HB 1269

A bill to be entitled
2An act relating to motor vehicle dealers; amending s.
3320.64, F.S.; revising prohibitions against actions by a
4licensed motor vehicle manufacturer, factory branch,
5distributor, or importer; prohibiting requiring a motor
6vehicle dealer to relocate, expand, improve, remodel,
7renovate, or alter certain approved facilities; providing
8for the licensee to offer certain inducements for such
9changes under certain conditions; prohibiting adverse
10action for refusal; revising a prohibition against certain
11changes in supply to a dealer; prohibiting adverse action
12against a dealer who sold or leased a motor vehicle to a
13customer who exported the vehicle to a foreign country, or
14who resold the vehicle, unless the licensee proves actual
15knowledge; revising prohibitions against certain audits;
16prohibiting certain acts that discriminate against one
17dealer in favor of another; creating s. 320.6412, F.S.;
18providing that no franchise agreement shall be terminated,
19canceled, discontinued, or not renewed on the basis of
20misrepresentation, fraud, or filing false or fraudulent
21statements or claims, unless the licensee proves actual
22knowledge; amending s. 320.696, F.S.; revising provisions
23for responsibilities of a licensee for work performed
24pursuant to warranty, preparation procedures, or recall,
25directive, or bulletin; providing requirements for
26compensation to a motor vehicle dealer for such work;
27providing procedures for determining compensation amounts;
28providing for changes in compensation amounts; prohibiting
29certain acts to recover compensation costs; prohibiting
30certain acts of discrimination against a dealer; providing
31for severability; providing an effective date.
33Be It Enacted by the Legislature of the State of Florida:
35     Section 1.  Subsections (10), (18), (22), (25), (26), and
36(30) of section 320.64, Florida Statutes, are amended, and
37subsection (38) is added to that section, to read:
38     320.64  Denial, suspension, or revocation of license;
39grounds.--A license of a licensee under s. 320.61 may be denied,
40suspended, or revoked within the entire state or at any specific
41location or locations within the state at which the applicant or
42licensee engages or proposes to engage in business, upon proof
43that the section was violated with sufficient frequency to
44establish a pattern of wrongdoing, and a licensee or applicant
45shall be liable for claims and remedies provided in ss. 320.695
46and 320.697 for any violation of any of the following
47provisions. A licensee is prohibited from committing the
48following acts:
49     (10)(a)  The applicant or licensee has attempted to enter,
50or has entered, into a franchise agreement with a motor vehicle
51dealer who does not, at the time of the franchise agreement,
52have proper facilities to provide the services to his or her
53purchasers of new motor vehicles which are covered by the new
54motor vehicle warranty issued by the applicant or licensee.
55Notwithstanding any provision of a franchise agreement, once a
56licensee has approved the sales and service facilities of a
57motor vehicle dealer, the licensee shall not thereafter require,
58by agreement, policy, or standard, any of its motor vehicle
59dealers to relocate, expand, improve, remodel, renovate, or
60alter any part of those facilities.
61     (b)  Notwithstanding paragraph (a), a licensee may provide
62a loan or grant of money to a motor vehicle dealer as an
63inducement for relocation, expansion, improvement, remodeling,
64or renovation of any of its facilities, provided:
65     1.  The licensee delivers an assurance to the motor vehicle
66dealer that it will supply a sufficient quantity of new motor
67vehicles, consistent with its allocation obligations under the
68law and to its other same line-make motor vehicle dealers, to
69the motor vehicle dealer that will economically justify such
70relocation, expansion, improvement, remodeling, or renovation in
71light of reasonably current and reasonably projected market and
72economic conditions;
73     2.  The provisions of the loan or grant and assurance, and
74the basis therefor, are contained in a written agreement
75voluntarily entered into by the motor vehicle dealer; and
76     3.  The loan or grant is made available on equal terms to
77the licensee's other franchised motor vehicle dealers in this
79     (c)  A licensee may not withhold a benefit that is
80available to its other franchised dealers in this state from, or
81take or threaten to take an action that is unfair or adverse to,
82a motor vehicle dealer that elects not to enter into an
83agreement with the licensee as provided in paragraph (b).
