Florida Senate - 2009                                    SB 2630
       
       
       
       By Senator Haridopolos
       
       
       
       
       26-01807A-09                                          20092630__
    1                        A bill to be entitled                      
    2         An act relating to motor vehicle dealerships; amending
    3         s. 320.642, F.S.; revising provisions for establishing
    4         an additional motor vehicle dealership in or
    5         relocating an existing dealer to a location within a
    6         community or territory where the same line-make
    7         vehicle is presently represented by a franchised motor
    8         vehicle dealer or dealers; revising notice
    9         requirements; revising provisions for denial of an
   10         application for a motor vehicle dealer license in any
   11         community or territory; revising provisions for
   12         evidence to be considered by the Department of Highway
   13         Safety and Motor Vehicles when evaluating the
   14         application; revising provisions under which a dealer
   15         has standing to protest a proposed additional or
   16         relocated motor vehicle dealer; revising time period
   17         within which the opening or reopening of the same or a
   18         successor dealer is not considered an additional motor
   19         vehicle dealer subject to protest; revising provisions
   20         for a proposed addition or relocation concerning a
   21         dealership that performs only service; amending s.
   22         320.643, F.S.; revising provisions for transfer,
   23         assignment, or sale of franchise agreements;
   24         prohibiting rejection of proposed transfer of interest
   25         in a motor vehicle dealer entity to a trust or other
   26         entity, or a beneficiary thereof, that is established
   27         for estate planning purposes; prohibiting placing
   28         certain conditions on such transfer; revising
   29         provisions for a hearing by the department or a court
   30         relating to a proposed transfer; providing for
   31         severability; providing an effective date.
   32  
   33  Be It Enacted by the Legislature of the State of Florida:
   34  
   35         Section 1. Section 320.642, Florida Statutes, is amended to
   36  read:
   37         320.642 Dealer licenses in areas previously served;
   38  procedure.—
   39         (1) Any licensee who proposes to establish an additional
   40  motor vehicle dealership or permit the relocation of an existing
   41  dealer to a location within a community or territory where the
   42  same line-make vehicle is presently represented by a franchised
   43  motor vehicle dealer or dealers shall give written notice of its
   44  intention to the department. Such notice shall state:
   45         (a) The specific location at which the additional or
   46  relocated motor vehicle dealership will be established.
   47         (b) The date on or after which the licensee intends to be
   48  engaged in business with the additional or relocated motor
   49  vehicle dealer at the proposed location.
   50         (c) The identity of all motor vehicle dealers who are
   51  franchised to sell the same line-make vehicle with licensed
   52  locations in the county and or any contiguous county to the
   53  county where the additional or relocated motor vehicle dealer is
   54  proposed to be located.
   55         (d) The names and addresses of the dealer-operator and
   56  principal investors in the proposed additional or relocated
   57  motor vehicle dealership.
   58  
   59  Immediately upon receipt of such notice the department shall
   60  cause a notice to be published in the Florida Administrative
   61  Weekly. The published notice shall state that a petition or
   62  complaint by any dealer with standing to protest pursuant to
   63  subsection (3) must be filed not more than 45 30 days after from
   64  the date of publication of the notice in the Florida
   65  Administrative Weekly. The published notice shall describe and
   66  identify the proposed dealership sought to be licensed, and the
   67  department shall cause a copy of the notice to be mailed to
   68  those dealers identified in the licensee’s notice under
   69  paragraph (c).
   70         (2)(a) An application for a motor vehicle dealer license in
   71  any community or territory shall be denied when:
   72         1. A timely protest is filed by a presently existing
   73  franchised motor vehicle dealer with standing to protest as
   74  defined in subsection (3); and
   75         2. The licensee fails to show that the existing franchised
   76  dealer or dealers who register new motor vehicle retail sales or
   77  retail leases of the same line-make in the community or
   78  territory of the proposed dealership are not providing adequate
   79  representation, adequate competition, and convenient customer
   80  service of such line-make motor vehicles in a manner beneficial
   81  to the public interest in such community or territory. The
   82  ultimate burden of proof in establishing inadequate
   83  representation, inadequate competition, and inconvenient
   84  customer service shall be on the licensee. Any geographic
   85  comparison area used to evaluate the performance of the line
   86  make or of the existing motor vehicle dealer or dealers within
   87  the community or territory must be reasonably similar in
   88  demographic traits to the community or territory of the proposed
   89  site, including such factors as age, income, education, vehicle
   90  size, class, or model preference, and product popularity, and
   91  the comparison area must not be smaller than an entire county or
   92  counties in which each of the protesting dealers are located.
