SB 412

General Assembly  Substitute Bill No. 412
  February Session, 2026
 AN ACT CONCERNING THE OFFERING PRICE OF A MOTOR
 VEHICLE AND PROVISIONS OF THE FRANCHISE ACT GOVERNING
 AGREEMENTS BETWEEN AUTOMOBILE MANUFACTURERS OR
 DISTRIBUTORS AND AUTOMOBILE DEALERS.
 Be it enacted by the Senate and House of Representatives in General
 Assembly convened:
1Section 1. Section 14-62a of the 2026 supplement to the general
2    statutes is repealed and the following is substituted in lieu thereof
3    (Effective October 1, 2026):
4      (a) No dealer licensed under the provisions of section 14-52 shall
5   advertise the price of any motor vehicle unless the stated price in such
6   advertisement includes the federal tax, the cost of delivery, dealer
7   preparation, any fee, charge or cost imposed for any add-on consumer
8   good or consumer service, any dealer conveyance fee or processing fee
9   and any other charges of any nature and such advertisement (1) states
10   in at least eight-point bold type that any state or local tax [,] or
11   registration fees [or dealer conveyance fee or processing fee, as defined
12   in subsection (a) of section 14-62,] are excluded from such advertised
13   price, (2) separately states, in at least eight-point bold type, immediately
14   next to the phrase "Dealer Conveyance Fee", the amount of such dealer
15   conveyance fee or processing fee, and (3) separately states, in at least
16   eight-point bold type, immediately next to the phrase "Additional Fees,
17   Charges and Costs", the amount of any fee, charge or cost imposed for
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18 any add-on consumer good or consumer service. For the purposes of
19 this subsection, (A) "dealer conveyance fee" and "processing fee" have
20 the same meanings as provided in subsection (a) of section 14-62, (B)
21 "consumer good" has the same meaning as provided in section 42-110r,
22 and (C) "consumer service" has the same meaning as provided in
23 subsection (a) of section 42-158ff.
24    (b) Any new or used car dealer violating the provisions of this section
25 shall be fined not more than one thousand dollars. The Commissioner
26 of Motor Vehicles may suspend or revoke, in accordance with section
27 14-64, the license of any such dealer violating the provisions of this
28 section.
29    Sec. 2. Subsection (b) of section 14-62 of the 2026 supplement to the
30 general statutes is repealed and the following is substituted in lieu
31 thereof (Effective October 1, 2026):
32     (b) (1) The selling price quoted by any dealer to a prospective buyer
33 shall (A) include [,] any dealer conveyance fee or processing fee, and (B)
34 separately [stated,] state the amount of [the] any such dealer conveyance
35 fee or processing fee and that such fee is negotiable. [No dealer
36 conveyance fee shall be added to the selling price at the time the order
37 is signed by the buyer.]
38    (2) The selling price quoted by any dealer to a prospective buyer shall
39 both (A) include any fee, charge or cost imposed for any optional add-
40 on consumer good or consumer service, and (B) separately state the
41 amount of each such fee, charge or cost and that such fee, charge or cost
42 is optional.
43   (3) No dealer shall include in the selling price a dealer preparation
44 charge for any item or service for which the dealer is reimbursed by the
45 manufacturer or any item or service not specifically ordered by the
46 buyer and itemized on the invoice.
47    (4) The form used by a dealer for the order and invoice shall not be
48 printed in advance of discussions with a prospective buyer to include
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49 the amount of any dealer conveyance fee or processing fee or any fee,
50 charge or cost imposed for any other optional add-on consumer good or
51 consumer service.
52    Sec. 3. Section 42-133r of the general statutes is repealed and the
53 following is substituted in lieu thereof (Effective October 1, 2026):
54    As used in sections 42-133r to 42-133ee, inclusive, as amended by this
55 act, and sections 5 and 7 of this act, unless the context indicates a
56 different meaning:
57    (1) "Manufacturer" means any person who manufactures or
58 assembles new motor vehicles, or imports motor vehicles for
59 distribution to dealers or through distributors, or factory branches.
