North Carolina Sen. Lazzara motor vehicle dealer regulation bill passes House and Senate

Passed bill sponsored by State Sen. Lazzara seeks to clarify motor vehicle dealer laws, including franchise termination rules, compensation requirements, and dealership operations across North Carolina, according to the North Carolina State Senate.

In the House, 43 Democrats and 66 Republicans voted in favor of the bill, while two Democrats opposed it.

Meanwhile, in the Senate, 16 Democrats and 27 Republicans voted in favor of the bill.

Lazzara filed the bill in the North Carolina Senate on March 13 during the 2025 regular session.

The legislation, known as SB 295, was passed on June 18 during the 2025 regular session.

According to the North Carolina General Assembly site, the bill’s official text was formally listed with the short title: “Clarify Motor Vehicle Dealer Laws.”

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill aims to amend North Carolina motor vehicle dealer laws by clarifying regulations surrounding franchise terminations, dealer compensation, ownership transfers, and other dealership operations. It prohibits manufacturers from terminating franchises without good cause and mandates compensation for unsold inventory upon termination. The bill requires manufacturers to pay franchisees 20% of gross compensation from sales of over-the-air motor vehicle products. It also defines selling activities and clarifies dealership succession processes. Additionally, it ensures reimbursement for loaner vehicles and establishes guidelines for warranty service compensation. Severability and an immediate effective date apply to current and future agreements.

A related bill, HB 406, was also filed in the North Carolina House, introduced by Rep. Brenden H. Jones (and two others) on March 13, 2025.

The bill was sponsored by Sen. Brent Jackson (Republican-9th District), Sen. Vickie Sawyer (Republican-37th District), and Sen. Michael A. Lazzara (Republican-6th District).

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Lazzara, a Republican, was elected to the North Carolina State Senate in 2021 to represent the state’s 6th Senate district, replacing previous state senator Harry Brown.

Under North Carolina law, bills must receive three readings in each chamber. According to the UNC School of Government, once a bill “passes its constitutionally required second reading and moves to its constitutionally required third reading,” additional debate can occur, but the final stage is often treated as a formality. Unless a legislator requests a roll-call, the third reading may be approved by voice vote or unanimous consent without a separate recorded tally.