Florida Senate - 2015                      CS for CS for SB 1048
       
       
        
       By the Committees on Rules; and Transportation; and Senator
       Garcia
       
       
       
       
       595-04192-15                                          20151048c2
    1                        A bill to be entitled                      
    2         An act relating to motor vehicle manufacturer
    3         licenses; amending s. 320.64, F.S.; providing that a
    4         motor vehicle dealer who received approval of a
    5         facility from an applicant or licensee within a
    6         specified timeframe is deemed to be in full compliance
    7         with facility-related requirements; providing that
    8         such motor vehicle dealer is entitled to certain
    9         benefits under certain circumstances; providing
   10         applicability; conforming a cross-reference; revising
   11         provisions related to an applicant or licensee who has
   12         undertaken or engaged in an audit of service-related
   13         payments or incentive payments; reducing the timeframe
   14         for the performance of such audits; defining the term
   15         “incentive”; authorizing an applicant or licensee to
   16         deny or charge back only the portion of a service
   17         related claim or incentive claim which the applicant
   18         or licensee has proven to be false or fraudulent or
   19         for which the dealer failed to substantially comply
   20         with certain procedures; prohibiting an applicant or
   21         licensee from taking adverse action against a motor
   22         vehicle dealer under certain circumstances;
   23         prohibiting an applicant or licensee from failing to
   24         make any payment due a motor vehicle dealer that
   25         substantially complies with the terms of a certain
   26         contract between the two parties regarding
   27         reimbursement for temporary replacement vehicles under
   28         certain circumstances; authorizing a motor vehicle
   29         dealer to purchase goods or services from a vendor
   30         chosen by the motor vehicle dealer, subject to certain
   31         requirements; defining the term “goods or services”;
   32         prohibiting an applicant or licensee from requiring a
   33         motor vehicle dealer to pay for certain advertising or
   34         marketing, or to participate in or affiliate with a
   35         dealer advertising or marketing entity; prohibiting an
   36         applicant or licensee from taking or threatening to
   37         take any adverse action against a motor vehicle dealer
   38         who refuses to join or participate in such entity;
   39         defining the term “adverse action”; providing that an
   40         applicant or licensee may not require a dealer to
   41         participate in, or may not preclude only a number of
   42         its motor vehicle dealers in a designated market area
   43         from establishing, a voluntary motor vehicle dealer
   44         advertising or marketing entity; providing that an
   45         applicant or licensee is not required to fund such an
   46         entity under certain circumstances; providing for
   47         retroactive applicability under certain circumstances;
   48         providing for severability; providing an effective
   49         date.
   50          
   51  Be It Enacted by the Legislature of the State of Florida:
   52  
   53         Section 1. Present paragraph (h) of subsection (10) of
   54  section 320.64, Florida Statutes, is redesignated as paragraph
   55  (i), a new paragraph (h) is added to that subsection, present
   56  paragraph (h) of subsection (10) and subsections (25) and (26)
   57  of that section are amended, and subsections (39), (40), and
   58  (41) are added to that section, to read:
   59         320.64 Denial, suspension, or revocation of license;
   60  grounds.—A license of a licensee under s. 320.61 may be denied,
   61  suspended, or revoked within the entire state or at any specific
   62  location or locations within the state at which the applicant or
   63  licensee engages or proposes to engage in business, upon proof
   64  that the section was violated with sufficient frequency to
   65  establish a pattern of wrongdoing, and a licensee or applicant
   66  shall be liable for claims and remedies provided in ss. 320.695
   67  and 320.697 for any violation of any of the following
   68  provisions. A licensee is prohibited from committing the
   69  following acts:
   70         (10)
   71         (h) If an applicant or licensee offers any bonus,
   72  incentive, rebate, or other program, standard, or policy that is
   73  available to a motor vehicle dealer in this state and that is
   74  premised, wholly or in part, on dealer facility improvements,
   75  renovations, expansions, remodeling, alterations, or
   76  installations of signs or other image elements, a motor vehicle
   77  dealer who completes an approved facility in reliance upon such
   78  offer shall be deemed to be in full compliance with all of the
   79  applicant’s or licensee’s requirements related to facility,
   80  sign, and image for the duration of a 10-year period following
   81  such completion. If, during the 10-year period, the applicant or
   82  licensee establishes a program, standard, or policy that offers
   83  a new bonus, incentive, rebate, or other benefit, a motor
   84  vehicle dealer that completed an approved facility in reliance
   85  upon the prior program, standard, or policy but does not comply
   86  with the provisions related to facility, sign, or image under
   87  the new program, standard, or policy, except as hereinafter
   88  provided, may not be eligible for benefits under the provisions
   89  related to facility, sign, or image of the new program,
   90  standard, or policy, but shall remain entitled to all the
   91  benefits under the older program, standard, or policy, plus any
   92  increase in the benefits between the old and new programs,
   93  standards, or policies during the remainder of the 10-year
   94  period. Nothing contained in this subsection shall in any way
   95  obviate, affect, or alter the provisions of subsection (38).