60    (2) "Distributor" means any person who offers for sale, sells or
61 distributes any new motor vehicle to dealers or who maintains factory
62 representatives or who controls any person, firm, association, joint
63 venture corporation or trust, who offers for sale, sells or distributes any
64 new motor vehicle to dealers.
65    (3) "Factory branch" means a branch office maintained by a
66 manufacturer for the purpose of selling, or offering for sale, motor
67 vehicles to a distributor or dealer, or for directing or supervising factory
68 or distributor representatives.
69    (4) "Owner" means any person holding an ownership interest in a
70 business entity operating as a dealer or under a franchise as defined in
71 this section either as a corporation, partnership or sole proprietorship.
72 To the extent that the rights of any owner under sections 42-133r to 42-
73 133ee, inclusive, as amended by this act, conflict with the rights of any
74 other owner, such rights shall accrue in priority order based on the
75 percentage of ownership interest held by each owner with the owner
76 having the greatest ownership interest having first priority and
77 succeeding priority accruing to other owners in the descending order of
78 their percentage of ownership interest.
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79    (5) "Dealership facilities" means real estate, buildings, fixtures and
80 improvements which are used in the course of business under a
81 franchise by a new motor vehicle dealer.
82    (6) "Dealer" means any person engaged in the business of selling,
83 offering to sell, soliciting or advertising the sale of new motor vehicles
84 and who holds a valid sales and service agreement, franchise or
85 contract, granted by a manufacturer or distributor for the retail sale of
86 the manufacturer's or distributor's new motor vehicles.
87    (7) "Motor vehicle" means a self-propelled vehicle intended primarily
88 for use and operation on the public highways, other than a farm tractor
89 or other machinery or tools used in the production, harvesting and care
90 of farm products.
91    (8) "New motor vehicle" means a motor vehicle which has been sold
92 to a new motor vehicle dealer and which has not been used for other
93 than demonstration purposes and on which the original title has not
94 been issued from the new motor vehicle dealer.
95    (9) "Established place of business" means a permanent, commercial
96 building easily accessible and open to the public at reasonable times and
97 at which the business of a new motor vehicle dealer, including the
98 display and repair of vehicles, may be lawfully carried on.
99    (10) "Franchise" means a written agreement or contract between a
100 manufacturer or distributor and a dealer which purports to fix the legal
101 rights and liabilities of the parties to such agreement or contract, and
102 pursuant to which the dealer purchases and resells the franchise
103 product or leases or rents the dealership premises.
104    (11) "Good faith" means honesty in fact and the observance of
105 reasonable commercial standards of fair dealing in the trade.
106   (12) "Designated family member" means the spouse, child,
107 grandchild, parent, brother or sister of an owner who, in the case of the
108 owner's death, is entitled to inherit the ownership interest in the dealer
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109 under the terms of the owner's will, or who has been nominated in any
110 other written instrument, or who, in the case of an incapacitated owner
111 of a dealer, has been appointed by a court as the legal representative of
112 the dealer's property.
113    (13) "Person" means a natural person, partnership, corporation,
114 limited liability company, association, trust, estate or any other legal
115 entity.
116    (14) "Relevant market area" means the area within a radius of
117 fourteen miles around an existing dealer or the area of responsibility
118 defined in a franchise, whichever is greater.
119   (15) "Commissioner" means the Commissioner of Motor Vehicles.
120    (16) "Substantial alteration" means an alteration that has a major
121 impact on the architectural features, characteristics, appearance or
122 integrity of a structure or lot located on a dealership facility. "Substantial
123 alteration" does not include routine maintenance, such as painting and
124 repairs reasonably necessary to maintain a dealership facility in
125 attractive condition or any changes to items protected by federal
126 intellectual property rights.
127    (17) "Consumer data" means "nonpublic personal information" as
128 such term is defined in 15 USC 6809(4), as amended from time to time,
129 that is collected by a dealer and provided by the dealer directly to a
130 manufacturer, distributor, factory branch or third party acting on behalf
131 of a manufacturer, distributor or factory branch. "Consumer data" does
132 not include the same or similar data obtained by a manufacturer from
133 any source other than the dealer or the dealer's data management
134 system.