   93  Reasonably expected market sales or service penetration must be
   94  measured with respect to the community or territory as a whole
   95  and not with respect to any part thereof or any identifiable
   96  plot therein.
   97         (b) In determining whether the existing franchised motor
   98  vehicle dealer or dealers are providing adequate representation,
   99  adequate competition, and convenient customer service in the
  100  community or territory for the line-make, the department may
  101  consider evidence of any factor deemed material by the finder of
  102  fact in the unique circumstances which may include, but is not
  103  limited to:
  104         1. The market share and return on investment impact of the
  105  establishment of the proposed or relocated dealer on the
  106  consumers, public interest, existing dealers, and the licensee;
  107  provided, however, that financial impact other than return on
  108  investment may only be considered with respect to the protesting
  109  dealer or dealers.
  110         2. The size and permanency of investment reasonably made
  111  and reasonable obligations incurred by the existing dealer or
  112  dealers to perform their obligations under the dealer agreement,
  113  including requirements made by the licensee up to 5 years prior
  114  to the date of the publication of the notice.
  115         3. The reasonably expected market penetration of the line
  116  make motor vehicle for the community or territory involved,
  117  after consideration of all factors which may affect said
  118  penetration, including, but not limited to, demographic factors
  119  such as age, income, education, vehicle size, class, or model
  120  preference, line-make, product popularity, retail lease
  121  transactions, reasonably foreseeable economic projections,
  122  financial expectations, availability of reasonable terms and
  123  reasonable amounts of credit to prospective customers, or other
  124  factors affecting sales to consumers of the community or
  125  territory.
  126         4. Any actions by the licensee licensees in denying its
  127  existing dealer or dealers of the same line-make the opportunity
  128  for reasonable growth, market expansion, or relocation,
  129  including the availability of line-make vehicles by model, in
  130  keeping with the reasonable expectations of the licensee in
  131  providing an adequate number of dealers in the community or
  132  territory, and the licensee making credit available to the
  133  existing dealers in reasonable amounts and on reasonable terms.
  134         5. Any attempts by the licensee to coerce the existing
  135  dealer or dealers into consenting to additional or relocated
  136  franchises of the same line-make in the community or territory.
  137         6. Distance, travel time, traffic patterns, and
  138  accessibility, between the existing dealer or dealers of the
  139  same line-make and the location of the proposed additional or
  140  relocated dealer, for prospective customers.
  141         7. Whether there will likely be a material positive impact
  142  and a material benefit benefits to consumers will likely occur
  143  from the establishment or relocation of the proposed dealership
  144  which will not cannot be obtained by other geographic or
  145  demographic changes or expected changes in the community or
  146  territory, by a material increase in advertising by the
  147  licensee, or by awarding to the protesting dealer or dealers an
  148  agreement to operate an additional sales-only dealership in the
  149  community or territory.
  150         8. Whether the protesting dealer or dealers are in
  151  substantial compliance with their dealer agreement.
  152         9. Whether there is adequate interbrand and intrabrand
  153  competition with respect to said line-make in the community or
  154  territory and adequately convenient consumer care for the motor
  155  vehicles of the line-make, including the adequacy of sales and
  156  service facilities.
  157         10. Whether the establishment or relocation of the proposed
  158  dealership is appears to be warranted and justified based on
  159  economic and marketing conditions pertinent to dealers competing
  160  in the community or territory, including anticipated future
  161  changes.
  162         11. The volume of registrations and service business
  163  transacted by the existing dealer or dealers of the same line
  164  make in the relevant community or territory of the proposed
  165  dealership.
