HB 1525

1	A bill to be entitled
2	An act relating to motor vehicle dealerships; amending s.
3	320.64, F.S.; revising provisions prohibiting certain acts
4	by a motor vehicle manufacturer, factory branch,
5	distributor, or importer licensed under specified
6	provisions; revising conditions and procedures for certain
7	audits; removing a presumption that a dealer had no actual
8	knowledge that a customer intended to export or resell a
9	motor vehicle; amending s. 320.642, F.S.; revising
10	provisions for establishing an additional motor vehicle
11	dealership in or relocating an existing dealer to a
12	location within a community or territory where the same
13	line-make vehicle is presently represented by a franchised
14	motor vehicle dealer or dealers; revising notice
15	requirements; revising provisions for denial of an
16	application for a motor vehicle dealer license in any
17	community or territory; revising provisions for evidence
18	to be considered by the Department of Highway Safety and
19	Motor Vehicles when evaluating the application; revising
20	provisions under which a dealer has standing to protest a
21	proposed additional or relocated motor vehicle dealer;
22	revising provisions for a proposed addition or relocation
23	concerning a dealership that performs only service;
24	amending s. 320.643, F.S.; revising provisions for
25	transfer, assignment, or sale of franchise agreements;
26	prohibiting rejection of proposed transfer of interest in
27	a motor vehicle dealer entity to a trust or other entity,
28	or a beneficiary thereof, that is established for estate
29	planning purposes; prohibiting placing certain conditions
30	on such transfer; revising provisions for a hearing by the
31	department or a court relating to a proposed transfer;
32	providing for severability; providing an effective date.
33
34	Be It Enacted by the Legislature of the State of Florida:
35
36	Section 1.  Subsections (25) and (26) of section 320.64,
37	Florida Statutes, are amended to read:
38	320.64  Denial, suspension, or revocation of license;
39	grounds.--A license of a licensee under s. 320.61 may be denied,
40	suspended, or revoked within the entire state or at any specific
41	location or locations within the state at which the applicant or
42	licensee engages or proposes to engage in business, upon proof
43	that the section was violated with sufficient frequency to
44	establish a pattern of wrongdoing, and a licensee or applicant
45	shall be liable for claims and remedies provided in ss. 320.695
46	and 320.697 for any violation of any of the following
47	provisions. A licensee is prohibited from committing the
48	following acts:
49	(25)  The applicant or licensee has undertaken an audit of
50	warranty, maintenance, and other service-related payments or of
51	incentive payments, including payments to a motor vehicle dealer
52	under any licensee-issued program, policy, or other benefit that
53	previously have been paid to a motor vehicle dealer, in
54	violation of this section or has failed to comply with any of
55	its obligations under s. 320.696. An applicant or licensee may
56	reasonably and periodically audit a motor vehicle dealer to
57	determine the validity of paid claims as provided in s. 320.696.
58	Audits Audit of warranty, maintenance, and other service-related
59	payments shall only be performed by an applicant or licensee
60	during for the 1-year period immediately following the date the
61	claim was paid. Audits Audit of incentive payments shall only be
62	performed by an applicant or licensee during for an 18-month
63	period immediately following the date the incentive was paid.
64	After those time periods have elapsed, all warranty,
65	maintenance, and other service-related payments and incentive
66	payments shall be deemed final and incontrovertible for any
67	reason cognizant under any applicable law and the motor vehicle
68	dealer shall not be subject to any charge back or repayment. An
69	applicant or licensee may deny a claim or, as a result of a
70	timely conducted audit, charge back a motor vehicle dealer for
71	warranty, maintenance, or other service-related payments or
72	incentive payments only if An applicant or licensee shall not
73	deny a claim or charge a motor vehicle dealer back subsequent to
74	the payment of the claim unless the applicant or licensee can
75	show that the warranty, maintenance, or other service-related
76	claim or incentive claim was false or fraudulent or that the
77	motor vehicle dealer failed to substantially comply with the
78	reasonable, written, and uniformly applied procedures of the
79	applicant or licensee for such repairs or incentives. An
80	applicant or licensee may not charge a motor vehicle dealer back
81	subsequent to the payment of a warranty, maintenance, or
82	service-related claim or incentive claim unless, within 30 days
83	or a timely conducted audit, a representative of the applicant
84	or licensee first meets in person, by telephone, or by video
85	teleconference with an officer or employee of the dealer
86	designated by the motor vehicle dealer. At such meeting the
87	applicant or licensee must provide a detailed explanation, with
88	supporting documentation, as to the basis for each of the claims
89	for which the applicant or licensee proposed a charge-back to
90	the dealer and a written statement containing the basis upon
91	which the motor vehicle dealer was selected for audit or review.