135    (18) "Data management system" means a computer hardware or
136 software system that: (A) Is owned, leased or licensed by a dealer,
137 including, but not limited to, a system of web-based applications,
138 computer software or computer hardware; (B) is located at the
139 dealership or hosted remotely; and (C) stores and provides access to
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140 consumer data collected or stored by a dealer.
141   Sec. 4. Section 42-133cc of the general statutes is amended by adding
142 subdivisions (23) and (24) as follows (Effective October 1, 2026):
143    (NEW) (23) (A) Require a dealer to construct, renovate or make
144 substantial alterations to the dealer's facilities unless the manufacturer
145 or distributor can demonstrate that such construction, renovation or
146 alteration requirements are reasonable and justifiable based on
147 reasonable business consideration, including current and reasonably
148 foreseeable projections of economic conditions existing in the
149 automotive industry at the time such action would be required of the
150 dealer, and agrees to make a good faith effort to make available, at the
151 dealer's option, a reasonable quantity and mix of new motor vehicles,
152 which, after a reasonable analysis of market conditions, are projected to
153 meet the sales level necessary to support the increased overhead
154 incurred by the dealer as a result of the required construction,
155 renovation or alteration, provided a dealer may be required by a
156 manufacturer or distributor to make reasonable facility improvements
157 and technological upgrades necessary to support the technology of the
158 manufacturer's or distributor's vehicles. If the dealer chooses not to
159 make such facility improvements or technological upgrades, the
160 manufacturer or distributor shall not be obligated to provide the dealer
161 with the vehicles that require the improvements or upgrades or any
162 corresponding incentives or benefits. A manufacturer or distributor
163 may not require a dealer to construct, renovate or make substantial
164 alterations to the dealer's facility if the dealer has completed a
165 construction, renovation or substantial alteration to the same
166 component of the facility that was required and approved by the
167 manufacturer or distributor within the previous ten years. If a dealer has
168 completed facility construction, renovation or substantial alteration
169 under and in compliance with an incentive program, the manufacturer
170 or distributor may not deny a dealer payment or benefits according to
171 the terms of the program in place when the dealer began to perform
172 under the program. If the incentive program under which the dealer
173 completed a facility construction, renovation or substantial alteration on
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174 or after October 1, 2026, does not contain a specific time period during
175 which the manufacturer or distributor shall provide payments or
176 benefits to a dealer, the manufacturer or distributor may not deny the
177 dealer payment or benefits under the terms of that incentive program,
178 as it existed when the dealer began to perform under the program for
179 the balance of ten years after the manufacturer or distributor made the
180 program available to the dealer, regardless of whether the
181 manufacturer's or distributor's facility program has been changed or
182 cancelled. Nothing in this subdivision shall be construed to require a
183 manufacturer or distributor to provide payment or benefits if changes
184 have been made to the facility since the manufacturer's or distributor's
185 approval that would render the facility not in compliance with the
186 manufacturer's or distributor's standards or plans, regardless of
187 whether the manufacturer's or distributor's image program has
188 changed. Facility changes that are necessitated due to damage sustained
189 from a natural disaster or as a result of necessary safety upgrades shall
190 not be considered a change to the facility that renders the facility not in
191 compliance with the manufacturer's or distributor's standards or plans,
192 provided such facility changes substantially restore the facility to the
193 previous or current compliant state. Eligibility for facility-related
194 incentives under this subdivision shall not apply to: (i) Lump sum
195 payments for the cost of the facility upgrade; (ii) payments on a per
196 vehicle basis; and (iii) any facility-related incentive program in effect
197 with one or more dealers in the state on October 1, 2026;
198    (B) Nothing in this subdivision shall be construed to allow a dealer
199 to: (i) Impair or eliminate a manufacturer's or distributor's intellectual
200 property or trademark rights or impair other intellectual property
201 interests owned or controlled by the manufacturer or distributor,
202 including the design and use of signs; or (ii) refuse to change the design
203 or branding of any signage or other branded items required by a
204 manufacturer or distributor at any time, provided the manufacturer or
205 distributor requires such changes of all of its franchised dealers
206 nationally;
207   (NEW) (24) Require a dealer who is constructing, renovating or
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208 substantially altering its dealership facility to purchase goods, building
209 materials or services for the dealership facility, including, but not
210 limited to, office furniture, design features, flooring and wall coverings,
211 from a vendor chosen by the manufacturer or distributor if goods,
212 building materials or services of a substantially similar appearance,
213 function, design and quality are available from other sources and the
214 dealer has received the manufacturer's or distributor's approval,
215 provided such approval shall not be unreasonably withheld or delayed.
