Change provisions of the Motor Vehicle Industry Regulation Act
LB667 amends the Nebraska Motor Vehicle Industry Regulation Act to revise how new motor vehicle manufacturers and distributors compensate franchised dealers for warranty-related work. The bill requires manufacturers and distributors to provide written statements of dealer obligations for preparation, delivery, warranty service, and recall work, and to publish a compensation schedule covering parts, labor, diagnostic work, and time allowances. It also requires that compensation for warranty labor and parts be “reasonable,” with labor time allowances adequate for a qualified technician and parts compensation tied to dealer cost plus markup, subject to specified methods for calculating average markup.
The bill further limits how manufacturers may challenge dealer-reported labor rates and parts markups, including rules for audits, documentation, timing, and the use of retail sales data. It prohibits manufacturers from unreasonably denying requests to modify time allowances or to recognize additional diagnostic or repair time, and it bars certain practices such as failing to compensate recall repairs or denying claims solely for minor clerical errors. The measure also extends similar warranty-compensation rules to manufacturers of transmissions, engines, and rear axles that separately warrant their components, while excluding recreational vehicles. Finally, it repeals the original section being amended.
LB667 changes state law governing the relationship between motor vehicle manufacturers/distributors and licensed new vehicle dealers in Nebraska, especially in the area of warranty reimbursement. It creates more detailed statutory standards for labor-rate and parts-markup compensation, claim processing, audits, and recall-related reimbursement, and it gives dealers clearer rights to seek adjustments and challenge denials before the board. Manufacturers and distributors must adjust internal warranty programs and dealer compensation practices to comply with the new requirements, while dealers gain stronger statutory protections for warranty work payment.
The bill appears to have had broadly favorable support and little visible opposition. It advanced 42-0 on April 9, 2025, and passed final reading 49-0, indicating unanimous support among voting members. The absence of recorded committee transcript debate in the provided materials suggests the measure was not highly contentious in the legislative process, at least on the floor.
The main policy tension in LB667 is between dealer advocates seeking fuller reimbursement for warranty diagnostics, labor, and parts, and manufacturers/distributors seeking to preserve control over compensation formulas, audits, and claim review. The bill addresses disputes over what counts as reasonable compensation, how average markup is calculated, whether manufacturers can require burdensome documentation, and how much discretion they have to deny or audit claims. It also limits manufacturers’ ability to reject claims for minor processing errors, which may have been a point of concern for manufacturers but is designed to protect dealers from technical denials.