SB0287

SENATE BILL 287

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Linda M. Trujillo

AN ACT

RELATING TO TRADE PRACTICES; EXEMPTING FROM THE PROVISIONS OF CHAPTER 57, ARTICLE 16 NMSA 1978 DEALERS, MANUFACTURERS AND DISTRIBUTORS THAT MANUFACTURE OR SELL NEW RECREATIONAL VEHICLES; ENACTING THE RECREATIONAL VEHICLE MANUFACTURER AND DEALER ACT; REQUIRING A MANUFACTURER-DEALER AGREEMENT TO SELL A NEW RECREATIONAL VEHICLE; PROVIDING REQUIREMENTS FOR MANUFACTURER-DEALER AGREEMENTS; PROVIDING LIMITATIONS TO THE TERMINATION, CANCELLATION OR NONRENEWAL OF A MANUFACTURER-DEALER AGREEMENT AND REQUIRING WRITTEN NOTICE; REQUIRING NOTICE FOR THE TRANSFER OF DEALER OWNERSHIP AND PROVIDING A PROCEDURE FOR OBJECTION TO TRANSFER OF OWNERSHIP; PROVIDING WARRANTY OBLIGATIONS ON THE WARRANTOR AND DEALER; PROVIDING INSPECTION AND REJECTION PROCEDURES FOR DAMAGED RECREATIONAL VEHICLES; REQUIRING ALTERNATIVE DISPUTE RESOLUTION PRIOR TO AN INJURED PARTY BRINGING A CIVIL ACTION FOR A VIOLATION OF THE RECREATIONAL VEHICLE MANUFACTURER AND DEALER ACT; PROVIDING PENALTIES; REPEALING A SECTION OF CHAPTER 57, ARTICLE 16 NMSA 1978 THAT APPLIES TO MANUFACTURERS AND DISTRIBUTORS OF RECREATIONAL VEHICLES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 57-16-2 NMSA 1978 (being Laws 1973, Chapter 6, Section 2) is amended to read:

"57-16-2. APPLICATION OF ACT.--

A. Except as provided in Subsection B of this section, the provisions of [this act] Chapter 57, Article 16 NMSA 1978 shall apply to all persons, manufacturers, representatives, distributors and dealers and to all written or oral agreements between the manufacturer, distributor or representative with a motor vehicle dealer, including [but not limited to] the franchise offering, the franchise agreement, sales of goods, services or advertising, leases or mortgages of real or personal property, promises to pay, security interest, pledges, insurance contracts, advertising contracts, construction or installation contracts, servicing contracts and all other such agreements in which the manufacturer, distributor or representative has any direct or indirect interest.

B. The provisions of Chapter 57, Article 16 NMSA 1978 shall not apply to a dealer, manufacturer, component manufacturer or distributor that manufactures or sells new recreational vehicles."

SECTION 2. Section 57-16-3 NMSA 1978 (being Laws 1973, Chapter 6, Section 3, as amended) is amended to read:

"57-16-3. DEFINITIONS.--As used in Chapter 57, Article 16 NMSA 1978:

A. "current price" means an amount equal to the price listed in the manufacturer's or distributor's printed price list in effect when the franchise is terminated, less applicable trade and cash discounts;

B. "dealer cost" means an amount equal to the sum of the original invoice price that the dealer paid for inventory and the cost of the delivery of the inventory from the manufacturer or distributor to the dealer, less applicable discounts;

C. "designated family member" means a spouse, child, grandchild, parent, brother or sister of a deceased or incapacitated dealer who is entitled to inherit the dealer's ownership interest in the dealership under the terms of a will or the laws of intestate succession in this state. In the case of an incapacitated dealer, the term means the person appointed by a court as the legal representative of the dealer's property. The term also includes the appointed and qualified personal representative and the testamentary trustee of a deceased dealer. However, the term shall be limited to mean only that individual designated by a dealer in a written document filed with the manufacturer, distributor or representative in the event that such a document has been filed;

D. "distributor" means any person who distributes or sells new or used motor vehicles to dealers and who is not a manufacturer;

E. "do not drive order" means a notice advising a motor vehicle dealer or an owner of a motor vehicle not to drive the vehicle until the vehicle has been repaired because the vehicle has a safety defect, fails to comply with a federal motor vehicle safety standard or fails to comply with a federal requirement;

