Senate Bill sb1814

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2005                                  SB 1814

    By Senator Baker





    20-1058-05                                         See HB 1037

  1                      A bill to be entitled

  2         An act relating to franchised motor vehicle

  3         dealers; amending s. 320.60, F.S.; revising the

  4         definition of "demonstrator"; defining

  5         "existing franchised motor vehicle dealer";

  6         amending s. 320.64, F.S.; prohibiting applicant

  7         or licensee failure to pay certain costs and

  8         amounts to a dealer after termination of

  9         franchise; amending s. 320.641, F.S.; providing

10         for admissibility of certain evidence in a

11         hearing of a complaint or petition filed

12         relating to discontinuations, cancellations,

13         nonrenewals, modifications, or replacement of

14         franchise agreements; amending s. 320.642,

15         F.S.; revising criteria and procedures to

16         establish an additional dealership or relocate

17         an existing dealer in an area where the same

18         line-make vehicle is presently represented;

19         revising provisions excluding certain openings

20         and reopenings from consideration as an

21         additional or relocated motor vehicle dealer;

22         limiting such openings and reopenings;

23         requiring distance between sites to be measured

24         from the geometric centroid of each site;

25         amending s. 320.643, F.S.; exempting a

26         transferee proposing to simultaneously relocate

27         dealership operations in conjunction with the

28         purchase from location requirements in the

29         franchise agreement under certain

30         circumstances; providing requirements for such

31         proposals; amending s. 320.699, F.S.; revising

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         procedures for administrative hearings;

 2         requiring a certain schedule unless extended by

 3         the administrative law judge under certain

 4         conditions; amending ss. 320.645, 681.102, and

 5         681.113, F.S.; correcting cross references;

 6         providing an effective date.

 7  

 8  Be It Enacted by the Legislature of the State of Florida:

 9  

10         Section 1.  Subsection (3) of section 320.60, Florida

11  Statutes, is amended, subsections (6) through (16) are

12  renumbered as subsections (7) through (17), respectively, and

13  a new subsection (6) is added to that section, to read:

14         320.60  Definitions for ss. 320.61-320.70.--Whenever

15  used in ss. 320.61-320.70, unless the context otherwise

16  requires, the following words and terms have the following

17  meanings:

18         (3)  "Demonstrator" means any new motor vehicle which

19  is carried on the records of the dealer as a demonstrator and

20  is used by or, being inspected or driven by the dealer or his

21  or her employees, or driven by prospective customers for the

22  purpose of demonstrating vehicle characteristics in the sale

23  or display of motor vehicles sold by the dealer.

24         (6)  "Existing franchised motor vehicle dealer" means

25  any motor vehicle dealer that has a franchise agreement with a

26  licensee in effect or that is the subject of a final order

27  permitting the establishment of additional representation or a

28  relocation, even if not yet opened for business.

29         Section 2.  Subsection (36) is added to section 320.64,

30  Florida Statutes, to read:

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         320.64  Denial, suspension, or revocation of license;

 2  grounds.--A license of a licensee under s. 320.61 may be

 3  denied, suspended, or revoked within the entire state or at

 4  any specific location or locations within the state at which

 5  the applicant or licensee engages or proposes to engage in

 6  business, upon proof that the section was violated with

 7  sufficient frequency to establish a pattern of wrongdoing, and

 8  a licensee or applicant shall be liable for claims and

 9  remedies provided in ss. 320.695 and 320.697 for any violation

10  of any of the following provisions. A licensee is prohibited

11  from committing the following acts:

12         (36)  Notwithstanding the terms of any franchise

13  agreement, after termination of a franchise, voluntarily or

14  involuntarily, an applicant or licensee has failed to pay to

15  the motor vehicle dealer, within 90 days after the effective

16  date of the termination, cancellation, or nonrenewal, the

17  following amounts:

18         (a)  The net cost paid by the dealer for each new motor

19  vehicle in the dealer's inventory with mileage of 6,000 miles

20  or less, exclusive of mileage placed on the vehicle before it

21  was delivered to the dealer.

