HB 1037CS

CHAMBER ACTION



1The Transportation Committee recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to franchised motor vehicle dealers;
7amending s. 320.13, F.S.; specifying a definition for
8purposes of provisions for issuance of dealer license
9plates; amending s. 320.60, F.S.; revising the definition
10of the term "demonstrator"; defining the term "existing
11franchised motor vehicle dealer"; amending s. 320.64,
12F.S.; prohibiting applicant or licensee failure to pay
13certain costs and amounts to a dealer after termination of
14franchise; providing that the prohibition does not apply
15to terminations, cancellations, or nonrenewals implemented
16as a result of the sale of assets or stock of the dealer;
17requiring certain procedures be followed; amending s.
18320.641, F.S.; providing procedures for discontinuation,
19cancellation, nonrenewal, modification, or replacement of
20a franchise agreement based upon an alleged failure of the
21dealer to comply with certain sales or service
22obligations; amending s. 320.642, F.S.; revising criteria
23and procedures to establish an additional dealership or
24relocate an existing dealer in an area where the same
25line-make vehicle is presently represented; revising
26provisions for determination by the Department of Highway
27Safety and Motor Vehicles that the existing franchised
28motor vehicle dealer or dealers are providing adequate
29representation; revising criteria for protest by an
30existing dealer; revising provisions excluding certain
31openings and reopenings from consideration as an
32additional or relocated motor vehicle dealer; prohibiting
33notice of an additional dealer for a certain period of
34time within a certain distance from a dealer that was
35opened or reopened and not considered an additional dealer
36subject to protest; requiring distance between sites to be
37measured from the geometric centroid of each site;
38amending s. 320.643, F.S.; exempting a transferee from
39location requirements in the franchise agreement when the
40transferee proposes to simultaneously relocate dealership
41operations in conjunction with the purchase of the
42dealership under certain circumstances; providing
43requirements for such proposals; amending s. 320.699,
44F.S.; revising procedures for administrative hearings;
45requiring a certain schedule unless extended by the
46administrative law judge under certain conditions;
47providing an effective date.
48
49Be It Enacted by the Legislature of the State of Florida:
50
51     Section 1.  Subsection (1) of section 320.13, Florida
52Statutes, is amended to read:
53     320.13  Dealer and manufacturer license plates and
54alternative method of registration.--
55     (1)(a)  Any licensed motor vehicle dealer and any licensed
56mobile home dealer may, upon payment of the license tax imposed
57by s. 320.08(12), secure one or more dealer license plates,
58which are valid for use on motor vehicles or mobile homes owned
59by the dealer to whom such plates are issued while the motor
60vehicles are in inventory and for sale, or while being operated
61in connection with such dealer's business, as defined in s.
62320.60(3), but are not valid for use for hire. Dealer license
63plates may not be used on any tow truck or wrecker unless the
64tow truck or wrecker is being demonstrated for sale, and the
65dealer license plates may not be used on a vehicle used to
66transport another motor vehicle for the motor vehicle dealer.
67     (b)1.  Marine boat trailer dealers and manufacturers may,
68upon payment of the license taxes imposed by s. 320.08(12),
69secure one or more dealer plates, which are valid for use on
70boat trailers owned by the dealer to whom such plates are issued
71while being used in connection with such dealer's business, but
72are not valid for use for hire.
73     2.  It is the intent of the Legislature that the method
74currently used to license marine boat trailer dealers to do
75business in the state, that is, by an occupational license
76issued by the city or county, not be changed. The department
77shall not interpret this act to mean that it is empowered to
78license such dealers to do business. An occupational license tax
79certificate shall be sufficient proof upon which the department
80may issue dealer license plates.
81     Section 2.  Subsection (3) of section 320.60, Florida
82Statutes, is amended, and subsection (17) is added to said
83section, to read:
84     320.60  Definitions for ss. 320.61-320.70.--Whenever used
85in ss. 320.61-320.70, unless the context otherwise requires, the
86following words and terms have the following meanings:
87     (3)  "Demonstrator" means any new motor vehicle which is
88carried on the records of the dealer as a demonstrator and is
89used by, being inspected or driven by the dealer or his or her
90employees, or while being operated or driven, with the
91permission of such motor vehicle dealer, by an owner, officer,
92employee, or independent contractor of a motor vehicle dealer or
93by a member of such owner's, officer's, or employee's immediate
94family, or driven by prospective customers for the purpose of
95demonstrating vehicle characteristics in the sale or display of
96motor vehicles sold by the dealer.
