairs caused by collision, road hazard, force
of elements, vandalism, theft or operator negligence;
(viii) Parts that do not have individual part
numbers;
(ix) Internal and dealership employee service and
repair orders;
(x) Repair orders where labor is performed by a third
party facility.
(m) Not later than thirty (30) days from receipt of the
new vehicle dealer's submission under subsection (f) of this
section, a new vehicle manufacturer may request that the dealer
submit additional repair orders if the manufacturer determines
from any set of repair orders submitted under paragraph (f)(i)
of this section that the dealer's submitted rate is
substantially higher or lower than the rate currently on record
in the manufacturer's schedule of compensation. The additional
repair orders submitted under this subsection shall be for a
period of thirty (30) days before or thirty (30) days after the
period of time that the original repair orders were submitted
under paragraph (f)(i) of this section. A dealer shall submit
the additional repair orders requested under this subsection not
later than thirty (30) days after receipt of the request. No
manufacturer shall request additional repair orders under this
subsection more than one (1) time per a dealer's submission
under subsection (f) of this section.
(n) A new vehicle manufacturer may contest a new vehicle
dealer's submitted rate by providing written notice to the
dealer not later than thirty (30) days after receipt of the
dealer's submission under subsection (f) or (m) of this section.
The manufacturer shall not modify its notice under this
subsection including the grounds for contesting the submitted
rate after the manufacturer sends its notice to the dealer. The
notice under this subsection shall:
(i) Explain the reasons why the dealer's submitted
rate is materially incomplete, materially inaccurate or
materially unreasonable;
(ii) Provide evidence to substantiate why the
submitted rate is materially incomplete, materially inaccurate
or materially unreasonable;
(iii) Propose an adjustment to the submitted rate.
(o) If a new vehicle manufacturer does not request
additional repair orders under subsection (m) of this section or
contest the new vehicle dealer's submitted rate under subsection
(n) of this section then the dealer's submitted rate shall
become effective and shall be included in the manufacturer's
schedule of compensation forty-five (45) days after the
manufacturer receives the dealer's submission under subsection
(f) or (m) of this section.
(p) If a new vehicle manufacturer contests a new vehicle
dealer's submitted rate under subsection (n) of this section
then the manufacturer and the dealer shall participate in
mediation. The mediation process shall terminate after sixty
(60) days unless extended by unanimous mutual agreement.
(q) Upon the expiration of the mediation period under
subsection (p) of this section, a new vehicle dealer may file a
civil cause of action in any court of competent jurisdiction not
later than sixty (60) days after the expiration of the mediation
period. In a civil action brought under this subsection, the new
vehicle manufacturer shall have the burden of proving by a
preponderance of the evidence that the dealer's submitted rate
was materially incomplete, materially inaccurate or materially
unreasonable.
(r) This section shall not apply to:
(i) Electric vehicle propulsion batteries provided to
the new vehicle dealer at no cost, provided that the new vehicle
manufacturer pays a reasonable handling fee to the dealer;
(ii) Complete engine and transmission assemblies
replaced under warranty or other new vehicle manufacturer
reimbursed repairs. For these assemblies, the manufacturer shall
reimburse the new vehicle dealer for the dealer's costs for the
parts purchased by the dealer for use in performing the work
pursuant to the manufacturer's express warranty plus forty
percent (40%).
(s) If a new vehicle manufacturer provided a part to a new
vehicle dealer at no cost to perform repairs under a
manufacturer campaign, service action or warranty repair, the
manufacturer shall provide to the dealer an amount equal to the
retail parts markup for that part. The retail parts markup under
this subsection shall be calculated by multiplying the dealer's
cost for the part as listed in the manufacturer's price schedule
by the retail parts markup rate established under this section.
(t) As used in this section:
(i) "Mediation" means the act of a neutral person in
intermediating between or among contending parties with a view
of assisting them to adjust or settle their dispute by mutual
agreement;
(ii) "Parts" means parts, accessories, equipment,
components, systems and functions including rear axle assemblies
and replacements of parts, accessories, equipment, components,
systems and functions;
(iii) "Qualified repair" means a repair to a motor
vehicle that would have been included within the new vehicle
manufacturer's new motor vehicle warranty if:
(A) The motor vehicle that is being repaired had
not exceeded the time or mileage limit, or both, of the
warranty;
(B) The repair does not constitute a repair that
is covered by the warranty; and
(C) The repair does not include any of the work
described in W.S. 31-16-117(k).
(iv) "Qualified repair order" means a repair order
that encompasses, in whole or in part, at least one (1)
qualified repair;
(v) "Repair order" means an accounting copy of an
invoice issued to a retail customer that is closed as of the
time of submission that evidences at least one (1) repair on a
motor vehicle. A "repair order" shall include:
(A) For a retail parts markup rate submission,
the cost of each part and the part's sale price including parts
sold or used and the total amount charged to the customer;
(B) For an hourly labor rate submission, the
number of labor hours charged for each repair, the sale price
for the labor and the total amount charged to the customer.