   96         (i)(h) A violation of paragraphs (b)-(h) (b) through (g) is
   97  not a violation of s. 320.70 and does not subject any licensee
   98  to any criminal penalty under s. 320.70.
   99         (25) The applicant or licensee has undertaken or engaged in
  100  an audit of warranty, maintenance, and other service-related
  101  payments or incentive payments, including payments to a motor
  102  vehicle dealer under any licensee-issued program, policy, or
  103  other benefit, which previously have been paid to a motor
  104  vehicle dealer in violation of this section or has failed to
  105  comply with any of its obligations under s. 320.696. An
  106  applicant or licensee may reasonably and periodically audit a
  107  motor vehicle dealer to determine the validity of paid claims as
  108  provided in s. 320.696. Audits of warranty, maintenance, and
  109  other service-related payments shall be performed by an
  110  applicant or licensee only during the 12-month 1-year period
  111  immediately following the date the claim was paid. Audits Audit
  112  of incentive payments shall only be performed only during the
  113  12-month for an 18-month period immediately following the date
  114  the incentive was paid. As used in this section, the term
  115  “incentive” includes any bonus, incentive, or other monetary or
  116  nonmonetary thing of value. After such time periods have
  117  elapsed, all warranty, maintenance, and other service-related
  118  payments and incentive payments shall be deemed final and
  119  incontrovertible for any reason notwithstanding any otherwise
  120  applicable law, and the motor vehicle dealer shall not be
  121  subject to any charge-back or repayment. An applicant or
  122  licensee may deny a claim or, as a result of a timely conducted
  123  audit, impose a charge-back against a motor vehicle dealer for
  124  warranty, maintenance, or other service-related payments or
  125  incentive payments only if the applicant or licensee can show
  126  that the warranty, maintenance, or other service-related claim
  127  or incentive claim was false or fraudulent or that the motor
  128  vehicle dealer failed to substantially comply with the
  129  reasonable written and uniformly applied procedures of the
  130  applicant or licensee for such repairs or incentives, but only
  131  for that portion of the claim so shown. Notwithstanding the
  132  terms of any franchise agreement, guideline, program, policy, or
  133  procedure, an applicant or licensee may deny or charge back only
  134  that portion of a warranty, maintenance, or other service
  135  related claim or incentive claim which the applicant or licensee
  136  has proven to be false or fraudulent or for which the dealer
  137  failed to substantially comply with the reasonable written and
  138  uniformly applied procedures of the applicant or licensee for
  139  such repairs or incentives, as set forth in this subsection. An
  140  applicant or licensee may not charge back a motor vehicle dealer
  141  back subsequent to the payment of a warranty, maintenance, or
  142  service-related claim or incentive claim unless, within 30 days
  143  after a timely conducted audit, a representative of the
  144  applicant or licensee first meets in person, by telephone, or by
  145  video teleconference with an officer or employee of the dealer
  146  designated by the motor vehicle dealer. At such meeting the
  147  applicant or licensee must provide a detailed explanation, with
  148  supporting documentation, as to the basis for each of the claims
  149  for which the applicant or licensee proposed a charge-back to
  150  the dealer and a written statement containing the basis upon
  151  which the motor vehicle dealer was selected for audit or review.
  152  Thereafter, the applicant or licensee must provide the motor
  153  vehicle dealer’s representative a reasonable period after the
  154  meeting within which to respond to the proposed charge-backs,
  155  with such period to be commensurate with the volume of claims
  156  under consideration, but in no case less than 45 days after the
  157  meeting. The applicant or licensee is prohibited from changing
  158  or altering the basis for each of the proposed charge-backs as
  159  presented to the motor vehicle dealer’s representative following
  160  the conclusion of the audit unless the applicant or licensee
  161  receives new information affecting the basis for one or more
  162  charge-backs and that new information is received within 30 days
  163  after the conclusion of the timely conducted audit. If the
  164  applicant or licensee claims the existence of new information,
  165  the dealer must be given the same right to a meeting and right
  166  to respond as when the charge-back was originally presented.
