LB830
2018

LB830
2018
LEGISLATURE OF NEBRASKA
ONE HUNDRED FIFTH LEGISLATURE
SECOND SESSION

LEGISLATIVE BILL 830

Introduced by Vargas, 7.
Read first time January 04, 2018
Committee: Transportation and Telecommunications
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A BILL FOR AN ACT relating to the Motor Vehicle Industry Regulation Act;

2

to amend section 60-1411.03, Reissue Revised Statutes of Nebraska,

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section 60-1438.01, Revised Statutes Cumulative Supplement, 2016,

4

and section 60-1407, Revised Statutes Supplement, 2017; to change

5

provisions relating to license applications, prohibited acts, and

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franchise restrictions; and to repeal the original sections.

7

Be it enacted by the people of the State of Nebraska,

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Section 1. Section 60-1407, Revised Statutes Supplement, 2017, is
amended to read:

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60-1407 Any person desiring to apply for one or more of the types of

4

licenses described in the Motor Vehicle Industry Regulation Act shall

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submit to the board, in writing, the following required information:

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(1) The name and address of the applicant, if the applicant is an

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individual, his or her social security number, and the name under which

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he or she intends to conduct business. If the applicant is a partnership

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or limited liability company, it shall set forth the name and address of

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each partner or member thereof and the name under which the business is

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to be conducted. If the applicant is a corporation, it shall set forth

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the name of the corporation and the name and address of each of its

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principal officers;

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(2) The place or places, including the city or village and the
street and street number, if any, where the business is to be conducted;

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(3) If the application is for a motor vehicle dealer's license,

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trailer dealer's license, or motorcycle dealer's license (a) the name or

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names of the new motor vehicle or vehicles, new trailer or trailers, or

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new motorcycle or motorcycles which the applicant has been enfranchised

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to sell or exchange, (b) the name or names and address or addresses of

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the manufacturer or distributor who has enfranchised the applicant, (c) a

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current copy of each existing franchise, and (d) a description of the

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community, as applicable;

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(4) If the application is for any of the above-named classes of

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dealer's licenses, the name and address of the person who is to act as a

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motor vehicle, trailer, or motorcycle salesperson under such license if

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issued;

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30
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(5) If the application is for a dealer's agent, the dealers for
which the agent will be buying;
(6)

A

description

of

the

proposed

place

or

places

of

business

proposed to be operated in the event a license is granted together with

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(a)

a

statement

whether

the

applicant

owns

or

leases

the

proposed

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established place of business and, if the proposed established place of

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business is leased, the applicant shall file a true and correct copy of

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the lease agreement, and (b) a description of the facilities for the

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display of motor vehicles, trailers, and motorcycles;

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(7) If the application is for a manufacturer's license, a statement

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regarding the manufacturer's compliance with the Motor Vehicle Industry

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Regulation Act; and

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(8) A statement that the licensee will comply with and be subject to

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the act, the rules and regulations adopted and promulgated by the board,

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and any amendments to the act and the rules and regulations existing on

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the date of application.

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Subdivision (3)(d) of this section shall not be construed to require

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any licensee who has a franchise on August 31, 2003, to show good cause

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to be in the same community as any other licensee who has a franchise of

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the same line-make in the same community on August 31, 2003.

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Sec. 2. Section 60-1411.03, Reissue Revised Statutes of Nebraska, is
amended to read:

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60-1411.03 It shall be unlawful for any licensee or motor vehicle
dealer to engage, directly or indirectly, in the following acts:

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(1) To advertise and offer any year, make, engine size, model, type,

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equipment, price, trade-in allowance, or terms or make other claims or

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conditions pertaining to the sale, leasing, or rental of motor vehicles,

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motorcycles, and trailers which are not truthful and clearly set forth;

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(2)

To

advertise

for

sale,

lease,

or

rental

a

specific

motor

26

vehicle, motorcycle, or trailer which is not in the possession of the

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dealer, owner, or advertiser and willingly shown and sold, as advertised,

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illustrated, or described, at the advertised price and terms, at the

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advertised

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motorcycle, or trailer advertised for sale shall be in operable condition

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and,

on

address.

request,

Unless

the

otherwise

advertiser

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specified,

thereof

shall

a

motor

show

vehicle,

records

to

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substantiate an advertised offer;

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(3) To advertise a new motor vehicle, motorcycle, or trailer at a

