Florida Senate - 2016                                     SB 430
       
       
        
       By Senator Garcia
       
       
       
       
       
       38-00457A-16                                           2016430__
    1                        A bill to be entitled                      
    2         An act relating to motor vehicle manufacturer
    3         licenses; amending s. 320.64, F.S.; revising
    4         provisions for denial, suspension, or revocation of
    5         the license of a manufacturer, factory branch,
    6         distributor, or importer of motor vehicles; providing
    7         requirements for incentive payments made to motor
    8         vehicle dealers for making certain changes or
    9         additions to a dealer’s facility or signage; providing
   10         applicability; conforming a cross-reference; revising
   11         provisions for certain audits of service-related
   12         payments or incentive payments to a dealer by an
   13         applicant or licensee and the timeframe for the
   14         performance of such audits; defining the term
   15         “incentive”; revising provisions for denial or
   16         chargeback of claims; revising provisions that
   17         prohibit certain adverse actions against a dealer that
   18         sold or leased a motor vehicle to a customer who
   19         exported the vehicle to a foreign country or who
   20         resold the vehicle; revising conditions for taking
   21         such adverse actions; prohibiting failure to make
   22         certain payments to a motor vehicle dealer for
   23         temporary replacement vehicles under certain
   24         circumstances; prohibiting requiring or coercing a
   25         dealer to purchase goods or services from a vendor
   26         designated by the applicant or licensee unless certain
   27         conditions are met; providing procedures for approval
   28         of a dealer to purchase goods or services from a
   29         vendor not designated by the applicant or licensee;
   30         defining the term “goods or services”; prohibiting an
   31         applicant or licensee from requiring a motor vehicle
   32         dealer to pay for certain advertising or marketing, or
   33         to participate in or affiliate with a dealer
   34         advertising or marketing entity; prohibiting an
   35         applicant or licensee from taking or threatening to
   36         take any adverse action against a motor vehicle dealer
   37         who refuses to join or participate in such entity;
   38         defining the term “adverse action”; providing that an
   39         applicant or licensee may not require a dealer to
   40         participate in, or may not preclude its motor vehicle
   41         dealers in a designated market area from establishing,
   42         a voluntary motor vehicle dealer advertising or
   43         marketing entity; providing that an applicant or
   44         licensee is not required to fund such an entity under
   45         certain circumstances; providing for retroactive
   46         applicability; providing for severability; providing
   47         an effective date.
   48          
   49  Be It Enacted by the Legislature of the State of Florida:
   50  
   51         Section 1. Paragraph (h) of subsection (10) of section
   52  320.64, Florida Statutes, is amended and redesignated as
   53  paragraph (i), a new paragraph (h) is added to that subsection,
   54  subsections (25) and (26) are amended, and subsections (39),
   55  (40), and (41) are added to that section, to read:
   56         320.64 Denial, suspension, or revocation of license;
   57  grounds.—A license of a licensee under s. 320.61 may be denied,
   58  suspended, or revoked within the entire state or at any specific
   59  location or locations within the state at which the applicant or
   60  licensee engages or proposes to engage in business, upon proof
   61  that the section was violated with sufficient frequency to
   62  establish a pattern of wrongdoing, and a licensee or applicant
   63  shall be liable for claims and remedies provided in ss. 320.695
   64  and 320.697 for any violation of any of the following
   65  provisions. A licensee is prohibited from committing the
   66  following acts:
   67         (10)
   68         (h) If an applicant or licensee establishes a program,
   69  standard, or policy that offers a bonus, incentive, rebate, or
   70  other benefit that is available to a motor vehicle dealer in
   71  this state and that is premised, wholly or in part, on dealer
   72  facility improvements, renovations, expansions, remodeling, or
   73  alterations or installation of signs or other image elements, a
   74  motor vehicle dealer who completes an approved change to or
   75  installation on the facility in reliance upon such program,
   76  standard, or policy is deemed to be in full compliance with all
   77  of the applicant’s or licensee’s requirements related to the
   78  facility, sign, and image for a 10-year period following such
   79  completion. If, during the 10-year period, the applicant or
   80  licensee establishes a new program, standard, or policy related
   81  to facility, sign, or image requirements that offers a new
   82  bonus, incentive, rebate, or other benefit, a motor vehicle
   83  dealer that completed an approved facility in reliance upon the
   84  prior program, standard, or policy but does not comply with the
   85  new program, standard, or policy is not eligible for benefits
   86  under provisions related to the facility, sign, or image of the
   87  new program, standard, or policy but shall remain entitled to
   88  all benefits under the older program, standard, or policy, in
   89  addition to any increase in benefits between the old and new
   90  programs, standards, or policies during the remainder of the 10
   91  year period. This subsection does not obviate, affect, or alter
   92  the any provision of subsection (38).
