Senate Bill sb1814c1
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Florida Senate - 2005 CS for SB 1814
By the Committee on Transportation; and Senator Baker
596-2002-05
1 A bill to be entitled
2 An act relating to franchised motor vehicle
3 dealers; amending s. 320.13, F.S.; specifying a
4 definition for purposes of provisions for
5 issuance of dealer license plates; amending s.
6 320.60, F.S.; revising the definition of the
7 term "demonstrator"; defining the term
8 "existing franchised motor vehicle dealer";
9 amending s. 320.64, F.S.; prohibiting applicant
10 or licensee failure to pay certain costs and
11 amounts to a dealer after termination of
12 franchise; providing that the prohibition does
13 not apply to terminations, cancellations, or
14 nonrenewals implemented as a result of the sale
15 of assets or stock of the dealer; requiring
16 that certain procedures be followed; amending
17 s. 320.641, F.S.; providing procedures for
18 discontinuation, cancellation, nonrenewal,
19 modification, or replacement of a franchise
20 agreement based upon an alleged failure of the
21 dealer to comply with certain sales or service
22 obligations; amending s. 320.642, F.S.;
23 revising criteria and procedures to establish
24 an additional dealership or relocate an
25 existing dealer in an area where the same
26 line-make vehicle is presently represented;
27 revising provisions for determination by the
28 Department of Highway Safety and Motor Vehicles
29 that the existing franchised motor vehicle
30 dealer or dealers are providing adequate
31 representation; revising criteria for protest
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1 by an existing dealer; revising provisions
2 excluding certain openings and reopenings from
3 consideration as an additional or relocated
4 motor vehicle dealer; prohibiting notice of an
5 additional dealer for a certain period of time
6 within a certain distance from a dealer that
7 was opened or reopened and not considered an
8 additional dealer subject to protest; requiring
9 distance between sites to be measured from the
10 geometric centroid of each site; amending s.
11 320.643, F.S.; exempting a transferee from
12 location requirements in the franchise
13 agreement when the transferee proposes to
14 simultaneously relocate dealership operations
15 in conjunction with the purchase of the
16 dealership under certain circumstances;
17 providing requirements for such proposals;
18 amending s. 320.699, F.S.; revising procedures
19 for administrative hearings; requiring a
20 certain schedule unless extended by the
21 administrative law judge under certain
22 conditions; providing an effective date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
26 Section 1. Subsection (1) of section 320.13, Florida
27 Statutes, is amended to read:
28 320.13 Dealer and manufacturer license plates and
29 alternative method of registration.--
30 (1)(a) Any licensed motor vehicle dealer and any
31 licensed mobile home dealer may, upon payment of the license
2
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1 tax imposed by s. 320.08(12), secure one or more dealer
2 license plates, which are valid for use on motor vehicles or
3 mobile homes owned by the dealer to whom such plates are
4 issued while the motor vehicles are in inventory and for sale,
5 or while being operated in connection with such dealer's
6 business, as defined in s. 320.60(3), but are not valid for
7 use for hire. Dealer license plates may not be used on any tow
8 truck or wrecker unless the tow truck or wrecker is being
9 demonstrated for sale, and the dealer license plates may not
10 be used on a vehicle used to transport another motor vehicle
11 for the motor vehicle dealer.
12 (b)1. Marine boat trailer dealers and manufacturers
13 may, upon payment of the license taxes imposed by s.
14 320.08(12), secure one or more dealer plates, which are valid
15 for use on boat trailers owned by the dealer to whom such
16 plates are issued while being used in connection with such
17 dealer's business, but are not valid for use for hire.
18 2. It is the intent of the Legislature that the method
19 currently used to license marine boat trailer dealers to do
20 business in the state, that is, by an occupational license
21 issued by the city or county, not be changed. The department
22 shall not interpret this act to mean that it is empowered to
23 license such dealers to do business. An occupational license
24 tax certificate shall be sufficient proof upon which the
25 department may issue dealer license plates.
