CS/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 for denial, suspension,
4	or revocation of the license of a motor vehicle
5	manufacturer, factory branch, distributor, or importer;
6	revising prohibitions against coercion, requiring a dealer
7	to relocate or make substantial changes to the dealer's
8	facilities, certain audits, and failing to pay the motor
9	vehicle dealer within a certain timeframe after a
10	termination or nonrenewal of a franchise; revising
11	requirements for licensee-offered program bonuses,
12	incentives, and other benefits; providing that criminal
13	penalties do not apply to certain violations; revising
14	conditions and procedures for certain audits; removing a
15	presumption that a dealer had no actual knowledge that a
16	customer intended to export or resell a motor vehicle;
17	providing for liability of the licensee to a dealer if
18	termination, cancellation, or nonrenewal of the dealer's
19	franchise is the result of the bankruptcy or
20	reorganization of a licensee or its common entity, or the
21	termination, elimination, or cessation of the line-make;
22	amending s. 320.642, F.S.; revising provisions for
23	establishing an additional motor vehicle dealership in or
24	relocating an existing dealer to a location within a
25	community or territory where the same line-make vehicle is
26	presently represented by a franchised motor vehicle dealer
27	or dealers; revising notice requirements; revising
28	provisions for denial of an application for a motor
29	vehicle dealer license in any community or territory;
30	revising provisions for evidence to be considered by the
31	Department of Highway Safety and Motor Vehicles when
32	evaluating the application; revising provisions under
33	which a dealer has standing to protest a proposed
34	additional or relocated motor vehicle dealer; revising
35	provisions for a proposed addition or relocation
36	concerning a dealership that performs only service;
37	amending s. 320.643, F.S.; revising provisions for
38	transfer, assignment, or sale of franchise agreements;
39	prohibiting rejection of proposed transfer of interest in
40	a motor vehicle dealer entity to a trust or other entity,
41	or a beneficiary thereof, that is established for estate
42	planning purposes; prohibiting placing certain conditions
43	on such transfer; revising provisions for a hearing by the
44	department or a court relating to a proposed transfer;
45	prohibiting a licensee from delaying or placing a
46	condition for approval of a transfer; revising provisions
47	for a determination that a rejection or withholding of a
48	transfer was reasonable; requiring such determination to
49	be based on a preponderance of the evidence; amending s.
50	320.696, F.S.; revising provisions for determining
51	compensation paid by a licensee to a dealer for warranty
52	labor and parts; eliminating certain methods for
53	determining warranty labor and parts reimbursement;
54	revising restrictions on licensees and dealers relating to
55	such compensation; providing for severability; providing
56	an effective date.
57
58	Be It Enacted by the Legislature of the State of Florida:
59
60	Section 1.  Subsection (5), paragraphs (a), (b), (c), (d),
61	and (f) of subsection (10), and subsections (25), (26), and (36)
62	of section 320.64, Florida Statutes, are amended, and paragraph
63	(h) is added to subsection (10) of that section, to read:
64	320.64  Denial, suspension, or revocation of license;
65	grounds.--A license of a licensee under s. 320.61 may be denied,
66	suspended, or revoked within the entire state or at any specific
67	location or locations within the state at which the applicant or
68	licensee engages or proposes to engage in business, upon proof
69	that the section was violated with sufficient frequency to
70	establish a pattern of wrongdoing, and a licensee or applicant
71	shall be liable for claims and remedies provided in ss. 320.695
72	and 320.697 for any violation of any of the following
73	provisions. A licensee is prohibited from committing the
74	following acts:
75	(5)  The applicant or licensee has coerced or attempted to
76	coerce any motor vehicle dealer into ordering or accepting
77	delivery of any motor vehicle or vehicles or parts or
78	accessories therefor or any other commodities which have not
79	been ordered voluntarily by the dealer or are in excess of that
80	number which the motor vehicle dealer considers as reasonably
81	required to adequately represent the licensee's line-make in
82	order to meet current and foreseeable market demand.
83	(10)(a)  The applicant or licensee has attempted to enter,
84	or has entered, into a franchise agreement with a motor vehicle
85	dealer who does not, at the time of the franchise agreement,
86	have proper facilities to provide the services to his or her
87	purchasers of new motor vehicles which are covered by the new
88	motor vehicle warranty issued by the applicant or licensee.
89	Notwithstanding any provision of a franchise, a licensee may not
90	require a motor vehicle dealer, by franchise agreement, program,
91	policy, standard, or otherwise, to relocate, to make substantial
92	changes, alterations, or remodeling to, or to replace a motor
93	vehicle dealer's sales or service facilities unless the licensee
94	can demonstrate that its licensee's requirements are reasonable
95	and justifiable in light of the current and reasonably
96	foreseeable projections of economic conditions, financial
97	expectations, and the motor vehicle dealer's market for the
98	licensee's motor vehicles.
99	(b)  A licensee may, however, provide to a motor vehicle
100	dealer a written commitment to supply allocate additional
101	vehicles consistent with its allocation obligations at law and
102	to its other same line-make motor vehicle dealers or to provide
103	a lump sum or a loan or grant of money as an inducement for the
104	motor vehicle dealer to relocate, expand, improve, remodel,
105	alter, or renovate its facilities, provided that if the licensee
106	delivers an assurance to the dealer that it will offer to supply
107	to the dealer a sufficient quantity of new motor vehicles,
108	consistent with its allocation obligations at law and to its
109	other same line-make motor vehicle dealers, which will
110	economically justify such relocation, expansion, improvement,
111	remodeling, renovation, or alteration, in light of reasonably
112	current and reasonably projected market and economic conditions.
