New MD Franchise Bill Calls for Fair Incentive & Audits

New MD Franchise Bill Calls for Fair Incentive & Audits

At the request of Maryland dealers, Sen. Jennie Forehand (D) recently introduced SB 943, aimed at improving automotive franchise law by tightening up standards for incentive audits and making sales incentive programs fair and reasonable and based on factual data.

Specifically, the bill would require that –a sales objective or other program for measuring the performance of franchised dealers be fair and based on specified factors under specified circumstances and prohibits a franchise manufacturer from denying benefits. The proposal would also shift the burden of proof from the dealer to the captive finance company when specified benefits to a dealer under specified circumstances are involved, etc.”

Spearheaded by former WANADA Chairman Jack Fitzgerald, MADA representatives have met with manufacturers to discuss the bill, which is due to be heard by the Senate Judicial Proceedings Committee shortly.

The bill was introduced out of concern that manufacturers have abused the incentive audit by indefinitely extending incentive programs and audits. –We will be pushing for changes to the franchise law that says the clock starts ticking on the day the dealer gets paid,” explained MADA President Peter Kitzmiller. In addition, MADA, with WANADAês support, will be pushing hard for a provision that would prevent manufacturers from forcing dealers to build facilities.

In other action, MADA and WANADA offered testimony strongly opposing HB 1318, Sales and Use Tax on Computer Services and Motor Vehicle Excise Tax Rates, sponsored by Del. Bill Bronrott (D), which would repeal the tax on computer services passed in last fallês special session and, to make up the difference in revenue, impose a 7.5% tax on SUVs.

MADA will also be submitting written testimony on HB 712, Global Warming Solutions – Reductions in Greenhouse Gases, to make sure any legislation passed does not put Maryland dealers at a competitive disadvantage with surrounding states.

The WANADA Bulletin will report on these and any other bills affecting dealers as they develop and more information is available.