HB 1037

1
A bill to be entitled
2An act relating to franchised motor vehicle dealers;
3amending s. 320.60, F.S.; revising the definition of
4"demonstrator"; defining "existing franchised motor
5vehicle dealer"; amending s. 320.64, F.S.; prohibiting
6applicant or licensee failure to pay certain costs and
7amounts to a dealer after termination of franchise;
8amending s. 320.641, F.S.; providing for admissibility of
9certain evidence in a hearing of a complaint or petition
10filed relating to discontinuations, cancellations,
11nonrenewals, modifications, or replacement of franchise
12agreements; amending s. 320.642, F.S.; revising criteria
13and procedures to establish an additional dealership or
14relocate an existing dealer in an area where the same
15line-make vehicle is presently represented; revising
16provisions excluding certain openings and reopenings from
17consideration as an additional or relocated motor vehicle
18dealer; limiting such openings and reopenings; requiring
19distance between sites to be measured from the geometric
20centroid of each site; amending s. 320.643, F.S.;
21exempting a transferee proposing to simultaneously
22relocate dealership operations in conjunction with the
23purchase from location requirements in the franchise
24agreement under certain circumstances; providing
25requirements for such proposals; amending s. 320.699,
26F.S.; revising procedures for administrative hearings;
27requiring a certain schedule unless extended by the
28administrative law judge under certain conditions;
29amending ss. 320.645, 681.102, and 681.113, F.S.;
30correcting cross references; providing an effective date.
31
32Be It Enacted by the Legislature of the State of Florida:
33
34     Section 1.  Subsection (3) of section 320.60, Florida
35Statutes, is amended, subsections (6) through (16) are
36renumbered as subsections (7) through (17), respectively, and a
37new subsection (6) is added to said section, to read:
38     320.60  Definitions for ss. 320.61-320.70.--Whenever used
39in ss. 320.61-320.70, unless the context otherwise requires, the
40following words and terms have the following meanings:
41     (3)  "Demonstrator" means any new motor vehicle which is
42carried on the records of the dealer as a demonstrator and is
43used by or, being inspected or driven by the dealer or his or
44her employees, or driven by prospective customers for the
45purpose of demonstrating vehicle characteristics in the sale or
46display of motor vehicles sold by the dealer.
47     (6)  "Existing franchised motor vehicle dealer" means any
48motor vehicle dealer that has a franchise agreement with a
49licensee in effect or that is the subject of a final order
50permitting the establishment of additional representation or a
51relocation, even if not yet opened for business.
52     Section 2.  Subsection (36) is added to section 320.64,
53Florida Statutes, to read:
54     320.64  Denial, suspension, or revocation of license;
55grounds.--A license of a licensee under s. 320.61 may be denied,
56suspended, or revoked within the entire state or at any specific
57location or locations within the state at which the applicant or
58licensee engages or proposes to engage in business, upon proof
59that the section was violated with sufficient frequency to
60establish a pattern of wrongdoing, and a licensee or applicant
61shall be liable for claims and remedies provided in ss. 320.695
62and 320.697 for any violation of any of the following
63provisions. A licensee is prohibited from committing the
64following acts:
65     (36)  Notwithstanding the terms of any franchise agreement,
66after termination of a franchise, voluntarily or involuntarily,
67an applicant or licensee has failed to pay to the motor vehicle
68dealer, within 90 days after the effective date of the
69termination, cancellation, or nonrenewal, the following amounts:
70     (a)  The net cost paid by the dealer for each new motor
71vehicle in the dealer's inventory with mileage of 6,000 miles or
72less, exclusive of mileage placed on the vehicle before it was
73delivered to the dealer.
74     (b)  The cost paid by the dealer for each new, unused,
75undamaged, and unsold part or accessory that:
76     1.  Is in the current parts catalog and is still in the
77original, resalable merchandising package and in an unbroken
78lot, except that, in the case of sheet metal, a comparable
79substitute for the original package may be used; and
80     2.  Was purchased by the dealer either directly from the
81manufacturer or distributor or was purchased from an outgoing
82authorized dealer as a part of the dealer's initial inventory.
83     (c)  The fair market value of each undamaged sign owned by
84the dealer that bears a trademark or trade name used or claimed
85by the applicant or licensee or a representative of the
86applicant or licensee and that was purchased from or at the
87request of the applicant or licensee or a representative of the
88applicant or licensee.