F. "former franchisee":

(1) means a dealer that has entered into a franchise agreement with a manufacturer and that has:

(a) entered into a termination agreement or deferred termination agreement with the manufacturer related to the franchise; or

(b) has had the franchise canceled, terminated or otherwise ended; and

(2) includes the designated successor of the former franchisee in the event the former franchisee is deceased or disabled;

G. "franchise" means an oral or written arrangement for a definite or indefinite period in which a manufacturer, distributor or representative grants to a motor vehicle dealer a license to use a trade name, service mark or related characteristic and in which there is a community of interest in the marketing of motor vehicles or services related to marketing, service or repair of motor vehicles at wholesale, retail, leasing or otherwise;

H. "fraud" includes, in addition to its normal legal connotation, the following:

(1) a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact;

(2) a promise or representation not made honestly and in good faith; and

(3) an intentional failure to disclose a material fact;

I. "inventory" means new or unused motorcycles, motor vehicles, motorcycle attachments and motorcycle and motor vehicle repair parts that are provided by a manufacturer or distributor to a dealer under a franchise agreement and that are purchased within thirty-six months of the termination of the franchise or are listed in the manufacturer's or distributor's current sales manual or price list at the time that the franchise is terminated;

J. "manufacturer" means any person who manufactures or assembles new motor vehicles either within or outside of this state and may include a predecessor manufacturer or a successor manufacturer;

K. "motorcycle" means any motor vehicle used on or off a public highway that has an unladen weight of less than one thousand five hundred pounds;

L. "motor vehicle" means every self-propelled vehicle, having two or more wheels, by which a person or property may be transported on a public highway [and includes recreational vehicles];

M. "motor vehicle dealer" or "dealer" means a person who sells or solicits or advertises the sale of new or used motor vehicles and is licensed as a dealer pursuant to the Motor Vehicle Code. "Motor vehicle dealer" or "dealer" shall not include:

(1) receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under judgment, decree or order of any court;

(2) public officers while performing their duties as such officers;

(3) persons making casual sales of their own vehicles duly registered and licensed to them by the state; or

(4) finance companies, banks and other lending institutions covering sales of repossessed vehicles;

N. "person" means every natural person, partnership, corporation, association, trust, estate or any other legal entity;

O. "predecessor manufacturer" means a manufacturer that is acquired, succeeded by or assumed by a successor manufacturer;

P. "prospective purchaser" means a person who has a bona fide written agreement to purchase a franchise;

Q. "recall claim" includes a claim for reimbursement for the parts and labor required for a dealer to repair a motor vehicle subject to a do not drive order or stop sale order;

R. "recreational vehicle" means [any motor vehicle with a camping body that either has its own motive power or is drawn by another vehicle] a vehicle that is either self-propelled or towed by a consumer-owned tow vehicle and that is designed to provide temporary living quarters for recreational, camping or travel use, and includes motor homes, travel trailers, fifth wheel travel trailers, truck campers and folding camping trailers;

S. "relevant market area" means an area of a size specified in this subsection around an existing motor vehicle dealer's place of business. The size of the area shall be the greater of the area of responsibility specified in the dealer's franchise or a circle with a center at the dealer's place of business and a radius of:

(1) seven miles, if the population of the county in which the dealership is located is two hundred fifty thousand or more;

(2) fifteen miles, if the population of the county in which the dealership is located is less than two hundred fifty thousand but is thirty-five thousand or more; or

(3) twenty miles in all other cases.

If the existing and proposed dealerships are in different counties, the lesser of the applicable mileage limitations shall be used. For purposes of this subsection, the population of any area shall be determined in accordance with the most recent decennial census or the most recent population update from the national planning data corporation or other similar recognized source, whichever is later;

T. "representative" means any person who is or acts as an agent, employee or representative of a manufacturer or distributor and who performs any duties in this state relating to promoting the distribution or sale of new or used motor vehicles or contacts dealers in this state on behalf of a manufacturer or distributor;

U. "sale" includes:

(1) the issuance, transfer, agreement for transfer, exchange, pledge, hypothecation or mortgage in any form, whether by transfer in trust or otherwise, of any motor vehicle or interest therein or of any franchise related thereto; and

