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                              PUBLIC CHAPTER NO. 885

                                                     SENATE BILL NO. 608

                                                         By Bailey, Taylor

                                           Substituted for: House Bill No. 475

                                                    By Vaughan, Bricken

AN ACT to amend Tennessee Code Annotated, Title 55, relative to motor vehicles.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Section 55-17-114(c)(1), is amended by deleting
the subdivision and substituting instead:

                   (1) Refused to deliver to a motor vehicle dealer having a franchise or contractual
          arrangement for the retail sale of new and unused motor vehicles sold or distributed by the
          manufacturer, distributor, distributor branch, or factory branch a motor vehicle publicly
          advertised for immediate delivery within sixty (60) days after the dealer's order has been
          received, except that refusal or failure to deliver a motor vehicle is not a violation of this
          subdivision (c)(1) if such failure is due to an act of God, a work stoppage or delay due to a
          strike or other labor action, a lack of available manufacturing capacity, a freight embargo, or
          other cause or material issue over which the manufacturer, factory branch, factory
          representative, distributor, or wholesaler, distributor branch, or distributor representative has
          no control. As it relates to such exceptions, the manufacturer, distributor, distributor branch,
          or factory branch has the burden of proof;

          SECTION 2. Tennessee Code Annotated, Section 55-17-114(c), is amended by adding the
following new subdivisions:

                    (26) Required, coerced, or attempted to coerce a motor vehicle dealer to change the
          location of the motor vehicle dealer, or to make a substantial alteration or investment to the
          dealer premises or facilities when doing so would be unreasonable in light of current market
          and economic conditions, financial expectations, and such dealer's market for the sale of
          vehicles. The manufacturer or distributor has the burden of proof to establish a request is
          reasonable;

                    (27) Required, coerced, or attempted to coerce the use of a vendor of goods or
          services selected by the manufacturer, factory branch, factory representative, distributor,
          wholesaler, distributor branch, or distributor representative for construction or substantial
          alterations if the dealer, with approval of the manufacturer, factory branch, factory
          representative, distributor, wholesaler, distributor branch, or distributor representative selects
          an alternative vendor of goods and services that are of the same design, quality, and kind.
          This subdivision (c)(27) does not eliminate, impair, damage, or otherwise limit a
          manufacturer's intellectual property, trademark, or trade dress rights in any way. This
          subdivision (c)(27) does not apply to goods or services paid for substantially by a
          manufacturer, factory branch, factory representative, distributor, or wholesaler;

                    (28) Required the construction of, or substantial alteration to a facility or premises if
          the same item or design component, consisting of interior or exterior elements of the sales,
          service, administrative, or parts components, was constructed or substantially altered within
          the prior ten (10) years and that construction or alteration was required and approved by the
          manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor
          branch, or distributor representative. For purposes of this subdivision (c)(28), "substantial
          alteration" means an alteration that has a major impact on the architectural features,
          characteristics, appearance, or integrity of a structure or lot, and does not include routine
S8608

          maintenance, such as interior painting reasonably necessary to maintain a dealership facility
          in attractive condition, nor any changes to items protected by federal intellectual property
          rights of the manufacturer, factory branch, factory representative, distributor, wholesaler,
          distributor branch, or distributor representative nor to their initial design or architectural
          review service. This subdivision (c)(28) does not authorize a dealer to impair or eliminate the
          intellectual property or trademark rights of the manufacturer, factory branch, factory
          representative, distributor, wholesaler, distributor branch, or distributor representative, or
          their affiliates or initial design or architectural review service, or to permit a dealer to erect or
          maintain signs that do not conform to the intellectual property usage guidelines of the same.
          This subdivision (c)(28) does not apply to construction or a substantial alteration made to
          comply with health or safety laws or a technology requirement that is essential to the sale or
          service of a motor vehicle that the new motor vehicle dealer is authorized by the franchisor to
          sell or service;

                    (29) Required, coerced, or attempted to coerce adherence to performance standards
          that are not fair, reasonable, and equitable or that are not applied uniformly to other similarly
          situated dealers. A performance standard, sales objective, or program for measuring
          dealership performance that may have a material effect on a dealer, including the dealer's
          right to payment under an incentive or reimbursement program must be fair, reasonable, and
          equitable; or

                    (30)(A) Adopted, changed, established, or implemented a plan or system for the
                    allocation and distribution of new vehicles to dealers that is arbitrary, capricious, or
                    unreasonably discriminatory or modified an existing plan so as to cause the same to
                    be arbitrary, capricious, or unreasonably discriminatory; or

                              (B) Failed or refused to advise or disclose to a dealer having a franchise
                    agreement, upon written request therefor, the basis upon which new motor vehicles
                    of the same line make are allocated or distributed to dealers in the state and the basis
                    upon which the current allocation or distribution is being made or will be made to the
                    dealer.
          SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.

                                                                 2
         SENATE BILL NO. 608

PASSED:  April 16, 2026

                                      RANDY McN,6J.LY
                         SPEAKER OF THE SEN>t TE

                                            ~%,_• ON, SPEAKER

                                                     RESENTA TIVES

~ APPROVED this  day o f ~                  2026

         /?Ji,U(.

                        BILL LEE, GOVERNOR