89     (d)  The fair market value of all special tools, data
90processing equipment, and automotive service equipment owned by
91the dealer that:
92     1.  Were recommended in writing by the applicant or
93licensee or a representative of the applicant or licensee and
94designated as special tools and equipment;
95     2.  Were purchased from or at the request of the applicant
96or licensee or a representative of the applicant or licensee;
97and
98     3.  Are in usable and good condition except for reasonable
99wear and tear.
100     (e)  The cost of transporting, handling, packing, storing,
101and loading any property subject to repurchase under this
102section.
103
104A motor vehicle dealer who can demonstrate that a violation of,
105or failure to comply with, any of the preceding provisions by an
106applicant or licensee will or can adversely and pecuniarily
107affect the complaining dealer, shall be entitled to pursue all
108of the remedies, procedures, and rights of recovery available
109under ss. 320.695 and 320.697.
110     Section 3.  Subsection (3) of section 320.641, Florida
111Statutes, is amended to read:
112     320.641  Discontinuations, cancellations, nonrenewals,
113modifications, and replacement of franchise agreements.--
114     (3)(a)  Any motor vehicle dealer who receives a notice of
115intent to discontinue, cancel, not renew, modify, or replace
116may, within the 90-day notice period, file a petition or
117complaint for a determination of whether such action is an
118unfair or prohibited discontinuation, cancellation, nonrenewal,
119modification, or replacement. Agreements and certificates of
120appointment shall continue in effect until final determination
121of the issues raised in such petition or complaint by the motor
122vehicle dealer. A discontinuation, cancellation, or nonrenewal
123of a franchise agreement is unfair if it is not clearly
124permitted by the franchise agreement; is not undertaken in good
125faith; is not undertaken for good cause; or is based on an
126alleged breach of the franchise agreement which is not in fact a
127material and substantial breach; or, if the grounds relied upon
128for termination, cancellation, or nonrenewal have not been
129applied in a uniform and consistent manner by the licensee. A
130modification or replacement is unfair if it is not clearly
131permitted by the franchise agreement; is not undertaken in good
132faith; or is not undertaken for good cause. The applicant or
133licensee shall have the burden of proof that such action is fair
134and not prohibited.
135     (b)  In any hearing held pursuant to a complaint or
136petition filed pursuant to this subsection, all conduct by the
137motor vehicle dealer or licensee until the commencement of the
138final hearing shall be admissible in evidence to determine the
139issues set forth under this subsection.
140     Section 4.  Subsections (2), (3), (5), and (6) of section
141320.642, Florida Statutes, are amended, and subsection (7) is
142added to said section, to read:
143     320.642  Dealer licenses in areas previously served;
144procedure.--
145     (2)(a)  An application for a motor vehicle dealer license
146in any community or territory shall be denied when:
147     1.  A timely protest is filed by a presently existing
148franchised motor vehicle dealer with standing to protest as
149defined in subsection (3); and
150     2.  The licensee fails to show that the existing franchised
151dealer or dealers who register new motor vehicle retail sales or
152retail leases of the same line-make in the community or
153territory of the proposed dealership are not providing adequate
154representation of such line-make motor vehicles in such
155community or territory as a whole and not with respect to any
156part thereof or identifiable plot therein. The burden of proof
157in establishing inadequate representation shall be on the
158licensee.
159     (b)  In determining whether the existing franchised motor
160vehicle dealer or dealers are providing adequate representation
161in the community or territory for the line-make, the department
162shall may consider evidence including which may include, but is
163not limited to:
164     1.  The impact of the establishment of the proposed or
165relocated dealer on the consumers, public interest, existing
166dealers, and the licensee; provided, however, that financial
167impact may only be considered with respect to the protesting
168dealer or dealers.
169     2.  The size and permanency of investment reasonably made
170and reasonable obligations incurred by the existing dealer or
171dealers to perform their obligations under the dealer agreement.
172     3.  The reasonably expected market penetration of the line-
173make motor vehicle for the community or territory involved,
174after consideration of all factors which may affect said
175penetration, including, but not limited to, demographic factors
176such as age, income, education, size class preference, product
177popularity, retail lease transactions, import penetration,
178existence and extent of interbrand competition, whether located
179in a metropolitan or nonmetropolitan area, or other factors
180affecting sales to consumers of the community or territory. With
181respect to any geographic comparison area used to evaluate the
182performance of the line-make within the community or territory,
183such comparison area shall not be smaller than an entire county
184and shall not include any geographic area located outside this
185state. Reasonably expected market penetration shall be measured
186with respect to the community or territory as a whole and not
187with respect to any part thereof or identifiable plot therein.