113	the provisions of the commitment increase in vehicle allocation,
114	the loan or grant and the assurance, and the economic and market
115	reasons and basis for them must be contained in a writing that
116	is written agreement voluntarily entered into by the dealer and
117	must be made available, on substantially similar terms, to any
118	of the licensee's other same line-make dealers in this state who
119	voluntarily agree to make substantially similar facility
120	expansions, improvements, remodelings, alterations, or
121	renovations with whom the licensee offers to enter into such an
122	agreement.
123	(c)1.  A licensee may shall not withhold a bonus,
124	incentive, or other benefit that is available to its other same
125	line-make franchised dealers in this state from, or take or
126	threaten to take any action that is unfair, discriminatory, or
127	adverse to a dealer who does not enter into an agreement with
128	the licensee pursuant to paragraph (b).
129	2.  No provision of this subsection shall require a
130	licensee to provide financial support for a relocation of a
131	motor vehicle dealer because such support was previously
132	provided to another of the licensee's same line-make motor
133	vehicle dealers who relocated.
134	(d)  Except for a program, bonus, incentive, or other
135	benefit offered by a licensee to its dealers in a market area
136	where the licensee's unrealized sales potential or other market
137	conditions, compared to its competitors' sales of motor
138	vehicles, justifies the licensee to target that market area with
139	such offer, a licensee may not refuse to offer a program, bonus,
140	incentive, or other benefit, in whole or in part, to a dealer in
141	this state which it offers generally to its other same line-make
142	dealers nationally or in the licensee's zone or region in which
143	this state is included. Neither may a licensee it discriminate
144	against a dealer in this state with respect to any program,
145	bonus, incentive, or other benefit. For purposes of this
146	chapter, a licensee may not establish this state alone as a
147	zone, region, or territory, or by any other area designation.
148	(f)  A licensee may offer any program for a bonus,
149	incentive, or other benefit to its motor vehicle dealers in this
150	state that contains rules, criteria, or eligibility requirements
151	relating to a motor vehicle dealer's facilities and nonfacility-
152	related eligibility provisions. If, however, any portion of a
153	licensee-offered program for a bonus, incentive, or other
154	benefit contains any qualifying rule, criteria, or eligibility
155	requirement that relates to a motor vehicle that, in whole or in
156	part, is based upon or aimed at inducing a dealer's relocation,
157	expansion, improvement, remodeling, renovation, or alteration of
158	the dealer's sales or service facility, or both, each of the
159	licensee's motor vehicle dealers in this state, upon complying
160	with all such qualifying provisions shall be entitled to obtain
161	the entire bonus, incentive, or other benefit offered; however,
162	a motor vehicle dealer who does not comply with the facility-
163	related rule, criteria, or eligibility requirement, but complies
164	with the other program rules, criteria, or eligibility
165	requirements, shall be entitled to receive a reasonable,
166	licensee-predetermined percentage of such bonuses, incentives,
167	or other benefits under the program that are unrelated to the
168	motor vehicle dealer's facilities. For purposes of this
169	paragraph, the licensee's predetermined percentage unrelated to
170	facilities is presumed reasonable if it is not less than 75
171	percent of the total bonuses, incentives, or other benefits
172	offered under such is void as to each of the licensee's motor
173	vehicle dealers in this state who, nevertheless, shall be
174	eligible for the entire amount of the bonuses, incentives, or
175	benefits offered in the program upon compliance with the other
176	eligibility provisions in the program.
177	(h)  A breach or violation of paragraphs (b)-(g) is not a
178	violation of s. 320.70 and does not subject a licensee to any
179	criminal penalty under s. 320.70.
180	(25)  The applicant or licensee has undertaken an audit of
181	warranty, maintenance, and other service-related payments or of
182	incentive payments, including payments to a motor vehicle dealer
183	under any licensee-issued program, policy, or other benefit that
184	previously have been paid to a motor vehicle dealer in violation
185	of this section or has failed to comply with any of its
186	obligations under s. 320.696. An applicant or licensee may
187	reasonably and periodically audit a motor vehicle dealer to
188	determine the validity of paid claims as provided in s. 320.696.
189	Audits Audit of warranty, maintenance, and other service-related
190	payments shall only be performed by an applicant or licensee
191	during for the 1-year period immediately following the date the
192	claim was paid. Audits Audit of incentive payments shall only be
193	performed by an applicant or licensee during the for an 18-month
194	period immediately following the date the incentive was paid.
195	After those time periods have elapsed, all warranty,
196	maintenance, and other service-related payments and incentive
197	payments shall be deemed final and incontrovertible for any
198	reason cognizant under any applicable law and the motor vehicle
199	dealer shall not be subject to any charge back or repayment. An
200	applicant or licensee may deny a claim or, as a result of a
201	timely conducted audit, charge back a motor vehicle dealer for
202	warranty, maintenance, or other service-related payments or
203	incentive payments only if An applicant or licensee shall not
204	deny a claim or charge a motor vehicle dealer back subsequent to
205	the payment of the claim unless the applicant or licensee can
206	show that the warranty, maintenance, or other service-related
207	claim or incentive claim was false or fraudulent or that the
208	motor vehicle dealer failed to substantially comply with the
209	reasonable, written, and uniformly applied procedures of the
210	applicant or licensee for such repairs or incentives. An
211	applicant or licensee may not charge a motor vehicle dealer back
212	subsequent to the payment of a warranty, maintenance, or
213	service-related claim or incentive claim unless, within 30 days
214	after a timely conducted audit, a representative of the
215	applicant or licensee first meets in person, by telephone, or by
216	video teleconference with an officer or employee of the dealer
217	designated by the motor vehicle dealer. At such meeting the
218	applicant or licensee must provide a detailed explanation, with
219	supporting documentation, as to the basis for each of the claims
220	for which the applicant or licensee proposed a charge-back to
221	the dealer and a written statement containing the basis upon
222	which the motor vehicle dealer was selected for audit or review.