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price which does not include standard equipment with which it is fitted

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or is ordinarily fitted, without disclosing such fact, or eliminating any

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such equipment for the purpose of advertising a low price;

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(4) To advertise (a) that the advertiser's prices are always or

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generally lower than competitive prices and not met or equalled by others

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or that the advertiser always or generally undersells competitors, (b)

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that the advertiser's prices are always or generally the lowest or that

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no other dealer has lower prices, (c) that the advertiser is never

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undersold, or (d) that no other advertiser or dealer will have a lower

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price;

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(5) To advertise and make statements such as, Write Your Own Deal,

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Name

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statements of a similar nature;

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Your

Own

Price,

or

Name

Your

Own

Monthly

Payments

and

other

(6) To advertise by making disparaging comparisons with competitors'
services, quality, price, products, or business methods;

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(7) To advertise by making the layout, headlines, illustrations, and

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type size of an advertisement so as to convey or permit an erroneous

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impression as to which motor vehicle, motorcycle, or trailer or motor

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vehicles, motorcycles, or trailers are offered at featured prices. No

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advertised offer, expression, or display of price, terms, downpayment,

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trade-in allowance, cash difference, or savings shall be misleading by

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itself, and any qualification to such offer, expression, or display shall

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be clearly and conspicuously set forth in comparative type size and

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style, location, and layout to prevent deception;

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(8)

To

advertise

the

price

of

a

motor

vehicle,

motorcycle,

or

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trailer without including all charges which the customer must pay for the

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motor vehicle, motorcycle, or trailer, excepting state and local taxes

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and license, title, and other fees. It shall be unlawful to advertise

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prices described as unpaid balance unless they are the full cash selling

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price and to advertise price which is not the full selling price even

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though qualified with expressions such as with trade, with acceptable

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trade, or other similar words;

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(9)

To

advertise

as

at

cost,

below

cost,

below

invoice,

or

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wholesale, unless the term used is strictly construed that the word cost

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as used in this subdivision or in a similar meaning is the actual price

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paid

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motorcycle, or trailer so advertised;

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by

(10)

the

advertiser

To

advertise

to

the

claims

manufacturer

that

for

Everybody

the

motor

Financed,

vehicle,

No

Credit

Rejected, or We Finance Anyone and other similar affirmative statements;

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(11) To advertise a specific trade-in amount or range of amounts;

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(12) To advertise the words Finance, Loan, or Discounts or others of

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similar import in the firm name or trade style of a person offering motor

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vehicles,

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actually engaged in the finance business and offering only bona fide

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repossessed

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unlawful to use the word Repossessed in the name or trade style of a firm

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in the advertising of motor vehicles, motorcycles, and trailers sold by

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such a company unless they are bona fide repossessions sold for unpaid

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balances due only. Advertisers offering repossessed automobiles for sale

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shall be able to offer proof of repossession;

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(13)

motorcycles,

To

motor

and

trailers

vehicles,

advertise

the

for

sale

motorcycles,

term

and

Authorized

unless

such

trailers.

Dealer

in

It

any

person

shall

way

as

is

be

to

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mislead as to the make or makes of motor vehicles, motorcycles, or

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trailers for which a dealer is franchised to sell at retail;

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(14)

To

advertise

or

sell

new

motor

vehicles,

motorcycles,

and

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trailers by any person who is not the manufacturer or not enfranchised by

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the manufacturer of the motor vehicle, motorcycle, or trailer offered

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without disclosing such the fact in each advertisement which includes the

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motor vehicle, motorcycle, or trailer, and in writing in the lease or

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purchase agreement that the licensee or motor vehicle dealer is not

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enfranchised or authorized by the manufacturer for service under factory

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warranty

provisions.

No

person

shall

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vehicle,

motorcycle,

or

trailer

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statement of origin unless the person is the manufacturer of the motor

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vehicle, motorcycle, or trailer or is enfranchised to do so by the

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manufacturer of the motor vehicle, motorcycle, or trailer;

by

transfer

ownership

reassignment

on

a

of

a

motor

manufacturer's

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(15) To advertise used motor vehicles, motorcycles, or trailers so

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as to create the impression that they are new. Used motor vehicles,

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motorcycles, and trailers of the current and preceding model year shall

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be clearly identified as Used, Executive Driven, Demonstrator, or Driver

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Training,

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vehicles, or motorcycles as may be the case and descriptions such as Low

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Mileage or Slightly Driven may also be applied only when correct. The

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terms

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motorcycles, or trailers shall not be used unless (a) they have never

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been sold to a member of the public, (b) such terms describe motor

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vehicles, motorcycles, or trailers used by new motor vehicle, motorcycle,

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or

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ability, and (c) such vehicles are advertised for sale as such only by an

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authorized dealer in the same make of motor vehicle, motorcycle, or

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trailer.