   93         (i)(h) A violation of paragraphs (b)-(h) (b) through (g) is
   94  not a violation of s. 320.70 and does not subject any licensee
   95  to any criminal penalty under s. 320.70.
   96         (25) The applicant or licensee has undertaken or engaged in
   97  an audit of warranty, maintenance, and other service-related
   98  payments or incentive payments, including payments to a motor
   99  vehicle dealer under any licensee-issued program, policy, or
  100  other benefit, which were previously have been paid to a motor
  101  vehicle dealer in violation of this section or has failed to
  102  comply with any of its obligations under s. 320.696. An
  103  applicant or licensee may reasonably and periodically audit a
  104  motor vehicle dealer to determine the validity of paid claims as
  105  provided in s. 320.696. Audits of warranty, maintenance, and
  106  other service-related payments shall be performed by an
  107  applicant or licensee only during the 12-month 1-year period
  108  immediately following the date the claim was paid. Audits Audit
  109  of incentive payments shall only be performed only during the
  110  12-month for an 18-month period immediately following the date
  111  the incentive was paid. As used in this section, the term
  112  “incentive” includes any bonus, incentive, or other monetary or
  113  nonmonetary consideration. After such time periods have elapsed,
  114  all warranty, maintenance, and other service-related payments
  115  and incentive payments shall be deemed final and
  116  incontrovertible for any reason notwithstanding any otherwise
  117  applicable law, and the motor vehicle dealer shall not be
  118  subject to any chargeback charge-back or repayment. An applicant
  119  or licensee may deny a claim or, as a result of a timely
  120  conducted audit, impose a chargeback charge-back against a motor
  121  vehicle dealer for warranty, maintenance, or other service
  122  related payments or incentive payments only if the applicant or
  123  licensee can show that the warranty, maintenance, or other
  124  service-related claim or incentive claim was false or fraudulent
  125  or that the motor vehicle dealer failed to substantially comply
  126  with the reasonable written and uniformly applied procedures of
  127  the applicant or licensee for such repairs or incentives, but
  128  only for that portion of the claim so shown. Notwithstanding the
  129  terms of any franchise agreement, guideline, program, policy, or
  130  procedure, an applicant or licensee may deny or charge back only
  131  that portion of a warranty, maintenance, or other service
  132  related claim or incentive claim which the applicant or licensee
  133  has proven to be false or fraudulent or for which the dealer
  134  failed to substantially comply with the reasonable written and
  135  uniformly applied procedures of the applicant or licensee for
  136  such repairs or incentives, as set forth in this subsection. An
  137  applicant or licensee may not charge back a motor vehicle dealer
  138  back subsequent to the payment of a warranty, maintenance, or
  139  service-related claim or incentive claim unless, within 30 days
  140  after a timely conducted audit, a representative of the
  141  applicant or licensee first meets in person, by telephone, or by
  142  video teleconference with an officer or employee of the dealer
  143  designated by the motor vehicle dealer. At such meeting the
  144  applicant or licensee must provide a detailed explanation, with
  145  supporting documentation, as to the basis for each of the claims
  146  for which the applicant or licensee proposed a chargeback
  147  charge-back to the dealer and a written statement containing the
  148  basis upon which the motor vehicle dealer was selected for audit
  149  or review. Thereafter, the applicant or licensee must provide
  150  the motor vehicle dealer’s representative a reasonable period
  151  after the meeting within which to respond to the proposed
  152  chargebacks charge-backs, with such period to be commensurate
  153  with the volume of claims under consideration, but in no case
  154  less than 45 days after the meeting. The applicant or licensee
  155  is prohibited from changing or altering the basis for each of
  156  the proposed chargebacks charge-backs as presented to the motor
  157  vehicle dealer’s representative following the conclusion of the
  158  audit unless the applicant or licensee receives new information
  159  affecting the basis for one or more chargebacks charge-backs and
  160  that new information is received within 30 days after the
  161  conclusion of the timely conducted audit. If the applicant or
  162  licensee claims the existence of new information, the dealer
  163  must be given the same right to a meeting and right to respond
  164  as when the chargeback charge-back was originally presented.
  165  After all internal dispute resolution processes provided through
  166  the applicant or licensee have been completed, the applicant or
  167  licensee shall give written notice to the motor vehicle dealer
  168  of the final amount of its proposed chargeback charge-back. If
  169  the dealer disputes that amount, the dealer may file a protest
  170  with the department within 30 days after receipt of the notice.
