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.