97     (17)  "Existing franchised motor vehicle dealer" means any
98motor vehicle dealer that has a franchise agreement with a
99licensee. For purposes of notice and identification under s.
100320.642 only, all dealer locations of an existing motor vehicle
101dealer or a person that is subject to an unexpired final order
102permitting the establishment of an additional location or a
103relocation, where the location is not yet open for business,
104will be entitled to the same notice and protest rights as an
105existing dealer under the provisions of s. 320.642. A final
106order shall expire upon the failure of the dealer or other
107person that is authorized to establish a location or to relocate
108to become established at the proposed location within the period
109provided by law or rule.
110     Section 3.  Subsection (36) is added to section 320.64,
111Florida Statutes, to read:
112     320.64  Denial, suspension, or revocation of license;
113grounds.--A license of a licensee under s. 320.61 may be denied,
114suspended, or revoked within the entire state or at any specific
115location or locations within the state at which the applicant or
116licensee engages or proposes to engage in business, upon proof
117that the section was violated with sufficient frequency to
118establish a pattern of wrongdoing, and a licensee or applicant
119shall be liable for claims and remedies provided in ss. 320.695
120and 320.697 for any violation of any of the following
121provisions. A licensee is prohibited from committing the
122following acts:
123     (36)(a)  Notwithstanding the terms of any franchise
124agreement, after termination of a franchise an applicant or
125licensee has failed to pay to the motor vehicle dealer all of
126the following amounts:
127     1.  The net cost paid by the dealer for each new motor
128vehicle in the dealer's inventory with mileage of 6,000 miles or
129less, exclusive of mileage placed on the vehicle before it was
130delivered to the dealer, provided that for every mile in excess
131of 1,000 miles there shall be a reduction of the required
132repurchase price at a rate equivalent to the then prevailing
133rate promulgated by the Internal Revenue Service.
134     2.  The cost paid by the dealer for each new, unused,
135undamaged, and unsold part or accessory that:
136     a.  Is in the current parts catalog and is still in the
137original, resalable merchandising package and in an unbroken
138lot, except that, in the case of sheet metal, a comparable
139substitute for the original package may be used; and
140     b.  Was purchased by the dealer either directly from the
141manufacturer or distributor or was purchased from an outgoing
142authorized dealer as a part of the dealer's initial inventory.
143     3.  The fair market value of each undamaged sign, excluding
144normal wear and tear, owned by the dealer that bears a trademark
145or trade name used or claimed by the applicant or licensee or a
146representative of the applicant or licensee and that was
147purchased from or at the request of the applicant or licensee or
148a representative of the applicant or licensee.
149     4.  The fair market value of all special tools, data
150processing equipment, and automotive service equipment owned by
151the dealer that:
152     a.  Were recommended in writing by the applicant or
153licensee or a representative of the applicant or licensee and
154designated as special tools and equipment;
155     b.  Were purchased from or at the request of the applicant
156or licensee or a representative of the applicant or licensee;
157and
158     c.  Are in usable and good condition except for reasonable
159wear and tear.
160     5.  The cost of transporting, handling, packing, storing,
161and loading any property subject to repurchase under this
162section.
163     (b)  This subsection shall not apply to terminations,
164cancellations, and nonrenewals that are implemented as a result
165of the sale of the assets or stock of the dealer. The dealer
166shall return the property listed in this subsection to the
167licensee within 90 days after the effective date of the
168termination, cancellation, or nonrenewal. The licensee shall
169supply the new vehicle dealer with reasonable instructions on
170the method by which the new vehicle dealer must return the
171property to the licensee. The compensation for the property
172shall be paid by the licensee within 60 days after the tender of
173inventory and other items, provided the new motor vehicle dealer
174has clear title to the inventory and other items and is in a
175position to convey that title to the manufacturer or
176distributor. In the event the inventory or other items are
177subject to a security interest, the licensee may make payment
178jointly to the new motor vehicle dealer and the holder of the
179security interest.
180
181A motor vehicle dealer who can demonstrate that a violation of,
182or failure to comply with, any of the preceding provisions by an
183applicant or licensee will or can adversely and pecuniarily
184affect the complaining dealer, shall be entitled to pursue all
185of the remedies, procedures, and rights of recovery available
186under ss. 320.695 and 320.697.