22         (b)  The cost paid by the dealer for each new, unused,

23  undamaged, and unsold part or accessory that:

24         1.  Is in the current parts catalog and is still in the

25  original, resalable merchandising package and in an unbroken

26  lot, except that, in the case of sheet metal, a comparable

27  substitute for the original package may be used; and

28         2.  Was purchased by the dealer either directly from

29  the manufacturer or distributor or was purchased from an

30  outgoing authorized dealer as a part of the dealer's initial

31  inventory.

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         (c)  The fair market value of each undamaged sign owned

 2  by the dealer that bears a trademark or trade name used or

 3  claimed by the applicant or licensee or a representative of

 4  the applicant or licensee and that was purchased from or at

 5  the request of the applicant or licensee or a representative

 6  of the applicant or licensee.

 7         (d)  The fair market value of all special tools, data

 8  processing equipment, and automotive service equipment owned

 9  by the dealer that:

10         1.  Were recommended in writing by the applicant or

11  licensee or a representative of the applicant or licensee and

12  designated as special tools and equipment;

13         2.  Were purchased from or at the request of the

14  applicant or licensee or a representative of the applicant or

15  licensee; and

16         3.  Are in usable and good condition except for

17  reasonable wear and tear.

18         (e)  The cost of transporting, handling, packing,

19  storing, and loading any property subject to repurchase under

20  this section.

21  

22  A motor vehicle dealer who can demonstrate that a violation

23  of, or failure to comply with, any of the preceding provisions

24  by an applicant or licensee will or can adversely and

25  pecuniarily affect the complaining dealer, shall be entitled

26  to pursue all of the remedies, procedures, and rights of

27  recovery available under ss. 320.695 and 320.697.

28         Section 3.  Subsection (3) of section 320.641, Florida

29  Statutes, is amended to read:

30         320.641  Discontinuations, cancellations, nonrenewals,

31  modifications, and replacement of franchise agreements.--

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         (3)(a)  Any motor vehicle dealer who receives a notice

 2  of intent to discontinue, cancel, not renew, modify, or

 3  replace may, within the 90-day notice period, file a petition

 4  or complaint for a determination of whether such action is an

 5  unfair or prohibited discontinuation, cancellation,

 6  nonrenewal, modification, or replacement. Agreements and

 7  certificates of appointment shall continue in effect until

 8  final determination of the issues raised in such petition or

 9  complaint by the motor vehicle dealer. A discontinuation,

10  cancellation, or nonrenewal of a franchise agreement is unfair

11  if it is not clearly permitted by the franchise agreement; is

12  not undertaken in good faith; is not undertaken for good

13  cause; or is based on an alleged breach of the franchise

14  agreement which is not in fact a material and substantial

15  breach; or, if the grounds relied upon for termination,

16  cancellation, or nonrenewal have not been applied in a uniform

17  and consistent manner by the licensee. A modification or

18  replacement is unfair if it is not clearly permitted by the

19  franchise agreement; is not undertaken in good faith; or is

20  not undertaken for good cause. The applicant or licensee shall

21  have the burden of proof that such action is fair and not

22  prohibited.

23         (b)  In any hearing held pursuant to a complaint or

24  petition filed pursuant to this subsection, all conduct by the

25  motor vehicle dealer or licensee until the commencement of the

26  final hearing shall be admissible in evidence to determine the

27  issues set forth under this subsection.

28         Section 4.  Subsections (2), (3), (5), and (6) of

29  section 320.642, Florida Statutes, are amended, and subsection

30  (7) is added to that section, to read:

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         320.642  Dealer licenses in areas previously served;

 2  procedure.--

 3         (2)(a)  An application for a motor vehicle dealer

 4  license in any community or territory shall be denied when:

 5         1.  A timely protest is filed by a presently existing

 6  franchised motor vehicle dealer with standing to protest as

 7  defined in subsection (3); and

 8         2.  The licensee fails to show that the existing

 9  franchised dealer or dealers who register new motor vehicle

10  retail sales or retail leases of the same line-make in the

11  community or territory of the proposed dealership are not

12  providing adequate representation of such line-make motor

13  vehicles in such community or territory as a whole and not

14  with respect to any part thereof or identifiable plot therein.