92	Thereafter, the applicant or licensee must provide the motor
93	vehicle dealer's representative a reasonable period after the
94	meeting within which to respond to the proposed charge-backs,
95	with such period to be commensurate with the volume of claims
96	under consideration, but in no case less than 45 days after the
97	meeting. The applicant or licensee is prohibited from changing
98	or altering the basis for each of the proposed charge-backs as
99	presented to the motor vehicle dealer's representative following
100	the conclusion of the audit unless the applicant or licensee
101	receives new information affecting the basis for one or more
102	charge-backs and that new information is received within 60 days
103	after the conclusion of the timely conducted audit. If the
104	applicant or licensee claims the existence of new information,
105	the dealer must be given the same right to a meeting within 30
106	days after the applicant's or licensee's receipt of the new
107	information and right to respond as when the charge-back was
108	originally presented.
109	(26)  Notwithstanding the terms of any franchise agreement,
110	including any licensee's program, policy, or procedure, the
111	applicant or licensee has refused to allocate, sell, or deliver
112	motor vehicles; charged back or withheld payments or other
113	things of value for which the dealer is otherwise eligible under
114	a sales promotion, program, or contest; prevented a motor
115	vehicle dealer from participating in any promotion, program, or
116	contest; or has taken or threatened to take any adverse action
117	against a dealer, including charge-backs, reducing vehicle
118	allocations, or terminating or threatening to terminate a
119	franchise because the dealer sold or leased a motor vehicle to a
120	customer who exported the vehicle to a foreign country or who
121	resold the vehicle, unless the licensee proves that the dealer
122	had actual knowledge that the customer intended to export or
123	resell the motor vehicle. There is a conclusive presumption that
124	the dealer had no actual knowledge if the vehicle is titled or
125	registered in any state in this country.
126
127	A motor vehicle dealer who can demonstrate that a violation of,
128	or failure to comply with, any of the preceding provisions by an
129	applicant or licensee will or can adversely and pecuniarily
130	affect the complaining dealer, shall be entitled to pursue all
131	of the remedies, procedures, and rights of recovery available
132	under ss. 320.695 and 320.697.
133	Section 2.  Subsections (1) and (2), paragraph (a) of
134	subsection (3), and paragraphs (b) and (c) of subsection (6) of
135	section 320.642, Florida Statutes, are amended to read:
136	320.642  Dealer licenses in areas previously served;
137	procedure.--
138	(1)  Any licensee who proposes to establish an additional
139	motor vehicle dealership or permit the relocation of an existing
140	dealer to a location within a community or territory where the
141	same line-make vehicle is presently represented by a franchised
142	motor vehicle dealer or dealers shall give written notice of its
143	intention to the department. Such notice shall state:
144	(a)  The specific location at which the additional or
145	relocated motor vehicle dealership will be established.
146	(b)  The date on or after which the licensee intends to be
147	engaged in business with the additional or relocated motor
148	vehicle dealer at the proposed location.
149	(c)  The identity of all motor vehicle dealers who are
150	franchised to sell the same line-make vehicle with licensed
151	locations in the county and or any contiguous county to the
152	county where the additional or relocated motor vehicle dealer is
153	proposed to be located.
154	(d)  The names and addresses of the dealer-operator and
155	principal investors in the proposed additional or relocated
156	motor vehicle dealership.
157
158	Immediately upon receipt of such notice the department shall
159	cause a notice to be published in the Florida Administrative
160	Weekly. The published notice shall state that a petition or
161	complaint by any dealer with standing to protest pursuant to
162	subsection (3) must be filed not more than 45 30 days after from
163	the date of publication of the notice in the Florida
164	Administrative Weekly. The published notice shall describe and
165	identify the proposed dealership sought to be licensed, and the
166	department shall cause a copy of the notice to be mailed to
167	those dealers identified in the licensee's notice under
168	paragraph (c).
