House passes bill letting car dealers charge more for warranty repairs

PROVIDENCE, R.I. — Over the objections of car makers from GM to Porsche, the Rhode Island House of Representatives Wednesday passed a bill intended to help local dealerships charge higher rates for fixing cars under warranty.

The Rhode Island Automobile Dealers Association, which requested the bill, said it will stop manufacturers from forcing them to accept unfairly low rates for work done under warranty.

But car companies say the bill, introduced by House Majority Leader K. Joseph Shekarchi, gives dealerships an incentive to jack up the cost of repairs on all drivers.

It passed unanimously with no debate.

Although the car makers are already legally required to pay dealers the same "retail rate" customers pay for non-warranty repairs, dealers association Executive Vice President Jack Perkins told lawmakers in hearing testimony that manufacturers often force dealers to give them a discount.

"When manufacturers unilaterally decide to take a discount, that loss of dealer income can only be made up by the dealer's local paying customers," Perkins wrote in testimony to the House Corporations Committee. "Warranty work is the same work as customer-paid work and should be reimbursed at the same retail rate as that paid by local consumers."

The bill, based on legislation in Connecticut, creates a formula for determining the retail rates for parts and labor from an average of what dealers have charged non-warranty customers. 

The car makers say dealerships are actually looking to be paid more for warranty work than what they charge local drivers by excluding some low-margin repairs from the rate formula.

"Some of these repairs — engine and transmission repairs are a perfect example — are the very sort of repairs warranties are designed to cover," wrote Wayne Weikel, senior director of state government affairs for the Alliance of Automobile Manufacturers, in hearing testimony.

"Additionally — because the rate paid to a dealer for warranty repairs under this bill would be a function of how much that dealer charges its non-warranty customers — this legislation would create an incentive for dealers to charge regular customers the absolute maximum they can bill," Weikel wrote.

The bill passed the House last year, but died in the Senate.

Also on Wednesday, the House passed, 61-3, legislation that would encourage, but not require, Rhode Island schools to teach the meaning of "consent" in sex education classes.

Rep, Michael Chippendale, R-Foster, was one of three to vote against the bill, calling it a "nanny stateism" intrusion into family matters.

The bill's sponsor, Warwick Democrat Joseph Solomon, said in January it was inspired by the "#MeToo" movement as an early intervention to prevent sexual harassment and abuse.

And, as they did last year, House lawmakers Wednesday unanimously passed legislation that would allow Rhode Island students to use sunscreen at school without a doctor's note.

An obscure state regulation now considers sunscreen an over-the-counter medication that requires a "written order from a licensed health care provider." 

The bill, introduced by Rep. David Bennett, D-Warwick, would not consider sunscreen an over-the-counter medication.