15  The burden of proof in establishing inadequate representation

16  shall be on the licensee.

17         (b)  In determining whether the existing franchised

18  motor vehicle dealer or dealers are providing adequate

19  representation in the community or territory for the

20  line-make, the department shall may consider evidence

21  including which may include, but is not limited to:

22         1.  The impact of the establishment of the proposed or

23  relocated dealer on the consumers, public interest, existing

24  dealers, and the licensee; provided, however, that financial

25  impact may only be considered with respect to the protesting

26  dealer or dealers.

27         2.  The size and permanency of investment reasonably

28  made and reasonable obligations incurred by the existing

29  dealer or dealers to perform their obligations under the

30  dealer agreement.

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         3.  The reasonably expected market penetration of the

 2  line-make motor vehicle for the community or territory

 3  involved, after consideration of all factors which may affect

 4  said penetration, including, but not limited to, demographic

 5  factors such as age, income, education, size class preference,

 6  product popularity, retail lease transactions, import

 7  penetration, existence and extent of interbrand competition,

 8  whether located in a metropolitan or nonmetropolitan area, or

 9  other factors affecting sales to consumers of the community or

10  territory. With respect to any geographic comparison area used

11  to evaluate the performance of the line-make within the

12  community or territory, such comparison area shall not be

13  smaller than an entire county and shall not include any

14  geographic area located outside this state. Reasonably

15  expected market penetration shall be measured with respect to

16  the community or territory as a whole and not with respect to

17  any part thereof or identifiable plot therein. In order to

18  satisfy its burden of proof pursuant to this section, the

19  licensee must prove that any deviation or shortfall in market

20  penetration from a reasonable comparison area is substantial

21  and significant, considering factors including, but not

22  limited to, the size of the community or territory and the

23  projected sales of the proposed dealership.

24         4.  Any actions by the licensees in denying its

25  existing dealer or dealers of the same line-make the

26  opportunity for reasonable growth, market expansion, or

27  relocation, including the availability of line-make vehicles

28  in keeping with the reasonable expectations of the licensee in

29  providing an adequate number of dealers in the community or

30  territory.

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         5.  Any attempts by the licensee to coerce the existing

 2  dealer or dealers into consenting to additional or relocated

 3  franchises of the same line-make in the community or

 4  territory.

 5         6.  Distance, travel time, traffic patterns, and

 6  accessibility between the existing dealer or dealers of the

 7  same line-make and the location of the proposed additional or

 8  relocated dealer.

 9         7.  Whether benefits to consumers will likely occur

10  from the establishment or relocation of the dealership which

11  cannot be obtained by other geographic or demographic changes

12  or expected changes in the community or territory.

13         8.  Whether the protesting dealer or dealers are in

14  substantial compliance with their dealer agreement.

15         9.  Whether there is adequate interbrand and intrabrand

16  competition with respect to said line-make in the community or

17  territory and adequately convenient consumer care for the

18  motor vehicles of the line-make, including the adequacy of

19  sales and service facilities.

20         10.  Whether the establishment or relocation of the

21  proposed dealership appears to be warranted and justified

22  based on economic and marketing conditions pertinent to

23  dealers competing in the community or territory, including

24  anticipated future changes.

25         11.  The volume of registrations and service business

26  transacted by the existing dealer or dealers of the same

27  line-make in the relevant community or territory of the

28  proposed dealership.