26 Section 2. Subsection (3) of section 320.60, Florida
27 Statutes, is amended, and subsection (17) is added to that
28 section, to read:
29 320.60 Definitions for ss. 320.61-320.70.--Whenever
30 used in ss. 320.61-320.70, unless the context otherwise
31
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1 requires, the following words and terms have the following
2 meanings:
3 (3) "Demonstrator" means any new motor vehicle which
4 is carried on the records of the dealer as a demonstrator and
5 is used by, being inspected or driven by the dealer or his or
6 her employees, or while being operated or driven, with the
7 permission of such motor vehicle dealer, by an owner, officer,
8 employee, or independent contractor of a motor vehicle dealer
9 or by a member of such owner's, officer's, or employee's
10 immediate family, or driven by prospective customers for the
11 purpose of demonstrating vehicle characteristics in the sale
12 or display of motor vehicles sold by the dealer.
13 (17) "Existing franchised motor vehicle dealer" means
14 any motor vehicle dealer that has a franchise agreement with a
15 licensee. For purposes of notice and identification under s.
16 320.642 only, all dealer locations of an existing motor
17 vehicle dealer or a person that is subject to an unexpired
18 final order permitting the establishment of an additional
19 location or a relocation, where the location is not yet open
20 for business, will be entitled to the same notice and protest
21 rights as an existing dealer under the provisions of s.
22 320.642. A final order expires upon the failure of the dealer
23 or other person that is authorized to establish a location or
24 to relocate to become established at the proposed location
25 within the period provided by law or rule.
26 Section 3. Subsection (36) is added to section 320.64,
27 Florida Statutes, to read:
28 320.64 Denial, suspension, or revocation of license;
29 grounds.--A license of a licensee under s. 320.61 may be
30 denied, suspended, or revoked within the entire state or at
31 any specific location or locations within the state at which
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1 the applicant or licensee engages or proposes to engage in
2 business, upon proof that the section was violated with
3 sufficient frequency to establish a pattern of wrongdoing, and
4 a licensee or applicant shall be liable for claims and
5 remedies provided in ss. 320.695 and 320.697 for any violation
6 of any of the following provisions. A licensee is prohibited
7 from committing the following acts:
8 (36)(a) Notwithstanding the terms of any franchise
9 agreement, after termination of a franchise an applicant or
10 licensee has failed to pay to the motor vehicle dealer all of
11 the following amounts:
12 1. The net cost paid by the dealer for each new motor
13 vehicle in the dealer's inventory with mileage of 6,000 miles
14 or less, exclusive of mileage placed on the vehicle before it
15 was delivered to the dealer, provided that for every mile in
16 excess of 1,000 miles there shall be a reduction of the
17 required repurchase price at a rate equivalent to the
18 then-prevailing rate promulgated by the Internal Revenue
19 Service.
20 2. The cost paid by the dealer for each new, unused,
21 undamaged, and unsold part or accessory that:
22 a. Is in the current parts catalog and is still in the
23 original, resalable merchandising package and in an unbroken
24 lot, except that, in the case of sheet metal, a comparable
25 substitute for the original package may be used; and
26 b. Was purchased by the dealer either directly from
27 the manufacturer or distributor or was purchased from an
28 outgoing authorized dealer as a part of the dealer's initial
29 inventory.
30 3. The fair market value of each undamaged sign,
31 excluding normal wear and tear, owned by the dealer that bears
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1 a trademark or trade name used or claimed by the applicant or
2 licensee or a representative of the applicant or licensee and
3 that was purchased from or at the request of the applicant or
4 licensee or a representative of the applicant or licensee.
5 4. The fair market value of all special tools, data
6 processing equipment, and automotive service equipment owned
7 by the dealer that:
8 a. Were recommended in writing by the applicant or
9 licensee or a representative of the applicant or licensee and
10 designated as special tools and equipment;
11 b. Were purchased from or at the request of the
12 applicant or licensee or a representative of the applicant or
13 licensee; and
14 c. Are in usable and good condition except for
15 reasonable wear and tear.