188In order to satisfy its burden of proof pursuant to this
189section, the licensee must prove that any deviation or shortfall
190in market penetration from a reasonable comparison area is
191substantial and significant, considering factors including, but
192not limited to, the size of the community or territory and the
193projected sales of the proposed dealership.
194     4.  Any actions by the licensees in denying its existing
195dealer or dealers of the same line-make the opportunity for
196reasonable growth, market expansion, or relocation, including
197the availability of line-make vehicles in keeping with the
198reasonable expectations of the licensee in providing an adequate
199number of dealers in the community or territory.
200     5.  Any attempts by the licensee to coerce the existing
201dealer or dealers into consenting to additional or relocated
202franchises of the same line-make in the community or territory.
203     6.  Distance, travel time, traffic patterns, and
204accessibility between the existing dealer or dealers of the same
205line-make and the location of the proposed additional or
206relocated dealer.
207     7.  Whether benefits to consumers will likely occur from
208the establishment or relocation of the dealership which cannot
209be obtained by other geographic or demographic changes or
210expected changes in the community or territory.
211     8.  Whether the protesting dealer or dealers are in
212substantial compliance with their dealer agreement.
213     9.  Whether there is adequate interbrand and intrabrand
214competition with respect to said line-make in the community or
215territory and adequately convenient consumer care for the motor
216vehicles of the line-make, including the adequacy of sales and
217service facilities.
218     10.  Whether the establishment or relocation of the
219proposed dealership appears to be warranted and justified based
220on economic and marketing conditions pertinent to dealers
221competing in the community or territory, including anticipated
222future changes.
223     11.  The volume of registrations and service business
224transacted by the existing dealer or dealers of the same line-
225make in the relevant community or territory of the proposed
226dealership.
227     (3)  An existing franchised motor vehicle dealer or dealers
228shall have standing to protest a proposed additional or
229relocated motor vehicle dealer where the existing motor vehicle
230dealer or dealers have a franchise agreement for the same line-
231make vehicle to be sold or serviced by the proposed additional
232or relocated motor vehicle dealer and are physically located so
233as to meet or satisfy any of the following requirements or
234conditions:
235     (a)  If the proposed additional or relocated motor vehicle
236dealer is to be located in a county with a population of less
237than 300,000 according to the most recent data of the United
238States Census Bureau or the data of the Bureau of Economic and
239Business Research of the University of Florida:
240     1.  The proposed additional or relocated motor vehicle
241dealer is to be located in the area designated or described as
242the area of responsibility, or such similarly designated area,
243including the entire area designated as a multiple-point area,
244in the franchise agreement or in any related document or
245commitment with the existing motor vehicle dealer or dealers of
246the same line-make as such agreement existed upon October 1,
2471988;
248     2.  The existing motor vehicle dealer or dealers of the
249same line-make have a licensed franchise location within a
250radius of 20 miles of the location of the proposed additional or
251relocated motor vehicle dealer; or
252     3.  Any existing motor vehicle dealer or dealers of the
253same line-make can establish that, during any consecutive 12-
254month period of the 36-month period preceding the month in which
255the publication of the proposed additional or relocated
256dealership appears in the Florida Administrative Weekly for the
257filing of the licensee's application for the proposed additional
258or relocated motor vehicle dealer, dealership, such dealer or
259its predecessor made 25 percent of the its retail sales of new
260motor vehicles made by such dealer or its predecessor were to
261persons or entities that whose registered the purchased vehicle
262to an address household addresses were located within a radius
263of 20 miles of the geometric centroid of the property that will
264encompass all location of the proposed additional or relocated
265motor vehicle dealer operations; provided such existing dealer
266is located in the same county or any county contiguous to the
267county where the additional or relocated dealer is proposed to
268be located.