(2) any option, subscription or other contract or solicitation looking to a sale or offer or attempt to sell in any form, whether spoken or written. A gift or delivery of any motor vehicle or franchise with respect thereto with, or as, a bonus on account of the sale of anything shall be deemed a sale of such motor vehicle or franchise;

V. "stop sale order" means a notice prohibiting a motor vehicle dealer from leasing or selling and delivering at wholesale or retail a used motor vehicle in the inventory of the dealer until the vehicle has been repaired because the vehicle has a safety defect, fails to comply with a federal motor vehicle safety standard or fails to comply with a federal requirement;

W. "successor manufacturer" means a motor vehicle manufacturer that, on or after January 1, 2010, acquires, succeeds to or assumes any part of the business of a predecessor manufacturer as the result of:

(1) a change in ownership, operation or control of the predecessor manufacturer;

(2) the termination, suspension or cessation of all or a part of the business operation of the predecessor manufacturer;

(3) the discontinuance of the sale of a product line; or

(4) a change in the distribution system by the predecessor manufacturer, whether through a change in distributor or the predecessor manufacturer's decision to cease conducting business through a distributor; and

X. "value of the used motor vehicle" means the average trade-in value indicated in an independent third party guide for a used motor vehicle of the same year, make and model."

SECTION 3. [NEW MATERIAL] SHORT TITLE.--Sections 3

through 13 of this act may be cited as the "Recreational Vehicle Manufacturer and Dealer Act".

SECTION 4. [NEW MATERIAL] DEFINITIONS.--As used in the

Recreational Vehicle Manufacturer and Dealer Act:

A. "area of sales responsibility" means the geographical area agreed to by a dealer and a manufacturer in a manufacturer-dealer agreement within which the dealer has the exclusive right to display or sell the manufacturer's new recreational vehicles of a particular line-make;

B. "coercion" means threatening to terminate, cancel or not renew a manufacturer-dealer agreement without good cause or threatening to withhold product lines or delay product delivery as an inducement to amending the agreement;

C. "component manufacturer" means a person, corporation or business entity that engages in the manufacturing of components, accessories or parts used in manufacturing recreational vehicles;

D. "dealer" means a person, corporation or business entity licensed or required to be licensed to sell new recreational vehicles under the Motor Vehicle Code;

E. "distributor" means a person, corporation or business entity that purchases new recreational vehicles for resale to dealers;

F. "factory campaign" means the effort of a warrantor to contact recreational vehicle owners or dealers to address an issue with a part or equipment;

G. "family member" means a spouse, child, grandchild, parent, sibling, niece or nephew;

H. "line-make" means a specific series of recreational vehicle products that:

(1) are targeted to a particular market segment, as determined by decor, features, equipment, size, weight and price range;

(2) have lengths and interior floor plans that distinguish the recreational vehicles from other recreational vehicles with substantially the same decor, features, equipment, weight and price; and

(3) belong to a single, distinct classification of recreational vehicle product type having a substantial degree of commonality in the construction of the chassis, frame and body;

I. "manufacturer" means a person, corporation or business entity that engages in the manufacturing of recreational vehicles;

J. "manufacturer-dealer agreement" means a written agreement or contract entered into between a manufacturer and a dealer that fixes the rights and responsibilities of the parties and pursuant to which the dealer sells new recreational vehicles;

K. "model" means a subset of a line-make that consists of a series of recreational vehicle products identified by a common series trade name or trademark;

L. "proprietary part" means any part manufactured by or for and sold exclusively by a manufacturer;

M. "recreational vehicle" means a vehicle that is either self-propelled or towed by a consumer-owned tow vehicle and that is designed to provide temporary living quarters for recreational, camping or travel use, and includes motor homes, travel trailers, fifth wheel travel trailers, truck campers and folding camping trailers;

N. "transient customer" means a customer who is temporarily traveling through a dealer's area of sales responsibility; and

O. "warrantor" means a person, corporation or business entity that gives a warranty in connection with a new recreational vehicle or parts, accessories or components of a recreational vehicle, and excludes service contracts, insurance or extended warranties sold for separate consideration by a dealer or person not controlled by a manufacturer.