  166         12. The past and reasonably foreseeable expected growth or
  167  decline in population, density of population, and new motor
  168  vehicle registrations in the community or territory of the
  169  proposed dealership for competing motor vehicles, and whether
  170  existing same line-make dealers will be unable to adjust their
  171  dealership operations to adequately deal with such changes.
  172         13. Whether the licensee has offered the protesting dealer
  173  or dealers the opportunity to own and operate the proposed new
  174  motor vehicle dealership in the community or territory.
  175         14. Whether the economic conditions reasonably forecasted
  176  by the licensee for the foreseeable future will enable all
  177  existing dealers and the proposed new or relocated dealership
  178  the opportunity for a reasonable return on their investment,
  179  including supplying an adequate number of every model of the
  180  licensee’s new motor vehicles to them.
  181         (3) An existing franchised motor vehicle dealer or dealers
  182  shall have standing to protest a proposed additional or
  183  relocated motor vehicle dealer where the existing motor vehicle
  184  dealer or dealers have a franchise agreement for the same line
  185  make vehicle to be sold or serviced by the proposed additional
  186  or relocated motor vehicle dealer and are physically located so
  187  as to meet or satisfy any of the following requirements or
  188  conditions:
  189         (a) If the proposed additional or relocated motor vehicle
  190  dealer is to be located in a county with a population of less
  191  than 300,000 according to the most recent data of the United
  192  States Census Bureau or the data of the Bureau of Economic and
  193  Business Research of the University of Florida:
  194         1. The proposed additional or relocated motor vehicle
  195  dealer is to be located in the area designated or described as
  196  the area of responsibility, or such similarly designated area,
  197  including the entire area designated as a multiple-point area,
  198  in the franchise agreement or in any related document or
  199  commitment with the existing motor vehicle dealer or dealers of
  200  the same line-make as such agreement existed on or after July 1,
  201  2009 upon October 1, 1988;
  202         2. The existing motor vehicle dealer or dealers of the same
  203  line-make have a licensed franchise location within a radius of
  204  30 20 miles of the location of the proposed additional or
  205  relocated motor vehicle dealer; or
  206         3. Any existing motor vehicle dealer or dealers of the same
  207  line-make can establish that during any 12-month period of the
  208  36-month period preceding the filing of the licensee’s
  209  application for the proposed dealership, such dealer or its
  210  predecessor made 10 25 percent of its retail sales of new motor
  211  vehicles to persons whose registered household addresses were
  212  located within a radius of 35 20 miles of the location of the
  213  proposed additional or relocated motor vehicle dealer; provided
  214  such existing dealer is located in the same county or any county
  215  contiguous to the county where the additional or relocated
  216  dealer is proposed to be located.
  217         (b) If the proposed additional or relocated motor vehicle
  218  dealer is to be located in a county with a population of more
  219  than 300,000 according to the most recent data of the United
  220  States Census Bureau or the data of the Bureau of Economic and
  221  Business Research of the University of Florida:
  222         1. Any existing motor vehicle dealer or dealers of the same
  223  line-make have a licensed franchise location within a radius of
  224  20 12.5 miles of the location of the proposed additional or
  225  relocated motor vehicle dealer; or
  226         2. Any existing motor vehicle dealer or dealers of the same
  227  line-make can establish that during any 12-month period of the
  228  36-month period preceding the filing of the licensee’s
  229  application for the proposed dealership, such dealer or its
  230  predecessor made 10 25 percent of its retail sales of new motor
  231  vehicles to persons whose registered household addresses were
  232  located within a radius of 20 12.5 miles of the location of the
  233  proposed additional or relocated motor vehicle dealer; provided
  234  such existing dealer is located in the same county or any county
  235  contiguous to the county where the additional or relocated
  236  dealer is proposed to be located.
  237         (4) The department’s decision to deny issuance of a license
  238  under this section shall remain in effect for a period of 12
  239  months. The department shall not issue a license for the
  240  proposed additional or relocated motor vehicle dealer until a
  241  final decision by the department is rendered determining that
  242  the application for the motor vehicle dealer’s license should be
  243  granted.
