Florida Senate - 2015 CS for SB 1048
By the Committee on Transportation; and Senator Garcia
596-02921-15 20151048c1
1 A bill to be entitled
2 An act relating to motor vehicle manufacturer
3 licenses; amending s. 320.64, F.S.; providing that a
4 motor vehicle dealer who receives approval of a
5 facility from an applicant or licensee within a
6 specified timeframe is deemed to be in full compliance
7 with facility-related requirements; providing that
8 such motor vehicle dealer are entitled to certain
9 benefits under certain circumstances; providing
10 applicability; conforming a cross-reference; revising
11 provisions related to an applicant or licensee who has
12 undertaken or engaged in an audit of service-related
13 payments or incentive payments; limiting the timeframe
14 for the performance of such audits; defining the term
15 “incentive”; providing that an applicant or licensee
16 may deny or charge back only the portion of a service
17 related claim or incentive claim which the applicant
18 or licensee has proven to be false or fraudulent or
19 for which the dealer failed to substantially comply
20 with certain procedures; prohibiting an applicant or
21 licensee from taking adverse action against a motor
22 vehicle dealer under certain circumstances;
23 prohibiting an applicant or licensee from failing to
24 make any payment due a motor vehicle dealer that
25 substantially complies with the terms of a certain
26 contract between the two parties regarding
27 reimbursement for temporary replacement vehicles under
28 certain circumstances; authorizing a motor vehicle
29 dealer to purchase goods or services from a vendor
30 chosen by the motor vehicle dealer, subject to certain
31 requirements; defining the term “goods or services”;
32 prohibiting an applicant or licensee from requiring a
33 motor vehicle dealer to pay for certain advertising or
34 marketing, or to participate in or affiliate with a
35 dealer advertising or marketing entity; providing that
36 an applicant or licensee may not take or threaten to
37 take any adverse action against a motor vehicle dealer
38 who refuses to join or participate in such entity;
39 defining the term “adverse action”; providing that an
40 applicant or licensee may not require a dealer to
41 participate in, or may not preclude only a number of
42 its motor vehicle dealers in a designated market area
43 from establishing, a voluntary motor vehicle dealer
44 advertising or marketing entity; providing that an
45 applicant or licensee is not required to fund such an
46 entity under certain circumstances; providing for
47 retroactive applicability under certain circumstances;
48 providing an effective date.
49
50 Be It Enacted by the Legislature of the State of Florida:
51
52 Section 1. Present paragraph (h) of subsection (10) of
53 section 320.64, Florida Statutes, is redesignated as paragraph
54 (i), a new paragraph (h) is added to that subsection, present
55 paragraph (h) of subsection (10) and subsections (25) and (26)
56 of that section are amended, and subsections (39), (40), and
57 (41) are added to that section, to read:
58 320.64 Denial, suspension, or revocation of license;
59 grounds.—A license of a licensee under s. 320.61 may be denied,
60 suspended, or revoked within the entire state or at any specific
61 location or locations within the state at which the applicant or
62 licensee engages or proposes to engage in business, upon proof
63 that the section was violated with sufficient frequency to
64 establish a pattern of wrongdoing, and a licensee or applicant
65 shall be liable for claims and remedies provided in ss. 320.695
66 and 320.697 for any violation of any of the following
67 provisions. A licensee is prohibited from committing the
68 following acts:
69 (10)
70 (h) If the applicant or licensee offers any bonus,
71 incentive, rebate, or other program, standard, or policy that is
72 available to a motor vehicle dealer in this state and that is
73 premised, wholly or in part, on dealer facility improvements,
74 renovations, expansion, remodeling, alterations, or installation
75 of signs or other image elements, and if the motor vehicle
76 dealer completes an approved facility in reliance upon such
77 offer, the motor vehicle dealer shall be deemed to be in full
78 compliance with all of the applicant’s or licensee’s
79 requirements related to facility, sign, and image for the
80 duration of a 10-year period following such completion. If,
81 during the 10-year period, the applicant or licensee establishes
82 a program, standard, or policy that offers a new bonus,
83 incentive, rebate, or other benefit, and if a motor vehicle
84 dealer has completed an approved facility in reliance upon the
85 prior program, standard, or policy but does not comply with the
86 provisions related to facility, sign, or image under the new
87 program, standard, or policy, except as hereinafter provided,
88 the motor vehicle dealer may not be eligible for benefits under
89 the provisions related to facility, sign, or image of the new
90 program, standard, or policy, but shall remain entitled to all
91 the benefits under the older program, standard, or policy, plus
92 any increase in the benefits between the old and new programs,
93 standards, or policies during the remainder of the 10-year
94 period. Nothing contained in this subsection shall in any way
95 obviate, affect, or alter the provisions of subsection (38).