223	Thereafter, the applicant or licensee must provide the motor
224	vehicle dealer's representative a reasonable period after the
225	meeting within which to respond to the proposed charge-backs,
226	with such period to be commensurate with the volume of claims
227	under consideration, but in no case less than 45 days after the
228	meeting. The applicant or licensee is prohibited from changing
229	or altering the basis for each of the proposed charge-backs as
230	presented to the motor vehicle dealer's representative following
231	the conclusion of the audit unless the applicant or licensee
232	receives new information affecting the basis for one or more
233	charge-backs and that new information is received within 60 days
234	after the conclusion of the timely conducted audit. If the
235	applicant or licensee claims the existence of new information,
236	the dealer must be given the same right to a meeting within 30
237	days after the applicant's or licensee's receipt of the new
238	information and right to respond as when the charge-back was
239	originally presented.
240	(26)  Notwithstanding the terms of any franchise agreement,
241	including any licensee's program, policy, or procedure, the
242	applicant or licensee has refused to allocate, sell, or deliver
243	motor vehicles; charged back or withheld payments or other
244	things of value for which the dealer is otherwise eligible under
245	a sales promotion, program, or contest; prevented a motor
246	vehicle dealer from participating in any promotion, program, or
247	contest; or has taken or threatened to take any adverse action
248	against a dealer, including charge-backs, reducing vehicle
249	allocations, or terminating or threatening to terminate a
250	franchise because the dealer sold or leased a motor vehicle to a
251	customer who exported the vehicle to a foreign country or who
252	resold the vehicle, unless the licensee proves that the dealer
253	had actual knowledge that the customer intended to export or
254	resell the motor vehicle. There is a conclusive presumption that
255	the dealer had no actual knowledge if the vehicle is titled or
256	registered in any state in this country.
257	(36)(a)  Notwithstanding the terms of any franchise
258	agreement, in addition to any other statutory or contractual
259	rights of recovery after the voluntary or involuntary
260	termination of a franchise, failing to pay the motor vehicle
261	dealer, within 90 days after the effective date of the
262	termination, cancellation, or nonrenewal, the following amounts:
263	1.  The net cost paid by the dealer for each new car or
264	truck in the dealer's inventory with mileage of 2,000 miles or
265	less, or a motorcycle with mileage of 100 miles or less,
266	exclusive of mileage placed on the vehicle before it was
267	delivered to the dealer.
268	2.  The current price charged for each new, unused,
269	undamaged, or unsold part or accessory that:
270	a.  Is in the current parts catalogue and is still in the
271	original, resalable merchandising package and in an unbroken
272	lot, except that sheet metal may be in a comparable substitute
273	for the original package; and
274	b.  Was purchased by the dealer directly from the
275	manufacturer or distributor or from an outgoing authorized
276	dealer as a part of the dealer's initial inventory.
277	3.  The fair market value of each undamaged sign owned by
278	the dealer which bears a trademark or trade name used or claimed
279	by the applicant or licensee or its representative which was
280	purchased from or at the request of the applicant or licensee or
281	its representative.
282	4.  The fair market value of all special tools, data
283	processing equipment, and automotive service equipment owned by
284	the dealer which:
285	a.  Were recommended in writing by the applicant or
286	licensee or its representative and designated as special tools
287	and equipment;
288	b.  Were purchased from or at the request of the applicant
289	or licensee or its representative; and
290	c.  Are in usable and good condition except for reasonable
291	wear and tear.
292	5.  The cost of transporting, handling, packing, storing,
293	and loading any property subject to repurchase under this
294	section.
295	6.  If the termination, cancellation, or nonrenewal of the
296	dealer's franchise is the result of the bankruptcy or
297	reorganization of a licensee or its common entity, or the
298	termination, elimination, or cessation of the line-make, in
299	addition to the payments required under subparagraphs 1.-5. to
300	the dealer, the licensee or, if the licensee is unable to do so,
301	its common entity, shall be liable to the motor vehicle dealer
302	for the following:
303	a.  An amount at least equal to the fair market value of
304	the franchise for the line-make, which shall be the greater of
305	that value determined as of the day the licensee announces the
306	action that results in the termination, cancellation, or
307	nonrenewal and such action becomes general knowledge or the day
308	that is 12 months prior to such date. In determining the fair
309	market value of a franchise for a line-make, if the line-make is
310	not the only line-make for which the dealer holds a franchise in
311	its dealership facilities, the dealer shall also be entitled to
312	compensation for the contribution of the line-make to the
313	payment of rent or to covering the dealer's obligation for the
314	fair rental value of the dealership facilities for the period
315	described in sub-subparagraph b. Fair market value of the
316	franchise for the line-make shall only include the goodwill
317	value of the dealer's franchise for that line-make in the
318	dealer's community or territory.
319	b.  If the line-make is the only line-make for which the
320	dealer holds a franchise in the dealership facilities, the
321	licensee, or its common entity if the licensee is unable to pay,
322	shall also pay to the dealer assistance with respect to the
323	dealership facilities leased or owned by the dealership or its
324	principal owner a sum equal to the rent for the unexpired term
325	of the lease or 3 years' rent, whichever is less; or, if the
326	dealer or its principal owner owns the dealership facilities, a
327	sum equal to the reasonable fair rental value of the dealership
328	facilities for a period of 3 years as if the franchise were
329	still in existence at the facilities, provided that the motor
330	vehicle dealer uses reasonable commercial efforts to mitigate
331	this liability by attempting in good faith to lease or sell the
332	facilities within a reasonable time on terms that are consistent
333	with local zoning requirements to preserve the facilities' right
334	to sell and service motor vehicles.