216 In the event that a manufacturer or distributor does not approve the
217 dealer's use of substantially similar goods, building materials or
218 services, the manufacturer or distributor shall provide the dealer, in
219 writing at the time of disapproval, a detailed list of reasons why the
220 proposed substantially similar items are not acceptable. Nothing in this
221 subdivision shall be construed to allow a dealer to impair or eliminate a
222 manufacturer's or distributor's intellectual property or trademark rights
223 and brand image standards, or impair other intellectual property
224 interests owned or controlled by the manufacturer or distributor,
225 including the design and use of signs.
226    Sec. 5. (NEW) (Effective October 1, 2026) (a) As used in this subsection,
227 (1) "stop-sale order" means a notification issued by a manufacturer to its
228 dealers stating that a used vehicle in inventory shall not be sold or leased
229 because of a federal safety recall for a defect or noncompliance or
230 because of a federal emissions recall, (2) "do-not-drive order" means a
231 notification issued by a manufacturer to its dealers or to the registered
232 owner of a used vehicle, or by the National Highway Traffic Safety
233 Administration to the registered owner of a used vehicle, stating that
234 the vehicle is subject to a federal safety recall for a defect or
235 noncompliance and including an unconditional instruction to the
236 recipient of the notification to not drive the vehicle until the remedy for
237 the recall is complete, and (3) "value of the used motor vehicle" means
238 the average trade-in value of the year, make and model of the used
239 motor vehicle determined using nationally recognized industry data or
240 pricing guides that reflect current national and regional used motor
241 vehicle market conditions.
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242    (b) If a manufacturer issues a recall and either a stop-sale order or a
243 do-not-drive order on a used vehicle and the parts or a remedy are not
244 available to perform a recall service or repair on the used vehicle not
245 later than thirty days after issuing the recall, a new vehicle dealer that is
246 franchised to sell and service new vehicles of the manufacturer is
247 entitled to compensation from the manufacturer and may file a claim
248 with the manufacturer for each used vehicle subject to the recall which
249 the dealer (1) has in its used vehicle inventory on the date on which the
250 stop-sale order or do-not-drive order is issued, or (2) takes into its used
251 car inventory as a consumer trade-in related to the sale of a new vehicle
252 after the date on which the stop-sale order or do-not-drive order is
253 issued or as a return of a leased motor vehicle.
254    (c) Any such claim for compensation shall be in a form as prescribed
255 by the manufacturer. The manufacturer may prescribe the manner in
256 which a dealer shall demonstrate eligibility for such compensation,
257 including, but not limited to, the documentation required to show the
258 inventory status of a used vehicle, provided such demonstration of
259 eligibility or documentation is not unduly burdensome.
260    (d) Except as provided in subsections (e) and (f) of this section,
261 compensation for a used motor vehicle pursuant to this section shall be
262 calculated at a rate of not less than one per cent of the value of the used
263 motor vehicle per month, beginning thirty days after the date on which
264 the stop-sale order or do-not-drive order is issued to the dealer and
265 continuing until the earlier of the date: (1) The parts or a remedy for the
266 recall service or repair are made available to the dealer; or (2) the dealer
267 sells, trades or otherwise disposes of the used vehicle.