84     (d)  A licensee shall not fail or refuse to offer any
85program for a bonus, incentive, or other benefit, in whole or in
86part, to any of its franchised motor vehicle dealers in this
87state that it offers to its other authorized dealers nationally
88or in the licensee's zone or region in which this state is
90     (e)  Any portion of any program offered by a licensee for a
91bonus, incentive, or other benefit that, in whole or in part, is
92based upon, or is aimed at, inducing a motor vehicle dealer's
93relocation, expansion, improvement, remodeling, renovation, or
94alteration shall be deemed void as to each of the licensee's
95franchised motor vehicle dealers in this state. However, such
96dealers shall be eligible for the entire amount of such bonus,
97incentive, or other benefit offered in the program upon
98compliance with the other basis or eligibility provisions
99contained in such program.
100     (f)  Notwithstanding any provision contained in this
101subsection, a licensee may set reasonable standards for a motor
102vehicle dealer's sales and service facilities related to upkeep,
103repair, and cleanliness.
104     (18)  The applicant or licensee has established a system of
105motor vehicle allocation or distribution or has implemented a
106system of allocation or distribution of motor vehicles to one or
107more of its franchised motor vehicle dealers which reduces or
108alters allocations or supplies of new motor vehicles to a motor
109vehicle dealer in order to achieve, directly or indirectly, a
110purpose that is prohibited by ss. 320.60-320.70 or which
111otherwise is unfair, inequitable, unreasonably discriminatory,
112or not supportable by reason and good cause after considering
113the equities of the affected motor vehicles dealer or dealers.
114An applicant or licensee shall maintain for 3 years records that
115describe its methods or formula of allocation and distribution
116of its motor vehicles and records of its actual allocation and
117distribution of motor vehicles to its motor vehicle dealers in
118this state. As used in this subsection, the term "unfair"
119includes, but is not limited to, refusal or failure to offer any
120franchised motor vehicle dealer an equitable supply of new motor
121vehicles covered by its franchise agreement, by model, mix, or
122colors, as the licensee offers or makes available to its other
123same line-make motor vehicle dealers in this state.
124     (22)  The applicant or licensee has refused to deliver, in
125reasonable quantities and within a reasonable time, to any duly
126licensed motor vehicle dealer who has an agreement with such
127applicant or licensee for the retail sale of new motor vehicles
128and parts for motor vehicles sold or distributed by the
129applicant or licensee, any such motor vehicles or parts as are
130covered by such agreement. Such refusal includes the failure to
131offer to its same line-make franchised motor vehicle dealers all
132models manufactured for that line-make, or requiring a dealer to
133pay any extra fee, require a dealer to execute a separate
134franchise agreement, purchase unreasonable advertising displays
135or other materials, or relocate, expand, improve, remodel,
136renovate, or recondition, or alter the dealer's existing
137facilities, or provide exclusive facilities as a prerequisite to
138receiving a model or series of vehicles. However, the failure to
139deliver any motor vehicle or part will not be considered a
140violation of this section if the failure is due to an act of
141God, work stoppage, or delay due to a strike or labor
142difficulty, a freight embargo, product shortage, or other cause
143over which the applicant or licensee has no control. An
144applicant or licensee may impose reasonable requirements on the
145motor vehicle dealer, other than the items listed above,
146including, but not limited to, the purchase of special tools
147required to properly service a motor vehicle and the undertaking
148of sales person or service person training related to the motor
150     (25)  The applicant or licensee has undertaken an audit of
151warranty payments or incentive payment previously paid to a
152motor vehicle dealer in violation of this section or has failed
153to comply with any of its obligations under s. 320.696. An
154applicant or licensee may reasonably and periodically audit a
155motor vehicle dealer to determine the validity of paid claims as
156provided in s. 320.696. Audit of warranty payments shall only be
157for the 1-year period immediately following the date the claim
158was paid. Audit of incentive payments shall only be for an 18-
159month period immediately following the date the incentive was
160paid. An applicant or licensee shall not deny a claim or charge
161a motor vehicle dealer back subsequent to the payment of the
162claim unless the applicant or licensee can show that the claim
163was false or fraudulent or that the motor vehicle dealer failed
164to substantially comply with the reasonable written and
165uniformly applied procedures of the applicant or licensee for
166such repairs or incentives. An applicant or licensee may not
167charge a motor vehicle dealer back subsequent to the payment of
168a claim unless a representative of the applicant or licensee
169first meets in person, by telephone, or by video teleconference
170with an officer or employee of the dealer designated by the
171motor vehicle dealer. At such meeting the applicant or licensee
172must provide a detailed explanation, with supporting
173documentation, as to the basis for each of the claims for which
174the applicant or licensee proposed a charge-back to the dealer
175and a written statement containing the basis upon which the
176motor vehicle dealer was selected for audit or review.
