[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2434 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2434

   To amend chapter 1 of title 9, United States Code, to provide for 
 greater fairness in the arbitration process relating to motor vehicle 
                          franchise contracts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             September 2 (legislative day, August 31), 1998

 Mr. Grassley (for himself and Mr. Feingold) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                                 A BILL


 
   To amend chapter 1 of title 9, United States Code, to provide for 
 greater fairness in the arbitration process relating to motor vehicle 
                          franchise contracts.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Motor Vehicle Franchise Control 
Arbitration Fairness Act of 1998''.

SEC. 2. ELECTION OF ARBITRATION.

    (a) Sales and Service Contracts.--Chapter 1 of title 9, United 
States Code, is amended by adding at the end the following new section:
``Sec. 17. Motor vehicle franchise contracts
    ``(a) For purposes of this section, the term--
            ``(1) `motor vehicle' has the meaning given such term under 
        section 30102(6) of title 49; and
            ``(2) `motor vehicle franchise contract' means a contract 
        under which a motor vehicle manufacturer, importer, or 
        distributor sells motor vehicles to any other person for resale 
        to an ultimate purchaser and authorizes such other person to 
        repair and service the manufacturer's motor vehicle.
    ``(b) Whenever a motor vehicle franchise contract provides for the 
use of arbitration to resolve a controversy arising out of or relating 
to the contract, each party to the contract shall have the option, 
after the controversy arises and before both parties commence an 
arbitration proceeding, to reject arbitration as the means of settling 
the controversy. Any such rejection shall be in writing.
    ``(c) Whenever arbitration is elected to settle a dispute under a 
motor vehicle franchise contract, the arbitrator shall provide the 
parties to the contract with a written explanation of the factual and 
legal basis for the award.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 1 of title 9, United States Code, is amended by adding at the 
end the following new item:

``17. Motor vehicle franchise contracts.''.

SEC. 3. EFFECTIVE DATE.

    The amendments made by section 2 shall apply to contracts entered 
into, amended, altered, modified, renewed, or extended after the date 
of enactment of this Act.
                                 <all>