29         (3)  An existing franchised motor vehicle dealer or

30  dealers shall have standing to protest a proposed additional

31  or relocated motor vehicle dealer where the existing motor

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1  vehicle dealer or dealers have a franchise agreement for the

 2  same line-make vehicle to be sold or serviced by the proposed

 3  additional or relocated motor vehicle dealer and are

 4  physically located so as to meet or satisfy any of the

 5  following requirements or conditions:

 6         (a)  If the proposed additional or relocated motor

 7  vehicle dealer is to be located in a county with a population

 8  of less than 300,000 according to the most recent data of the

 9  United States Census Bureau or the data of the Bureau of

10  Economic and Business Research of the University of Florida:

11         1.  The proposed additional or relocated motor vehicle

12  dealer is to be located in the area designated or described as

13  the area of responsibility, or such similarly designated area,

14  including the entire area designated as a multiple-point area,

15  in the franchise agreement or in any related document or

16  commitment with the existing motor vehicle dealer or dealers

17  of the same line-make as such agreement existed upon October

18  1, 1988;

19         2.  The existing motor vehicle dealer or dealers of the

20  same line-make have a licensed franchise location within a

21  radius of 20 miles of the location of the proposed additional

22  or relocated motor vehicle dealer; or

23         3.  Any existing motor vehicle dealer or dealers of the

24  same line-make can establish that, during any consecutive

25  12-month period of the 36-month period preceding the month in

26  which the publication of the proposed additional or relocated

27  dealership appears in the Florida Administrative Weekly for

28  the filing of the licensee's application for the proposed

29  additional or relocated motor vehicle dealer, dealership, such

30  dealer or its predecessor made 25 percent of the its retail

31  sales of new motor vehicles made by such dealer or its

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1  predecessor were to persons or entities that whose registered

 2  the purchased vehicle to an address household addresses were

 3  located within a radius of 20 miles of the geometric centroid

 4  of the property that will encompass all location of the

 5  proposed additional or relocated motor vehicle dealer

 6  operations; provided such existing dealer is located in the

 7  same county or any county contiguous to the county where the

 8  additional or relocated dealer is proposed to be located.

 9         (b)  If the proposed additional or relocated motor

10  vehicle dealer is to be located in a county with a population

11  of more than 300,000 according to the most recent data of the

12  United States Census Bureau or the data of the Bureau of

13  Economic and Business Research of the University of Florida:

14         1.  Any existing motor vehicle dealer or dealers of the

15  same line-make have a licensed franchise location within a

16  radius of 12.5 miles of the location of the proposed

17  additional or relocated motor vehicle dealer; or

18         2.  Any existing motor vehicle dealer or dealers of the

19  same line-make can establish that, during any consecutive

20  12-month period of the 36-month period preceding the month in

21  which the publication of the proposed additional or relocated

22  dealership appears in the Florida Administrative Weekly for

23  the filing of the licensee's application for the proposed

24  additional or relocated motor vehicle dealer, dealership, such

25  dealer or its predecessor made 25 percent of the its retail

26  sales of new motor vehicles made by such dealer or its

27  predecessor were to persons or entities that whose registered

28  the purchased vehicle to an address household addresses were

29  located within a radius of 12.5 miles of the geometric

30  centroid of the property that will encompass all location of

31  the proposed additional or relocated motor vehicle dealer

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1  operations; provided such existing dealer is located in the

 2  same county or any county contiguous to the county where the

 3  additional or relocated dealer is proposed to be located.

 4         (5)(a)  The opening or reopening of the same or a

 5  successor motor vehicle dealer within 12 months shall not be

 6  considered an additional motor vehicle dealer subject to

 7  protest within the meaning of this section, if:

 8         1.(a)  The opening or reopening is within the same or

 9  an adjacent county and, is within 2 miles of the former motor

10  vehicle dealer location;,

11         2.(b)  There is no dealer within 25 miles of the

12  proposed location or the proposed location is further from

13  each existing dealer of the same line-make than the prior

14  location is from each dealer of the same line-make within 25

15  miles of the new location;,

16         3.(c)  The opening or reopening is within 6 miles of

17  the prior location and, if any existing motor vehicle dealer

18  of the same line-make is located within 15 miles of the former

19  location, the proposed location is no closer to any existing

20  dealer of the same line-make within 15 miles of the proposed

21  location;, or

22         4.(d)  The opening or reopening is within 6 miles of

23  the prior location and, if all existing motor vehicle dealers

24  of the same line-make are beyond 15 miles of the former

25  location, the proposed location is further than 15 miles from

26  any existing motor vehicle dealer of the same line-make.