  167  After all internal dispute resolution processes provided through
  168  the applicant or licensee have been completed, the applicant or
  169  licensee shall give written notice to the motor vehicle dealer
  170  of the final amount of its proposed charge-back. If the dealer
  171  disputes that amount, the dealer may file a protest with the
  172  department within 30 days after receipt of the notice. If a
  173  protest is timely filed, the department shall notify the
  174  applicant or licensee of the filing of the protest, and the
  175  applicant or licensee may not take any action to recover the
  176  amount of the proposed charge-back until the department renders
  177  a final determination, which is not subject to further appeal,
  178  that the charge-back is in compliance with the provisions of
  179  this section. In any hearing pursuant to this subsection, the
  180  applicant or licensee has the burden of proof that its audit and
  181  resulting charge-back are in compliance with this subsection.
  182         (26) Notwithstanding the terms of any franchise agreement,
  183  including any licensee’s program, policy, or procedure, the
  184  applicant or licensee has refused to allocate, sell, or deliver
  185  motor vehicles; charged back or withheld payments or other
  186  things of value for which the dealer is otherwise eligible under
  187  a sales promotion, program, or contest; prevented a motor
  188  vehicle dealer from participating in any promotion, program, or
  189  contest; or has taken or threatened to take any adverse action
  190  against a dealer, including charge-backs, reducing vehicle
  191  allocations, or terminating or threatening to terminate a
  192  franchise because the dealer sold or leased a motor vehicle to a
  193  customer who exported the vehicle to a foreign country or who
  194  resold the vehicle, unless the licensee proves that the dealer
  195  knew or reasonably should have known that the customer intended
  196  to export or resell the motor vehicle. There is a rebuttable
  197  presumption that the dealer neither knew nor reasonably should
  198  have known of its customer’s intent to export or resell the
  199  vehicle if the vehicle is titled or registered in any state in
  200  this country. A licensee may not take any action against a motor
  201  vehicle dealer, including reducing its allocations or supply of
  202  motor vehicles to the dealer, or charging back a dealer for an
  203  incentive payment previously paid, unless the licensee first
  204  meets in person, by telephone, or video conference with an
  205  officer or other designated employee of the dealer. At such
  206  meeting, the licensee must provide a detailed explanation, with
  207  supporting documentation, as to the basis for its claim that the
  208  dealer knew or reasonably should have known of the customer’s
  209  intent to export or resell the motor vehicle. Thereafter, the
  210  motor vehicle dealer shall have a reasonable period,
  211  commensurate with the number of motor vehicles at issue, but not
  212  less than 15 days, to respond to the licensee’s claims. If,
  213  following the dealer’s response and completion of all internal
  214  dispute resolution processes provided through the applicant or
  215  licensee, the dispute remains unresolved, the dealer may file a
  216  protest with the department within 30 days after receipt of a
  217  written notice from the licensee that it still intends to take
  218  adverse action against the dealer with respect to the motor
  219  vehicles still at issue. If a protest is timely filed, the
  220  department shall notify the applicant or licensee of the filing
  221  of the protest, and the applicant or licensee may not take any
  222  action adverse to the dealer until the department renders a
  223  final determination, which is not subject to further appeal,
  224  that the licensee’s proposed action is in compliance with the
  225  provisions of this subsection. In any hearing pursuant to this
  226  subsection, the applicant or licensee has the burden of proof on
  227  all issues raised by this subsection. An applicant or licensee
  228  may not take any adverse action against a motor vehicle dealer
  229  because the dealer sold or leased a motor vehicle to a customer
  230  who exported the vehicle to a foreign country or who resold the
  231  vehicle unless the applicant or licensee provides written
  232  notification to the motor vehicle dealer of such resale or
  233  export within 12 months after the date the dealer sold or leased
  234  the vehicle to the customer.
  235         (39) Notwithstanding the terms of any agreement, program,
  236  incentive, bonus, policy, or rule, an applicant or licensee
  237  fails to make any payment pursuant to any of the foregoing for
  238  any temporary replacement motor vehicle loaned, rented, or
  239  provided by a motor vehicle dealer to or for its service or
  240  repair customers, even if the temporary replacement motor
  241  vehicle has been leased, rented, titled, or registered to the
  242  motor vehicle dealer’s rental or leasing division or an entity
  243  that is owned or controlled by the motor vehicle dealer,
  244  provided that the motor vehicle dealer or its rental or leasing
  245  division or entity complies with the written and uniformly
  246  enforced vehicle eligibility, use, and reporting requirements
  247  specified by the applicant or licensee in its agreement,
  248  program, policy, bonus, incentive, or rule relating to loaner
  249  vehicles.