  171  If a protest is timely filed, the department shall notify the
  172  applicant or licensee of the filing of the protest, and the
  173  applicant or licensee may not take any action to recover the
  174  amount of the proposed chargeback charge-back until the
  175  department renders a final determination, which is not subject
  176  to further appeal, that the chargeback charge-back is in
  177  compliance with the provisions of this section. In any hearing
  178  pursuant to this subsection, the applicant or licensee has the
  179  burden of proof that its audit and resulting chargeback charge
  180  back are in compliance with this subsection.
  181         (26) Notwithstanding the terms of any franchise agreement,
  182  including any licensee’s program, policy, or procedure, the
  183  applicant or licensee has refused to allocate, sell, or deliver
  184  motor vehicles; charged back or withheld payments or other
  185  things of value for which the dealer is otherwise eligible under
  186  a sales promotion, program, or contest; prevented a motor
  187  vehicle dealer from participating in any promotion, program, or
  188  contest; or has taken or threatened to take any adverse action
  189  against a dealer, including chargebacks charge-backs, reducing
  190  vehicle allocations, or terminating or threatening to terminate
  191  a franchise because the dealer sold or leased a motor vehicle to
  192  a customer who exported the vehicle to a foreign country or who
  193  resold the vehicle, unless the licensee proves that the dealer
  194  knew or reasonably should have known that the customer intended
  195  to export or resell the motor vehicle. There is a rebuttable
  196  presumption that the dealer neither knew nor reasonably should
  197  have known of its customer’s intent to export or resell the
  198  vehicle if the vehicle is titled or registered in any state in
  199  this country. A licensee may not take any action against a motor
  200  vehicle dealer, including reducing its allocations or supply of
  201  motor vehicles to the dealer, or charging back to a dealer any
  202  for an incentive payment previously paid, unless the licensee
  203  first meets in person, by telephone, or video conference with an
  204  officer or other designated employee of the dealer. At such
  205  meeting, the licensee must provide a detailed explanation, with
  206  supporting documentation, as to the basis for its claim that the
  207  dealer knew or reasonably should have known of the customer’s
  208  intent to export or resell the motor vehicle. Thereafter, the
  209  motor vehicle dealer shall have a reasonable period,
  210  commensurate with the number of motor vehicles at issue, but not
  211  less than 15 days, to respond to the licensee’s claims. If,
  212  following the dealer’s response and completion of all internal
  213  dispute resolution processes provided through the applicant or
  214  licensee, the dispute remains unresolved, the dealer may file a
  215  protest with the department within 30 days after receipt of a
  216  written notice from the licensee that it still intends to take
  217  adverse action against the dealer with respect to the motor
  218  vehicles still at issue. If a protest is timely filed, the
  219  department shall notify the applicant or licensee of the filing
  220  of the protest, and the applicant or licensee may not take any
  221  action adverse to the dealer until the department renders a
  222  final determination, which is not subject to further appeal,
  223  that the licensee’s proposed action is in compliance with the
  224  provisions of this subsection. In any hearing pursuant to this
  225  subsection, the applicant or licensee has the burden of proof on
  226  all issues raised by this subsection. An applicant or licensee
  227  may not take any adverse action against a motor vehicle dealer
  228  because the dealer sold or leased a motor vehicle to a customer
  229  who exported the vehicle to a foreign country or who resold the
  230  vehicle unless the applicant or licensee provides written
  231  notification to the motor vehicle dealer of such resale or
  232  export within 12 months after the date the dealer sold or leased
  233  the vehicle to the customer.
  234         (39) Notwithstanding any agreement, program, incentive,
  235  bonus, policy, or rule, an applicant or licensee may not fail to
  236  make any payment pursuant to any agreement, program, incentive,
  237  bonus, policy, or rule for any temporary replacement motor
  238  vehicle loaned, rented, or provided by a motor vehicle dealer to
  239  or for its service or repair customers, even if the temporary
  240  replacement motor vehicle has been leased, rented, titled, or
  241  registered to the motor vehicle dealer’s rental or leasing
  242  division or an entity that is owned or controlled by the motor
  243  vehicle dealer, provided that the motor vehicle dealer or its
  244  rental or leasing division or entity complies with the written
  245  and uniformly enforced vehicle eligibility, use, and reporting
  246  requirements specified by the applicant or licensee in its
  247  agreement, program, policy, bonus, incentive, or rule relating
  248  to loaner vehicles.
