Bill > HB3859

This bill modifies Texas law regarding reimbursement of motor vehicle franchised dealers by manufacturers and distributors for warranty, recall, over-the-air, and preparation and delivery work. The legislation introduces detailed definitions for terms like "goodwill repair" and "routine maintenance" and establishes comprehensive guidelines for how manufacturers must compensate dealers for their work. Key provisions include requiring manufacturers to fairly compensate dealers for warranty and recall work, using specific formulas to calculate labor and parts reimbursement rates that consider the dealer's actual retail customer charges while excluding certain types of repairs. The bill also establishes new procedural requirements, such as mandating that manufacturers respond to dealer rate adjustment requests within 60 days, provide detailed explanations for any rate reductions or disapprovals, and prohibits manufacturers from recovering compensation through indirect means like supplemental charges or reduced wholesale pricing. Additionally, the bill limits manufacturers' ability to charge back approved claims, restricts claim audits, and prevents manufacturers from imposing overly burdensome documentation requirements. These changes aim to create more transparent and equitable reimbursement practices for motor vehicle dealers, with the new regulations taking effect on September 1, 2025, and applying only to work commenced on or after that date.

Transportation and Infrastructure

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB3859