177Thereafter, the applicant or licensee must provide the motor
178vehicle dealer's representative a reasonable period after the
179meeting within which to respond to the proposed charge-backs,
180with such period to be commensurate with the volume of claims
181under consideration, but in no case less than 45 days after the
182meeting. The applicant or licensee is prohibited from changing
183or altering the basis for each of the proposed charge-backs as
184presented to the motor vehicle dealer's representative following
185the conclusion of the audit unless the applicant or licensee
186receives new information affecting the basis for one or more
187charge-backs. If the applicant or licensee claims the existence
188of new information, the dealer must be given the same right to a
189meeting and right to respond as when the charge-back was
190originally presented.
191     (26)  Notwithstanding the terms of any franchise agreement,
192including any licensee's program, policy, or procedure, the
193applicant or licensee has refused to allocate, sell, or deliver
194motor vehicles; charged back or withheld payments or other
195things of value for which the dealer is otherwise eligible under
196a sales promotion, program, or contest; or prevented the motor
197vehicle dealer from participating in any promotion, program, or
198contest; or taken any adverse action against a motor vehicle
199dealer, including, but not limited to, terminating or
200threatening to terminate a franchise because the dealer sold or
201leased a motor vehicle to a customer who exported the vehicle to
202a foreign country or who resold the vehicle, unless the licensee
203proves that the motor vehicle dealer had actual knowledge that
204the customer's intent was to export or resell the motor vehicle.
205There will be a conclusive presumption that the motor vehicle
206dealer had no such actual knowledge for selling a motor vehicle
207to a customer who was present at the dealership and the motor
208vehicle dealer did not know or should not have reasonably known
209that the vehicle would be shipped to a foreign country. There
210will be a rebuttable presumption that the dealer did not know or
211should not have reasonably known that the vehicle would be
212shipped to a foreign country if the vehicle is titled in one of
213the 50 United States.
214     (30)  The applicant or licensee has conducted or threatened
215to conduct any audit of a motor vehicle dealer in order to
216coerce or attempt to coerce the dealer to forego any right or
217remedy rights granted to the dealer under ss. 320.60-320.70 or
218under the agreement between the licensee and the motor vehicle
219dealer. Nothing in this section shall prohibit an applicant or
220licensee from reasonably and periodically auditing a dealer to
221determine the validity of paid claims as permitted in this
222chapter, provided the licensee complies with all provisions of
223ss. 320.60-320.70 applicable to such audits.