SECTION 5. [NEW MATERIAL] MANUFACTURER-DEALER AGREEMENT-- REQUIREMENTS--AREA OF SALES RESPONSIBILITY.--

A. A manufacturer or distributor shall not sell a new recreational vehicle to or through a dealer without first entering into a manufacturer-dealer agreement with the dealer.

B. A dealer shall not sell a new recreational vehicle without first entering into a manufacturer-dealer agreement with a manufacturer or distributor.

C. A manufacturer-dealer agreement shall state the duration of the terms of the agreement and designate an area of sales responsibility exclusively assigned to a dealer. For the duration of the manufacturer-dealer agreement, the area of sales responsibility shall not change, and the manufacturer or distributor shall not contract with another dealer for sale of the same model or line-make, as specified in the manufacturer-dealer agreement, in the designated area of sales responsibility, unless agreed to by written consent of all parties to the agreement.

D. A manufacturer, distributor or dealer shall not issue a policy or procedure that violates or substantially alters a provision of the manufacturer-dealer agreement during the duration of the agreement, unless agreed to by written consent of all parties to the agreement.

E. A manufacturer or distributor shall:

(1) distribute new recreational vehicles to its dealers in a fair and equitable manner;

(2) if requested by a dealer, provide information on its manner of distribution; and

(3) if requested by a dealer, provide a dealer pursuant to a manufacturer-dealer agreement with adequate technical data to perform proper service and repairs.

F. When taking on an additional recreational vehicle of a particular line-make, a dealer shall notify in writing a manufacturer or distributor with which the dealer has a manufacturer-dealer agreement of the same line-make at least thirty days prior to entering into a new manufacturer-dealer agreement with the manufacturer or distributor of the additional recreational vehicle.

SECTION 6. [NEW MATERIAL] TERMINATION, CANCELLATION AND NONRENEWAL OF A MANUFACTURER-DEALER AGREEMENT--GOOD CAUSE--NOTICE--REQUIRED REPURCHASE.--

A. A manufacturer or distributor, directly or through an officer, agent or employee, shall terminate, cancel or fail to renew a model, line-make or manufacturer-dealer agreement only with good cause, and upon renewal, shall not require additional inventory stocking requirements or increased retail sales targets in excess of the market growth in the dealer's area of sales responsibility. For the purposes of determining whether there is good cause for an action to terminate, cancel or fail to renew a model, line-make or manufacturer-dealer agreement, the following factors may be considered:

(1) the extent of the affected dealer's penetration in the relevant market area for the relevant model or line-make;

(2) the nature and extent of the dealer's investment in the dealer's business;

(3) the adequacy of the dealer's service facilities, equipment, parts, supplies and personnel;

(4) the effect of the proposed action on the relevant community;

(5) the extent and quality of the dealer's service under recreational vehicle warranties;

(6) any failures by the dealer to follow procedures or standards of operation pursuant to the manufacturer-dealer agreement and the law; and

(7) a dealer's violation of the terms of the manufacturer-dealer agreement or the Recreational Vehicle Manufacturer and Dealer Act.

B. Except as otherwise provided in this section and unless the reason for termination, cancellation or nonrenewal of a model, line-make or manufacturer-dealer agreement is insolvency, bankruptcy or the occurrence of an assignment for the benefit of creditors, a manufacturer or distributor shall provide a dealer with at least one hundred twenty days of written notice of termination, cancellation or nonrenewal of a model, line-make or manufacturer-dealer agreement. The written notice shall state all reasons for the proposed termination, cancellation or nonrenewal.

C. If, within thirty days following receipt of a notice pursuant to Subsection B of this section, the dealer provides to the manufacturer or distributor a written notice of intent to cure all stated deficiencies, the dealer shall have one hundred twenty days following receipt of the notice to rectify the deficiencies.

D. The notice period for a manufacturer's or distributor's termination, cancellation or nonrenewal may be reduced to thirty days if the grounds for termination, cancellation or nonrenewal are due to:

(1) a dealer or one of the dealer's owners being convicted of or entering a plea of nolo contendere to a felony;

(2) a dealer abandoning or closing business operations for at least ten consecutive business days, unless the abandoning or closing is due to force majeure or a strike, labor difficulty or other cause over which the dealer has no control;

(3) a misrepresentation by the dealer that materially affects the business relationship;

(4) a material violation by the dealer of a provision of the Recreational Vehicle Manufacturer and Dealer Act that is not cured within thirty days after written notice; or

(5) a suspension or revocation of the dealer's license, or the refusal to renew the dealer's license, by the taxation and revenue department.