27  

28  Any other such opening or reopening shall constitute an

29  additional motor vehicle dealer within the meaning of this

30  section.

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         (b)  If an opening or reopening is accomplished

 2  pursuant to the terms of this subsection and therefore not

 3  considered an additional motor vehicle dealer subject to

 4  protest, the licensee shall not propose a motor vehicle dealer

 5  of the same line-make that is to be located within 5 miles

 6  from the previous location for a period of 5 years after the

 7  date of the exempt relocation.

 8         (6)  When a proposed addition or relocation concerns a

 9  dealership that performs or is to perform only service, as

10  defined in s. 320.60(17)(16), and will not or does not sell or

11  lease new motor vehicles, as defined in s. 320.60(16)(15), the

12  proposal shall be subject to notice and protest pursuant to

13  the provisions of this section.

14         (a)  Standing to protest the addition or relocation of

15  a service-only dealership shall be limited to those instances

16  in which the applicable mileage requirement established in

17  subparagraphs (3)(a)2. and (3)(b)1. is met.

18         (b)  The addition or relocation of a service-only

19  dealership shall not be subject to protest if:

20         1.  The applicant for the service-only dealership

21  location is an existing motor vehicle dealer of the same

22  line-make as the proposed additional or relocated service-only

23  dealership;

24         2.  There is no existing dealer of the same line-make

25  closer than the applicant to the proposed location of the

26  additional or relocated service-only dealership; and

27         3.  The proposed location of the additional or

28  relocated service-only dealership is at least 7 miles from all

29  existing motor vehicle dealerships of the same line-make,

30  other than motor vehicle dealerships owned by the applicant.

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         (c)  In determining whether existing franchised motor

 2  vehicle dealers are providing adequate representations in the

 3  community or territory for the line-make in question in a

 4  protest of the proposed addition or relocation of a

 5  service-only dealership, the department may consider the

 6  elements set forth in paragraph (2)(b), provided:

 7         1.  With respect to subparagraph (2)(b)1., only the

 8  impact as it relates to service may be considered;

 9         2.  Subparagraph (2)(b)3. shall not be considered;

10         3.  With respect to subparagraph (2)(b)9., only service

11  facilities shall be considered; and

12         4.  With respect to subparagraph (2)(b)11., only the

13  volume of service business transacted shall be considered.

14         (d)  If an application for a service-only dealership is

15  granted, the department shall issue a license which permits

16  only service, as defined in s. 320.60(17)(16), and does not

17  permit the selling or leasing of new motor vehicles, as

18  defined in s. 320.60(16)(15). If a service-only dealership

19  subsequently seeks to sell new motor vehicles at its location,

20  the notice and protest provisions of this section shall apply.

21         (7)  All measurements required by this section of the

22  distance between existing motor vehicle dealer locations or

23  existing motor vehicle dealer locations and a proposed motor

24  vehicle dealer's location shall be taken from the geometric

25  centroid of the property that encompasses all of the existing

26  or proposed motor vehicle dealer operations.

27         Section 5.  Subsection (5) of section 320.643, Florida

28  Statutes, is renumbered as subsection (6) and a new subsection

29  (5) is added to that section to read:

30         320.643  Transfer, assignment, or sale of franchise

31  agreements.--

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         (5)  A transferee proposing to simultaneously relocate

 2  motor vehicle dealership operations in conjunction with an

 3  asset purchase pursuant to subsection (1) or an equity

 4  purchase pursuant to subsection (2) shall not be required to

 5  comply with the location requirements of the franchise

 6  agreement then in effect and such a proposal shall be subject

 7  to this section if:

 8         (a)  The proposed relocation is a relocation exempt

 9  from protest and not considered as an additional motor vehicle

10  dealer pursuant to the provisions of s. 320.642(5); and

11         (b)  The proposed dealership's facility satisfies

12  facility requirements in effect between the licensee and the

13  dealer proposing the transfer at the time the transfer is

14  proposed.