187     Section 4.  Subsection (1) of section 320.641, Florida
188Statutes, is amended to read:
189     320.641  Discontinuations, cancellations, nonrenewals,
190modifications, and replacement of franchise agreements.--
191     (1)(a)  An applicant or licensee shall give written notice
192to the motor vehicle dealer and the department of the licensee's
193intention to discontinue, cancel, or fail to renew a franchise
194agreement or of the licensee's intention to modify a franchise
195or replace a franchise with a succeeding franchise, which
196modification or replacement will adversely alter the rights or
197obligations of a motor vehicle dealer under an existing
198franchise agreement or will substantially impair the sales,
199service obligations, or investment of the motor vehicle dealer,
200at least 90 days before the effective date thereof, together
201with the specific grounds for such action.
202     (b)  The failure by the licensee to comply with the 90-day
203notice period and procedure prescribed herein shall render
204voidable, at the option of the motor vehicle dealer, any
205discontinuation, cancellation, nonrenewal, modification, or
206replacement of any franchise agreement. Designation of a
207franchise agreement at a specific location as a "nondesignated
208point" shall be deemed an evasion of this section and
209constitutes an unfair cancellation.
210     (c)  If the notice required in paragraph (a) is based upon
211an alleged failure of the dealer to comply with the obligations
212of the dealer agreement with respect to the performance of sales
213or service obligations, the applicant or licensee shall transmit
214to the dealer a notice of default not less than 180 days prior
215to transmission of the notice required in paragraph (a). The
216notice of default under this paragraph shall specify the sales
217and service deficiencies alleged by the applicant or licensee
218and afford the dealer a period of time of not less than 180 days
219to cure those deficiencies.
220     Section 5.  Subsections (2), (3), and (5) of section
221320.642, Florida Statutes, are amended, and subsection (7) is
222added to said section, to read:
223     320.642  Dealer licenses in areas previously served;
224procedure.--
225     (2)(a)  An application for a motor vehicle dealer license
226in any community or territory shall be denied when:
227     1.  A timely protest is filed by a presently existing
228franchised motor vehicle dealer with standing to protest as
229defined in subsection (3); and
230     2.  The licensee fails to show that the existing franchised
231dealer or dealers who register new motor vehicle retail sales or
232retail leases of the same line-make in the community or
233territory of the proposed dealership are not providing adequate
234representation of such line-make motor vehicles in such
235community or territory as a whole and not with respect to any
236part thereof or identifiable plot therein. The burden of proof
237in establishing inadequate representation shall be on the
238licensee.
239     (b)  In determining whether the existing franchised motor
240vehicle dealer or dealers are providing adequate representation
241in the community or territory for the line-make, the department
242shall may consider evidence including which may include, but is
243not limited to:
244     1.  The impact of the establishment of the proposed or
245relocated dealer on the consumers, public interest, existing
246dealers, and the licensee; provided, however, that financial
247impact may only be considered with respect to the protesting
248dealer or dealers.
249     2.  The size and permanency of investment reasonably made
250and reasonable obligations incurred by the existing dealer or
251dealers to perform their obligations under the dealer agreement.
252     3.  The reasonably expected market penetration of the line-
253make motor vehicle for the community or territory involved,
254after consideration of all factors which may affect said
255penetration, including, but not limited to, demographic factors
256such as age, income, education, size class preference, product
257popularity, retail lease transactions, whether located in a
258metropolitan or nonmetropolitan area, or other factors affecting
259sales to consumers of the community or territory. With respect
260to any geographic comparison area used to evaluate the
261performance of the line-make within the community or territory,
262such comparison area shall not be smaller than an entire county
263and shall not include any geographic area located outside this
264state. Reasonably expected market penetration shall be measured
265with respect to the community or territory as a whole and not
266with respect to any part thereof or identifiable plot therein.
267In order to satisfy its burden of proof pursuant to this
268section, the licensee must prove that any deviation or shortfall
269in market penetration from a reasonable comparison area is
270substantial and significant, considering factors including, but
271not limited to, the size of the community or territory and the
272projected sales of the proposed dealership.
273     4.  Any actions by the licensees in denying its existing
274dealer or dealers of the same line-make the opportunity for
275reasonable growth, market expansion, or relocation, including
276the availability of line-make vehicles in keeping with the
277reasonable expectations of the licensee in providing an adequate
278number of dealers in the community or territory.