E. A dealer may terminate, cancel or not renew a model, line-make or manufacturer-dealer agreement with a manufacturer or distributor with or without good cause at any time by giving thirty days of written notice to the manufacturer or distributor. If the termination, cancellation

or nonrenewal is for good cause, the dealer shall state all reasons for the proposed termination, cancellation or nonrenewal and has the burden of showing good cause. The following factors may be considered for the purposes of determining whether there is good cause:

(1) a manufacturer or distributor being convicted of or entering a plea of nolo contendere to a felony;

(2) a manufacturer or distributor abandoning or closing business operations for at least ten consecutive business days, unless the closing is due to force majeure or a strike, labor difficulty or other cause over which the manufacturer or distributor has no control;

(3) a misrepresentation by a manufacturer or distributor that materially affects the business relationship;

(4) a material violation of a provision of the Recreational Vehicle Manufacturer and Dealer Act that is not cured within thirty days after written notice by the dealer to the manufacturer or distributor;

(5) a declaration by the manufacturer or distributor of bankruptcy or insolvency or the occurrence of

an assignment by the manufacturer or distributor for the benefit of creditors or bankruptcy;

(6) a material violation by the manufacturer or distributor of the manufacturer-dealer agreement that is

not cured within one hundred twenty days after written notice is provided by the dealer to the manufacturer or distributor; and

(7) coercion of the dealer by the manufacturer or distributor.

SECTION 7. [NEW MATERIAL] REQUIRED REPURCHASE--TERMINATION, CANCELLATION AND NONRENEWAL OF A MANUFACTURER-DEALER AGREEMENT.--

A. If a manufacturer-dealer agreement is terminated, canceled or not renewed by a dealer for good cause, the manufacturer or distributor shall, at the election of the dealer within forty-five days after the termination, cancellation or nonrenewal, repurchase:

(1) new, untitled recreational vehicles that were sold to the dealer within the eighteen months prior to the date of the notice of termination, cancellation or nonrenewal that have not been used, except for demonstration purposes, and that have not been altered or damaged, at one hundred percent of the original invoice cost, including transportation, less applicable rebates and discounts to the dealer. If a vehicle repurchased is damaged, the amount paid to the dealer shall be reduced by the cost to repair the damaged vehicle. Damage prior to the original delivery to the dealer does not disqualify repurchase pursuant to this subsection;

(2) undamaged accessories and proprietary parts that were sold to the dealer for resale within the twelve months prior to the termination, cancellation or nonrenewal if

accompanied by the original invoice, at one hundred five percent of the original invoice cost; and

(3) properly functioning diagnostic equipment, special tools, current signage and other equipment and machinery that were sold to the dealer within the five years prior to the termination, cancellation or nonrenewal at one hundred percent of the original invoice cost plus the dealer's freight, destination, delivery and distribution charges and sales taxes, if any, if the diagnostic equipment, special tools, current signage and other equipment can no longer

be used in the normal course of the dealer's ongoing business.

B. If the manufacturer-dealer agreement is terminated, canceled or not renewed by the manufacturer or distributor without good cause, in violation of Subsection A of this section, the manufacturer or distributor shall repurchase vehicles, accessories and equipment in accordance with this section.

C. A vehicle, accessory or equipment that is repurchased pursuant to this section shall be paid for in full before it is removed from dealer's premises, and upon payment, must be immediately surrendered to the manufacturer or distributor.

D. A dealer is not prohibited from selling the remaining in-stock inventory of a particular model or line-make after a dealer agreement has been terminated, canceled or not renewed by the manufacturer, including recreational vehicles of a model or line-make subject to the manufacturer-dealer agreement that are not repurchased or required to be repurchased by the manufacturer.