335	(b)  This subsection does not apply to a termination,
336	cancellation, or nonrenewal that is implemented as a result of
337	the sale of the assets or corporate stock or other ownership
338	interests of the dealer. The dealer shall return the property
339	listed in this subsection to the licensee at the dealer's place
340	of business on a date selected by the dealer in the absence of
341	an agreement with the licensee that is within 90 days after the
342	effective date of the termination, cancellation, or nonrenewal.
343	The licensee shall supply the dealer with reasonable
344	instructions regarding the packing for transport method by which
345	the dealer must return the property. The compensation for the
346	property shall be paid by the licensee upon and simultaneously
347	with within 60 days after the tender of inventory and other
348	items provided that, if the dealer does not have has clear title
349	to the inventory and other items and is not in a position to
350	convey that title to the licensee manufacturer or distributor.
351	If the inventory or other items are subject to a security
352	interest, the licensee shall may make payment jointly to the
353	dealer and the holder of any the security interest.
354
355	A motor vehicle dealer who can demonstrate that a violation of,
356	or failure to comply with, any of the preceding provisions by an
357	applicant or licensee will or can adversely and pecuniarily
358	affect the complaining dealer, shall be entitled to pursue all
359	of the remedies, procedures, and rights of recovery available
360	under ss. 320.695 and 320.697.
361	Section 2.  Subsections (1), (2), (3), and (6) of section
362	320.642, Florida Statutes, are amended to read:
363	320.642  Dealer licenses in areas previously served;
364	procedure.--
365	(1)  Any licensee who proposes to establish an additional
366	motor vehicle dealership or permit the relocation of an existing
367	dealer to a location within a community or territory where the
368	same line-make vehicle is presently represented by a franchised
369	motor vehicle dealer or dealers shall give written notice of its
370	intention to the department. Such notice shall state:
371	(a)  The specific location at which the additional or
372	relocated motor vehicle dealership will be established.
373	(b)  The date on or after which the licensee intends to be
374	engaged in business with the additional or relocated motor
375	vehicle dealer at the proposed location.
376	(c)  The identity of all motor vehicle dealers who are
377	franchised to sell the same line-make vehicle with licensed
378	locations in the county and or any contiguous county to the
379	county where the additional or relocated motor vehicle dealer is
380	proposed to be located.
381	(d)  The names and addresses of the dealer-operator and
382	principal investors in the proposed additional or relocated
383	motor vehicle dealership.
384
385	Immediately upon receipt of such notice the department shall
386	cause a notice to be published in the Florida Administrative
387	Weekly. The published notice shall state that a petition or
388	complaint by any dealer with standing to protest pursuant to
389	subsection (3) must be filed not more than 45 30 days after from
390	the date of publication of the notice in the Florida
391	Administrative Weekly. The published notice shall describe and
392	identify the proposed dealership sought to be licensed, and the
393	department shall cause a copy of the notice to be mailed to
394	those dealers identified in the licensee's notice under
395	paragraph (c).
396	(2)(a)  An application for a motor vehicle dealer license
397	in any community or territory shall be denied when:
398	1.  A timely protest is filed by a presently existing
399	franchised motor vehicle dealer with standing to protest as
400	defined in subsection (3); and
401	2.  The licensee fails to show that the existing franchised
402	dealer or dealers who register new motor vehicle retail sales or
403	retail leases of the same line-make in the community or
404	territory of the proposed dealership are not providing adequate
405	representation, adequate competition, and convenient customer
406	service of such line-make motor vehicles in a manner beneficial
407	to the public interest in such community or territory. The
408	ultimate burden of proof in establishing inadequate
409	representation, inadequate competition, and inconvenient
410	customer service shall be on the licensee. Any geographic
411	comparison area used to evaluate the performance of the line-
412	make or of the existing motor vehicle dealer or dealers within
413	the community or territory must be reasonably similar in
414	demographic traits to the community or territory of the proposed
415	site, including such factors as age, income, education, and
416	vehicle size, class, or model preference and product popularity
417	and the comparison area must not be smaller than the largest
418	entire county in which any of the protesting dealers are
419	located. Reasonably expected market sales or service penetration
420	must be measured with respect to the community or territory as a
421	whole and not with respect to any part thereof or any
422	identifiable plot therein.
423	(b)  In determining whether the existing franchised motor
424	vehicle dealer or dealers are providing adequate representation,
425	adequate competition, and convenient customer service in the
426	community or territory for the line-make, the department may
427	consider evidence of any factor deemed material by the finder of
428	fact in the unique circumstances, which may include, but is not
429	limited to:
430	1.  The market share and return on investment impact of the
431	establishment of the proposed or relocated dealer on the
432	consumers, public interest, existing dealers, and the licensee;
433	provided, however, that financial impact other than return on
434	investment may only be considered with respect to the protesting
435	dealer or dealers.
436	2.  The size and permanency of investment reasonably made
437	and reasonable obligations incurred by the existing dealer or
438	dealers to perform their obligations under the dealer agreement,
439	including requirements made by the licensee up to 5 years prior
440	to the date of the publication of the notice.
441	3.  The reasonably expected market penetration of the line-
442	make motor vehicle for the community or territory involved,
443	after consideration of all factors which may affect such said
444	penetration, including, but not limited to, demographic factors
445	such as age, income, education, vehicle size, class, or model
446	preference, line-make, product popularity, retail lease
447	transactions, reasonably foreseeable economic projections,
448	financial expectations, availability of reasonable terms and
449	reasonable amounts of credit to prospective customers, or other
450	factors affecting sales to consumers of the community or
451	territory.
452	4.  Any actions by the licensee licensees in denying its
453	existing dealer or dealers of the same line-make the opportunity
454	for reasonable growth, market expansion, or relocation,
455	including the availability of line-make vehicles by model, in
456	keeping with the reasonable expectations of the licensee in
457	providing an adequate number of dealers in the community or
458	territory, and the licensee, or its common entity, making or
459	there otherwise being credit available to the existing dealers
460	in reasonable amounts and on reasonable terms.
