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Bill to protect N.H. auto dealers wins big majority in House after passing Senate

Lobbyist Andy Crews (center) talks with Rep. Laurie Sanborn of Bedford as he passes out pens and fliers in support of Senate Bill 126, an "auto dealer bill of rights";  Wednesday, May 22, 2013. The House passed the bill easily.

ALEXANDER COHN / Monitor staff

Lobbyist Andy Crews (center) talks with Rep. Laurie Sanborn of Bedford as he passes out pens and fliers in support of Senate Bill 126, an "auto dealer bill of rights"; Wednesday, May 22, 2013. The House passed the bill easily. ALEXANDER COHN / Monitor staff

New Hampshire auto dealers have a lot of clout at the State House, as demonstrated this spring by the massive majorities in both the House and Senate that have endorsed new protections for them at the expense of automakers.

The Democratic-led House yesterday voted, 338-30, to pass an expansion of the “Dealer Bill of Rights,” an existing state law that provides certain legal protections to local franchises that sell vehicles made by Ford, General Motors, Chrysler, Toyota, Honda and other manufacturers.

“We have to take action to help our businesses in our state, and (Senate Bill) 126 is that instrument,” said Rep. Pam Tucker, a Greenland Republican. “It provides guidelines for manufacturer and dealer relations, which are greatly unbalanced right now.”

A similar version passed the Republican-led Senate by a vote of 21-2 on March 21. Sen. Andy Sanborn, a Bedford Republican and the bill’s prime sponsor, wasn’t sure yesterday whether the Senate would concur with the House’s changes or send the bill to a committee of conference.

But Gov. Maggie Hassan, a Democrat, hasn’t said whether she’ll sign the bill.

“Gov. Hassan understands the important role that New Hampshire’s auto dealers play in our economy and looks forward to hearing from the bill’s sponsors and advocates as she reviews the legislation,” said spokesman Marc Goldberg.

The New Hampshire Automobile Dealers Association has lobbied hard for the bill, arguing the relationship between dealers and manufacturers is often one-sided and arbitrary. The Alliance of Automobile Manufacturers has fought just as hard against it, saying it would grant unprecedented powers to dealers and improperly interfere with private business relationships.

And if Hassan signs the bill, a legal challenge could follow. Daniel Gage, a spokesman for the automakers’ group, said in an email yesterday that it “always keeps all legal options open.”

The bill, among other things, says dealers can’t be forced to renovate their facilities except every 15 years, and it allows dealers more flexibility in choosing vendors for equipment and materials.

Tucker said the bill will also allow a manufacturer to sell directly to customers in New Hampshire if they have no dealerships here, which would benefit relatively new automakers like Tesla Motors, which makes high-end electric cars.

One point of contention yesterday was whether farm and construction equipment dealers should be covered by the same law as auto dealers. The bill also covers equipment dealers, which Rep. Catherine Mulholland, a Grafton Democrat, said could raise constitutional issues and interfere with existing contracts.

An amendment offered by Mulholland to keep in place an existing, separate law for tractor and other equipment dealers was rejected, 319-47.

The New Hampshire Automobile Dealers Association hailed the bill’s passage.

“We want to thank New Hampshire lawmakers for their time and their willingness to listen to the challenges facing our industry,” said Pete McNamara, the association’s president, in a statement. “This proposal will stop the unfair spending mandates passed down to us from manufacturers, and will require basic fairness in the relationship.”

The Alliance of Automobile Manufacturers was less pleased.

“Automakers are disappointed that New Hampshire car dealers succeeded in their high pressure demands to stall manufacturer efforts to reform and improve the car buying experience,” Gage said in a statement. “The unfortunate result is New Hampshire motorists will ultimately pay more in both the showroom and service department to further add to car dealers’ ongoing record breaking profits.”

(Ben Leubsdorf can be reached at 369-3307 or
bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)

Legacy Comments3

Jim is missing the point, as many have, that it may be considered legally OK to have a legislature change the terms within a current contract (its called regulatory forseability, such as with the auto dealers) but it is unconstitutional to pass laws that retrospectectively change the terms of conditions of contracts that were created under a different set a stautes. Never the less, the bill has passed and if the Governor signs it, the courts will decide. Its just too bad the State will have to spend so much money defending itself against such an illegal action.

"An amendment offered by Mulholland to keep in place an existing, separate law for tractor and other equipment dealers was rejected, 319-47. Sounds like you just have to fight like the autodealers to get what you need. Seems like 319 people are on your side.

Interesting, NH votes yes to a law saying they can change an existing legal contract for auto dealers but when you call the item a tractor or construction equipment they feel it "could raise constitutional issues and interfere with existing contracts".

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