SECTION 8. [NEW MATERIAL] TRANSFER OF OWNERSHIP--FAMILY SUCCESSION--OBJECTIONS--WRITTEN NOTICE.--

A. If a dealer desires to make a change in dealer ownership by the sale of the business assets, stock transfer or otherwise, the dealer shall provide written notice to a manufacturer or distributor with which the dealer has an active manufacturer-dealer agreement at least ten business days before the closing, including all supporting documentation as may be

reasonably required by the manufacturer or distributor to determine if an objection to the sale may be made.

B. In the absence of a breach by a selling dealer of a manufacturer-dealer agreement or the provisions of the Recreational Vehicle Manufacturer and Dealer Act, a manufacturer or distributor shall not object to a proposed change in ownership unless the manufacturer or distributor has previously terminated with good cause a manufacturer-dealer agreement with the prospective owner or the prospective owner:

(1) has been convicted of a felony or any crime of fraud, deceit or moral turpitude;

(2) lacks a license required by law;

(3) does not have an active line of credit sufficient to purchase a manufacturer's or distributor's product; or

(4) has undergone in the last ten years bankruptcy, insolvency, a general assignment for the benefit of creditors or the appointment of a receiver, trustee or conservator to take possession of the prospective owner's business or property.

C. If the manufacturer or distributor objects to a proposed change of ownership, the manufacturer or distributor shall provide written notice to the dealer stating the reasons pursuant to Subsection B of this section within seven business days after receipt of the dealer's notification and documentation. The manufacturer or distributor bears the burden of proving its objection.

D. A manufacturer or distributor shall provide a dealer an opportunity to designate in writing a family member as a successor to the dealership in the event of the death, incapacity or retirement of the dealer, and a manufacturer or distributor shall honor the succession unless the manufacturer or distributor provides to the dealer or the dealer's successor written notice of its objections within ten business days after receipt of the dealer's succession plan. A manufacturer or distributor shall only object for the reasons listed pursuant to Subsection B of this section or if the succession involves a relocation of the dealer's business or an alteration of the terms and conditions of the manufacturer-dealer agreement.

SECTION 9. [NEW MATERIAL] DEALER INSPECTION AND REJECTION--DAMAGED RECREATIONAL VEHICLE--NEW RECREATIONAL VEHICLE ODOMETER.--

A. If a new recreational vehicle is damaged prior to transit to the dealer or is damaged in transit to the dealer when the carrier or means of transportation has been selected by the manufacturer or distributor, the dealer shall notify the manufacturer or distributor of the damage within the time frame specified in the manufacturer-dealer agreement and:

(1) request from the manufacturer or distributor authorization to replace the damaged components, parts or accessories or otherwise correct the damage; or

(2) reject the damaged vehicle within the time frame specified in the manufacturer-dealer agreement, which shall not be less than two business days after physical delivery of the recreational vehicle.

B. If a manufacturer or distributor refuses or fails to authorize repair of the damage in accordance with the provisions of Subsection A of this section within ten days after receipt of notification or if a dealer rejects the recreational vehicle because of damage, ownership of the new recreational vehicle shall revert to the manufacturer or distributor.

C. A dealer may reject a manufacturer's or distributor's new recreational vehicle that has, at the time of delivery to the dealer, an unreasonable amount of miles on its odometer, as determined by the dealer. An unreasonable amount of miles shall not be equal to an amount less than the distance between the dealer and the manufacturer's factory or a distributor's point of distribution, plus one hundred miles. If a dealer rejects a new recreational vehicle pursuant to this subsection, ownership of the recreational vehicle shall revert to the manufacturer or distributor.

D. A dealer shall exercise due care in custody of a damaged or rejected recreational vehicle but shall have no other obligations, financial or otherwise, with respect to that recreational vehicle.

SECTION 10. [NEW MATERIAL] COERCION OF DEALER PROHIBITED.--

A. A manufacturer or distributor shall not coerce or attempt to coerce a dealer to:

(1) purchase a product that the dealer did not order;

(2) enter into an agreement with the manufacturer or distributor;

(3) take any illegal action or action that is unfair or unreasonable to the dealer;

(4) enter into an agreement that requires the dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under the Recreational Vehicle Manufacturer and Dealer Act; or

(5) forego exercising a right authorized by a manufacturer-dealer agreement or any law governing the relationship between the manufacturer or distributor and the dealer.

