2016 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 4 - Miscellaneous Regulated Industries
Chapter 112 - Arkansas Motor Vehicle Commission Act
Subchapter 3 - -- Licensing and Regulation
§ 23-112-310. Delivery, preparation, and warranty obligations

(a) (1) Every licensed motor vehicle manufacturer, distributor, second-stage manufacturer, importer, or converter shall file with the Arkansas Motor Vehicle Commission with its initial application for a license:

(A) A copy of the documents stating the delivery, preparation, and warranty obligations of its motor vehicle dealers; and

(B) A schedule of the compensation to be paid to its motor vehicle dealers for the work and services they shall be required to perform in connection with the delivery, preparation, and warranty obligations.

(2) The documents shall constitute the dealer's only responsibility for product liability as between the dealer and the manufacturer or distributor.

(3) Any revisions to the delivery, preparation, and warranty obligations or to the schedule of compensation shall be filed no later than September 15 of each calendar year.

(b) Any mechanical, body, or parts defects arising from any express or implied warranties of any manufacturer shall constitute the manufacturer's product or warranty liability.

(c) Notwithstanding the terms of a franchise agreement or provision of law in conflict with this subsection, the dealer's delivery, preparation, and warranty obligations as filed with the commission shall constitute the dealer's sole responsibility for product liability as between the dealer and the manufacturer or distributor, and, except for a loss caused by the dealer's negligence or intentional misconduct or a loss caused by the dealer's modification of a product without manufacturer authorization, the manufacturer or distributor shall reimburse the dealer for all losses incurred by the dealer, including legal fees, court costs, and damages, as a result of the dealer's having been named a party in a product liability action.

(d) (1) (A) A manufacturer, distributor, distributor branch or division, or factory or division branch shall not pay to any of its motor vehicle dealers a labor rate per hour or parts price for warranty work that is less than that charged by the dealer to its retail customers, provided the rate is reasonable compared to other same line-make dealers in the dealer's relevant market area or the dealer's competitive market area.

(B) Conversely, a dealer shall not charge to its manufacturer, distributor, distributor branch or division, or factory branch or division a labor rate per hour or parts price in excess of the rate charged to its retail customers.

(C) A manufacturer, distributor, distributor branch or division, or factory branch or division of new motorcycles, motorized cycles, and all-terrain vehicles shall not pay to any new motor vehicle dealers of motorcycles, motorized cycles, and all-terrain vehicles a labor rate per hour or parts price for warranty work that is less than that charged by the new motor vehicle dealer to its retail customers, provided that the rate is reasonable compared to other same line make motor vehicle dealers in the new motor vehicle dealer's relevant market area or the new motor vehicle dealer's competitive market area.

(2) (A) All claims made by motor vehicle dealers for the labor, parts, or incidental expenses shall be paid within thirty (30) days following their approval.

(B) All claims shall be either approved or disapproved within thirty (30) days after their receipt, and when any claim is disapproved, the motor vehicle dealer who submits it shall be notified in writing of its disapproval within the period, and each notice shall state the specific grounds upon which the disapproval is based.

(3) (A) In no event shall a manufacturer, distributor, distributor branch or division, or factory or division branch refuse to pay a motor vehicle dealer for warranty work, as long as the work in question was properly performed in accordance with safety and repair specifications, bulletins, and requirements of the manufacturer, distributor, distributor branch or division, or factory or division branch.

(B) A requirement that a motor vehicle dealer utilize a service technician with a specific qualification, training, or certification level may be satisfied if:

(i) The motor vehicle dealer submits to the manufacturer, distributor, distributor branch or division, or factory or factory division branch a written request listing the specific repairs to be completed and seeking preapproval authorizing the motor vehicle dealer to utilize a service technician who does not meet the training or certification requirements of the manufacturer, distributor, distributor branch or division, or factory or division branch but who is enrolled in a qualified training curriculum to receive the requisite training or certification;

(ii) The manufacturer, distributor, distributor branch or division, or factory or factory division or branch approves the motor vehicle dealer's request in writing; and

(iii) The work is supervised by a service technician with the required training or certification and the repair order is signed by both the supervising technician and the motor vehicle dealer's service department management.

(C) A manufacturer, distributor, distributor branch or division, or factory or factory division or branch is not required to consider a preapproval request to utilize an otherwise unqualified service technician if:

(i) The proposed repair is related to a safety or noncompliance recall;

(ii) The same repair has previously been attempted one (1) or more times by any authorized motor vehicle dealer;

(iii) The repair is to be made on a high-performance or alternative-technology vehicle; or

(iv) The requesting motor vehicle dealer's average service customer satisfaction ratings are below the applicable national or regional average for the same line make dealer.

(D) A motor vehicle dealer that utilizes an unqualified service technician under this section shall not be entitled to additional warranty repair labor time that is not authorized in the labor time guide of the manufacturer, distributor, distributor branch or division, or factory or factory division or branch.