268    (e) Compensation due to a new vehicle dealer is limited to the amount
269 equal to the value of the used motor vehicle for which the compensation
270 is paid.
271   (f) A manufacturer may, in lieu of compensating a new vehicle dealer
272 pursuant to the provisions of subsection (d) of this section: (1)
273 Compensate the dealer pursuant to a national recall compensation
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274 program, if the amount of compensation owed to the dealer under the
275 program is not less than the amount of compensation owed to the dealer
276 pursuant to the provisions of subsection (d) of this section; or (2) enter
277 into an agreement with the dealer for an alternative form or amount of
278 compensation.
279    (g) A manufacturer may not take any action to offset or reduce the
280 amount of compensation owed to a new vehicle dealer pursuant to this
281 section, including, without limitation, through a charge-back program,
282 any reduction in an amount owed to the new vehicle dealer under an
283 incentive program or the removal of the new vehicle dealer from an
284 incentive program, if such action is taken, in whole or in part, because
285 the new vehicle dealer filed a claim for compensation pursuant to this
286 section. The provisions of this subsection do not apply to any action
287 taken by a manufacturer that is applied uniformly to all new vehicle
288 dealers of the same line and make of vehicles in this state.
289    (h) Except as provided in subsection (f) of this section, any
290 compensation provided to a new vehicle dealer pursuant to this section
291 is exclusive and may not be combined with any other state or federal
292 recall compensation remedy.
293    Sec. 6. Subsection (j) of section 42-133s of the general statutes is
294 repealed and the following is substituted in lieu thereof (Effective October
295 1, 2026):
296    (j) All claims by dealers under this section for such labor and parts,
297 [and] all claims for compensation relative to any sales incentive,
298 marketing and advertising programs and all claims for compensation
299 pursuant to the provisions of section 5 of this act shall be paid not later
300 than thirty days after approval by the manufacturer or distributor,
301 provided manufacturers or distributors retain the right to audit such
302 claims and to charge-back the dealer for false or unsubstantiated claims
303 for a period of one year following payment. A manufacturer or
304 distributor shall not deny a claim submitted under this subsection or
305 charge-back such a claim or payment following a timely audit based
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306 solely on the dealer's failure to comply with a claim processing
307 procedure, a clerical error or other administrative technicality, provided
308 such failure does not call into question the legitimacy of the claim. The
309 manufacturer or distributor shall allow the dealer to resubmit such
310 claim according to reasonable manufacturer or distributor guidelines
311 not later than thirty days after the initial claim denial or charge-back. If
312 there is evidence of fraud, the provisions of this subsection shall not
313 limit the right of a manufacturer or distributor to audit a dealer for
314 longer periods of time and charge-back the dealer for any fraudulent
315 claim. Dealers shall be required to maintain defective parts for a period
316 of not longer than ninety days following submission of claims. All such
317 claims shall be either approved or disapproved not later than thirty days
318 after their receipt on forms, and in the manner specified by, the
319 manufacturer or distributor. Any claim not disapproved in writing or
320 by means of electronic transmission not later than thirty days after
321 receipt shall be deemed approved and payment shall be made within
322 thirty days.
