Section 465. Procedures relating to warranties and sales incentives

1.
  Every franchisor shall properly fulfill any  warranty  agreement  and/or
  franchisor's   service   contract  and  shall  compensate  each  of  its
  franchised motor vehicle dealers for warranty parts and labor in amounts
  which reflect fair  and  reasonable  compensation  for  such  work.  All
  warranty claims and/or claims under a franchisor's service contract made
  by  franchised  motor  vehicle  dealers shall be paid within thirty days
  following  their  approval.  For   parts   reimbursement,   other   than
  components,  systems, fixtures, appliances, furnishings, accessories and
  features of a  house  coach  that  are  designed,  used  and  maintained
  primarily   for   nonvehicular   residential  purposes,  and  for  labor
  reimbursement, fair and reasonable compensation shall not be  less  than
  the  price  and  rate charged by the franchised motor vehicle dealer for
  like services to non-warranty and/or non-service contract customers. For
  purposes of this section, the price and rate charged by  the  franchised
  motor  vehicle  dealer for parts may be established by submitting to the
  franchisor one  hundred  sequential  nonwarranty  customer-paid  service
  repair  orders  or  the  number  of sequential nonwarranty customer-paid
  service repair orders written within a ninety day period,  whichever  is
  less,  covering repairs made no more than one hundred eighty days before
  the submission, and declaring the  price  and  rate,  including  average
  markup  for  the  franchised  motor  vehicle dealer as its reimbursement
  rate. The reimbursement rate so declared shall  go  into  effect  thirty
  days  following  the  declaration  and  shall be presumed to be fair and
  reasonable, however a franchisor may rebut such presumption  by  showing
  that such rate so established is unfair and unreasonable in light of the
  practices  of all other franchised motor vehicle dealers in the vicinity
  offering the same line make. The franchised motor vehicle  dealer  shall
  not  request a change in the reimbursement rate more often than twice in
  each calendar year. In establishing the labor  reimbursement  rate,  the
  franchisor  shall  not  require  a  franchised  motor  vehicle dealer to
  establish said rate by a methodology, or by requiring information,  that
  is  unduly  burdensome  or time consuming to provide, including, but not
  limited to, a transaction by transaction calculation.
    2. All warranty or sales incentive claims shall be either approved  or
  disapproved  within thirty days after their receipt. When any such claim
  is disapproved the franchised motor vehicle dealer shall be notified  in
  writing  of  its  disapproval within said period. Each such notice shall
  state the specific grounds upon which the disapproval is based.  Failure
  to disapprove a claim within thirty days shall be deemed approval.
    3. No franchisor shall conduct an audit or charge back any warranty or
  sales  incentive  payment  or  otherwise hold a franchised motor vehicle
  dealer liable for charges more than one year, or five years in the  case
  of fraud, after the date the franchisor made such payment to the dealer.
    4.  A  franchisor  shall  not  charge  a dealer back subsequent to the
  payment of a warranty or sales incentive claim unless  a  representative
  of  the franchisor has met in person at the dealership, or by telephone,
  with an officer or employee of the dealer designated by the  dealer  and
  explained  in detail the basis for each of the proposed charge backs and
  thereafter given the dealer's representative a reasonable opportunity at
  the meeting, or during the  telephone  call,  to  explain  the  dealer's
  position relating to each of the proposed charge backs. In the event the
  dealer was selected for audit or review on the basis that some or all of
  the  dealer's  claims were viewed as excessive in comparison to average,
  mean or aggregate data accumulated by the franchisor, or in relation  to
  claims  submitted by a group of other franchisees, the franchisor shall,
  at or  prior  to  the  meeting  or  telephone  call  with  the  dealer's
  representative,  provide  the dealer with a written statement containing

  the basis or methodology upon which the dealer was selected for audit or
  review.
    5.  A  franchisor shall not deny or charge back a payment for warranty
  work claimed by the dealer unless the franchisor satisfies its burden of
  proof that the dealer did not make a good faith effort  to  comply  with
  the  reasonable  written procedures of the franchisor or that the dealer
  did not actually perform the work.
    6. A franchisor shall not  deny  or  charge  back  a  sales  incentive
  payment  made  to  a  dealer  unless  the  claim was materially false or
  fraudulent or that the dealer  failed  to  reasonably  substantiate  the
  claim   either   in   accordance   with  the  manufacturer's  reasonable
  procedures.
    7. After all internal dispute resolution  processes  provided  through
  the  franchisor  have been resolved, the franchisor shall give notice to
  the dealer of the final amount of a proposed warranty or sales incentive
  charge back. If the dealer institutes an action pursuant to this article
  within thirty days of receipt of such notice, the proposed  charge  back
  shall  be  stayed,  without bond, during the pendency of such action and
  until the final judgment has been rendered in an adjudicatory proceeding
  or action as  provided  in  section  four  hundred  sixty-nine  of  this
  article.