  244         (5)(a) The opening or reopening of the same or a successor
  245  motor vehicle dealer within 24 12 months is not considered an
  246  additional motor vehicle dealer subject to protest within the
  247  meaning of this section, if:
  248         1. The opening or reopening is within the same or an
  249  adjacent county and is within 2 miles of the former motor
  250  vehicle dealer location;
  251         2. There is no dealer within 25 miles of the proposed
  252  location or the proposed location is further from each existing
  253  dealer of the same line-make than the prior location is from
  254  each dealer of the same line-make within 25 miles of the new
  255  location;
  256         3. The opening or reopening is within 6 miles of the prior
  257  location and, if any existing motor vehicle dealer of the same
  258  line-make is located within 15 miles of the former location, the
  259  proposed location is no closer to any existing dealer of the
  260  same line-make within 15 miles of the proposed location; or
  261         4. The opening or reopening is within 6 miles of the prior
  262  location and, if all existing motor vehicle dealers of the same
  263  line-make are beyond 15 miles of the former location, the
  264  proposed location is further than 15 miles from any existing
  265  motor vehicle dealer of the same line-make.
  266         (b) Any other such opening or reopening shall constitute an
  267  additional motor vehicle dealer within the meaning of this
  268  section.
  269         (c) If a motor vehicle dealer has been opened or reopened
  270  pursuant to this subsection, the licensee may not propose a
  271  motor vehicle dealer of the same line-make to be located within
  272  4 miles of the previous location of such dealer for 2 years
  273  after the date the relocated dealership opens.
  274         (6) When a proposed addition or relocation concerns a
  275  dealership that performs or is to perform only service, as
  276  defined in s. 320.60(16), and will not or does not sell or lease
  277  new motor vehicles, as defined in s. 320.60(15), the proposal
  278  shall be subject to notice and protest pursuant to the
  279  provisions of this section.
  280         (a) Standing to protest the addition or relocation of a
  281  service-only dealership shall be limited to those instances in
  282  which the applicable mileage requirement established in
  283  subparagraphs (3)(a)2. and (3)(b)1. is met.
  284         (b) The addition or relocation of a service-only dealership
  285  shall not be subject to protest if:
  286         1. The applicant for the service-only dealership location
  287  is an existing motor vehicle dealer of the same line-make as the
  288  proposed additional or relocated service-only dealership;
  289         2. There is no existing dealer of the same line-make closer
  290  than the applicant to the proposed location of the additional or
  291  relocated service-only dealership; and
  292         3. The proposed location of the additional or relocated
  293  service-only dealership is at least 15 7 miles from all existing
  294  motor vehicle dealerships of the same line-make, other than
  295  motor vehicle dealerships owned by the applicant.
  296         (c) In determining whether existing franchised motor
  297  vehicle dealers are providing adequate representation, adequate
  298  competition, and convenient customer service representations in
  299  the community or territory for the line-make in question in a
  300  protest of the proposed addition or relocation of a service-only
  301  dealership, the department may consider the elements set forth
  302  in paragraph (2)(b), provided:
  303         1. With respect to subparagraph (2)(b)1., only the impact
  304  as it relates to service may be considered;
  305         2. Subparagraph (2)(b)3. shall not be considered;
  306         3. With respect to subparagraph (2)(b)9., only service
  307  facilities shall be considered; and
  308         4. With respect to subparagraph (2)(b)11., only the volume
  309  of service business transacted shall be considered.
  310         (d) If an application for a service-only dealership is
  311  granted, the department shall issue a license which permits only
  312  service, as defined in s. 320.60(16), and does not permit the
  313  selling or leasing of new motor vehicles, as defined in s.
  314  320.60(15). If a service-only dealership subsequently seeks to
  315  sell new motor vehicles at its location, the notice and protest
  316  provisions of this section shall apply.
  317         (7) Measurements of the distance between proposed or
  318  existing dealer locations required by this section shall be
  319  taken from the geometric centroid of the property that
  320  encompasses all of the existing or proposed motor vehicle dealer
  321  operations.
  322         (8) The department shall not be obligated to determine the
  323  accuracy of any distance asserted by any party in a notice
  324  submitted to it. Any dispute concerning a distance measurement
  325  asserted by a party shall be resolved by a hearing conducted in
  326  accordance with ss. 120.569 and 120.57.