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Clearance and others of similar import shall not be used in advertising

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used

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impression that the motor vehicles, motorcycles, and trailers offered are

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holdover new motor vehicles, motorcycles, and trailers. When new and used

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motor vehicles, motorcycles, and trailers of the current and preceding

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model year are offered in the same advertisement, such offers shall be

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clearly separated by description, layout, and art treatment;

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and

lease

cars,

demonstrator's,

trailer

Phrases

motor

(16)

dealers

To

executive's,

or

such

vehicles,

taxicabs,

their

as

and

employees

Last

of

motorcycles,

advertise

fleet

the

and

executives'

vehicles,

official's

for

motor

demonstrating

Remaining,

trailers

or

police

vehicles,

performance

Closeout,

so

officials'

as

to

motor

motor

or

Final

convey

the

vehicles,

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motorcycles, or trailers unless they have been used exclusively by the

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personnel

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manufacturer or by an executive of any authorized dealer of the same make

or

executive

of

the

motor

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vehicle,

motorcycle,

or

trailer

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thereof and such motor vehicles, motorcycles, and trailers have not been

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sold

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advertisement;

to

a

member

of

the

public

prior

to

the

appearance

of

the

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(17) To advertise motor vehicles, motorcycles, and trailers owned by

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or in the possession of dealers without the name of the dealership or in

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any other manner so as to convey the impression that they are being

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offered by private parties;

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(18) To advertise the term wholesale in connection with the retail
offering of used motor vehicles, motorcycles, and trailers;

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(19) To advertise the terms auction or auction special and other

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terms of similar import unless such terms are used in connection with

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motor vehicles, motorcycles, and trailers offered or sold at a bona fide

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auction to the highest bidder and under such other specific conditions as

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may be required in the Motor Vehicle Industry Regulation Act;

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(20) To advertise free driving trial unless it means a trial without

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obligation of any kind and that the motor vehicle, motorcycle, or trailer

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may be returned in the period specified without obligation or cost. A

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driving trial advertised on a money back basis or with privilege of

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exchange or applying money paid on another motor vehicle, motorcycle, or

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trailer shall be so explained. Terms and conditions of driving trials,

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free or otherwise, shall be set forth in writing for the customer;

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(21) To advertise (a) the term Manufacturer's Warranty unless it is

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used in advertising only in reference to cars covered by a bona fide

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factory warranty for that particular make of motor vehicle, motorcycle,

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or trailer. In the event only a portion of such warranty is remaining,

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then reference to a warranty may be used only if stated that that unused

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portion

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Guarantee except in connection with new motor vehicles, motorcycles, and

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trailers, and (c) the terms Ninety-day Warranty, Fifty-fifty Guarantee,

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Three-hundred-mile Guarantee, and Six-month Warranty, unless the major

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terms and exclusions are sufficiently described in the advertisement;

of

the

warranty

is

still

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in

effect,

(b)

the

term

New

Car

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(22) To advertise representations inconsistent with or contrary to

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the fact that a motor vehicle, motorcycle, or trailer is sold as is and

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without a guarantee. The customer contract shall clearly indicate when a

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car

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similarly shall clearly indicate when a car is sold as is and without a

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guarantee; and

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(23)

will

be

sold

To

with

advertise

a

guarantee

or

to

make

and

what

any

that

guarantee

statement,

is

declaration,

and

or

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representation in any advertisement that cannot be substantiated in fact,

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and

the

burden

of

proof

of

the

factual

basis

for

the

statement,

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declaration, or representation shall be on the licensee or motor vehicle

11

dealer and not on the board.

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Sec. 3. Section 60-1438.01, Revised Statutes Cumulative Supplement,
2016, is amended to read:

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60-1438.01

(1)

section,

distributor or who, directly or indirectly through an intermediary, is

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controlled by, or is under common control with, the manufacturer or

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distributor. A person is controlled by a manufacturer or distributor if

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the manufacturer or distributor has the authority directly or indirectly,

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by

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management and policies of the person. A franchise agreement with a

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Nebraska-licensed dealer which conforms to and is subject to the Motor

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Vehicle Industry Regulation Act is not control for purposes of this

25

section.

