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LB 667

Change provisions of the Motor Vehicle Industry Regulation Act

109th Legislature (2025-2026) Introduced by Tanya Storer

Nebraska LB 667 standardizes dealer warranty pay: written compensation schedules, time allowances, markup rules, and audit/appeal paths to reduce disputes.

Approved by Governor on May 15, 2025
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Bill Summary · LB 667

Summary — LB 667 (Motor Vehicle Industry Regulation Act)

Status: Approved by Governor (May 15, 2025)
Introduced: January 22, 2025 | Sponsor: Sen. Tanya Storer

Purpose

LB 667 clarifies and updates how manufacturers (franchisors) must compensate franchised new vehicle dealers for warranty work. It refines calculation and dispute procedures for part markups, labor/time allowances, and diagnostic/repair compensation to reduce litigation over vague “reasonableness” standards and provide a defined audit and appeal process.

Key provisions

  • Warranty compensation requirements

    • Manufacturers must provide dealers a written schedule of compensation (parts, labor, time allowances) and pay dealers for warranty and recall work the manufacturer requires.
    • Time allowances for diagnosis and repair must be adequate for a qualified technician; dealers may submit written requests (with supporting documentation) to modify a franchisor’s uniform time allowance for a specific warranty repair or request additional time for a specific vehicle. A franchisor may not unreasonably deny such requests.

  • Labor and parts compensation metrics

    • In determining compensation, principal factors include prevailing wage rates in the dealer’s community; compensation for warranty parts/labor must not be less than the dealer’s retail/fleet rates (subject to the statutory limits).
    • Routine maintenance items and related repair orders are excluded from calculations: oil, filters, fluids, brake pads/discs/drums, spark plugs, wiper blades, tire repair/replacement.

  • Dealer-established average percentage markup for parts

    • A dealer may establish an average percentage markup by submitting 100 sequential customer-paid service repair orders (or 90 days of such orders, whichever is less) covering repairs made within the prior 180 days and declaring the average markup.
    • Manufacturer may audit those orders within 30 days and approve or deny the declared average markup. If approved, the markup goes into effect 45 days after approval.
    • If denied, the dealer may appeal to the Nebraska Motor Vehicle Industry Licensing Board; the manufacturer bears the burden to justify the denial under the Act.

  • Additional manufacturer audit rights (AM395)

    • Manufacturer may request up to 100 additional repair orders (selected by the dealer) drawn from a 90‑day period within the most recent 12 months to test whether declared rates are materially different from actual nonwarranty rates.
    • Manufacturer has 30 days after receipt to rebut the dealer’s declared retail labor rate, average markup rate, or both.
    • Such additional requests cannot be made more than once in a 12‑month period.

  • Parts furnished at reduced/no cost

    • If a franchisor furnishes a part at reduced/no cost for warranty work, the franchisor must compensate the dealer: dealer’s cost (if any) + dealer’s markup, and that amount is multiplied by the part’s “fair wholesale value.”
    • “Fair wholesale value” = the greatest of: dealer’s paid amount; franchisor’s price-schedule cost at time furnished; cost of a substantially identical part in franchisor’s price schedule.

  • Miscellaneous

    • Dealers and manufacturers may mutually agree to retail labor rates or average percentage markups.
    • Dealers’ warranty claims may be denied only for enumerated reasons (e.g., nonwarranty work, lack of documentation, failure to comply with franchisor program terms, or bona fide belief of fraud).

Who is affected

  • Primary: franchised new motor vehicle dealers and new motor vehicle manufacturers/distributors doing business in Nebraska.
  • Secondary: consumers receiving warranty repairs (affects timeliness and potential outcome of repair authorizations) and industry groups (manufacturers associations and dealer associations).

Timeline / Legislative actions

  • Referred to Transportation & Telecommunications Committee: Jan 24, 2025
  • Committee hearing: Feb 18, 2025 (AM395 adopted)
  • Passed Final Reading: May 14, 2025 (49–0)
  • Presented to Governor: May 14, 2025
  • Approved by Governor / Became law: May 15, 2025

Practical impact

  • Creates clearer procedures and timelines for establishing and auditing dealer parts markups and labor rates, and for resolving disputes through the Nebraska Motor Vehicle Industry Licensing Board.
  • Limits use of certain routine maintenance items when calculating compensation benchmarks to avoid skewed averages.
  • Provides manufacturers a defined, limited mechanism to audit/contest dealer-declared rates while placing evidentiary burdens on manufacturers in appeals.

Compiled from official sources — confirm details with the bill’s official record.

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