224     (38)  The licensee has discriminated or threatened to
225discriminate against any of its franchised motor vehicle dealers
226in this state in favor of another dealer or other dealers of the
227same line-make in this state by:
228     (a)  Selling or offering to sell a new motor vehicle to any
229motor vehicle dealer at a lower actual price, including the
230price for vehicle transportation, than the actual price at which
231the same model similarly equipped is offered to or is available
232to another dealer in this state during a similar time period; or
233     (b)  Offering or using a promotional program or device, or
234an incentive, bonus, payment, or other benefit, whether paid at
235the time of the sale of the new motor vehicle to the dealer or
236later, that results in the sale or offer to sell a new motor
237vehicle to a motor vehicle dealer at a lower price, including
238the price for vehicle transportation, than the price at which
239the same model similarly equipped is offered or is available to
240another dealer in this state during a similar time period. This
241subsection shall not prohibit a promotional, bonus, or incentive
242program that is functionally available to competing dealers of
243the same line-make in this state on substantially comparable
246A motor vehicle dealer who can demonstrate that a violation of,
247or failure to comply with, any of the preceding provisions by an
248applicant or licensee will or can adversely and pecuniarily
249affect the complaining dealer, shall be entitled to pursue all
250of the remedies, procedures, and rights of recovery available
251under ss. 320.695 and 320.697.
252     Section 2.  Section 320.6412, Florida Statutes, is created
253to read:
254     320.6412  Termination based on misrepresentation; evidence
255required.--Notwithstanding s. 320.64, or any of the provisions
256of any franchise agreement, no franchise agreement of any motor
257vehicle dealer shall be terminated, canceled, discontinued, or
258not renewed by any licensee on the basis of misrepresentation,
259fraud, or filing false or fraudulent statements or claims,
260unless the licensee proves by clear and convincing evidence at a
261hearing that the majority owner or, if there is no majority
262owner, the person designated as dealer-operator or dealer-
263principal in the franchise agreement had actual knowledge of
264such misrepresentation or fraud or the filing of false
265statements or claims at the time any such conduct was allegedly
266perpetrated on a customer or a licensee and failed within a
267reasonable time after being so advised to take such actions
268reasonably calculated to prevent such misrepresentation, fraud,
269or filing of false or fraudulent statements or claims from
270continuing or reoccurring.
271     Section 3.  Section 320.696, Florida Statutes, is amended
272to read:
273     320.696  Warranty responsibility.--
274     (1)(a)  The licensee shall timely compensate any authorized
275motor vehicle dealer who performs work to:
276     1.  Maintain or repair a licensee's product under a
277warranty or maintenance plan, extended warranty, certified
278preowned vehicle warranty, or service contract issued by the
279licensee or its common entity;
280     2.  Fulfill a licensee's delivery or preparation
281procedures; or
282     3.  Make repairs to a motor vehicle as a result of a
283licensee's or common entity's recall or other directive or
285     (b)  As used in this section, unless the context clearly
286requires otherwise, the term:
287     1.  "Compensate" and "compensation" include all labor and
288parts included in the work as provided in this section.
289     2.  "Labor" includes, without limitation, the time spent by
290employees of a motor vehicle dealer for diagnosis or repair of a
292     3.  "Parts" includes all replacement parts and accessories.
293     4.  "Retail customer repair" refers to work, including
294parts and labor, performed by a motor vehicle dealer that does
295not come within the provisions of a licensee's or its common
296entity's warranty, extended warranty, service contract, or
297maintenance plan, but excludes parts and labor described in
298paragraphs (3)(b) and (4)(c).
299     5.  "Work" and "repair" include all items contained in
300paragraph (a), as the case may be.
301     (c)  Compensation not paid to a motor vehicle dealer within
30230 days after receipt of a claim therefor is deemed untimely. A
303licensee shall not establish or implement any term, policy, or
304procedure different from those described in this section for any
305of its motor vehicle dealers to obtain compensation due under
306this section or pay a motor vehicle dealer less than amounts due
307as described in this section.
