HB 1037CS

CHAMBER ACTION



1The State Infrastructure Council 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 or, being inspected or driven by the dealer or his or
90her employees, or while being operated or driven, with the
91permission of such motor vehicle dealer, by an owner, officer,
92or employee of a motor vehicle dealer, or by a member of such
93owner's, officer's, or employee's immediate family, or driven by
94prospective customers for the purpose of demonstrating vehicle
95characteristics in the sale or display of motor vehicles sold by
96the 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,
102or in the application process for a final order, permitting the
103establishment of an additional location or a relocation, where
104the location is not yet open for business, will be entitled to
105the same notice and protest rights as an existing dealer under
106the provisions of s. 320.642. A final order shall expire upon
107the failure of the dealer or other person that is authorized to
108establish a location or to relocate to become established at the
109proposed location within the period provided 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. The burden of proof in establishing
236inadequate representation shall be on the licensee.
237     (b)  In determining whether the existing franchised motor
238vehicle dealer or dealers are providing adequate representation
239in the community or territory for the line-make, the department
240shall may consider evidence including which may include, but is
241not limited to:
242     1.  The impact of the establishment of the proposed or
243relocated dealer on the consumers, public interest, existing
244dealers, and the licensee; provided, however, that financial
245impact may only be considered with respect to the protesting
246dealer or dealers.
247     2.  The size and permanency of investment reasonably made
248and reasonable obligations incurred by the existing dealer or
249dealers to perform their obligations under the dealer agreement.
250     3.  The reasonably expected market penetration of the line-
251make motor vehicle for the community or territory involved,
252after consideration of all factors which may affect said
253penetration, including, but not limited to, demographic factors
254such as age, income, education, size class preference, product
255popularity, retail lease transactions, whether located in a
256metropolitan or nonmetropolitan area, or other factors affecting
257sales to consumers of the community or territory. With respect
258to any geographic comparison area used to evaluate the
259performance of the line-make within the community or territory,
260such comparison area shall not include any geographic area
261located outside this state. In order to satisfy its burden of
262proof pursuant to this section, the licensee must prove that any
263deviation or shortfall in market penetration from a reasonable
264comparison area is substantial and significant, considering
265factors including, but not limited to, the size of the community
266or territory and the projected sales of the proposed dealership.
267     4.  Any actions by the licensees in denying its existing
268dealer or dealers of the same line-make the opportunity for
269reasonable growth, market expansion, or relocation, including
270the availability of line-make vehicles in keeping with the
271reasonable expectations of the licensee in providing an adequate
272number of dealers in the community or territory.
273     5.  Any attempts by the licensee to coerce the existing
274dealer or dealers into consenting to additional or relocated
275franchises of the same line-make in the community or territory.
276     6.  Distance, travel time, traffic patterns, and
277accessibility between the existing dealer or dealers of the same
278line-make and the location of the proposed additional or
279relocated dealer.
280     7.  Whether benefits to consumers will likely occur from
281the establishment or relocation of the dealership which cannot
282be obtained by other geographic or demographic changes or
283expected changes in the community or territory.
284     8.  Whether the protesting dealer or dealers are in
285substantial compliance with their dealer agreement.
286     9.  Whether there is adequate interbrand and intrabrand
287competition with respect to said line-make in the community or
288territory and adequately convenient consumer care for the motor
289vehicles of the line-make, including the adequacy of sales and
290service facilities.
291     10.  Whether the establishment or relocation of the
292proposed dealership appears to be warranted and justified based
293on economic and marketing conditions pertinent to dealers
294competing in the community or territory, including anticipated
295future changes.
296     11.  The volume of registrations and service business
297transacted by the existing dealer or dealers of the same line-
298make in the relevant community or territory of the proposed
299dealership.
300     (3)  An existing franchised motor vehicle dealer or dealers
301shall have standing to protest a proposed additional or
302relocated motor vehicle dealer where the existing motor vehicle
303dealer or dealers have a franchise agreement for the same line-
304make vehicle to be sold or serviced by the proposed additional
305or relocated motor vehicle dealer and are physically located so
306as to meet or satisfy any of the following requirements or
307conditions:
308     (a)  If the proposed additional or relocated motor vehicle
309dealer is to be located in a county with a population of less
310than 300,000 according to the most recent data of the United
311States Census Bureau or the data of the Bureau of Economic and
312Business Research of the University of Florida:
313     1.  The proposed additional or relocated motor vehicle
314dealer is to be located in the area designated or described as
315the area of responsibility, or such similarly designated area,
316including the entire area designated as a multiple-point area,
317in the franchise agreement or in any related document or
318commitment with the existing motor vehicle dealer or dealers of
319the same line-make as such agreement existed upon October 1,
3201988;
321     2.  The existing motor vehicle dealer or dealers of the
322same line-make have a licensed franchise location within a
323radius of 20 miles of the location of the proposed additional or
324relocated motor vehicle dealer; or
325     3.  Any existing motor vehicle dealer or dealers of the
326same line-make can establish that, during any consecutive 12-
327month period of the 36-month period preceding the month in which
328the publication of the proposed additional or relocated
329dealership appears in the Florida Administrative Weekly, filing
330of the licensee's application for the proposed dealership, such
331dealer or its predecessor made 25 percent of the its retail
332sales or leases of new motor vehicles made by such dealer or its
333predecessor were to persons or entities that whose registered
334the purchased or leased vehicle to an address household
335addresses were located within a radius of 20 miles of the