16 5. The cost of transporting, handling, packing,
17 storing, and loading any property subject to repurchase under
18 this section.
19 (b) This subsection does not apply to terminations,
20 cancellations, and nonrenewals that are implemented as a
21 result of the sale of the assets or stock of the dealer. The
22 dealer shall return the property listed in this subsection to
23 the licensee within 90 days after the effective date of the
24 termination, cancellation, or nonrenewal. The licensee shall
25 supply the new vehicle dealer with reasonable instructions on
26 the method by which the new vehicle dealer must return the
27 property to the licensee. The compensation for the property
28 shall be paid by the licensee within 60 days after the tender
29 of inventory and other items, provided the new motor vehicle
30 dealer has clear title to the inventory and other items and is
31 in a position to convey that title to the manufacturer or
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1 distributor. In the event the inventory or other items are
2 subject to a security interest, the licensee may make payment
3 jointly to the new motor vehicle dealer and the holder of the
4 security interest.
5
6 A motor vehicle dealer who can demonstrate that a violation
7 of, or failure to comply with, any of the preceding provisions
8 by an applicant or licensee will or can adversely and
9 pecuniarily affect the complaining dealer, shall be entitled
10 to pursue all of the remedies, procedures, and rights of
11 recovery available under ss. 320.695 and 320.697.
12 Section 4. Subsection (1) of section 320.641, Florida
13 Statutes, is amended to read:
14 320.641 Discontinuations, cancellations, nonrenewals,
15 modifications, and replacement of franchise agreements.--
16 (1)(a) An applicant or licensee shall give written
17 notice to the motor vehicle dealer and the department of the
18 licensee's intention to discontinue, cancel, or fail to renew
19 a franchise agreement or of the licensee's intention to modify
20 a franchise or replace a franchise with a succeeding
21 franchise, which modification or replacement will adversely
22 alter the rights or obligations of a motor vehicle dealer
23 under an existing franchise agreement or will substantially
24 impair the sales, service obligations, or investment of the
25 motor vehicle dealer, at least 90 days before the effective
26 date thereof, together with the specific grounds for such
27 action.
28 (b) The failure by the licensee to comply with the
29 90-day notice period and procedure prescribed herein shall
30 render voidable, at the option of the motor vehicle dealer,
31 any discontinuation, cancellation, nonrenewal, modification,
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1 or replacement of any franchise agreement. Designation of a
2 franchise agreement at a specific location as a "nondesignated
3 point" shall be deemed an evasion of this section and
4 constitutes an unfair cancellation.
5 (c) If the notice required in paragraph (a) is based
6 upon an alleged failure of the dealer to comply with the
7 obligations of the dealer agreement with respect to the
8 performance of sales or service obligations, the applicant or
9 licensee shall transmit to the dealer a notice of default not
10 less than 180 days prior to transmission of the notice
11 required in paragraph (a). The notice of default under this
12 paragraph shall specify the sales and service deficiencies
13 alleged by the applicant or licensee and afford the dealer a
14 period of time of not less than 180 days to cure those
15 deficiencies.
16 Section 5. Subsections (2), (3), and (5) of section
17 320.642, Florida Statutes, are amended, and subsection (7) is
18 added to that section, to read:
19 320.642 Dealer licenses in areas previously served;
20 procedure.--
21 (2)(a) An application for a motor vehicle dealer
22 license in any community or territory shall be denied when:
23 1. A timely protest is filed by a presently existing
24 franchised motor vehicle dealer with standing to protest as
25 defined in subsection (3); and
26 2. The licensee fails to show that the existing
27 franchised dealer or dealers who register new motor vehicle
28 retail sales or retail leases of the same line-make in the
29 community or territory of the proposed dealership are not
30 providing adequate representation of such line-make motor
31 vehicles in such community or territory as a whole and not
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1 with respect to any part thereof or identifiable plot therein.