308     (2)  No licensee shall take or threaten to take any adverse
309action against any of its franchised motor vehicle dealers who
310seek to obtain compensation described in this section. The term
311"adverse action" includes, without limitation, taking or
312omitting to take any action other than in good faith; creating
313or implementing any obstacle or process that is inconsistent
314with any of the licensee's obligations under this section;
315hindering, delaying, or rejecting the proper and timely payment
316of compensation due under this section to a motor vehicle
317dealer; establishing, implementing, enforcing, or applying any
318policy, standard, rule, program, or incentive regarding
319compensation due under this section other than in a uniformly
320and nondisparate manner among the licensee's franchised dealers
321in this state; conducting or threatening to conduct any
322warranty, retail customer repair, or other service-related audit
323more frequently than once each calendar year; or denying,
324reducing, or charging back any warranty claim because of a motor
325vehicle dealer's failure to comply with all of the specific
326requirements of a licensee for processing a claim. Inclusion of
327the examples in this subsection shall not exclude other conduct
328from the meaning of the term "adverse action."
329     (3)(a)1.  As provided in this subsection, a licensee shall
330compensate a motor vehicle dealer for all parts used in
331performing any of the work described in subsection (1). The
332compensation may be an agreed percentage markup over the
333licensee's dealer cost but, if no agreement is reached within 30
334days after a motor vehicle dealer's written request therefor,
335compensation for such parts shall be deemed to be the greater
337     a.  The motor vehicle dealer's arithmetical mean percentage
338markup over dealer cost for all parts charged by the motor
339vehicle dealer in 25 consecutive retail customer repair orders
340made and selected by the motor vehicle dealer within the 3-month
341period prior to the written request, or all of such retail
342customer repair orders over the previous 3 months if there are
343fewer than 25 retail customer repair orders in that period,
344provided no motor vehicle dealer's repair order shall be
345excluded from this computation because it contains both warranty
346or maintenance work and retail customer repairs. However, only
347the retail customer repair portion of such repair order shall be
348included in this computation, and those parts described in
349paragraph (b) shall be excluded from this computation;
350     b.  The licensee's highest suggested retail or list price
351for such parts; or
352     c.  An amount equal to the motor vehicle dealer's markup
353over dealer cost that results in the same gross profit
354percentage for parts used in work done under subsection (1) as
355the motor vehicle dealer is receiving for parts used in the
356dealer's customer retail repairs as evidenced by the motor
357vehicle dealer's financial statement delivered to the licensee
358for the month preceding the motor vehicle dealer's written
360     2.  If a licensee decreases its suggested retail or list
361price for any replacement part or accessory, it shall also
362decrease by at least the identical percentage the cost to the
363motor vehicle dealer for such part or accessory. The markup or
364gross profit percentage described in this subsection shall be
365uniformly applied to all of the licensee's parts used by the
366motor vehicle dealer in performing work described under
367subsection (1).
368     (b)  For purposes of determining compensation to be paid
369for parts under sub-subparagraph (a)1.a., parts discounted by a
370motor vehicle dealer for repairs made in group, fleet,
371insurance, or other third-party-payor service work; parts used
372in repairs for government agencies for which volume discounts
373have been negotiated; parts used in special events, or
374"specials," or promotional discounts for retail customer
375repairs; parts sold by the dealer at wholesale; parts used for a
376dealer's internal repairs; engine assemblies and transmission
377assemblies; nuts, bolts, fasteners, and similar items that do
378not have an individual part number; and tires shall all be
379excluded in determining a motor vehicle dealer's average
380percentage markup over dealer cost.