B. A dealer bears the burden of proving unlawful coercion pursuant to this section.

SECTION 11. [NEW MATERIAL] WARRANTY OBLIGATIONS.--

A. A warrantor shall:

(1) specify in writing to its dealers any obligations for preparation, delivery and warranty service on its products;

(2) provide a dealer with the warrantor's schedule of compensation to be paid and reasonable time allowances for the diagnosis and performance of any work and service. The schedule of compensation shall include reasonable compensation for diagnostic work and warranty labor. If the schedule of compensation does not include a particular repair, the warrantor shall reimburse the dealer for warranty service for the actual time expended unless the warrantor demonstrates that the actual time was not reasonable, in which case the warrantor shall pay a reasonable sum based on industry averages for pay rate and time;

(3) compensate its dealers for warranty service covered by the warranty in accordance with the provided schedule and time allowances if the service is performed in a timely and competent manner;

(4) compensate its dealers for authorized repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer if the carrier is designated by the warrantor, factory branch, distributor or distributor branch;

(5) compensate a dealer for warranty labor in an amount not less than the lowest retail labor rate actually charged by the dealer in the ordinary course of business for like nonwarranty labor; provided that the rate is reasonable;

(6) reimburse a dealer for any warranty part, accessory or complete component at actual wholesale cost plus a minimum thirty percent handling charge and any cost of freight to return the part to the warrantor or, if a part is sent to the dealer at no cost, reimburse the dealer in an amount equal to thirty percent of the wholesale cost of the part from the warrantor as a handling charge, with a maximum handling charge for a part of three hundred dollars ($300);

(7) conduct warranty audits of dealer records on a reasonable basis;

(8) not deny dealer claims for warranty compensation except for good cause, such as performance of nonwarranty repairs, material noncompliance with the warrantor's published policies and procedures, lack of material documentation, fraud or misrepresentation;

(9) approve or disapprove of warranty claims in writing within forty-five days after the date of submission by a dealer;

(10) include, in written notices of factory campaigns to recreational vehicle owners and dealers, the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the factory campaign work. A warrantor may ship parts to a dealer to affect the factory campaign work, and, if such parts are in excess of the dealer's requirements, the dealer may return unused parts to the warrantor for credit after completion of the factory campaign;

(11) not intentionally misrepresent to purchasers of recreational vehicles that warranties with respect to the manufacture, performance or design of the vehicle are made by the dealer as warrantor or co-warrantor;

(12) not require its dealers to make warranties to customers in any manner related to the manufacture of the recreational vehicle; and

(13) perform its warranty obligations with respect to its warranted products.

B. A dealer shall:

(1) submit warranty claims within forty-five days after completing work;

(2) notify a warrantor as soon as is reasonably possible, verbally or in writing, if the dealer is unable or unwilling to perform material or repetitive warranty repairs;

(3) perform pre-delivery inspection functions, as specified by the warrantor, in a competent and timely manner;

(4) perform warranty service work authorized by the warrantor in a competent and timely manner on any transient customer's vehicle of the same line-make unless the dealer determines that the customer is acting in a manner detrimental to its business;

(5) track actual time spent performing warranty work not governed by time allowances in the warrantor's schedule of compensation;

(6) not claim an agency relationship with a warrantor or manufacturer; and

(7) not misrepresent the terms of any warranty.

C. Warranty claims not specifically disapproved by a warrantor in writing within forty-five days after the date of submission by a dealer shall be construed to be approved and shall be paid within sixty days; provided that the dealer submits the warranty claim in the manner and form prescribed by the warrantor.

D. Notwithstanding the terms of any manufacturer-dealer agreement, a warrantor shall indemnify, defend and hold harmless its dealers against any losses or damages to the extent such losses or damages are caused by the negligence or willful misconduct of the warrantor, including a dealer that fails to discover, disclose or remedy a defect in the design or manufacture of the relevant recreational vehicle. A dealer shall provide to the warrantor a copy of any suit in which allegations are made pursuant to this subsection within ten days after receiving the suit. This subsection shall continue to apply even after a recreational vehicle is titled.

E. Notwithstanding the terms of any manufacturer-dealer agreement, a dealer shall indemnify, defend and hold harmless its warrantor against any losses or damages to the extent such losses or damages are caused by the negligence or willful misconduct of the dealer. The warrantor shall provide to the dealer a copy of any suit in which allegations are made pursuant to this subsection within ten days after receiving the suit. This subsection shall continue to apply even after a recreational vehicle is titled.