26
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the

parties,

to

direct

or

or

a

or

17

of

representative

manufacturer

representative or (b) a person who is affiliated with a manufacturer or

agreement

factory

this

16

by

a

of

distributor

or

(a)

purposes

15

law

includes

For

distributor

influence

the

(2)(a) (2) Except as provided in this section, a manufacturer or
distributor shall not directly or indirectly:

28

(i) (a) Own an interest in a franchise, franchisee, or consumer care

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or service facility, except that a manufacturer or distributor may hold

30

stock in a publicly held franchise, franchisee, or consumer care or

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service facility so long as the manufacturer or distributor does not by

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virtue

2

franchisee, or consumer care or service facility;

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4
5
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of

holding

such

stock

operate

or

control

the

franchise,

(ii) (b) Operate or control a franchise, franchisee, or consumer
care or service facility; or
(iii) (c) Act in the capacity of a franchisee or motor vehicle
dealer.

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(b) This subsection does not apply to a manufacturer that:

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(i) Does not have, and has not previously had, any franchisees

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10
11
12
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representing

such

manufacturer’s

line-make

of

motor

vehicles,

motorcycles, or trailers in this state; and
(ii)

Sells

to

the

general

public

only

the

line-make

of

motor

vehicles, motorcycles, or trailers that it manufactures.
(3)

A

manufacturer

or

distributor

may

own

an

interest

in

a

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franchisee or otherwise control a franchise for a period not to exceed

15

twelve months after the date the manufacturer or distributor acquires the

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franchise if:

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(a) The person from whom the manufacturer or distributor acquired
the franchise was a franchisee; and

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(b) The franchise is for sale by the manufacturer or distributor.

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(4) For purposes of broadening the diversity of its franchisees and

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enhancing opportunities for qualified persons who lack the resources to

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purchase a franchise outright, but for no other purpose, a manufacturer

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or distributor may temporarily own an interest in a franchise if the

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manufacturer's or distributor's participation in the franchise is in a

25

bona fide relationship with a franchisee and the franchisee:

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(a)

Has

made

a

significant

investment

in

the

franchise,

which

investment is subject to loss;

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(b) Has an ownership interest in the franchise; and

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(c) Operates the franchise under a plan to acquire full ownership of

30

the franchise within a reasonable time and under reasonable terms and

31

conditions.

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(5) On a showing of good cause by a manufacturer or distributor, the

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board may extend the time limit set forth in subsection (3) of this

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section. An extension may not exceed twelve months. An application for an

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extension after the first extension is granted is subject to protest by a

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franchisee of the same line-make whose franchise is located in the same

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community as the franchise owned or controlled by the manufacturer or

7

distributor.

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(6) The prohibition in subdivision (2)(a)(ii) (2)(b) of this section

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shall not apply to any manufacturer of manufactured housing, recreational

10

vehicles, or trailers.

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(7) The prohibitions set forth in subsection (2) of this section
shall not apply to a manufacturer that:

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(a) Does not own or operate more than two such dealers or dealership
locations in this state;

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16

(b) Owned, operated, or controlled a warranty repair or service
facility in this state as of January 1, 2016;

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(c) Manufactures engines for installation in a motor-driven vehicle

18

with a gross vehicle weight rating of more than sixteen thousand pounds

19

for

20

condition precedent to registration under the laws of this state, if the

21

manufacturer is not otherwise a manufacturer of motor vehicles; and

which

motor-driven

vehicle

evidence

of

title

is

required

as

a

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(d) Provides to dealers on substantially equal terms access to all

23

support for completing repairs, including, but not limited to, parts and

24

assemblies,

training

25

information

concerning

26

facilities owned, operated, or controlled by the manufacturer.

27

Sec. 4.

28

Nebraska,

29

2016,

30

repealed.

and

and

technical

repairs

that

service
the

bulletins,

manufacturer

and

other

provides

to

Original section 60-1411.03, Reissue Revised Statutes of

section
section

60-1438.01,
60-1407,

Revised
Revised

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Statutes
Statutes

Cumulative
Supplement,

Supplement,
2017,

are