461	5.  Any attempts by the licensee to coerce the existing
462	dealer or dealers into consenting to additional or relocated
463	franchises of the same line-make in the community or territory.
464	6.  Distance, travel time, traffic patterns, and
465	accessibility, between the existing dealer or dealers of the
466	same line-make and the location of the proposed additional or
467	relocated dealer, for prospective customers.
468	7.  Whether there will likely be a material positive impact
469	and a material benefit benefits to consumers will likely occur
470	from the establishment or relocation of the proposed dealership
471	which will not cannot be obtained by other geographic or
472	demographic changes or expected changes in the community or
473	territory or by a material increase in advertising by the
474	licensee.
475	8.  Whether the protesting dealer or dealers are in
476	substantial compliance with their dealer agreement.
477	9.  Whether there is adequate interbrand and intrabrand
478	competition with respect to such said line-make in the community
479	or territory and adequately convenient consumer care for the
480	motor vehicles of the line-make, including the adequacy of sales
481	and service facilities.
482	10.  Whether the establishment or relocation of the
483	proposed dealership is appears to be warranted and justified
484	based on economic and marketing conditions pertinent to dealers
485	competing in the community or territory, including anticipated
486	future changes.
487	11.  The volume of registrations and service business
488	transacted by the existing dealer or dealers of the same line-
489	make in the relevant community or territory of the proposed
490	dealership.
491	12.  The past and reasonably foreseeable expected growth or
492	decline in population, density of population, and new motor
493	vehicle registrations in the community or territory of the
494	proposed dealership for competing motor vehicles and whether
495	existing same line-make dealers will be unable to adjust their
496	dealership operations to adequately deal with such changes.
497	13.  Whether the licensee has provided marketing and
498	advertising support of its line-make in the community or
499	territory on a basis comparable to its interbrand competitors.
500	14.  Whether the economic conditions reasonably forecasted
501	by the licensee for the foreseeable future will provide all
502	existing same line-make dealers and the proposed new or
503	relocated dealership the opportunity for a reasonable return on
504	their investment, including supplying an adequate number of
505	every model of the licensee's new motor vehicles to them.
506	(3)  An existing franchised motor vehicle dealer or dealers
507	shall have standing to protest a proposed additional or
508	relocated motor vehicle dealer where the existing motor vehicle
509	dealer or dealers have a franchise agreement for the same line-
510	make vehicle to be sold or serviced by the proposed additional
511	or relocated motor vehicle dealer and are physically located so
512	as to meet or satisfy any of the following requirements or
513	conditions:
514	(a)  If the proposed additional or relocated motor vehicle
515	dealer is to be located in a county with a population of less
516	than 300,000 according to the most recent data of the United
517	States Census Bureau or the data of the Bureau of Economic and
518	Business Research of the University of Florida:
519	1.  The proposed additional or relocated motor vehicle
520	dealer is to be located in the area designated or described as
521	the area of responsibility, or such similarly designated area,
522	including the entire area designated as a multiple-point area,
523	in the franchise agreement or in any related document or
524	commitment with the existing motor vehicle dealer or dealers of
525	the same line-make as such agreement existed on or after the
526	effective date of this act upon October 1, 1988;
527	2.  The existing motor vehicle dealer or dealers of the
528	same line-make have a licensed franchise location within a
529	radius of 20 miles of the location of the proposed additional or
530	relocated motor vehicle dealer; or
531	3.  Any existing motor vehicle dealer or dealers of the
532	same line-make can establish that during any 12-month period of
533	the 36-month period preceding the filing of the licensee's
534	application for the proposed dealership, such dealer or its
535	predecessor made 25 percent of its retail sales of new motor
536	vehicles to persons whose registered household addresses were
537	located within a radius of 20 miles of the location of the
538	proposed additional or relocated motor vehicle dealer; provided
539	such existing dealer is located in the same county or any county
540	contiguous to the county where the additional or relocated
541	dealer is proposed to be located.
542	(b)  If the proposed additional or relocated motor vehicle
543	dealer is to be located in a county with a population of more
544	than 300,000 according to the most recent data of the United
545	States Census Bureau or the data of the Bureau of Economic and
546	Business Research of the University of Florida:
547	1.  Any existing motor vehicle dealer or dealers of the
548	same line-make have a licensed franchise location within a
549	radius of 15 12.5 miles of the location of the proposed
550	additional or relocated motor vehicle dealer; or
551	2.  Any existing motor vehicle dealer or dealers of the
552	same line-make can establish that during any 12-month period of
553	the 36-month period preceding the filing of the licensee's
554	application for the proposed dealership, such dealer or its
555	predecessor made 20 25 percent of its retail sales of new motor
556	vehicles to persons whose registered household addresses were
557	located within a radius of 15 12.5 miles of the location of the
558	proposed additional or relocated motor vehicle dealer, or
559	performed repairs on the same line-make motor vehicles that
560	constituted 15 percent of its total service department sales to
561	persons whose registered addresses were located within a radius
562	of 15 miles of the location of the proposed additional or
563	relocated dealer; provided such existing dealer is located in
564	the same county or any county contiguous to the county where the
565	additional or relocated dealer is proposed to be located.
566	(6)  When a proposed addition or relocation concerns a
567	dealership that performs or is to perform only service, as
568	defined in s. 320.60(16), and will not or does not sell or lease
569	new motor vehicles, as defined in s. 320.60(15), the proposal
570	shall be subject to notice and protest pursuant to the
571	provisions of this section.
572	(a)  Standing to protest the addition or relocation of a
573	service-only dealership shall be limited to those instances in
574	which the applicable mileage requirement established in
575	subparagraphs (3)(a)2. and (3)(b)1. or 2. is met.