  250         (40) Notwithstanding the terms of any franchise agreement,
  251  the applicant or licensee has required or coerced, or attempted
  252  to require or coerce, a motor vehicle dealer to purchase goods
  253  or services from a vendor selected, identified, or designated by
  254  the applicant or licensee, or one of its parents, subsidiaries,
  255  divisions, or affiliates, by agreement, standard, policy,
  256  program, incentive provision, or otherwise, without making
  257  available to the motor vehicle dealer the option to obtain the
  258  goods or services of substantially similar design and quality
  259  from a vendor chosen by the motor vehicle dealer. If the motor
  260  vehicle dealer exercises such option, the dealer must provide
  261  written notice of its desire to use the alternative goods or
  262  services to the applicant or licensee, along with samples or
  263  clear descriptions of the alternative goods or services that the
  264  dealer desires to use. The licensee or applicant shall have the
  265  opportunity to evaluate the alternative goods or services for up
  266  to 30 days to determine whether it will provide a written
  267  approval to the motor vehicle dealer to use said alternative
  268  goods or services. Approval may not be unreasonably withheld by
  269  the applicant or licensee. If the motor vehicle dealer does not
  270  receive a response from the applicant or licensee within 30
  271  days, approval to use the alternative goods or services shall be
  272  deemed granted. If a dealer using alternative goods or services
  273  complies with the terms of this subsection and has received
  274  approval from the licensee or applicant, the dealer shall not be
  275  ineligible for all benefits described in the agreement,
  276  standard, policy, program, incentive provision, or otherwise
  277  solely for having used such alternative goods or services. As
  278  used in this subsection, the term “goods or services” is limited
  279  to such goods and services used to construct or renovate
  280  dealership facilities, or furniture and fixtures at the
  281  dealership facilities. The term does not include:
  282         (a)Any intellectual property of the applicant or licensee,
  283  including signage incorporating the applicant’s or licensee’s
  284  trademark or copyright, or facility or building materials to the
  285  extent that the applicant’s or licensee’s trademark is displayed
  286  thereon;
  287         (b) Any special tool and training as required by the
  288  licensee or applicant;
  289         (c) Any part to be used in repairs under warranty
  290  obligations of an applicant or licensee;
  291         (d) Any good or service paid for entirely by the applicant
  292  or licensee; or
  293         (e) Any applicant’s or licensee’s design or architectural
  294  review service.
  295         (41)(a) The applicant or licensee, by agreement, policy,
  296  program, standard, or otherwise, requires a motor vehicle
  297  dealer, directly or indirectly, to advance or pay for, or to
  298  reimburse the applicant or licensee for, any costs related to
  299  the creation, development, showing, placement, or publication in
  300  any media of any advertisement for a motor vehicle; requires a
  301  motor vehicle dealer to participate in, contribute to, affiliate
  302  with, or join a dealer advertising or marketing group, fund,
  303  pool, association, or other entity; or takes or threatens to
  304  take any adverse action against a motor vehicle dealer that
  305  refuses to join or participate in such group, fund, pool,
  306  association, or other entity. As used in this subsection, the
  307  term “adverse action” includes, but is not limited to, reducing
  308  allocations, charging fees for a licensee’s or dealer’s
  309  advertising or a marketing group’s advertising or marketing,
  310  terminating or threatening to terminate the motor vehicle
  311  dealer’s franchise agreement, reducing any incentive for which
  312  the motor vehicle dealer is eligible, or engaging in any action
  313  that fails to take into account the equities of the motor
  314  vehicle dealer.
  315         (b) The applicant or licensee requires a dealer to
  316  participate in, or precludes a number of its motor vehicle
  317  dealers in a designated market area from establishing, a
  318  voluntary motor vehicle dealer advertising or marketing group,
  319  fund, pool, association, or other entity. Except as provided in
  320  an agreement, if a motor vehicle dealer chooses to form an
  321  independent advertising or marketing group, the applicant or
  322  licensee is not required to fund such group.
  323         (c) This subsection does not prohibit an applicant or
  324  licensee from offering advertising or promotional materials to a
  325  motor vehicle dealer for a fee or charge, if the use of such
  326  advertising or promotional materials is voluntary for the motor
  327  vehicle dealer.
  328  
  329  A motor vehicle dealer who can demonstrate that a violation of,
  330  or failure to comply with, any of the preceding provisions by an
  331  applicant or licensee will or can adversely and pecuniarily
  332  affect the complaining dealer, shall be entitled to pursue all
  333  of the remedies, procedures, and rights of recovery available
  334  under ss. 320.695 and 320.697.
  335         Section 2. This act applies to all franchise agreements
  336  entered into, renewed, or amended after October 1, 1988, except
  337  to the extent that such application would impair valid
  338  contractual agreements in violation of the State Constitution or
  339  the United States Constitution.
  340         Section 3. If any provision of this act or its application
  341  to any person or circumstances is held invalid, the invalidity
  342  does not affect other provisions or applications of this act
  343  which can be given effect without the invalid provision or
  344  application, and to this end the provisions of this act are
  345  severable.
  346         Section 4. This act shall take effect upon becoming a law.