269     (b)  If the proposed additional or relocated motor vehicle
270dealer is to be located in a county with a population of more
271than 300,000 according to the most recent data of the United
272States Census Bureau or the data of the Bureau of Economic and
273Business Research of the University of Florida:
274     1.  Any existing motor vehicle dealer or dealers of the
275same line-make have a licensed franchise location within a
276radius of 12.5 miles of the location of the proposed additional
277or relocated motor vehicle dealer; or
278     2.  Any existing motor vehicle dealer or dealers of the
279same line-make can establish that, during any consecutive 12-
280month period of the 36-month period preceding the month in which
281the publication of the proposed additional or relocated
282dealership appears in the Florida Administrative Weekly for the
283filing of the licensee's application for the proposed additional
284or relocated motor vehicle dealer, dealership, such dealer or
285its predecessor made 25 percent of the its retail sales of new
286motor vehicles made by such dealer or its predecessor were to
287persons or entities that whose registered the purchased vehicle
288to an address household addresses were located within a radius
289of 12.5 miles of the geometric centroid of the property that
290will encompass all location of the proposed additional or
291relocated motor vehicle dealer operations; provided such
292existing dealer is located in the same county or any county
293contiguous to the county where the additional or relocated
294dealer is proposed to be located.
295     (5)(a)  The opening or reopening of the same or a successor
296motor vehicle dealer within 12 months shall not be considered an
297additional motor vehicle dealer subject to protest within the
298meaning of this section, if:
299     1.(a)  The opening or reopening is within the same or an
300adjacent county and, is within 2 miles of the former motor
301vehicle dealer location;,
302     2.(b)  There is no dealer within 25 miles of the proposed
303location or the proposed location is further from each existing
304dealer of the same line-make than the prior location is from
305each dealer of the same line-make within 25 miles of the new
306location;,
307     3.(c)  The opening or reopening is within 6 miles of the
308prior location and, if any existing motor vehicle dealer of the
309same line-make is located within 15 miles of the former
310location, the proposed location is no closer to any existing
311dealer of the same line-make within 15 miles of the proposed
312location;, or
313     4.(d)  The opening or reopening is within 6 miles of the
314prior location and, if all existing motor vehicle dealers of the
315same line-make are beyond 15 miles of the former location, the
316proposed location is further than 15 miles from any existing
317motor vehicle dealer of the same line-make.
318
319Any other such opening or reopening shall constitute an
320additional motor vehicle dealer within the meaning of this
321section.
322     (b)  If an opening or reopening is accomplished pursuant to
323the terms of this subsection and therefore not considered an
324additional motor vehicle dealer subject to protest, the licensee
325shall not propose a motor vehicle dealer of the same line-make
326that is to be located within 5 miles from the previous location
327for a period of 5 years after the date of the exempt relocation.
328     (6)  When a proposed addition or relocation concerns a
329dealership that performs or is to perform only service, as
330defined in s. 320.60(17)(16), and will not or does not sell or
331lease new motor vehicles, as defined in s. 320.60(16)(15), the
332proposal shall be subject to notice and protest pursuant to the
333provisions of this section.
334     (a)  Standing to protest the addition or relocation of a
335service-only dealership shall be limited to those instances in
336which the applicable mileage requirement established in
337subparagraphs (3)(a)2. and (3)(b)1. is met.
338     (b)  The addition or relocation of a service-only
339dealership shall not be subject to protest if:
340     1.  The applicant for the service-only dealership location
341is an existing motor vehicle dealer of the same line-make as the
342proposed additional or relocated service-only dealership;
343     2.  There is no existing dealer of the same line-make
344closer than the applicant to the proposed location of the
345additional or relocated service-only dealership; and
346     3.  The proposed location of the additional or relocated
347service-only dealership is at least 7 miles from all existing
348motor vehicle dealerships of the same line-make, other than
349motor vehicle dealerships owned by the applicant.
350     (c)  In determining whether existing franchised motor
351vehicle dealers are providing adequate representations in the
352community or territory for the line-make in question in a
353protest of the proposed addition or relocation of a service-only
354dealership, the department may consider the elements set forth
355in paragraph (2)(b), provided:
356     1.  With respect to subparagraph (2)(b)1., only the impact
357as it relates to service may be considered;
358     2.  Subparagraph (2)(b)3. shall not be considered;
359     3.  With respect to subparagraph (2)(b)9., only service
360facilities shall be considered; and
361     4.  With respect to subparagraph (2)(b)11., only the volume
362of service business transacted shall be considered.
363     (d)  If an application for a service-only dealership is
364granted, the department shall issue a license which permits only
365service, as defined in s. 320.60(17)(16), and does not permit
366the selling or leasing of new motor vehicles, as defined in s.
367320.60(16)(15). If a service-only dealership subsequently seeks
368to sell new motor vehicles at its location, the notice and
369protest provisions of this section shall apply.