576	(b)  The addition or relocation of a service-only
577	dealership shall not be subject to protest if:
578	1.  The applicant for the service-only dealership location
579	is an existing motor vehicle dealer of the same line-make as the
580	proposed additional or relocated service-only dealership;
581	2.  There is no existing dealer of the same line-make
582	closer than the applicant to the proposed location of the
583	additional or relocated service-only dealership; and
584	3.  The proposed location of the additional or relocated
585	service-only dealership is at least 10 7 miles from all existing
586	motor vehicle dealerships of the same line-make, other than
587	motor vehicle dealerships owned by the applicant.
588	(c)  In determining whether existing franchised motor
589	vehicle dealers are providing adequate representation, adequate
590	competition, and convenient customer service representations in
591	the community or territory for the line-make in question in a
592	protest of the proposed addition or relocation of a service-only
593	dealership, the department may consider the elements set forth
594	in paragraph (2)(b), provided:
595	1.  With respect to subparagraph (2)(b)1., only the impact
596	as it relates to service may be considered;
597	2.  Subparagraph (2)(b)3. shall not be considered;
598	3.  With respect to subparagraph (2)(b)9., only service
599	facilities shall be considered; and
600	4.  With respect to subparagraph (2)(b)11., only the volume
601	of service business transacted shall be considered.
602	(d)  If an application for a service-only dealership is
603	granted, the department shall issue a license which permits only
604	service, as defined in s. 320.60(16), and does not permit the
605	selling or leasing of new motor vehicles, as defined in s.
606	320.60(15). If a service-only dealership subsequently seeks to
607	sell new motor vehicles at its location, the notice and protest
608	provisions of this section shall apply.
609	Section 3.  Section 320.643, Florida Statutes, is amended
610	to read:
611	320.643  Transfer, assignment, or sale of franchise
612	agreements.--
613	(1)(a)  Notwithstanding the terms of any franchise
614	agreement, a licensee shall not, by contract or otherwise, fail
615	or refuse to give effect to, prevent, prohibit, or penalize or
616	attempt to refuse to give effect to, prohibit, or penalize any
617	motor vehicle dealer from selling, assigning, transferring,
618	alienating, or otherwise disposing of its franchise agreement to
619	any other person or persons, including a corporation established
620	or existing for the purpose of owning or holding a franchise
621	agreement, unless the licensee proves at a hearing pursuant to a
622	complaint filed by a motor vehicle dealer under this section
623	that such sale, transfer, alienation, or other disposition is to
624	a person who is not, or whose controlling executive management
625	is not, of good moral character or does not meet the written,
626	reasonable, and uniformly applied standards or qualifications of
627	the licensee relating to financial qualifications of the
628	transferee and business experience of the transferee or the
629	transferee's executive management. A motor vehicle dealer who
630	desires to sell, assign, transfer, alienate, or otherwise
631	dispose of a franchise shall notify, or cause the proposed
632	transferee to notify, the licensee, in writing, setting forth
633	the prospective transferee's name, address, financial
634	qualifications, and business experience during the previous 5
635	years. A licensee who receives such notice may, within 60 days
636	following such receipt, notify the motor vehicle dealer, in
637	writing, that the proposed transferee is not a person qualified
638	to be a transferee under this section and setting forth the
639	material reasons for such rejection. Failure of the licensee to
640	notify the motor vehicle dealer within the 60-day period of such
641	rejection shall be deemed an approval of the transfer. No such
642	transfer, assign, or sale shall be valid unless the transferee
643	agrees in writing to comply with all requirements of the
644	franchise then in effect.
645	(b)  A motor vehicle dealer whose proposed sale is rejected
646	may, within 60 days following such receipt of such rejection,
647	file with the department a complaint for a determination that
648	the proposed transferee has been rejected in violation of this
649	section. The licensee has the burden of proof with respect to
650	all issues raised by such complaint. The department shall
651	determine, and enter an order providing, that the proposed
652	transferee is either qualified or is not and cannot be qualified
653	for specified reasons, or the order may provide the conditions
654	under which a proposed transferee would be qualified. If the
655	licensee fails to file such a response to the motor vehicle
656	dealer's complaint within 30 days after receipt of the
657	complaint, unless the parties agree in writing to an extension,
658	or if the department, after a hearing, renders a decision other
659	than one disqualifying the proposed transferee, the franchise
660	agreement between the motor vehicle dealer and the licensee
661	shall be deemed amended to incorporate such transfer or amended
662	in accordance with the determination and order rendered,
663	effective upon compliance by the proposed transferee with any
664	conditions set forth in the determination or order.