169	(2)(a)  An application for a motor vehicle dealer license
170	in any community or territory shall be denied when:
171	1.  A timely protest is filed by a presently existing
172	franchised motor vehicle dealer with standing to protest as
173	defined in subsection (3); and
174	2.  The licensee fails to show that the existing franchised
175	dealer or dealers who register new motor vehicle retail sales or
176	retail leases of the same line-make in the community or
177	territory of the proposed dealership are not providing adequate
178	representation, adequate competition, and convenient customer
179	service of such line-make motor vehicles in a manner beneficial
180	to the public interest in such community or territory. The
181	ultimate burden of proof in establishing inadequate
182	representation, inadequate competition, and inconvenient
183	customer service shall be on the licensee. Any geographic
184	comparison area used to evaluate the performance of the line-
185	make or of the existing motor vehicle dealer or dealers within
186	the community or territory must be reasonably similar in
187	demographic traits to the community or territory of the proposed
188	site, including such factors as age, income, education, vehicle
189	size, class, or model preference, and product popularity, and
190	the comparison area must not be smaller than the largest entire
191	county in which any of the protesting dealers are located.
192	Reasonably expected market sales or service penetration must be
193	measured with respect to the community or territory as a whole
194	and not with respect to any part thereof or any identifiable
195	plot therein.
196	(b)  In determining whether the existing franchised motor
197	vehicle dealer or dealers are providing adequate representation,
198	adequate competition, and convenient customer service in the
199	community or territory for the line-make, the department may
200	consider evidence of any factor deemed material by the finder of
201	fact in the unique circumstances, which may include, but is not
202	limited to:
203	1.  The market share and return on investment impact of the
204	establishment of the proposed or relocated dealer on the
205	consumers, public interest, existing dealers, and the licensee;
206	provided, however, that financial impact other than return on
207	investment may only be considered with respect to the protesting
208	dealer or dealers.
209	2.  The size and permanency of investment reasonably made
210	and reasonable obligations incurred by the existing dealer or
211	dealers to perform their obligations under the dealer agreement,
212	including requirements made by the licensee up to 5 years prior
213	to the date of the publication of the notice.
214	3.  The reasonably expected market penetration of the line-
215	make motor vehicle for the community or territory involved,
216	after consideration of all factors which may affect such said
217	penetration, including, but not limited to, demographic factors
218	such as age, income, education, vehicle size, class, or model
219	preference, line-make, product popularity, retail lease
220	transactions, reasonably foreseeable economic projections,
221	financial expectations, availability of reasonable terms and
222	reasonable amounts of credit to prospective customers, or other
223	factors affecting sales to consumers of the community or
224	territory.
225	4.  Any actions by the licensee licensees in denying its
226	existing dealer or dealers of the same line-make the opportunity
227	for reasonable growth, market expansion, or relocation,
228	including the availability of line-make vehicles by model, in
229	keeping with the reasonable expectations of the licensee in
230	providing an adequate number of dealers in the community or
231	territory, and the licensee, its common entity, making or there
232	otherwise being credit available to the existing dealers in
233	reasonable amounts and on reasonable terms.
234	5.  Any attempts by the licensee to coerce the existing
235	dealer or dealers into consenting to additional or relocated
236	franchises of the same line-make in the community or territory.
237	6.  Distance, travel time, traffic patterns, and
238	accessibility, between the existing dealer or dealers of the
239	same line-make and the location of the proposed additional or
240	relocated dealer, for prospective customers.
241	7.  Whether there will likely be a material positive impact
242	and a material benefit benefits to consumers will likely occur
243	from the establishment or relocation of the proposed dealership
244	which will not cannot be obtained by other geographic or
245	demographic changes or expected changes in the community or
246	territory, or by a material increase in advertising by the
247	licensee.
248	8.  Whether the protesting dealer or dealers are in
249	substantial compliance with their dealer agreement.
250	9.  Whether there is adequate interbrand and intrabrand
251	competition with respect to such said line-make in the community
252	or territory and adequately convenient consumer care for the
253	motor vehicles of the line-make, including the adequacy of sales
254	and service facilities.