2 The burden of proof in establishing inadequate representation
3 shall be on the licensee.
4 (b) In determining whether the existing franchised
5 motor vehicle dealer or dealers are providing adequate
6 representation in the community or territory for the
7 line-make, the department shall may consider evidence
8 including which may include, but is not limited to:
9 1. The impact of the establishment of the proposed or
10 relocated dealer on the consumers, public interest, existing
11 dealers, and the licensee; provided, however, that financial
12 impact may only be considered with respect to the protesting
13 dealer or dealers.
14 2. The size and permanency of investment reasonably
15 made and reasonable obligations incurred by the existing
16 dealer or dealers to perform their obligations under the
17 dealer agreement.
18 3. The reasonably expected market penetration of the
19 line-make motor vehicle for the community or territory
20 involved, after consideration of all factors which may affect
21 said penetration, including, but not limited to, demographic
22 factors such as age, income, education, size class preference,
23 product popularity, retail lease transactions, whether located
24 in a metropolitan or nonmetropolitan area, or other factors
25 affecting sales to consumers of the community or territory.
26 With respect to any geographic comparison area used to
27 evaluate the performance of the line-make within the community
28 or territory, the comparison area may not be smaller than an
29 entire county and may not include any geographic area located
30 outside this state. Reasonably expected market penetration
31 shall be measured with respect to the community or territory
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1 as a whole and not with respect to any part thereof or
2 identifiable plot therein. In order to satisfy its burden of
3 proof under this section, the licensee must prove that any
4 deviation or shortfall in market penetration from a reasonable
5 comparison area is substantial and significant, considering
6 factors including, but not limited to, the size of the
7 community or territory and the projected sales of the proposed
8 dealership.
9 4. Any actions by the licensees in denying its
10 existing dealer or dealers of the same line-make the
11 opportunity for reasonable growth, market expansion, or
12 relocation, including the availability of line-make vehicles
13 in keeping with the reasonable expectations of the licensee in
14 providing an adequate number of dealers in the community or
15 territory.
16 5. Any attempts by the licensee to coerce the existing
17 dealer or dealers into consenting to additional or relocated
18 franchises of the same line-make in the community or
19 territory.
20 6. Distance, travel time, traffic patterns, and
21 accessibility between the existing dealer or dealers of the
22 same line-make and the location of the proposed additional or
23 relocated dealer.
24 7. Whether benefits to consumers will likely occur
25 from the establishment or relocation of the dealership which
26 cannot be obtained by other geographic or demographic changes
27 or expected changes in the community or territory.
28 8. Whether the protesting dealer or dealers are in
29 substantial compliance with their dealer agreement.
30 9. Whether there is adequate interbrand and intrabrand
31 competition with respect to said line-make in the community or
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1 territory and adequately convenient consumer care for the
2 motor vehicles of the line-make, including the adequacy of
3 sales and service facilities.
4 10. Whether the establishment or relocation of the
5 proposed dealership appears to be warranted and justified
6 based on economic and marketing conditions pertinent to
7 dealers competing in the community or territory, including
8 anticipated future changes.
9 11. The volume of registrations and service business
10 transacted by the existing dealer or dealers of the same
11 line-make in the relevant community or territory of the
12 proposed dealership.