323   Sec. 7. (NEW) (Effective October 1, 2026) (a) With respect to consumer
324 data, a manufacturer, distributor or a third party acting on behalf of a
325 manufacturer or distributor:
326    (1) Shall comply with, and shall not cause a dealer to violate, any
327 applicable restrictions on reuse or disclosure of the consumer data
328 established by federal or state law;
329    (2) Shall, upon the request of the dealer, provide a written statement
330 to the dealer describing the established procedures adopted by such
331 manufacturer, distributor or third party acting on behalf of the
332 manufacturer or distributor that meet or exceed any federal or state
333 requirements to safeguard the consumer data, including, but not limited
334 to, the requirements in the Gramm-Leach-Bliley Act, 15 USC 6801 et
335 seq., as amended from time to time;
336    (3) Shall, upon the written request of the dealer, provide a written list
337 of the consumer data obtained from the dealer and all persons to whom
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338 any consumer data has been provided by the manufacturer, distributor
339 or a third party acting on behalf of the manufacturer or distributor
340 during the preceding six months. The dealer may make such a request
341 not more than once every six months. The list shall indicate the specific
342 fields of consumer data that were provided to each person, except such
343 list shall not be required to include: (A) A person to whom consumer
344 data was provided, or the specific consumer data provided to such
345 person, if the person was, at the time such consumer data was provided,
346 a service provider, subcontractor or consultant acting in the course of
347 performance of services on behalf of or for the benefit of the
348 manufacturer, distributor, third party or dealer, provided the
349 manufacturer, distributor, third party or dealer has entered into an
350 agreement with such person requiring that such person comply with the
351 safeguard requirements of applicable state and federal law, including,
352 but not limited to, the requirements in the Gramm-Leach-Bliley Act, 15
353 USC 6801 et seq., as amended from time to time; and (B) a person to
354 whom consumer data was provided, or the specific consumer data
355 provided to such person, if the dealer has previously consented in
356 writing to such person receiving such consumer data and the dealer has
357 not withdrawn such consent in writing;
358    (4) May not require that a dealer grant the manufacturer, distributor
359 or third party acting on behalf of the manufacturer or distributor direct
360 or indirect access to such dealer's data management system to obtain
361 consumer data. A manufacturer, distributor or a third party acting on
362 behalf of the manufacturer or distributor shall permit a dealer to furnish
363 consumer data in a widely accepted file format, such as comma
364 delimited, and through a third-party vendor selected by the dealer. A
365 manufacturer, distributor or a third party acting on behalf of the
366 manufacturer or distributor may access or obtain consumer data
367 directly from a dealer's data management system with the express
368 consent of the dealer. The consent shall be in the form of a written
369 document that (A) is separate from the franchise agreement, (B) is
370 executed by the dealer, and (C) may be withdrawn by the dealer upon
371 thirty days' written notice to the manufacturer or distributor. For
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372 incentive programs beginning on or after October 1, 2026, such consent
373 shall not be required as a condition to a motor vehicle dealer's
374 participation in an incentive program unless such consent is necessary
375 to obtain consumer data to implement the program; and
376    (5) Shall indemnify the dealer for any third-party claims asserted
377 against or damages incurred by the dealer to the extent caused by access
378 to, use of or disclosure of consumer data in violation of the provisions
379 of this section by the manufacturer, distributor or a third party to whom
380 the manufacturer or distributor has provided consumer data.
381    (b) Nothing is this section shall be construed to limit the ability of the
382 manufacturer or distributor to require that the dealer provide, or use in
383 accordance with the law, such customer information related solely to
384 such manufacturer's or distributor's own vehicle makes to the extent
385 necessary to do any of the following:
386   (1) Satisfy any safety or recall notice obligations or other legal notice
387 obligations on the part of the manufacturer;
388   (2) Complete the sale and delivery of a new motor vehicle to a
389 customer;
390   (3) Validate and pay customer or dealer incentives;
391   (4) Submit to the manufacturer or distributor claims for any services
392 supplied by the dealer for any claim for warranty parts or repairs;
393   (5) Market analysis;
394    (6) Evaluate sales and service customer satisfaction with the dealer,
395 including surveys; or
396   (7) Reasonable marketing purposes that benefit the dealer.
397    (c) In any cause of action against a manufacturer or distributor for a
398 violation of the provisions of this section, the party bringing the action
399 shall have the burden of proof.
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This act shall take effect as follows and shall amend the following
sections:
Section 1      October 1, 2026  14-62a
Sec. 2  October 1, 2026  14-62(b)
Sec. 3  October 1, 2026  42-133r
Sec. 4  October 1, 2026  42-133cc(23) and (24)
Sec. 5  October 1, 2026  New section
Sec. 6  October 1, 2026  42-133s(j)
Sec. 7  October 1, 2026  New section
TRA  Joint Favorable Subst.
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