665	(2)(a)  Notwithstanding the terms of any franchise
666	agreement, a licensee shall not, by contract or otherwise, fail
667	or refuse to give effect to, prevent, prohibit, or penalize, or
668	attempt to refuse to give effect to, prevent, prohibit, or
669	penalize, any motor vehicle dealer or any proprietor, partner,
670	stockholder, owner, or other person who holds or otherwise owns
671	an interest therein from selling, assigning, transferring,
672	alienating, or otherwise disposing of, in whole or in part, the
673	equity interest of any of them in such motor vehicle dealer to
674	any other person or persons, including a corporation established
675	or existing for the purpose of owning or holding the stock or
676	ownership interests of other entities, unless the licensee
677	proves at a hearing pursuant to a complaint filed by a motor
678	vehicle dealer under this section that such sale, transfer,
679	alienation, or other disposition is to a person who is not, or
680	whose controlling executive management is not, of good moral
681	character. A motor vehicle dealer, or any proprietor, partner,
682	stockholder, owner, or other person who holds or otherwise owns
683	an interest in the motor vehicle dealer, who desires to sell,
684	assign, transfer, alienate, or otherwise dispose of any interest
685	in such motor vehicle dealer shall notify, or cause the proposed
686	transferee to so notify, the licensee, in writing, of the
687	identity and address of the proposed transferee. A licensee who
688	receives such notice may, within 60 days following such receipt,
689	notify the motor vehicle dealer in writing that the proposed
690	transferee is not a person qualified to be a transferee under
691	this section and setting forth the material reasons for such
692	rejection. Failure of the licensee to notify the motor vehicle
693	dealer within the 60-day period of such rejection shall be
694	deemed an approval of the transfer. Any person whose proposed
695	sale of stock is rejected may file within 60 days of receipt of
696	such rejection a complaint with the department alleging that the
697	rejection was in violation of the law or the franchise
698	agreement. The licensee has the burden of proof with respect to
699	all issues raised by such complaint. The department shall
700	determine, and enter an order providing, that the proposed
701	transferee either is qualified or is not and cannot be qualified
702	for specified reasons; or the order may provide the conditions
703	under which a proposed transferee would be qualified. If the
704	licensee fails to file a response to the motor vehicle dealer's
705	complaint within 30 days of receipt of the complaint, unless the
706	parties agree in writing to an extension, or if the department,
707	after a hearing, renders a decision on the complaint other than
708	one disqualifying the proposed transferee, the transfer shall be
709	deemed approved in accordance with the determination and order
710	rendered, effective upon compliance by the proposed transferee
711	with any conditions set forth in the determination or order.
712	(b)  Notwithstanding paragraph (a), neither a licensee nor
713	the department shall reject a proposed transfer of a legal,
714	equitable, or beneficial interest in a motor vehicle dealer to a
715	trust or other entity, or to any beneficiary thereof, that is
716	established by an owner of any interest in a motor vehicle
717	dealer for estate planning purposes, provided the controlling
718	person of the trust or entity thereof, or such beneficiary, is
719	of good moral character; nor shall a licensee or the department
720	condition any proposed transfer under this section upon a
721	relocation of, construction of any addition or modification to,
722	or any refurbishing or remodeling of any dealership structure,
723	facility, or building of the existing motor vehicle dealer or
724	upon any modification of the existing franchise agreement.
725	(3)  During the pendency of any such department or court
726	hearing, the franchise agreement of the motor vehicle dealer
727	shall continue in effect in accordance with its terms. The
728	department or any court shall use reasonable efforts to expedite
729	any determination requested under this section.
730	(4)  Notwithstanding the terms of any franchise agreement,
731	the acceptance by the licensee of the proposed transferee shall
732	not be unreasonably withheld, delayed, or conditioned. For the
733	purposes of this section, the refusal by the licensee to accept,
734	in a timely manner, a proposed transferee who satisfies the
735	criteria set forth in subsection (1) or subsection (2) is
736	presumed to be unreasonable.
737	(5)  It shall be a violation of this section for the
738	licensee to reject, or withhold, delay, or condition approval of
739	a proposed transfer unless the licensee can prove in any court
740	of competent jurisdiction in defense of any claim brought
741	pursuant to s. 320.697 that, in fact, the rejection or
742	withholding of approval of the proposed transfer was not in
743	violation of or precluded by this section and was reasonable.
744	The determination of whether such rejection or withholding was
745	reasonable shall be based on a preponderance of the evidence
746	presented during the proceeding on an objective standard.
747	Alleging the permitted statutory grounds by the licensee in the
748	written rejection of the proposed transfer shall not constitute
749	a defense of the licensee or protect the licensee from liability
750	for violating this section.
751	Section 4.  Subsections (3), (4), (5), and (7) of section
752	320.696, Florida Statutes, are amended to read:
753	320.696  Warranty responsibility.--
754	(3)(a)  A licensee shall compensate a motor vehicle dealer
755	for parts used in any work described in subsection (1). The
756	compensation may be an agreed percentage markup over the
757	licensee's dealer cost, but if an agreement is not reached
758	within 30 days after a dealer's written request, compensation
759	for the parts shall be is the greater of:
760	1.  The dealer's arithmetical mean percentage markup over
761	dealer cost for all parts charged by the dealer in 75 50
762	consecutive retail customer repairs made by the dealer within a
763	3-month period before the dealer's written request for a change
764	in reimbursement pursuant to this section, or all of the retail
765	customer repair orders over that 3-month period if there are
766	fewer than 75 50 retail customer repair orders in that period.
767	The motor vehicle dealer shall give the licensee 10 days'
768	written notice that it intends to make a written request to the
769	licensee for a warranty parts reimbursement increase and permit
770	the licensee, within that 10-day period, to select the initial
771	retail customer repair for the consecutive repair orders that
772	will be attached to the written request used for the markup
773	computation, provided that if the licensee fails to provide a
774	timely selection, the dealer may make that selection. No repair
775	order shall be excluded from the markup computation because it
776	contains both warranty, extended warranty, certified pre-owned
777	warranty, maintenance, recall, campaign service, or authorized
778	goodwill work and a retail customer repair. However, only the
779	retail customer repair portion of the repair order shall be
780	included in the computation, and the parts described in
781	paragraph (b) shall be excluded from the computation; or
782	2.  The licensee's highest suggested retail or list price
783	for the parts.; or
784	3.  An amount equal to the dealer's markup over dealer cost
785	that results in the same gross profit percentage for parts used
786	in work done under subsection (1) as the dealer receives for
787	parts used in the customer retail repairs, as evidenced by the
788	average of said dealer's gross profit percentage in the dealer's
789	financial statements for the 2 months preceding the dealer's
790	request.