  327         Section 2. Section 320.643, Florida Statutes, is amended to
  328  read:
  329         320.643 Transfer, assignment, or sale of franchise
  330  agreements.—
  331         (1)(a) Notwithstanding the terms of any franchise
  332  agreement, a licensee shall not, by contract or otherwise, fail
  333  or refuse to give effect to, prevent, prohibit, or penalize or
  334  attempt to refuse to give effect to, prohibit, or penalize any
  335  motor vehicle dealer from selling, assigning, transferring,
  336  alienating, or otherwise disposing of its franchise agreement to
  337  any other person or persons, including a corporation established
  338  or existing for the purpose of owning or holding a franchise
  339  agreement, unless the licensee proves at a hearing pursuant to a
  340  complaint filed by a motor vehicle dealer under this section
  341  that such sale, transfer, alienation, or other disposition is to
  342  a person who is not, or whose controlling executive management
  343  is not, of good moral character or does not meet the written,
  344  reasonable, and uniformly applied standards or qualifications of
  345  the licensee relating to financial qualifications of the
  346  transferee and business experience of the transferee or the
  347  transferee’s executive management. A motor vehicle dealer who
  348  desires to sell, assign, transfer, alienate, or otherwise
  349  dispose of a franchise shall notify, or cause the proposed
  350  transferee to notify, the licensee, in writing, setting forth
  351  the prospective transferee’s name, address, financial
  352  qualifications, and business experience during the previous 5
  353  years. A licensee who receives such notice may, within 60 days
  354  following such receipt, notify the motor vehicle dealer, in
  355  writing, that the proposed transferee is not a person qualified
  356  to be a transferee under this section and setting forth the
  357  material reasons for such rejection. Failure of the licensee to
  358  notify the motor vehicle dealer within the 60-day period of such
  359  rejection shall be deemed an approval of the transfer. No such
  360  transfer, assign, or sale shall be valid unless the transferee
  361  agrees in writing to comply with all requirements of the
  362  franchise then in effect.
  363         (b) A motor vehicle dealer whose proposed sale is rejected
  364  may, within 60 days following such receipt of such rejection,
  365  file with the department a complaint for a determination that
  366  the proposed transferee has been rejected in violation of this
  367  section. The licensee has the burden of proof with respect to
  368  all issues raised by such complaint. The department shall
  369  determine, and enter an order providing, that the proposed
  370  transferee is either qualified or is not and cannot be qualified
  371  for specified reasons, or the order may provide the conditions
  372  under which a proposed transferee would be qualified. If the
  373  licensee fails to file such a response to the motor vehicle
  374  dealer’s complaint within 30 days after receipt of the
  375  complaint, unless the parties agree in writing to an extension,
  376  or if the department, after a hearing, renders a decision other
  377  than one disqualifying the proposed transferee, the franchise
  378  agreement between the motor vehicle dealer and the licensee
  379  shall be deemed amended to incorporate such transfer or amended
  380  in accordance with the determination and order rendered,
  381  effective upon compliance by the proposed transferee with any
  382  conditions set forth in the determination or order.