F. Indemnification pursuant to Subsection D or E of this section shall include court costs, reasonable attorney fees and expert witness fees incurred by the dealer or warrantor.

SECTION 12. [NEW MATERIAL] DISPUTE RESOLUTION--MEDIATION REQUIRED BEFORE CIVIL ACTION--VENUE--RELIEF.--

A. A dealer, manufacturer, distributor or warrantor injured by another party's violation of the Recreational Vehicle Manufacturer and Dealer Act may bring a civil action to recover actual damages. The court shall award attorney fees and costs to the prevailing party. Venue for any civil action authorized by this section shall be in the county in which the dealership is located. In an action involving more than one dealer, venue may be in any county in which a dealer that is party to the action is located.

B. Prior to bringing suit for an alleged violation pursuant to this section, a party shall make a good faith effort to mediate the dispute, including serving upon the responding party a written demand for mediation, selecting a mediator, scheduling a mediation and participating in the mediation. This provision does not apply to a proceeding for injunctive relief.

C. A written demand for mediation shall contain a brief statement of the dispute and the relief sought by the party filing the demand, and the written demand for mediation shall be served upon the responding party via certified mail at the address stated in the agreement between the parties or, if the address is not contained in the agreement or the address is no longer valid, the address on the responding party's license filed with the state. In the event of a civil action between two dealers, the demand shall be mailed to the address on the dealer's license filed with the state.

D. Within thirty days after the date a demand for mediation is served, the parties shall mutually select an independent mediator and meet with the mediator for the purpose of attempting to resolve the dispute. The mediator shall select a location in New Mexico, and the mediator may extend the date of the meeting for good cause shown by either party or upon stipulation of both parties.

E. If a responding party does not reply within thirty days after the demand for mediation is served, the party initiating the action may proceed to a civil action without mediating.

F. The service of a demand for mediation pursuant to this subsection stays the time for the filing of any complaint, petition, protest or action pursuant to the Recreational Vehicle Manufacturer and Dealer Act until representatives of the involved parties complete a mediation with a mutually selected mediator for the purpose of attempting to resolve the dispute. If a complaint, petition, protest or action is filed before the mediation, a court shall enter an order suspending the proceeding or action until the meeting has occurred and may, upon written stipulation of all parties to the proceeding or action that the parties wish to continue to mediate pursuant to this subsection, enter an order suspending the proceeding or action for as long a period as the court considers appropriate. The suspension order issued may be revoked by the court.

G. The parties to a mediation pursuant to this section shall bear their own costs for attorney fees and divide equally the cost of the mediator.

H. In addition to the remedies provided by this section and notwithstanding the existence of any additional remedy at law, a dealer, manufacturer or distributor may apply to the relevant court for the grant, upon a hearing and for cause shown, of a temporary or permanent injunction to restrain a person from acting as a dealer, manufacturer or distributor without being properly licensed or from violating the provisions of the Recreational Vehicle Manufacturer and Dealer Act. The injunction shall be issued without bond.

SECTION 13. [NEW MATERIAL] PENALTIES.--

A. If the taxation and revenue department finds that a dealer, manufacturer or distributor has violated a provision of the Recreational Vehicle Manufacturer and Dealer Act, the department may suspend or revoke the license of the dealer, manufacturer or distributor.

B. If the taxation and revenue department finds that a person has violated a provision of the Recreational Vehicle Manufacturer and Dealer Act, the department may assess and collect an administrative penalty against the person in an amount not to exceed one thousand dollars ($1,000) for each violation.

C. A person, dealer, manufacturer or distributor aggrieved by a decision of the taxation and revenue department made pursuant to the provisions of this section may appeal to the administrative hearings office for a hearing. A person, dealer, manufacturer or distributor that continues to be

aggrieved after the decision made by a hearing officer may appeal that decision to a district court pursuant to the

provisions of Section 39-3-1.1 NMSA 1978.

SECTION 14. REPEAL.--Section 57-16-6.2 NMSA 1978 (being Laws 1995, Chapter 19, Section 2, as amended) is repealed.

SECTION 15. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2026.

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