279     5.  Any attempts by the licensee to coerce the existing
280dealer or dealers into consenting to additional or relocated
281franchises of the same line-make in the community or territory.
282     6.  Distance, travel time, traffic patterns, and
283accessibility between the existing dealer or dealers of the same
284line-make and the location of the proposed additional or
285relocated dealer.
286     7.  Whether benefits to consumers will likely occur from
287the establishment or relocation of the dealership which cannot
288be obtained by other geographic or demographic changes or
289expected changes in the community or territory.
290     8.  Whether the protesting dealer or dealers are in
291substantial compliance with their dealer agreement.
292     9.  Whether there is adequate interbrand and intrabrand
293competition with respect to said line-make in the community or
294territory and adequately convenient consumer care for the motor
295vehicles of the line-make, including the adequacy of sales and
296service facilities.
297     10.  Whether the establishment or relocation of the
298proposed dealership appears to be warranted and justified based
299on economic and marketing conditions pertinent to dealers
300competing in the community or territory, including anticipated
301future changes.
302     11.  The volume of registrations and service business
303transacted by the existing dealer or dealers of the same line-
304make in the relevant community or territory of the proposed
305dealership.
306     (3)  An existing franchised motor vehicle dealer or dealers
307shall have standing to protest a proposed additional or
308relocated motor vehicle dealer where the existing motor vehicle
309dealer or dealers have a franchise agreement for the same line-
310make vehicle to be sold or serviced by the proposed additional
311or relocated motor vehicle dealer and are physically located so
312as to meet or satisfy any of the following requirements or
313conditions:
314     (a)  If the proposed additional or relocated motor vehicle
315dealer is to be located in a county with a population of less
316than 300,000 according to the most recent data of the United
317States Census Bureau or the data of the Bureau of Economic and
318Business Research of the University of Florida:
319     1.  The proposed additional or relocated motor vehicle
320dealer is to be located in the area designated or described as
321the area of responsibility, or such similarly designated area,
322including the entire area designated as a multiple-point area,
323in the franchise agreement or in any related document or
324commitment with the existing motor vehicle dealer or dealers of
325the same line-make as such agreement existed upon October 1,
3261988;
327     2.  The existing motor vehicle dealer or dealers of the
328same line-make have a licensed franchise location within a
329radius of 20 miles of the location of the proposed additional or
330relocated motor vehicle dealer; or
331     3.  Any existing motor vehicle dealer or dealers of the
332same line-make can establish that, during any consecutive 12-
333month period of the 36-month period preceding the month in which
334the publication of the proposed additional or relocated
335dealership appears in the Florida Administrative Weekly, filing
336of the licensee's application for the proposed dealership, such
337dealer or its predecessor made 25 percent of the its retail
338sales or leases of new motor vehicles made by such dealer or its
339predecessor were to persons or entities that whose registered
340the purchased or leased vehicle to an address household
341addresses were located within a radius of 20 miles of the
342geometric centroid of the property that will encompass all
343location of the proposed additional or relocated motor vehicle
344dealer operations; provided such existing dealer is located in
345the same county or any county contiguous to the county where the
346additional or relocated dealer is proposed to be located.
347     (b)  If the proposed additional or relocated motor vehicle
348dealer is to be located in a county with a population of more
349than 300,000 according to the most recent data of the United
350States Census Bureau or the data of the Bureau of Economic and
351Business Research of the University of Florida:
352     1.  Any existing motor vehicle dealer or dealers of the
353same line-make have a licensed franchise location within a
354radius of 12.5 miles of the location of the proposed additional
355or relocated motor vehicle dealer; or
356     2.  Any existing motor vehicle dealer or dealers of the
357same line-make can establish that, during any consecutive 12-
358month period of the 36-month period preceding the month in which
359the publication of the proposed additional or relocated
360dealership appears in the Florida Administrative Weekly, filing
361of the licensee's application for the proposed dealership, such
362dealer or its predecessor made 25 percent of the its retail
363sales or leases of new motor vehicles made by such dealer or its
364predecessor were to persons or entities that whose registered
365the purchased or leased vehicle to an address household
366addresses were located within a radius of 12.5 miles of the
367geometric centroid of the property that will encompass all
368location of the proposed additional or relocated motor vehicle
369dealer; provided such existing dealer is located in the same
370county or any county contiguous to the county where the
371additional or relocated dealer is proposed to be located.