96 (i)(h) A violation of paragraphs (b)-(h) (b) through (g) is
97 not a violation of s. 320.70 and does not subject any licensee
98 to any criminal penalty under s. 320.70.
99 (25) The applicant or licensee has undertaken or engaged in
100 an audit of warranty, maintenance, and other service-related
101 payments or incentive payments, including payments to a motor
102 vehicle dealer under any licensee-issued program, policy, or
103 other benefit, which previously have been paid to a motor
104 vehicle dealer in violation of this section or has failed to
105 comply with any of its obligations under s. 320.696. An
106 applicant or licensee may reasonably and periodically audit a
107 motor vehicle dealer to determine the validity of paid claims as
108 provided in s. 320.696. Audits of warranty, maintenance, and
109 other service-related payments shall be performed by an
110 applicant or licensee only during the 12-month 1-year period
111 immediately following the date the claim was paid. Audits Audit
112 of incentive payments shall only be performed only during the
113 12-month for an 18-month period immediately following the date
114 the incentive was paid. As used in this section, the term
115 “incentive” includes any bonus, incentive, or other monetary or
116 nonmonetary thing of value. After such time periods have
117 elapsed, all warranty, maintenance, and other service-related
118 payments and incentive payments shall be deemed final and
119 incontrovertible for any reason notwithstanding any otherwise
120 applicable law, and the motor vehicle dealer shall not be
121 subject to any charge-back or repayment. An applicant or
122 licensee may deny a claim or, as a result of a timely conducted
123 audit, impose a charge-back against a motor vehicle dealer for
124 warranty, maintenance, or other service-related payments or
125 incentive payments only if the applicant or licensee can show
126 that the warranty, maintenance, or other service-related claim
127 or incentive claim was false or fraudulent or that the motor
128 vehicle dealer failed to substantially comply with the
129 reasonable written and uniformly applied procedures of the
130 applicant or licensee for such repairs or incentives, but only
131 for that portion of the claim so shown. Notwithstanding the
132 terms of any franchise agreement, guideline, program, policy, or
133 procedure, an applicant or licensee may deny or charge back only
134 that portion of a warranty, maintenance, or other service
135 related claim or incentive claim which the applicant or licensee
136 has proven to be false or fraudulent or for which the dealer
137 failed to substantially comply with the reasonable, written, and
138 uniformly applied procedures of the applicant or licensee for
139 such repairs or incentives, as set forth in this subsection. An
140 applicant or licensee may not charge back a motor vehicle dealer
141 back subsequent to the payment of a warranty, maintenance, or
142 service-related claim or incentive claim unless, within 30 days
143 after a timely conducted audit, a representative of the
144 applicant or licensee first meets in person, by telephone, or by
145 video teleconference with an officer or employee of the dealer
146 designated by the motor vehicle dealer. At such meeting the
147 applicant or licensee must provide a detailed explanation, with
148 supporting documentation, as to the basis for each of the claims
149 for which the applicant or licensee proposed a charge-back to
150 the dealer and a written statement containing the basis upon
151 which the motor vehicle dealer was selected for audit or review.
152 Thereafter, the applicant or licensee must provide the motor
153 vehicle dealer’s representative a reasonable period after the
154 meeting within which to respond to the proposed charge-backs,
155 with such period to be commensurate with the volume of claims
156 under consideration, but in no case less than 45 days after the
157 meeting. The applicant or licensee is prohibited from changing
158 or altering the basis for each of the proposed charge-backs as
159 presented to the motor vehicle dealer’s representative following
160 the conclusion of the audit unless the applicant or licensee
161 receives new information affecting the basis for one or more
162 charge-backs and that new information is received within 30 days
163 after the conclusion of the timely conducted audit. If the
164 applicant or licensee claims the existence of new information,
165 the dealer must be given the same right to a meeting and right
166 to respond as when the charge-back was originally presented.
167 After all internal dispute resolution processes provided through
168 the applicant or licensee have been completed, the applicant or
169 licensee shall give written notice to the motor vehicle dealer
170 of the final amount of its proposed charge-back. If the dealer
171 disputes that amount, the dealer may file a protest with the
172 department within 30 days after receipt of the notice. If a
173 protest is timely filed, the department shall notify the
174 applicant or licensee of the filing of the protest, and the
175 applicant or licensee may not take any action to recover the
176 amount of the proposed charge-back until the department renders
177 a final determination, which is not subject to further appeal,
178 that the charge-back is in compliance with the provisions of
179 this section. In any hearing pursuant to this subsection, the
180 applicant or licensee has the burden of proof that its audit and
181 resulting charge-back are in compliance with this subsection.