  249         (40) Notwithstanding the terms of any franchise agreement,
  250  the applicant or licensee may not require or coerce, or attempt
  251  to require or coerce, a motor vehicle dealer to purchase goods
  252  or services from a vendor selected, identified, or designated by
  253  the applicant or licensee, or one of its parents, subsidiaries,
  254  divisions, or affiliates, by agreement, standard, policy,
  255  program, incentive provision, or otherwise, without making
  256  available to the motor vehicle dealer the option to obtain the
  257  goods or services of substantially similar design and quality
  258  from a vendor chosen by the motor vehicle dealer. If the motor
  259  vehicle dealer exercises such option, the dealer must provide
  260  written notice of its desire to use the alternative goods or
  261  services to the applicant or licensee, along with samples or
  262  clear descriptions of the alternative goods or services that the
  263  dealer desires to use. The licensee or applicant shall have the
  264  opportunity to evaluate the alternative goods or services for up
  265  to 30 days to determine whether it will provide a written
  266  approval to the motor vehicle dealer to use said alternative
  267  goods or services. Approval may not be unreasonably withheld by
  268  the applicant or licensee. If the motor vehicle dealer does not
  269  receive a response from the applicant or licensee within 30
  270  days, approval to use the alternative goods or services is
  271  deemed granted. If a dealer using alternative goods or services
  272  complies with this subsection and has received approval from the
  273  licensee or applicant, the dealer is not ineligible for all
  274  benefits described in the agreement, standard, policy, program,
  275  incentive provision, or otherwise solely for having used such
  276  alternative goods or services. As used in this subsection, the
  277  term “goods or services” is limited to such goods and services
  278  used to construct or renovate dealership facilities or furniture
  279  and fixtures at the dealership facilities. The term does not
  280  include:
  281         (a) Any intellectual property of the applicant or licensee,
  282  including signage incorporating the applicant’s or licensee’s
  283  trademark or copyright, or facility or building materials to the
  284  extent that the applicant’s or licensee’s trademark is displayed
  285  thereon;
  286         (b) Any special tool and training as required by the
  287  licensee or applicant;
  288         (c) Any part to be used in repairs under warranty
  289  obligations of an applicant or licensee;
  290         (d) Any good or service paid for entirely by the applicant
  291  or licensee; or
  292         (e) Any applicant’s or licensee’s design or architectural
  293  review service.
  294         (41)(a) The applicant or licensee, by agreement, policy,
  295  program, standard, or otherwise, may not require a motor vehicle
  296  dealer, directly or indirectly, to advance or pay or reimburse
  297  the applicant or licensee for any costs related to the creation,
  298  development, showing, placement, or publication in any media of
  299  any advertisement for a motor vehicle; require a motor vehicle
  300  dealer to participate in, contribute to, affiliate with, or join
  301  a dealer advertising or marketing group, fund, pool,
  302  association, or other entity; or take or threaten to take any
  303  adverse action against a motor vehicle dealer that refuses to
  304  join or participate in such group, fund, pool, association, or
  305  other entity. As used in this subsection, the term “adverse
  306  action” includes, but is not limited to, reducing allocations,
  307  charging fees for a licensee’s or dealer’s advertising or a
  308  marketing group’s advertising or marketing, terminating or
  309  threatening to terminate the motor vehicle dealer’s franchise
  310  agreement, reducing any incentive for which the motor vehicle
  311  dealer is eligible, or engaging in any action that fails to take
  312  into account the equities of the motor vehicle dealer.
  313         (b) The applicant or licensee may not require a dealer to
  314  participate in or preclude a number of its motor vehicle dealers
  315  in a designated market area from establishing a voluntary motor
  316  vehicle dealer advertising or marketing group, fund, pool,
  317  association, or other entity. Except as provided in an
  318  agreement, if a motor vehicle dealer chooses to form an
  319  independent advertising or marketing group, the applicant or
  320  licensee is not required to fund such group.
  321         (c) This subsection does not prohibit an applicant or
  322  licensee from offering advertising or promotional materials to a
  323  motor vehicle dealer for a fee or charge, if the use of such
  324  advertising or promotional materials is voluntary for the motor
  325  vehicle dealer.
  326  
  327  A motor vehicle dealer who can demonstrate that a violation of,
  328  or failure to comply with, any of the preceding provisions by an
  329  applicant or licensee will or can adversely and pecuniarily
  330  affect the complaining dealer, shall be entitled to pursue all
  331  of the remedies, procedures, and rights of recovery available
  332  under ss. 320.695 and 320.697.
  333         Section 2. This act applies to all franchise agreements
  334  entered into, renewed, or amended after October 1, 1988, except
  335  to the extent that such application would impair valid
  336  contractual agreements in violation of the State Constitution or
  337  the United States Constitution.
  338         Section 3. If any provision of this act or its application
  339  to any person or circumstance is held invalid, the invalidity
  340  does not affect other provisions or applications of this act
  341  which can be given effect without the invalid provision or
  342  application, and to this end the provisions of this act are
  343  severable.
  344         Section 4. This act shall take effect upon becoming a law.