255	10.  Whether the establishment or relocation of the
256	proposed dealership is appears to be warranted and justified
257	based on economic and marketing conditions pertinent to dealers
258	competing in the community or territory, including anticipated
259	future changes.
260	11.  The volume of registrations and service business
261	transacted by the existing dealer or dealers of the same line-
262	make in the relevant community or territory of the proposed
263	dealership.
264	12.  The past and reasonably foreseeable expected growth or
265	decline in population, density of population, and new motor
266	vehicle registrations in the community or territory of the
267	proposed dealership for competing motor vehicles, and whether
268	existing same line-make dealers will be unable to adjust their
269	dealership operations to adequately deal with such changes.
270	13.  Whether the licensee has provided marketing and
271	advertising support of its line-make in the community or
272	territory on a basis comparable to its interbrand competitors.
273	14.  Whether the economic conditions reasonably forecasted
274	by the licensee for the foreseeable future will enable all
275	existing same line-make dealers and the proposed new or
276	relocated dealership the opportunity for a reasonable return on
277	their investment, including supplying an adequate number of
278	every model of the licensee's new motor vehicles to them.
279	(3)  An existing franchised motor vehicle dealer or dealers
280	shall have standing to protest a proposed additional or
281	relocated motor vehicle dealer where the existing motor vehicle
282	dealer or dealers have a franchise agreement for the same line-
283	make vehicle to be sold or serviced by the proposed additional
284	or relocated motor vehicle dealer and are physically located so
285	as to meet or satisfy any of the following requirements or
286	conditions:
287	(a)  If the proposed additional or relocated motor vehicle
288	dealer is to be located in a county with a population of less
289	than 300,000 according to the most recent data of the United
290	States Census Bureau or the data of the Bureau of Economic and
291	Business Research of the University of Florida:
292	1.  The proposed additional or relocated motor vehicle
293	dealer is to be located in the area designated or described as
294	the area of responsibility, or such similarly designated area,
295	including the entire area designated as a multiple-point area,
296	in the franchise agreement or in any related document or
297	commitment with the existing motor vehicle dealer or dealers of
298	the same line-make as such agreement existed on or after July 1,
299	2009 upon October 1, 1988;
300	2.  The existing motor vehicle dealer or dealers of the
301	same line-make have a licensed franchise location within a
302	radius of 20 miles of the location of the proposed additional or
303	relocated motor vehicle dealer; or
304	3.  Any existing motor vehicle dealer or dealers of the
305	same line-make can establish that during any 12-month period of
306	the 36-month period preceding the filing of the licensee's
307	application for the proposed dealership, such dealer or its
308	predecessor made 25 percent of its retail sales of new motor
309	vehicles to persons whose registered household addresses were
310	located within a radius of 20 miles of the location of the
311	proposed additional or relocated motor vehicle dealer; provided
312	such existing dealer is located in the same county or any county
313	contiguous to the county where the additional or relocated
314	dealer is proposed to be located.
315	(6)  When a proposed addition or relocation concerns a
316	dealership that performs or is to perform only service, as
317	defined in s. 320.60(16), and will not or does not sell or lease
318	new motor vehicles, as defined in s. 320.60(15), the proposal
319	shall be subject to notice and protest pursuant to the
320	provisions of this section.
321	(b)  The addition or relocation of a service-only
322	dealership shall not be subject to protest if:
323	1.  The applicant for the service-only dealership location
324	is an existing motor vehicle dealer of the same line-make as the
325	proposed additional or relocated service-only dealership;
326	2.  There is no existing dealer of the same line-make
327	closer than the applicant to the proposed location of the
328	additional or relocated service-only dealership; and
329	3.  The proposed location of the additional or relocated
330	service-only dealership is at least 15 7 miles from all existing
331	motor vehicle dealerships of the same line-make, other than
332	motor vehicle dealerships owned by the applicant.