  383         (2)(a) Notwithstanding the terms of any franchise
  384  agreement, a licensee shall not, by contract or otherwise, fail
  385  or refuse to give effect to, prevent, prohibit, or penalize, or
  386  attempt to refuse to give effect to, prevent, prohibit, or
  387  penalize, any motor vehicle dealer or any proprietor, partner,
  388  stockholder, owner, or other person who holds or otherwise owns
  389  an interest therein from selling, assigning, transferring,
  390  alienating, or otherwise disposing of, in whole or in part, the
  391  equity interest of any of them in such motor vehicle dealer to
  392  any other person or persons, including a corporation established
  393  or existing for the purpose of owning or holding the stock or
  394  ownership interests of other entities, unless the licensee
  395  proves at a hearing pursuant to a complaint filed by a motor
  396  vehicle dealer under this section that such sale, transfer,
  397  alienation, or other disposition is to a person who is not, or
  398  whose controlling executive management is not, of good moral
  399  character. A motor vehicle dealer, or any proprietor, partner,
  400  stockholder, owner, or other person who holds or otherwise owns
  401  an interest in the motor vehicle dealer, who desires to sell,
  402  assign, transfer, alienate, or otherwise dispose of any interest
  403  in such motor vehicle dealer shall notify, or cause the proposed
  404  transferee to so notify, the licensee, in writing, of the
  405  identity and address of the proposed transferee. A licensee who
  406  receives such notice may, within 60 days following such receipt,
  407  notify the motor vehicle dealer in writing that the proposed
  408  transferee is not a person qualified to be a transferee under
  409  this section and setting forth the material reasons for such
  410  rejection. Failure of the licensee to notify the motor vehicle
  411  dealer within the 60-day period of such rejection shall be
  412  deemed an approval of the transfer. Any person whose proposed
  413  sale of stock is rejected may file within 60 days of receipt of
  414  such rejection a complaint with the department alleging that the
  415  rejection was in violation of the law or the franchise
  416  agreement. The licensee has the burden of proof with respect to
  417  all issues raised by such complaint. The department shall
  418  determine, and enter an order providing, that the proposed
  419  transferee either is qualified or is not and cannot be qualified
  420  for specified reasons; or the order may provide the conditions
  421  under which a proposed transferee would be qualified. If the
  422  licensee fails to file a response to the motor vehicle dealer’s
  423  complaint within 30 days of receipt of the complaint, unless the
  424  parties agree in writing to an extension, or if the department,
  425  after a hearing, renders a decision on the complaint other than
  426  one disqualifying the proposed transferee, the transfer shall be
  427  deemed approved in accordance with the determination and order
  428  rendered, effective upon compliance by the proposed transferee
  429  with any conditions set forth in the determination or order.
  430         (b) Notwithstanding paragraph (a), a licensee, the
  431  department, or any court shall not reject a proposed transfer of
  432  a legal, equitable, or beneficial interest in a motor vehicle
  433  dealer entity to a trust or other entity, or to any beneficiary
  434  thereof, that is established by an owner of any interest in a
  435  motor vehicle dealer for estate planning purposes; nor shall a
  436  licensee, the department, or any court condition any proposed
  437  transfer under this section upon a relocation of, construction
  438  of any addition or modification to, or any refurbishing or
  439  remodeling of any dealership structure, facility, or building of
  440  the existing motor vehicle dealer, or upon any modification of
  441  the existing franchise agreement.
  442         (3) During the pendency of any such department or court
  443  hearing, the franchise agreement of the motor vehicle dealer
  444  shall continue in effect in accordance with its terms. The
  445  department or any court shall use reasonable efforts to expedite
  446  any determination requested under this section.
  447         (4) Notwithstanding the terms of any franchise agreement,
  448  the acceptance by the licensee of the proposed transferee shall
  449  not be unreasonably withheld, delayed, or conditioned. For the
  450  purposes of this section, the refusal by the licensee to accept,
  451  in a timely manner, a proposed transferee who satisfies the
  452  criteria set forth in subsection (1) or subsection (2) is
  453  presumed to be unreasonable.
  454         (5) It shall be a violation of this section for the
  455  licensee to reject, or withhold, delay, or condition approval of
  456  a proposed transfer unless the licensee can prove in any court
  457  of competent jurisdiction in defense of any claim brought
  458  pursuant to s. 320.697 that, in fact, the rejection or
  459  withholding of approval of the proposed transfer was not in
  460  violation of or precluded by this section and was reasonable.
  461  The determination of whether such rejection or withholding was
  462  reasonable shall be based on a preponderance of the evidence
  463  presented during the proceeding on an objective standard.
  464  Alleging the permitted statutory grounds by the licensee in the
  465  written rejection of the proposed transfer shall not constitute
  466  a defense of the licensee, or protect the licensee from
  467  liability for violating this section.
  468         Section 3. If any provision of this act or the application
  469  thereof to any person or circumstance is held invalid, the
  470  invalidity shall not affect other provisions or applications of
  471  the act which can be given effect without the invalid provision
  472  or application, and to this end the provisions of this act are
  473  declared severable.
  474         Section 4. This act shall take effect upon becoming a law.