Brief ⁽¹⁾

SB 489 establishes the general prohibition against first or second stage manufacturers of motor vehicles or distributors or factory representatives from directly or indirectly owning or operating a new vehicle dealership in Kansas.

Certain exceptions to the above prohibition include:

• An interest in a dealership may be owned for not to exceed 12 months if the person from whom the dealership was acquired was a new vehicle dealer and the dealership is for sale for a reasonable price and reasonable terms. The Director of the Division of Vehicles may grant a one-time extension for not to exceed 12 months for good cause.



• Temporary dealership ownership is permitted to broaden diversity of dealer ownership among minorities or those lacking resources to purchase a dealership if a relationship exists with a new vehicle dealer who has made a significant investment, has an ownership interest, and operates the new vehicle dealership under a plan to acquire full ownership.



• Further, a minority interest may be owned in an entity that owns and operates a new vehicle dealership of the line-make vehicles manufactured if, on January 1, 2000, there were not more than two new vehicle dealers of the line-make in the state and the nearest unaffiliated new vehicle dealer of the same line-make is not less than 100 miles distance (Saturn dealership as an example).



• Dealerships already owned by first or second stage manufacturers, distributors, or factory representatives.

The bill also extends consumer lemon law protections to vehicles delivered in Kansas but not sold here. The bill is effective upon publication in the Kansas Register.

Background

SB 489 was supported by the Kansas Automobile Dealers Association and the National Association of Minority Automobile Dealers.

The bill was opposed as introduced by the Alliance of Automobile Manufacturers. A representative of General Motors also expressed concern about certain provisions of the bill as introduced.

The Senate Committee Chairman requested the two sides try and reach compromise amendments. The Senate Committee amendments are a result of this attempt.

The bill would have no fiscal impact on the state.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html