372     (c)  The date of sale shall be the later of the dates on
373which the sale is reported to the licensee or the department. In
374the event of a conflict between the address listed by the
375purchaser on the registration with the licensee and that listed
376on the registration with the department, the address listed with
377the department shall be used.
378     (5)(a)  The opening or reopening of the same or a successor
379motor vehicle dealer within 12 months after the date that the
380department revokes a previously issued license and all legal
381proceedings, including appeal, regarding such revocation are
382completed, or the dealer voluntarily terminates the previously
383issued license, or the opening of a relocated dealer within 12
384months after the date that the department approves an
385application for change of address, shall not be considered an
386additional motor vehicle dealer subject to protest within the
387meaning of this section, if:
388     1.(a)  The opening or reopening is within the same or an
389adjacent county and, is within 2 miles of the former motor
390vehicle dealer location;,
391     2.(b)  There is no dealer within 25 miles of the proposed
392location or the proposed location is further from each existing
393dealer of the same line-make than the prior location is from
394each dealer of the same line-make within 25 miles of the new
395location;,
396     3.(c)  The opening or reopening is within 6 miles of the
397prior location and, if any existing motor vehicle dealer of the
398same line-make is located within 15 miles of the former
399location, the proposed location is no closer to any existing
400dealer of the same line-make within 15 miles of the proposed
401location;, or
402     4.(d)  The opening or reopening is within 6 miles of the
403prior location and, if all existing motor vehicle dealers of the
404same line-make are beyond 15 miles of the former location, the
405proposed location is further than 15 miles from any existing
406motor vehicle dealer of the same line-make.
407
408Any other such opening or reopening shall constitute an
409additional motor vehicle dealer within the meaning of this
410section.
411     (b)  If an opening or reopening is accomplished pursuant to
412the terms of this subsection and therefore is not considered an
413additional motor vehicle dealer subject to protest, the licensee
414shall not notice an additional motor vehicle dealer of the same
415line-make that is to be located within 4 miles from the previous
416location for a period of 2 years after the date of the exempt
417relocation.
418     (7)  All measurements required by this section of the
419distance between existing motor vehicle dealer locations or
420existing motor vehicle dealer locations and a proposed motor
421vehicle dealer's location shall be taken from the geometric
422centroid of the property that encompasses all of the existing or
423proposed motor vehicle dealer operations.
424     Section 6.  Subsection (5) of section 320.643, Florida
425Statutes, is renumbered as subsection (6) and a new subsection
426(5) is added to said section to read:
427     320.643  Transfer, assignment, or sale of franchise
428agreements.--
429     (5)  A transferee proposing to simultaneously relocate
430motor vehicle dealership operations in conjunction with an asset
431purchase pursuant to subsection (1) or an equity purchase
432pursuant to subsection (2) shall not be required to comply with
433the location requirements of the franchise agreement then in
434effect and such a proposal shall be subject to this section if:
435     (a)  The proposed relocation is a relocation exempt from
436protest and not considered as an additional motor vehicle dealer
437pursuant to the provisions of s. 320.642(5)(a)1.;
438     (b)  The proposed dealership's facility satisfies facility
439requirements in effect between the licensee and the dealer
440proposing the transfer at the time the transfer is proposed; and
441     (c)  The proposed facility is otherwise an appropriate
442location, taking into account the accessibility and convenience
443to consumers of the proposed location, the location of other
444dealers of the same line-make, and other factors related to the
445appropriateness of the facility for its proposed use, and
446whether the proposed dealership facility and dealership
447operations are separate from any other line-makes.
448     Section 7.  Subsection (3) is added to section 320.699,
449Florida Statutes, to read:
450     320.699  Administrative hearings and adjudications;
451procedure.--
452     (3)  If a complaint is filed pursuant to s. 320.641, except
453a complaint filed pursuant to s. 320.641(5), a hearing shall be
454held not sooner than 180 days nor later than 240 days after the
455date of filing of the complaint unless the time is extended by
456the administrative law judge for good cause shown. This
457subsection shall govern the schedule of hearings in lieu of any
458other provision of law with respect to an administrative hearing
459conducted by the Department of Highway Safety and Motor Vehicles
460or the Division of Administrative Hearings.
461     Section 8.  This act shall take effect July 1, 2005.


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