182 (26) Notwithstanding the terms of any franchise agreement,
183 including any licensee’s program, policy, or procedure, the
184 applicant or licensee has refused to allocate, sell, or deliver
185 motor vehicles; charged back or withheld payments or other
186 things of value for which the dealer is otherwise eligible under
187 a sales promotion, program, or contest; prevented a motor
188 vehicle dealer from participating in any promotion, program, or
189 contest; or has taken or threatened to take any adverse action
190 against a dealer, including charge-backs, reducing vehicle
191 allocations, or terminating or threatening to terminate a
192 franchise because the dealer sold or leased a motor vehicle to a
193 customer who exported the vehicle to a foreign country or who
194 resold the vehicle, unless the licensee proves that the dealer
195 knew or reasonably should have known that the customer intended
196 to export or resell the motor vehicle. There is a rebuttable
197 presumption that the dealer neither knew nor reasonably should
198 have known of its customer’s intent to export or resell the
199 vehicle if the vehicle is titled or registered in any state in
200 this country. A licensee may not take any action against a motor
201 vehicle dealer, including reducing its allocations or supply of
202 motor vehicles to the dealer, or charging back a dealer for an
203 incentive payment previously paid, unless the licensee first
204 meets in person, by telephone, or video conference with an
205 officer or other designated employee of the dealer. At such
206 meeting, the licensee must provide a detailed explanation, with
207 supporting documentation, as to the basis for its claim that the
208 dealer knew or reasonably should have known of the customer’s
209 intent to export or resell the motor vehicle. Thereafter, the
210 motor vehicle dealer shall have a reasonable period,
211 commensurate with the number of motor vehicles at issue, but not
212 less than 15 days, to respond to the licensee’s claims. If,
213 following the dealer’s response and completion of all internal
214 dispute resolution processes provided through the applicant or
215 licensee, the dispute remains unresolved, the dealer may file a
216 protest with the department within 30 days after receipt of a
217 written notice from the licensee that it still intends to take
218 adverse action against the dealer with respect to the motor
219 vehicles still at issue. If a protest is timely filed, the
220 department shall notify the applicant or licensee of the filing
221 of the protest, and the applicant or licensee may not take any
222 action adverse to the dealer until the department renders a
223 final determination, which is not subject to further appeal,
224 that the licensee’s proposed action is in compliance with the
225 provisions of this subsection. In any hearing pursuant to this
226 subsection, the applicant or licensee has the burden of proof on
227 all issues raised by this subsection. In addition to the
228 requirements, protections, and procedures set forth in this
229 subsection, an applicant or licensee, by agreement, program,
230 rule, policy, standard, or otherwise, may not take adverse
231 action against a motor vehicle dealer, including, but not
232 limited to, reducing allocations, product deliveries, or
233 planning volumes, or imposing any penalty or charge-back,
234 because a motor vehicle that was sold, leased, or delivered to a
235 customer was resold or exported more than 120 days after it was
236 delivered to the customer. If the applicant or licensee does not
237 provide written notification to the motor vehicle dealer of such
238 resale or export within 12 months after the date of the motor
239 vehicle dealer’s delivery of the vehicle to the customer, the
240 motor vehicle dealer may not be subject to any adverse action.
241 Notwithstanding the provisions of any franchise agreement,
242 program, policy, or procedure, a motor vehicle dealer’s
243 franchise agreement may not be terminated, canceled,
244 discontinued, or nonrenewed by an applicant or licensee on the
245 basis of any act related to a customer’s exporting or reselling
246 of a motor vehicle, unless the applicant or licensee proves by
247 clear and convincing evidence before a trier of fact that the
248 motor vehicle dealer knowingly engaged in a pattern of conduct
249 of selling to known exporters and that the majority owner, or if
250 there is no majority owner, the person designated as the dealer
251 principal in the franchise agreement, had actual knowledge, at
252 the time the motor vehicle was sold, leased, or delivered, that
253 the customer intended to export or resell the motor vehicle.
254 However, nothing herein shall prohibit a licensee from
255 terminating or nonrenewing a motor vehicle dealer’s franchise
256 agreement for a pattern of conduct that includes fraud, or
257 intentionally making false statements or documentation in
258 connection with retail sales of motor vehicles that are
259 exported.
260 (39) Notwithstanding the terms of any agreement, program,
261 incentive, bonus, policy, or rule, the applicant or licensee
262 fails to make any payment pursuant to any of the foregoing for
263 any temporary replacement motor vehicle loaned, rented, or
264 provided by a motor vehicle dealer to or for its service or
265 repair customers, even if the temporary replacement motor
266 vehicle has been leased, rented, titled, or registered to the
267 motor vehicle dealer’s rental or leasing division or an entity
268 that is owned or controlled by the motor vehicle dealer,
269 provided that the motor vehicle dealer or its rental or leasing
270 division or entity complies with the written and uniformly
271 enforced vehicle eligibility and use requirements specified by
272 the applicant or licensee in its agreement, program, policy,
273 bonus, incentive or rule relating to loaner vehicles.