381     (c)  Notwithstanding the provisions of paragraph (a), if a
382licensee furnishes a part or component to a motor vehicle dealer
383at no cost for use in the motor vehicle dealer's performance of
384repairs under a recall or service action or warranty, the
385licensee shall compensate the motor vehicle dealer for such part
386or component in the same manner as warranty parts compensation
387under this subsection, less the dealer cost for such part or
388component as listed in the licensee's then-current price
390     (d)  No licensee shall establish or implement any special
391part or component number for parts used in predelivery, dealer
392preparation, warranty, or maintenance-only applications if such
393number results in lower compensation to the motor vehicle dealer
394than such compensation as described in paragraphs (a), (b), and
396     (4)(a)  A licensee shall compensate a motor vehicle dealer
397for all labor performed in connection with work described in
398subsection (1) in amounts as described under paragraphs (b) and
400     (b)1.  Compensation paid by a licensee to a motor vehicle
401dealer may be an agreed hourly labor rate but, if no agreement
402is reached within 30 days after a motor vehicle dealer's written
403request therefor, labor compensation shall be, at the election
404of the motor vehicle dealer, the greater of:
405     a.  The motor vehicle dealer's hourly labor rate for retail
406customer repairs, which shall be determined by dividing the
407amount of the motor vehicle dealer's total labor sales for
408retail customer repairs by the number of total labor hours which
409generated those total sales for the month preceding the written
410request, excluding the work described in paragraph (c); or
411     b.  An amount equal to the motor vehicle dealer's markup
412over dealer cost that results in the same gross profit
413percentage for labor hours used in work done under subsection
414(1) as the motor vehicle dealer is receiving for labor used in
415the dealer's customer retail repairs as evidenced by the motor
416vehicle dealer's financial statement delivered to the licensee
417for the month preceding the motor vehicle dealer's written
418request, provided the motor vehicle dealer provides in the
419written request the arithmetical mean of the compensation for
420all of its technicians during that preceding month and that
421arithmetical mean shall be the "dealer cost" used in such
423     2.  Once an hourly labor rate is agreed or determined
424pursuant to this subsection, the licensee shall uniformly apply
425and pay that hourly labor rate for all labor used by the motor
426vehicle dealer in performing work described in subsection (1),
427provided no licensee shall pay an hourly labor rate less than
428the hourly rate it was paying to the motor vehicle dealer for
429work done under subsection (1) on January 1, 2008. No licensee
430shall eliminate flat rate times from, or establish any
431unreasonable flat rate time in, its warranty repair manual,
432warranty time guide, or any other similarly named document. A
433licensee shall establish reasonable flat-rate labor times in its
434warranty repair manuals and warranty time guides for its newly
435introduced model motor vehicles which are at least consistent
436with its existing such documents. A motor vehicle dealer who
437disputes as unreasonable any flat-rate time established by the
438licensee or its common entity may bring an action against the
439licensee or common entity in the circuit court for the county in
440which the motor vehicle dealer's principal place of business is
441located for such relief as is provided in this chapter. As used
442in this subsection, the terms "retail customer repair" and
443"similar work" are not limited to a repair to the same model
444vehicle or model year but shall include a prior repair that
445resembles but may not be identical to the repair for which the
446motor vehicle dealer is making a claim for compensation under
447this section.
448     (c)  In determining the hourly labor rate for compensation
449to be paid by a licensee for all work under sub-subparagraph
450(b)1.a., a motor vehicle dealer's labor charges for its internal
451vehicle repairs; for vehicle reconditioning; for repairs
452performed for group, fleet, insurance, or other third-party
453payors; for discounted repairs of motor vehicles for government
454agencies; and for labor used in special events, "specials,"
455"express service," and promotional discounts shall not be
456included as retail customer repairs and shall be excluded from
457any calculation under sub-subparagraph (b)1.a.