15         Section 6.  Subsection (4) of section 320.645, Florida

16  Statutes, is amended to read:

17         320.645  Restriction upon ownership of dealership by

18  licensee.--

19         (4)  Nothing in this chapter shall prohibit a

20  distributor as defined in s. 320.60(5) or common entity that

21  is not a manufacturer, a division of a manufacturer, an entity

22  that is controlled by a manufacturer, or a common entity of a

23  manufacturer, and that is not owned, in whole or in part,

24  directly or indirectly, by a manufacturer, as defined in s.

25  320.60(10)(9), from receiving a license or licenses as defined

26  in s. 320.27 and owning and operating a motor vehicle

27  dealership or dealerships that sell or service motor vehicles

28  other than any line-make of motor vehicles distributed by the

29  distributor.

30         Section 7.  Subsection (3) is added to section 320.699,

31  Florida Statutes, to read:

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         320.699  Administrative hearings and adjudications;

 2  procedure.--

 3         (3)  If a complaint is filed pursuant to s. 320.641, s.

 4  320.643, s. 320.644, or s. 320.696, a hearing shall be held

 5  not sooner than 180 days nor later than 240 days after the

 6  date of filing of the complaint unless the time is extended by

 7  the administrative law judge for good cause shown. This

 8  subsection shall govern the schedule of hearings for a

 9  complaint filed pursuant to s. 320.641, s. 320.643, s.

10  320.644, or s. 320.696 in lieu of any other provision of law

11  with respect to an administrative hearing conducted by the

12  Department of Highway Safety and Motor Vehicles or the

13  Division of Administrative Hearings, including performance

14  standards of state agencies, which may be included in current

15  and future appropriations acts.

16         Section 8.  Subsection (14) of section 681.102, Florida

17  Statutes, is amended to read:

18         681.102  Definitions.--As used in this chapter, the

19  term:

20         (14)  "Manufacturer" means any person, whether a

21  resident or nonresident of this state, who manufactures or

22  assembles motor vehicles, or who manufactures or assembles

23  chassis for recreational vehicles, or who manufactures or

24  installs on previously assembled truck or recreational vehicle

25  chassis special bodies or equipment which, when installed,

26  forms an integral part of the motor vehicle, a distributor as

27  defined in s. 320.60(5), or an importer as defined in s.

28  320.60(8)(7). A dealer as defined in s. 320.60(12)(11)(a)

29  shall not be deemed to be a manufacturer, distributor, or

30  importer as provided in this section.

31  

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    Florida Senate - 2005                                  SB 1814
    20-1058-05                                         See HB 1037




 1         Section 9.  Section 681.113, Florida Statutes, is

 2  amended to read:

 3         681.113  Dealer liability.--Except as provided in ss.

 4  681.103(3) and 681.114(2), nothing in this chapter imposes any

 5  liability on a dealer as defined in s. 320.60(12)(11)(a) or

 6  creates a cause of action by a consumer against a dealer,

 7  except for written express warranties made by the dealer apart

 8  from the manufacturer's warranties. A dealer may not be made a

 9  party defendant in any action involving or relating to this

10  chapter, except as provided in this section. The manufacturer

11  shall not charge back or require reimbursement by the dealer

12  for any costs, including, but not limited to, any refunds or

13  vehicle replacements, incurred by the manufacturer arising out

14  of this chapter, in the absence of evidence that the related

15  repairs had been carried out by the dealer in a manner

16  substantially inconsistent with the manufacturer's published

17  instructions.

18         Section 10.  This act shall take effect July 1, 2005.

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