274 (40) Notwithstanding the terms of any franchise agreement,
275 the applicant or licensee has required or coerced, or attempted
276 to require or coerce, a motor vehicle dealer to purchase goods
277 or services from a vendor selected, identified, or designated by
278 the applicant or licensee, or one of its parents, subsidiaries,
279 divisions, or affiliates, by agreement, standard, policy,
280 program, incentive provision, or otherwise, without making
281 available to the motor vehicle dealer the option to obtain the
282 goods or services of like kind, design, and quality from a
283 vendor chosen by the motor vehicle dealer. If the motor vehicle
284 dealer exercises such option, the dealer must provide written
285 notice of its desire to use the alternative goods or services to
286 the applicant or licensee, along with samples or clear
287 descriptions of the alternative goods or services that the
288 dealer desires to use. The licensee or applicant shall have the
289 opportunity to evaluate the alternative good or service for up
290 to 30 days and to provide its written consent to use said good
291 or service; such consent may not be unreasonably withheld by the
292 applicant or licensee. If the motor vehicle dealer does not
293 receive a response from the applicant or licensee within 30
294 days, consent to use the alternative goods or services shall be
295 deemed granted. If a dealer using alternative goods or services
296 complies with the terms of this subsection, the dealer shall
297 qualify and be eligible for all benefits described in the
298 agreement, standard, policy, program, incentive provision, or
299 otherwise. As used in this subsection, the term “goods or
300 services” is limited to such goods and services used to
301 construct or renovate dealership facilities, or furniture and
302 fixtures at the dealership facilities. The term does not
303 include:
304 (a) Any intellectual property of the applicant or licensee
305 relating to signage incorporating the applicant’s or licensee’s
306 trademark or copyright, any facility or building materials
307 bearing the applicant’s or licensee’s trademark;
308 (b) Any special tool and training as required by the
309 licensee or applicant;
310 (c) Any part to be used in repairs under warranty
311 obligations of an applicant or licensee;
312 (d) Any good or service paid for entirely by the applicant
313 or licensee; or
314 (e) Any applicant’s or licensee’s design or architectural
315 review service.
316 (41)(a) The applicant or licensee, by agreement, policy,
317 program, standard, or otherwise, requires a motor vehicle
318 dealer, directly or indirectly, to advance or pay for, or to
319 reimburse the applicant or licensee for, any costs related to
320 the creation, development, showing, or publication in any media
321 of any advertisement for a motor vehicle; requires a motor
322 vehicle dealer to participate in, contribute to, affiliate with,
323 or join a dealer advertising or marketing group, fund, pool,
324 association, or other entity; or takes or threatens to take any
325 adverse action against a motor vehicle dealer that refuses to
326 join or participate in such group, fund, pool, association, or
327 other entity. As used in this subsection, the term “adverse
328 action” includes, but is not limited to, reduction of
329 allocations, charging fees for a licensee’s or dealer’s
330 advertising or a marketing group’s advertising or marketing,
331 termination of or threatening to terminate the motor vehicle
332 dealer’s franchise, or reducing any incentive for which the
333 motor vehicle dealer is eligible.
334 (b) An applicant or licensee requires a dealer to
335 participate in, or precludes a number of its motor vehicle
336 dealers in a designated market area from establishing, a
337 voluntary motor vehicle dealer advertising or marketing group,
338 fund, pool, association, or other entity. Except as provided in
339 an agreement, if a motor vehicle dealer chooses to form an
340 independent advertising or marketing group, the applicant or
341 licensee is not required to fund such group.
342 (c) This subsection may not prohibit an applicant or
343 licensee from offering advertising or promotional materials to a
344 motor vehicle dealer for a fee or charge, as long as the use of
345 such advertising or promotional materials is voluntary for the
346 motor vehicle dealer.
347
348 A motor vehicle dealer who can demonstrate that a violation of,
349 or failure to comply with, any of the preceding provisions by an
350 applicant or licensee will or can adversely and pecuniarily
351 affect the complaining dealer, shall be entitled to pursue all
352 of the remedies, procedures, and rights of recovery available
353 under ss. 320.695 and 320.697.
354 Section 2. This act applies to all franchise agreements
355 entered into, renewed, or amended after October 1, 1988, except
356 and to the extent that such application impairs valid
357 contractual agreements in violation of the Florida Constitution
358 or the United States Constitution.
359 Section 3. This act shall take effect upon becoming a law.
360