458     (5)  A licensee shall not review, change, or fail to pay a
459motor vehicle dealer's parts or labor compensation as determined
460under this section unless a motor vehicle dealer has requested a
461change or pursuant to a licensee's written predetermined
462schedule for increasing parts or labor compensation. A motor
463vehicle dealer may make written requests for changes in
464compensation for parts or labor for work performed under this
465section not more often than semiannually. The motor vehicle
466dealer shall attach supporting documentation as described in
467this section to each written request. A motor vehicle dealer's
468written request for changes in parts or labor compensation under
469this section shall be deemed accepted unless the licensee,
470within 30 days after receipt thereof, in writing, disputes with
471specificity the supporting documentation contained in the motor
472vehicle dealer's written request. Any motor vehicle dealer whose
473request for increased compensation under this section has been
474disputed shall have the right to bring an action against the
475licensee in a court of competent jurisdiction in the county in
476which the motor vehicle dealer's principal place of business is
477located for a declaratory judgment for approval of its change
478request under this section, for an injunction precluding the
479licensee from refusing to compensate the motor vehicle dealer as
480provided in this section, or for damages, all as provided in
481this chapter. In calculating damages, any increase in parts or
482labor determined in such litigation to be due to the motor
483vehicle dealer under this section shall be ordered paid to the
484motor vehicle dealer for all work performed under this
485subsection retroactively to the date of the licensee's receipt
486of such written request.
487     (6)  A licensee shall not recover, or seek or attempt to
488recover, directly or indirectly, any of its costs for
489compensating any of its motor vehicle dealers under this
490section, including, without limitation, by decreasing or
491eliminating solely in this state at one or more of its motor
492vehicle dealers any bonus or incentive that it placed in effect
493nationally or regionally; by reducing solely in this state at
494one or more of its motor vehicle dealers any of its dealer's
495gross margin for any of the licensee's products or services when
496the wholesale price charged to the motor vehicle dealer is
497determined by the licensee and which reduction is not in effect
498nationally or regionally; or by imposing any separate charge or
499surcharge to the wholesale price paid by a motor vehicle dealer
500in this state to the licensee for any product or service offered
501to or supplied by a licensee, either under its franchise
502agreement with the motor vehicle dealer or by passing on to the
503motor vehicle dealer any such charge or surcharge of a common
504entity of such licensee.
505     (7)  A licensee shall not require, influence, or attempt to
506influence a motor vehicle dealer to implement or change the
507prices or charges for which it sells parts or labor for retail
508customer repairs. A licensee shall not implement or continue a
509policy, procedure, or program with respect to one or more of its
510licensed motor vehicle dealers in this state for compensation
511under this section that is less favorable to its franchised
512motor vehicle dealers in this state than is applicable to its
513franchised dealers nationally or regionally or, if there is no
514such national or regional policy, to its franchised dealers in a
515majority of states.
516     (8)  If a court of competent jurisdiction determines with
517finality that any provision or any part thereof contained in
518this section is void or unenforceable, the remaining provisions
519thereof shall not be affected by such determination but shall
520remain in full force and effect. The licensee shall reasonably
521and timely compensate any authorized motor vehicle dealer who
522performs work, including labor and parts, to rectify the
523licensee's product or warranty defects or fulfills delivery and
524preparation obligations. In the determination of what
525constitutes reasonable compensation under this section, the
526factors to be given consideration shall include, among others,
527the compensation being paid by other licensees to their dealers,
528the prevailing wage rate being paid by the dealers, and the
529prevailing labor rate being charged by the dealers, in the city
530or community in which the dealer is doing business. For the
531purpose of this section, reasonable compensation for work,
532including labor and parts, by a motor vehicle dealer for
533warranty repairs or service, including labor and parts, on
534behalf of a licensee shall be determined to be equal to the
535amount charged by the dealer for like work to retail customers
536for nonwarranty repairs and service, including labor and parts,
537unless the licensee has demonstrated and established in a
538proceeding before the department that the dealer's retail
539charges for labor and parts are improper in light of all
540economic circumstances. Compensation not paid within 30 days
541after receipt or notice of billing is presumed untimely. A
542licensee may not otherwise recover, or seek to recover, any of
543its costs for compensating a motor vehicle dealer for warranty
544work, including labor and parts, by imposing on a motor vehicle
545dealer any charge or surcharge to the wholesale price paid by a
546motor vehicle dealer to the licensee for any product, including
547motor vehicles and parts.
548     Section 4.  This act shall take effect July 1, 2008.

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