336geometric centroid of the property that will encompass all
337location of the proposed additional or relocated motor vehicle
338dealer operations; provided such existing dealer is located in
339the same county or any county contiguous to the county where the
340additional or relocated dealer is proposed to be located.
341     (b)  If the proposed additional or relocated motor vehicle
342dealer is to be located in a county with a population of more
343than 300,000 according to the most recent data of the United
344States Census Bureau or the data of the Bureau of Economic and
345Business Research of the University of Florida:
346     1.  Any existing motor vehicle dealer or dealers of the
347same line-make have a licensed franchise location within a
348radius of 12.5 miles of the location of the proposed additional
349or relocated motor vehicle dealer; or
350     2.  Any existing motor vehicle dealer or dealers of the
351same line-make can establish that, during any consecutive 12-
352month period of the 36-month period preceding the month in which
353the publication of the proposed additional or relocated
354dealership appears in the Florida Administrative Weekly, filing
355of the licensee's application for the proposed dealership, such
356dealer or its predecessor made 25 percent of the its retail
357sales or leases of new motor vehicles made by such dealer or its
358predecessor were to persons or entities that whose registered
359the purchased or leased vehicle to an address household
360addresses were located within a radius of 12.5 miles of the
361geometric centroid of the property that will encompass all
362location of the proposed additional or relocated motor vehicle
363dealer; provided such existing dealer is located in the same
364county or any county contiguous to the county where the
365additional or relocated dealer is proposed to be located.
366     (c)  The date of sale shall be the later of the dates on
367which the sale is reported to the licensee or the department. In
368the event of a conflict between the address listed by the
369purchaser on the registration with the licensee and that listed
370on the registration with the department, the address listed with
371the department shall be used.
372     (5)(a)  The opening or reopening of the same or a successor
373motor vehicle dealer within 12 months after the date that the
374department revokes a previously issued license and all legal
375proceedings, including appeal, regarding such revocation are
376completed, or the dealer voluntarily terminates the previously
377issued license, or the opening of a relocated dealer within 12
378months after the date that the department approves an
379application for change of address, shall not be considered an
380additional motor vehicle dealer subject to protest within the
381meaning of this section, if:
382     1.(a)  The opening or reopening is within the same or an
383adjacent county and, is within 2 miles of the former motor
384vehicle dealer location;,
385     2.(b)  There is no dealer within 25 miles of the proposed
386location or the proposed location is further from each existing
387dealer of the same line-make than the prior location is from
388each dealer of the same line-make within 25 miles of the new
389location;,
390     3.(c)  The opening or reopening is within 6 miles of the
391prior location and, if any existing motor vehicle dealer of the
392same line-make is located within 15 miles of the former
393location, the proposed location is no closer to any existing
394dealer of the same line-make within 15 miles of the proposed
395location;, or
396     4.(d)  The opening or reopening is within 6 miles of the
397prior location and, if all existing motor vehicle dealers of the
398same line-make are beyond 15 miles of the former location, the
399proposed location is further than 15 miles from any existing
400motor vehicle dealer of the same line-make.
401
402Any other such opening or reopening shall constitute an
403additional motor vehicle dealer within the meaning of this
404section.
405     (b)  If an opening or reopening is accomplished pursuant to
406the terms of this subsection and therefore is not considered an
407additional motor vehicle dealer subject to protest, the licensee
408shall not notice an additional motor vehicle dealer of the same
409line-make that is to be located within 4 miles from the previous
410location for a period of 2 years after the date of the exempt
411relocation.
412     (7)  All measurements required by this section of the
413distance between existing motor vehicle dealer locations or
414existing motor vehicle dealer locations and a proposed motor
415vehicle dealer's location shall be taken from the geometric
416centroid of the property that encompasses all of the existing or
417proposed motor vehicle dealer operations.
418     Section 6.  Subsection (5) of section 320.643, Florida
419Statutes, is renumbered as subsection (6) and a new subsection
420(5) is added to said section to read:
421     320.643  Transfer, assignment, or sale of franchise
422agreements.--
423     (5)  A transferee proposing to simultaneously relocate
424motor vehicle dealership operations in conjunction with an asset
425purchase pursuant to subsection (1) or an equity purchase
426pursuant to subsection (2) shall not be required to comply with
427the location requirements of the franchise agreement then in
428effect and such a proposal shall be subject to this section if:
429     (a)  The proposed relocation is a relocation exempt from
430protest and not considered as an additional motor vehicle dealer
431pursuant to the provisions of s. 320.642(5)(a)1.;
432     (b)  The proposed dealership's facility satisfies facility
433requirements in effect between the licensee and the dealer
434proposing the transfer at the time the transfer is proposed; and
435     (c)  The proposed facility is otherwise an appropriate
436location, taking into account the accessibility and convenience
437to consumers of the proposed location, the location of other
438dealers of the same line-make, and other factors related to the
439appropriateness of the facility for its proposed use, and
440whether the proposed dealership facility and dealership
441operations are separate from any other line-makes.
442     Section 7.  Subsection (3) is added to section 320.699,
443Florida Statutes, to read:
444     320.699  Administrative hearings and adjudications;
445procedure.--
446     (3)  If a complaint is filed pursuant to s. 320.641, except
447a complaint filed pursuant to s. 320.641(5), a hearing shall be
448held not sooner than 180 days nor later than 240 days after the
449date of filing of the complaint unless the time is extended by
450the administrative law judge for good cause shown. This
451subsection shall govern the schedule of hearings in lieu of any
452other provision of law with respect to an administrative hearing
453conducted by the Department of Highway Safety and Motor Vehicles
454or the Division of Administrative Hearings.
455     Section 8.  This act shall take effect July 1, 2005.


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