13 (3) An existing franchised motor vehicle dealer or
14 dealers shall have standing to protest a proposed additional
15 or relocated motor vehicle dealer where the existing motor
16 vehicle dealer or dealers have a franchise agreement for the
17 same line-make vehicle to be sold or serviced by the proposed
18 additional or relocated motor vehicle dealer and are
19 physically located so as to meet or satisfy any of the
20 following requirements or conditions:
21 (a) If the proposed additional or relocated motor
22 vehicle dealer is to be located in a county with a population
23 of less than 300,000 according to the most recent data of the
24 United States Census Bureau or the data of the Bureau of
25 Economic and Business Research of the University of Florida:
26 1. The proposed additional or relocated motor vehicle
27 dealer is to be located in the area designated or described as
28 the area of responsibility, or such similarly designated area,
29 including the entire area designated as a multiple-point area,
30 in the franchise agreement or in any related document or
31 commitment with the existing motor vehicle dealer or dealers
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1 of the same line-make as such agreement existed upon October
2 1, 1988;
3 2. The existing motor vehicle dealer or dealers of the
4 same line-make have a licensed franchise location within a
5 radius of 20 miles of the location of the proposed additional
6 or relocated motor vehicle dealer; or
7 3. Any existing motor vehicle dealer or dealers of the
8 same line-make can establish that, during any consecutive
9 12-month period of the 36-month period preceding the month in
10 which the publication of the proposed additional or relocated
11 dealership appears in the Florida Administrative Weekly,
12 filing of the licensee's application for the proposed
13 dealership, such dealer or its predecessor made 25 percent of
14 the its retail sales or leases of new motor vehicles made by
15 such dealer or its predecessor were to persons or entities
16 that whose registered the purchased or leased vehicle to an
17 address household addresses were located within a radius of 20
18 miles of the geometric centroid of the property that will
19 encompass all location of the proposed additional or relocated
20 motor vehicle dealer operations; provided such existing dealer
21 is located in the same county or any county contiguous to the
22 county where the additional or relocated dealer is proposed to
23 be located.
24 (b) If the proposed additional or relocated motor
25 vehicle dealer is to be located in a county with a population
26 of more than 300,000 according to the most recent data of the
27 United States Census Bureau or the data of the Bureau of
28 Economic and Business Research of the University of Florida:
29 1. Any existing motor vehicle dealer or dealers of the
30 same line-make have a licensed franchise location within a
31
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1 radius of 12.5 miles of the location of the proposed
2 additional or relocated motor vehicle dealer; or
3 2. Any existing motor vehicle dealer or dealers of the
4 same line-make can establish that, during any consecutive
5 12-month period of the 36-month period preceding the month in
6 which the publication of the proposed additional or relocated
7 dealership appears in the Florida Administrative Weekly,
8 filing of the licensee's application for the proposed
9 dealership, such dealer or its predecessor made 25 percent of
10 the its retail sales or leases of new motor vehicles made by
11 such dealer or its predecessor were to persons or entities
12 that whose registered the purchased or leased vehicle to an
13 address household addresses were located within a radius of
14 12.5 miles of the geometric centroid of the property that will
15 encompass all location of the proposed additional or relocated
16 motor vehicle dealer; provided such existing dealer is located
17 in the same county or any county contiguous to the county
18 where the additional or relocated dealer is proposed to be
19 located.
20 (c) The date of sale shall be the later of the dates
21 on which the sale is reported to the licensee or the
22 department. In the event of a conflict between the address
23 listed by the purchaser on the registration with the licensee
24 and that listed on the registration with the department, the
25 address listed with the department shall be used.
26 (5)(a) The opening or reopening of the same or a
27 successor motor vehicle dealer within 12 months after the date
28 that the department revokes a previously issued license and
29 all legal proceedings, including appeal, regarding such
30 revocation are completed, or the dealer voluntarily terminates
31 the previously issued license, or the opening of a relocated
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1 dealer within 12 months after the date that the department
2 approves an application for change of address, shall not be
3 considered an additional motor vehicle dealer subject to
4 protest within the meaning of this section, if:
5 1.(a) The opening or reopening is within the same or
6 an adjacent county and, is within 2 miles of the former motor
7 vehicle dealer location;,
8 2.(b) There is no dealer within 25 miles of the
9 proposed location or the proposed location is further from
10 each existing dealer of the same line-make than the prior
11 location is from each dealer of the same line-make within 25
12 miles of the new location;,
13 3.(c) The opening or reopening is within 6 miles of
14 the prior location and, if any existing motor vehicle dealer
15 of the same line-make is located within 15 miles of the former
16 location, the proposed location is no closer to any existing
17 dealer of the same line-make within 15 miles of the proposed
18 location;, or
19 4.(d) The opening or reopening is within 6 miles of
20 the prior location and, if all existing motor vehicle dealers
21 of the same line-make are beyond 15 miles of the former
22 location, the proposed location is further than 15 miles from
23 any existing motor vehicle dealer of the same line-make.