791
792	If a licensee reduces the suggested retail or list price for any
793	replacement part or accessory, it also shall reduce, by at least
794	the same percentage, the cost to the dealer for the part or
795	accessory. The dealer's markup or gross profit percentage shall
796	be uniformly applied to all of the licensee's parts used by the
797	dealer in performing work covered by subsection (1).
798	(b)  In calculating the compensation to be paid for parts
799	by the arithmetical mean percentage markup over dealer cost
800	method in paragraph (a), parts discounted by a dealer for
801	repairs made in group, fleet, insurance, or other third-party
802	payer service work; parts used in repairs of government
803	agencies' vehicles repairs for which volume discounts have been
804	negotiated; parts used in bona fide special events, specials, or
805	promotional discounts for retail customer repairs; parts sold at
806	wholesale; parts used for internal repairs; engine assemblies
807	and transmission assemblies; parts used in retail customer
808	repairs for routine maintenance, such as fluids, filters and
809	belts; nuts, bolts, fasteners, and similar items that do not
810	have an individual part number; and tires shall be excluded in
811	determining the percentage markup over dealer cost.
812	(c)  If a licensee furnishes a part or component to a motor
813	vehicle dealer at no cost to use in performing repairs under a
814	recall, campaign service action, or warranty repair, the
815	licensee shall compensate the dealer for the part or component
816	in the same manner as warranty parts compensation under this
817	subsection, less the dealer cost for the part or component as
818	listed in the licensee's price schedule.
819	(d)  A licensee shall not establish or implement a special
820	part or component number for parts used in predelivery, dealer
821	preparation, warranty, extended warranty, certified pre-owned
822	warranty, recall, campaign service, authorized goodwill, or
823	maintenance-only applications if that results in lower
824	compensation to the dealer than as calculated in this
825	subsection.
826	(4)(a)  A licensee shall compensate a motor vehicle dealer
827	for labor performed in connection with work described in
828	subsection (1) as calculated in this subsection.
829	(b)1.  Compensation paid by a licensee to a motor vehicle
830	dealer may be an agreed hourly labor rate. If, however, an
831	agreement is not reached within 30 days after the dealer's
832	written request, the compensation shall be dealer may choose to
833	be paid the greater of:
834	1.  the dealer's hourly labor rate for retail customer
835	repairs, determined by dividing the amount of the dealer's total
836	labor sales for retail customer repairs by the number of total
837	labor hours that generated those sales for the month preceding
838	the request, excluding the work in paragraph (c).; or
839	2.  An amount equal to the dealer's markup over dealer cost
840	that results in the same gross profit percentage for labor hours
841	performed in work covered by subsection (1) as the dealer
842	receives for labor performed in its customer retail repairs, as
843	evidenced by the average of said dealer's gross profit
844	percentage in the dealer's financial statements provided to the
845	licensee for the 2 months preceding the dealer's written
846	request, if the dealer provides in the written request the
847	arithmetical mean of the hourly wage paid to all of its
848	technicians during that preceding month. The arithmetical mean
849	shall be the dealer cost used in that calculation.
850	2.  After an hourly labor rate is agreed or determined, the
851	licensee shall uniformly apply and pay that hourly labor rate
852	for all labor used by the dealer in performing work under
853	subsection (1). However, a licensee shall not pay an hourly
854	labor rate less than the hourly rate it was paying to the dealer
855	for work done under subsection (1) on January 2, 2008. A
856	licensee shall not eliminate or decrease, unless the licensee
857	can prove that it has improved the technology related to a
858	particular repair and thereby has lessened the average repair
859	time, flat-rate times from or establish an unreasonable flat-
860	rate time in its warranty repair manual, warranty time guide, or
861	any other similarly named document. A licensee shall establish
862	reasonable flat-rate labor times in its warranty repair manuals
863	and warranty time guides for newly introduced model motor
864	vehicles which are at least consistent with its existing
865	documents. As used in this subsection, the terms "retail
866	customer repair" and "similar work" are not limited to a repair
867	to the same model vehicle or model year, but include prior
868	repairs that resemble but are not identical to the repair for
869	which the dealer is making a claim for compensation.
870	(c)  In determining the hourly labor rate calculated under
871	subparagraph (b)1., a dealer's labor charges for internal
872	vehicle repairs; vehicle reconditioning; repairs performed for
873	group, fleet, insurance, or other third-party payers; discounted
874	repairs of motor vehicles for government agencies; labor used in
875	bona fide special events, specials, or express service; and
876	promotional discounts shall not be included as retail customer
877	repairs and shall be excluded from such calculations.
878	(5)  A licensee shall not review, change, or fail to pay a
879	motor vehicle dealer for parts or labor determined under this
880	section unless the dealer has requested a change, or the action
881	is pursuant to the licensee's written, predetermined schedule
882	for increasing parts or labor compensation that is not contrary
883	to any provision of this section. A dealer may make written
884	requests for changes in compensation for parts or labor
885	performed under this section not more than annually
886	semiannually. The dealer shall attach supporting documentation
887	to each written request. Any increase in parts or labor
888	reimbursement determined thereafter to be owed to the dealer
889	shall be paid pursuant to this section retroactively for all
890	claims filed by a dealer 15 days after the date of the
891	licensee's receipt of the dealer's written request.
892	(7)  A licensee shall not require, influence, or attempt to
893	influence a motor vehicle dealer to implement or change the
894	prices for which it sells parts or labor in retail customer
895	repairs. A licensee shall not implement or continue a policy,
896	procedure, or program to any of its dealers in this state for
897	compensation under this section which is inconsistent with this
898	section.
899	Section 5.  If any provision of this act or the application
900	thereof to any person or circumstance is held invalid, the
901	invalidity shall not affect other provisions or applications of
902	the act which can be given effect without the invalid provision
903	or application, and to this end the provisions of this act are
904	declared severable.
905	Section 6.  This act shall take effect upon becoming a law.

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