333	(c)  In determining whether existing franchised motor
334	vehicle dealers are providing adequate representation, adequate
335	competition, and convenient customer service representations in
336	the community or territory for the line-make in question in a
337	protest of the proposed addition or relocation of a service-only
338	dealership, the department may consider the elements set forth
339	in paragraph (2)(b), provided:
340	1.  With respect to subparagraph (2)(b)1., only the impact
341	as it relates to service may be considered;
342	2.  Subparagraph (2)(b)3. shall not be considered;
343	3.  With respect to subparagraph (2)(b)9., only service
344	facilities shall be considered; and
345	4.  With respect to subparagraph (2)(b)11., only the volume
346	of service business transacted shall be considered.
347	Section 3.  Section 320.643, Florida Statutes, is amended
348	to read:
349	320.643  Transfer, assignment, or sale of franchise
350	agreements.--
351	(1)(a)  Notwithstanding the terms of any franchise
352	agreement, a licensee shall not, by contract or otherwise, fail
353	or refuse to give effect to, prevent, prohibit, or penalize or
354	attempt to refuse to give effect to, prohibit, or penalize any
355	motor vehicle dealer from selling, assigning, transferring,
356	alienating, or otherwise disposing of its franchise agreement to
357	any other person or persons, including a corporation established
358	or existing for the purpose of owning or holding a franchise
359	agreement, unless the licensee proves at a hearing pursuant to a
360	complaint filed by a motor vehicle dealer under this section
361	that such sale, transfer, alienation, or other disposition is to
362	a person who is not, or whose controlling executive management
363	is not, of good moral character or does not meet the written,
364	reasonable, and uniformly applied standards or qualifications of
365	the licensee relating to financial qualifications of the
366	transferee and business experience of the transferee or the
367	transferee's executive management. A motor vehicle dealer who
368	desires to sell, assign, transfer, alienate, or otherwise
369	dispose of a franchise shall notify, or cause the proposed
370	transferee to notify, the licensee, in writing, setting forth
371	the prospective transferee's name, address, financial
372	qualifications, and business experience during the previous 5
373	years. A licensee who receives such notice may, within 60 days
374	following such receipt, notify the motor vehicle dealer, in
375	writing, that the proposed transferee is not a person qualified
376	to be a transferee under this section and setting forth the
377	material reasons for such rejection. Failure of the licensee to
378	notify the motor vehicle dealer within the 60-day period of such
379	rejection shall be deemed an approval of the transfer. No such
380	transfer, assign, or sale shall be valid unless the transferee
381	agrees in writing to comply with all requirements of the
382	franchise then in effect.
383	(b)  A motor vehicle dealer whose proposed sale is rejected
384	may, within 60 days following such receipt of such rejection,
385	file with the department a complaint for a determination that
386	the proposed transferee has been rejected in violation of this
387	section. The licensee has the burden of proof with respect to
388	all issues raised by such complaint. The department shall
389	determine, and enter an order providing, that the proposed
390	transferee is either qualified or is not and cannot be qualified
391	for specified reasons, or the order may provide the conditions
392	under which a proposed transferee would be qualified. If the
393	licensee fails to file such a response to the motor vehicle
394	dealer's complaint within 30 days after receipt of the
395	complaint, unless the parties agree in writing to an extension,
396	or if the department, after a hearing, renders a decision other
397	than one disqualifying the proposed transferee, the franchise
398	agreement between the motor vehicle dealer and the licensee
399	shall be deemed amended to incorporate such transfer or amended
400	in accordance with the determination and order rendered,
401	effective upon compliance by the proposed transferee with any
402	conditions set forth in the determination or order.