24
25 Any other such opening or reopening shall constitute an
26 additional motor vehicle dealer within the meaning of this
27 section.
28 (b) If an opening or reopening is accomplished under
29 the terms of this subsection and therefore is not considered
30 an additional motor vehicle dealer subject to protest, the
31 licensee may not notice an additional motor vehicle dealer of
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1 the same line-make that is to be located within 4 miles from
2 the previous location for a period of 2 years after the date
3 of the exempt relocation.
4 (7) All measurements required by this section of the
5 distance between existing motor vehicle dealer locations or
6 existing motor vehicle dealer locations and a proposed motor
7 vehicle dealer's location shall be taken from the geometric
8 centroid of the property that encompasses all of the existing
9 or proposed motor vehicle dealer operations.
10 Section 6. Subsection (5) of section 320.643, Florida
11 Statutes, is renumbered as subsection (6), and a new
12 subsection (5) is added to that section, to read:
13 320.643 Transfer, assignment, or sale of franchise
14 agreements.--
15 (5) A transferee proposing to simultaneously relocate
16 motor vehicle dealership operations in conjunction with an
17 asset purchase under subsection (1) or an equity purchase
18 under subsection (2) may not be required to comply with the
19 location requirements of the franchise agreement then in
20 effect and the proposal shall be subject to this section if:
21 (a) The proposed relocation is a relocation exempt
22 from protest and not considered as an additional motor vehicle
23 dealer under s. 320.642(5)(a)1.;
24 (b) The proposed dealership's facility satisfies
25 facility requirements in effect between the licensee and the
26 dealer proposing the transfer at the time the transfer is
27 proposed; and
28 (c) The proposed facility is otherwise an appropriate
29 location, taking into account the accessibility and
30 convenience to consumers of the proposed location, the
31 location of other dealers of the same line-make, and other
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1 factors related to the appropriateness of the facility for its
2 proposed use, and whether the proposed dealership facility and
3 dealership operations are separate from any other line-makes.
4 Section 7. Subsection (3) is added to section 320.699,
5 Florida Statutes, to read:
6 320.699 Administrative hearings and adjudications;
7 procedure.--
8 (3) If a complaint is filed under s. 320.641, except a
9 complaint filed under s. 320.641(5), a hearing shall be held
10 not sooner than 180 days and not later than 240 days after the
11 date of filing of the complaint unless the time is extended by
12 the administrative law judge for good cause shown. This
13 subsection governs the schedule of hearings in lieu of any
14 other provision of law with respect to an administrative
15 hearing conducted by the Department of Highway Safety and
16 Motor Vehicles or the Division of Administrative Hearings.
17 Section 8. This act shall take effect July 1, 2005.
18
19 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
20 Senate Bill 1814
21
22 The CS expands the definition of "demonstrator" to include new
vehicles owned by a dealer that are driven or operated by
23 family members of the dealer or employees of the dealership
and to include independent contractors of the dealership.
24
The CS clarifies conditions for the return of dealership
25 inventory upon termination of a franchise. The inventory must
be returned to the licensee within 90 days of the termination
26 and payment from the licensee must be received within 60 days
of the return.
27
The CS establishes a 180 day period for franchised dealers to
28 respond to claims from a licensee regarding the dealer's sales
performance obligations and take corrective actions. If a
29 licensee opens a new dealership which is not open to protest,
the licensee may not propose additional dealerships within
30 four miles of the previous dealerships for two years.
31
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