370     (7)  All measurements required by this section of the
371distance between existing motor vehicle dealer locations or
372existing motor vehicle dealer locations and a proposed motor
373vehicle dealer's location shall be taken from the geometric
374centroid of the property that encompasses all of the existing or
375proposed motor vehicle dealer operations.
376     Section 5.  Subsection (5) of section 320.643, Florida
377Statutes, is renumbered as subsection (6) and a new subsection
378(5) is added to said section to read:
379     320.643  Transfer, assignment, or sale of franchise
380agreements.--
381     (5)  A transferee proposing to simultaneously relocate
382motor vehicle dealership operations in conjunction with an asset
383purchase pursuant to subsection (1) or an equity purchase
384pursuant to subsection (2) shall not be required to comply with
385the location requirements of the franchise agreement then in
386effect and such a proposal shall be subject to this section if:
387     (a)  The proposed relocation is a relocation exempt from
388protest and not considered as an additional motor vehicle dealer
389pursuant to the provisions of s. 320.642(5); and
390     (b)  The proposed dealership's facility satisfies facility
391requirements in effect between the licensee and the dealer
392proposing the transfer at the time the transfer is proposed.
393     Section 6.  Subsection (4) of section 320.645, Florida
394Statutes, is amended to read:
395     320.645  Restriction upon ownership of dealership by
396licensee.--
397     (4)  Nothing in this chapter shall prohibit a distributor
398as defined in s. 320.60(5) or common entity that is not a
399manufacturer, a division of a manufacturer, an entity that is
400controlled by a manufacturer, or a common entity of a
401manufacturer, and that is not owned, in whole or in part,
402directly or indirectly, by a manufacturer, as defined in s.
403320.60(10)(9), from receiving a license or licenses as defined
404in s. 320.27 and owning and operating a motor vehicle dealership
405or dealerships that sell or service motor vehicles other than
406any line-make of motor vehicles distributed by the distributor.
407     Section 7.  Subsection (3) is added to section 320.699,
408Florida Statutes, to read:
409     320.699  Administrative hearings and adjudications;
410procedure.--
411     (3)  If a complaint is filed pursuant to s. 320.641, s.
412320.643, s. 320.644, or s. 320.696, a hearing shall be held not
413sooner than 180 days nor later than 240 days after the date of
414filing of the complaint unless the time is extended by the
415administrative law judge for good cause shown. This subsection
416shall govern the schedule of hearings for a complaint filed
417pursuant to s. 320.641, s. 320.643, s. 320.644, or s. 320.696 in
418lieu of any other provision of law with respect to an
419administrative hearing conducted by the Department of Highway
420Safety and Motor Vehicles or the Division of Administrative
421Hearings, including performance standards of state agencies,
422which may be included in current and future appropriations acts.
423     Section 8.  Subsection (14) of section 681.102, Florida
424Statutes, is amended to read:
425     681.102  Definitions.--As used in this chapter, the term:
426     (14)  "Manufacturer" means any person, whether a resident
427or nonresident of this state, who manufactures or assembles
428motor vehicles, or who manufactures or assembles chassis for
429recreational vehicles, or who manufactures or installs on
430previously assembled truck or recreational vehicle chassis
431special bodies or equipment which, when installed, forms an
432integral part of the motor vehicle, a distributor as defined in
433s. 320.60(5), or an importer as defined in s. 320.60(8)(7). A
434dealer as defined in s. 320.60(12)(11)(a) shall not be deemed to
435be a manufacturer, distributor, or importer as provided in this
436section.
437     Section 9.  Section 681.113, Florida Statutes, is amended
438to read:
439     681.113  Dealer liability.--Except as provided in ss.
440681.103(3) and 681.114(2), nothing in this chapter imposes any
441liability on a dealer as defined in s. 320.60(12)(11)(a) or
442creates a cause of action by a consumer against a dealer, except
443for written express warranties made by the dealer apart from the
444manufacturer's warranties. A dealer may not be made a party
445defendant in any action involving or relating to this chapter,
446except as provided in this section. The manufacturer shall not
447charge back or require reimbursement by the dealer for any
448costs, including, but not limited to, any refunds or vehicle
449replacements, incurred by the manufacturer arising out of this
450chapter, in the absence of evidence that the related repairs had
451been carried out by the dealer in a manner substantially
452inconsistent with the manufacturer's published instructions.
453     Section 10.  This act shall take effect July 1, 2005.


CODING: Words stricken are deletions; words underlined are additions.