CS/HB 815

1	A bill to be entitled
2	An act relating to motor vehicle dealers; amending s.
3	320.64, F.S.; revising provisions for grounds for denial,
4	suspension, or revocation of license of a motor vehicle
5	manufacturer, factory branch, distributor, or importer
6	licensed by the Department of Highway Safety and Motor
7	Vehicles to enter into franchise agreements with dealers;
8	prohibiting certain charge-backs of warranty service
9	payments made to a dealer unless certain procedures are
10	followed; revising such procedures; prohibiting an
11	applicant or licensee from refusing to allow, limiting, or
12	restricting a motor vehicle dealer's acquisition or
13	addition of operations for another line-make of motor
14	vehicles without demonstrating that the action is
15	justified based on consideration of certain requirements;
16	amending s. 320.641, F.S.; revising procedures for a
17	determination that a discontinuation, cancellation, or
18	nonrenewal of a franchise agreement by the applicant or
19	licensee is unfair; requiring that a new dealer be given
20	180 days to correct alleged sales or service performance
21	failure; providing an effective date.
22
23	Be It Enacted by the Legislature of the State of Florida:
24
25	Section 1.  Subsection (25) of section 320.64, Florida
26	Statutes, is amended, and subsection (37) is added to that
27	section, to read:
28	320.64  Denial, suspension, or revocation of license;
29	grounds.--A license of a licensee under s. 320.61 may be denied,
30	suspended, or revoked within the entire state or at any specific
31	location or locations within the state at which the applicant or
32	licensee engages or proposes to engage in business, upon proof
33	that the section was violated with sufficient frequency to
34	establish a pattern of wrongdoing, and a licensee or applicant
35	shall be liable for claims and remedies provided in ss. 320.695
36	and 320.697 for any violation of any of the following
37	provisions. A licensee is prohibited from committing the
38	following acts:
39	(25)  The applicant or licensee has undertaken an audit of
40	warranty payments or incentive payment previously paid to a
41	motor vehicle dealer in violation of this section or has failed
42	to comply with s. 320.696. An applicant or licensee may
43	reasonably and periodically audit a motor vehicle dealer to
44	determine the validity of paid claims. Audit of warranty
45	payments shall only be for the 1-year period immediately
46	following the date the claim was paid. Audit of incentive
47	payments shall only be for an 18-month period immediately
48	following the date the incentive was paid. An applicant or
49	licensee shall not deny a claim or charge a motor vehicle dealer
50	back subsequent to the payment of the claim unless the applicant
51	or licensee can show that the claim was false or fraudulent or
52	that the motor vehicle dealer failed to substantially comply
53	with the reasonable written and uniformly applied procedures of
54	the applicant or licensee for such repairs or incentives. An
55	applicant or licensee may not charge a motor vehicle dealer back
56	subsequent to the payment of a claim unless a representative of
57	the applicant or licensee first meets in person, by telephone,
58	or by video teleconference with an officer or employee of the
59	dealer designated by the motor vehicle dealer. At such meeting
60	the applicant or licensee must provide a detailed explanation,
61	with supporting documentation, as to the basis for each of the
62	claims for which the applicant or licensee proposed a charge
63	back to the dealer and a written statement containing the basis
64	upon which the motor vehicle dealer was selected for audit or
65	review. Thereafter, the applicant or licensee must provide the
66	motor vehicle dealer's representative a reasonable period after
67	the meeting within which to respond to the proposed charge-
68	backs, with such period to be commensurate with the volume of
69	claims under consideration, but in no case less than 45 days
70	after the meeting. The applicant or licensee is prohibited from
71	changing or altering the basis for each of the proposed charge-
72	backs as presented to the motor vehicle dealer's representative
73	following the conclusion of the audit unless the applicant or
74	licensee receives new information affecting the basis for one or
75	more charge-backs. If the applicant or licensee claims the
76	existence of new information, the dealer must be given the same
77	right to a meeting and right to respond as when the charge-back
78	was originally presented.
79	(37)  Notwithstanding the terms of any franchise agreement,
80	the applicant or licensee has refused to allow or has limited or
81	restricted a motor vehicle dealer from acquiring or adding a
82	sales or service operation for another line-make of motor
83	vehicles at the same or expanded facility at which the motor
84	vehicle dealer currently operates a dealership unless the
85	applicant or licensee can demonstrate that such refusal,
86	limitation, or restriction is justified by consideration of
87	reasonable facility and financial requirements and the dealer's
88	performance for the existing line-make.
89
90	A motor vehicle dealer who can demonstrate that a violation of,
91	or failure to comply with, any of the preceding provisions by an
92	applicant or licensee will or can adversely and pecuniarily
93	affect the complaining dealer, shall be entitled to pursue all
94	of the remedies, procedures, and rights of recovery available
95	under ss. 320.695 and 320.697.
96	Section 2.  Subsection (3) of section 320.641, Florida
97	Statutes, is amended to read:
98	320.641  Discontinuations, cancellations, nonrenewals,
99	modifications, and replacement of franchise agreements.--
100	(3)  Any motor vehicle dealer who receives a notice of
101	intent to discontinue, cancel, not renew, modify, or replace
102	may, within the 90-day notice period, file a petition or
103	complaint for a determination of whether such action is an
104	unfair or prohibited discontinuation, cancellation, nonrenewal,
105	modification, or replacement. Agreements and certificates of
106	appointment shall continue in effect until final determination
107	of the issues raised in such petition or complaint by the motor
108	vehicle dealer. A discontinuation, cancellation, or nonrenewal
109	of a franchise agreement is unfair if it is not clearly
110	permitted by the franchise agreement; is not undertaken in good
111	faith; is not undertaken for good cause; or is based on an
112	alleged breach of the franchise agreement which is not in fact a
113	material and substantial breach; or, if the grounds relied upon
114	for termination, cancellation, or nonrenewal have not been
115	applied in a uniform and consistent manner by the licensee. If
116	the notice of discontinuation, cancellation, or nonrenewal
117	relates to an alleged failure of the new motor vehicle dealer's
118	sales or service performance obligations under the franchise
119	agreement, the new motor vehicle dealer must first be provided
120	with at least 180 days to correct the alleged failure before a
121	licensee may send the notice of discontinuation, cancellation,
122	or nonrenewal. A modification or replacement is unfair if it is
123	not clearly permitted by the franchise agreement; is not
124	undertaken in good faith; or is not undertaken for good cause.
125	The applicant or licensee shall have the burden of proof that
126	such action is fair and not prohibited.
127	Section 3.  This act shall take effect July 1, 2007.

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