13 states weigh 'bans'

Thirteen state legislatures are considering bills to ban factory stores, in a continuation of last year's movement that saw 12 states outlaw or severely restrict retailing competition by automakers.

William C. Price, director of legal affairs for NADA, says his staff is assisting state dealer associations draft franchise law amendments in the factory-retail area following an NADA board of directors resolution enacted last fall.

"We were most gratified in 1999 when, despite heated opposition from automakers, legislatures and governors in so many states passed bills flatly prohibiting factory stores," Mr. Price says at the NADA convention. "The U.S. Supreme Court's decision of 1978 on this issue is still binding."

States where factory prohibition bills are pending this year are Alaska, Arizona, Colorado, Iowa, Kansas, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, Utah, Washington and West Virginia.