403	(2)(a)  Notwithstanding the terms of any franchise
404	agreement, a licensee shall not, by contract or otherwise, fail
405	or refuse to give effect to, prevent, prohibit, or penalize, or
406	attempt to refuse to give effect to, prevent, prohibit, or
407	penalize, any motor vehicle dealer or any proprietor, partner,
408	stockholder, owner, or other person who holds or otherwise owns
409	an interest therein from selling, assigning, transferring,
410	alienating, or otherwise disposing of, in whole or in part, the
411	equity interest of any of them in such motor vehicle dealer to
412	any other person or persons, including a corporation established
413	or existing for the purpose of owning or holding the stock or
414	ownership interests of other entities, unless the licensee
415	proves at a hearing pursuant to a complaint filed by a motor
416	vehicle dealer under this section that such sale, transfer,
417	alienation, or other disposition is to a person who is not, or
418	whose controlling executive management is not, of good moral
419	character. A motor vehicle dealer, or any proprietor, partner,
420	stockholder, owner, or other person who holds or otherwise owns
421	an interest in the motor vehicle dealer, who desires to sell,
422	assign, transfer, alienate, or otherwise dispose of any interest
423	in such motor vehicle dealer shall notify, or cause the proposed
424	transferee to so notify, the licensee, in writing, of the
425	identity and address of the proposed transferee. A licensee who
426	receives such notice may, within 60 days following such receipt,
427	notify the motor vehicle dealer in writing that the proposed
428	transferee is not a person qualified to be a transferee under
429	this section and setting forth the material reasons for such
430	rejection. Failure of the licensee to notify the motor vehicle
431	dealer within the 60-day period of such rejection shall be
432	deemed an approval of the transfer. Any person whose proposed
433	sale of stock is rejected may file within 60 days of receipt of
434	such rejection a complaint with the department alleging that the
435	rejection was in violation of the law or the franchise
436	agreement. The licensee has the burden of proof with respect to
437	all issues raised by such complaint. The department shall
438	determine, and enter an order providing, that the proposed
439	transferee either is qualified or is not and cannot be qualified
440	for specified reasons; or the order may provide the conditions
441	under which a proposed transferee would be qualified. If the
442	licensee fails to file a response to the motor vehicle dealer's
443	complaint within 30 days of receipt of the complaint, unless the
444	parties agree in writing to an extension, or if the department,
445	after a hearing, renders a decision on the complaint other than
446	one disqualifying the proposed transferee, the transfer shall be
447	deemed approved in accordance with the determination and order
448	rendered, effective upon compliance by the proposed transferee
449	with any conditions set forth in the determination or order.
450	(b)  Notwithstanding paragraph (a), neither a licensee nor
451	the department shall reject a proposed transfer of a legal,
452	equitable, or beneficial interest in a motor vehicle dealer to a
453	trust or other entity, or to any beneficiary thereof, that is
454	established by an owner of any interest in a motor vehicle
455	dealer for estate planning purposes provided the controlling
456	person or entity thereof is of good moral character; nor shall a
457	licensee or the department condition any proposed transfer under
458	this section upon a relocation of, construction of any addition
459	or modification to, or any refurbishing or remodeling of any
460	dealership structure, facility, or building of the existing
461	motor vehicle dealer, or upon any modification of the existing
462	franchise agreement.
463	(3)  During the pendency of any such department or court
464	hearing, the franchise agreement of the motor vehicle dealer
465	shall continue in effect in accordance with its terms. The
466	department or any court shall use reasonable efforts to expedite
467	any determination requested under this section.
468	(4)  Notwithstanding the terms of any franchise agreement,
469	the acceptance by the licensee of the proposed transferee shall
470	not be unreasonably withheld, delayed, or conditioned. For the
471	purposes of this section, the refusal by the licensee to accept,
472	in a timely manner, a proposed transferee who satisfies the
473	criteria set forth in subsection (1) or subsection (2) is
474	presumed to be unreasonable.
475	(5)  It shall be a violation of this section for the
476	licensee to reject, or withhold, delay, or condition approval of
477	a proposed transfer unless the licensee can prove in any court
478	of competent jurisdiction in defense of any claim brought
479	pursuant to s. 320.697 that, in fact, the rejection or
480	withholding of approval of the proposed transfer was not in
481	violation of or precluded by this section and was reasonable.
482	The determination of whether such rejection or withholding was
483	reasonable shall be based on a preponderance of the evidence
484	presented during the proceeding on an objective standard.
485	Alleging the permitted statutory grounds by the licensee in the
486	written rejection of the proposed transfer shall not constitute
487	a defense of the licensee, or protect the licensee from
488	liability for violating this section.
489	Section 4.  If any provision of this act or the application
490	thereof to any person or circumstance is held invalid, the
491	invalidity shall not affect other provisions or applications of
492	the act which can be given effect without the invalid provision
493	or application, and to this end the provisions of this act are
494	declared severable.
495	Section 5.  This act shall take effect upon becoming a law.

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