Florida Senate - 2015 CS for CS for SB 1048
By the Committees on Rules; and Transportation; and Senator
Garcia
595-04192-15 20151048c2
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 received 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 is 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; reducing the timeframe
14 for the performance of such audits; defining the term
15 “incentive”; authorizing an applicant or licensee to
16 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; prohibiting an
36 applicant or licensee from taking or threatening 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 for severability; providing an effective
49 date.
50
51 Be It Enacted by the Legislature of the State of Florida:
52
53 Section 1. Present paragraph (h) of subsection (10) of
54 section 320.64, Florida Statutes, is redesignated as paragraph
55 (i), a new paragraph (h) is added to that subsection, present
56 paragraph (h) of subsection (10) and subsections (25) and (26)
57 of that section are amended, and subsections (39), (40), and
58 (41) are added to that section, to read:
59 320.64 Denial, suspension, or revocation of license;
60 grounds.—A license of a licensee under s. 320.61 may be denied,
61 suspended, or revoked within the entire state or at any specific
62 location or locations within the state at which the applicant or
63 licensee engages or proposes to engage in business, upon proof
64 that the section was violated with sufficient frequency to
65 establish a pattern of wrongdoing, and a licensee or applicant
66 shall be liable for claims and remedies provided in ss. 320.695
67 and 320.697 for any violation of any of the following
68 provisions. A licensee is prohibited from committing the
69 following acts:
70 (10)
71 (h) If an applicant or licensee offers any bonus,
72 incentive, rebate, or other program, standard, or policy that is
73 available to a motor vehicle dealer in this state and that is
74 premised, wholly or in part, on dealer facility improvements,
75 renovations, expansions, remodeling, alterations, or
76 installations of signs or other image elements, a motor vehicle
77 dealer who completes an approved facility in reliance upon such
78 offer shall be deemed to be in full compliance with all of the
79 applicant’s or licensee’s requirements related to facility,
80 sign, and image for the duration of a 10-year period following
81 such completion. If, during the 10-year period, the applicant or
82 licensee establishes a program, standard, or policy that offers
83 a new bonus, incentive, rebate, or other benefit, a motor
84 vehicle dealer that completed an approved facility in reliance
85 upon the prior program, standard, or policy but does not comply
86 with the provisions related to facility, sign, or image under
87 the new program, standard, or policy, except as hereinafter
88 provided, may not be eligible for benefits under the provisions
89 related to facility, sign, or image of the new program,
90 standard, or policy, but shall remain entitled to all the
91 benefits under the older program, standard, or policy, plus any
92 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. An applicant or licensee
228 may not take any adverse action against a motor vehicle dealer
229 because the dealer sold or leased a motor vehicle to a customer
230 who exported the vehicle to a foreign country or who resold the
231 vehicle unless the applicant or licensee provides written
232 notification to the motor vehicle dealer of such resale or
233 export within 12 months after the date the dealer sold or leased
234 the vehicle to the customer.
235 (39) Notwithstanding the terms of any agreement, program,
236 incentive, bonus, policy, or rule, an applicant or licensee
237 fails to make any payment pursuant to any of the foregoing for
238 any temporary replacement motor vehicle loaned, rented, or
239 provided by a motor vehicle dealer to or for its service or
240 repair customers, even if the temporary replacement motor
241 vehicle has been leased, rented, titled, or registered to the
242 motor vehicle dealer’s rental or leasing division or an entity
243 that is owned or controlled by the motor vehicle dealer,
244 provided that the motor vehicle dealer or its rental or leasing
245 division or entity complies with the written and uniformly
246 enforced vehicle eligibility, use, and reporting requirements
247 specified by the applicant or licensee in its agreement,
248 program, policy, bonus, incentive, or rule relating to loaner
249 vehicles.
250 (40) Notwithstanding the terms of any franchise agreement,
251 the applicant or licensee has required or coerced, or attempted
252 to require or coerce, a motor vehicle dealer to purchase goods
253 or services from a vendor selected, identified, or designated by
254 the applicant or licensee, or one of its parents, subsidiaries,
255 divisions, or affiliates, by agreement, standard, policy,
256 program, incentive provision, or otherwise, without making
257 available to the motor vehicle dealer the option to obtain the
258 goods or services of substantially similar design and quality
259 from a vendor chosen by the motor vehicle dealer. If the motor
260 vehicle dealer exercises such option, the dealer must provide
261 written notice of its desire to use the alternative goods or
262 services to the applicant or licensee, along with samples or
263 clear descriptions of the alternative goods or services that the
264 dealer desires to use. The licensee or applicant shall have the
265 opportunity to evaluate the alternative goods or services for up
266 to 30 days to determine whether it will provide a written
267 approval to the motor vehicle dealer to use said alternative
268 goods or services. Approval may not be unreasonably withheld by
269 the applicant or licensee. If the motor vehicle dealer does not
270 receive a response from the applicant or licensee within 30
271 days, approval to use the alternative goods or services shall be
272 deemed granted. If a dealer using alternative goods or services
273 complies with the terms of this subsection and has received
274 approval from the licensee or applicant, the dealer shall not be
275 ineligible for all benefits described in the agreement,
276 standard, policy, program, incentive provision, or otherwise
277 solely for having used such alternative goods or services. As
278 used in this subsection, the term “goods or services” is limited
279 to such goods and services used to construct or renovate
280 dealership facilities, or furniture and fixtures at the
281 dealership facilities. The term does not include:
282 (a) Any intellectual property of the applicant or licensee,
283 including signage incorporating the applicant’s or licensee’s
284 trademark or copyright, or facility or building materials to the
285 extent that the applicant’s or licensee’s trademark is displayed
286 thereon;
287 (b) Any special tool and training as required by the
288 licensee or applicant;
289 (c) Any part to be used in repairs under warranty
290 obligations of an applicant or licensee;
291 (d) Any good or service paid for entirely by the applicant
292 or licensee; or
293 (e) Any applicant’s or licensee’s design or architectural
294 review service.
295 (41)(a) The applicant or licensee, by agreement, policy,
296 program, standard, or otherwise, requires a motor vehicle
297 dealer, directly or indirectly, to advance or pay for, or to
298 reimburse the applicant or licensee for, any costs related to
299 the creation, development, showing, placement, or publication in
300 any media of any advertisement for a motor vehicle; requires a
301 motor vehicle dealer to participate in, contribute to, affiliate
302 with, or join a dealer advertising or marketing group, fund,
303 pool, association, or other entity; or takes or threatens to
304 take any adverse action against a motor vehicle dealer that
305 refuses to join or participate in such group, fund, pool,
306 association, or other entity. As used in this subsection, the
307 term “adverse action” includes, but is not limited to, reducing
308 allocations, charging fees for a licensee’s or dealer’s
309 advertising or a marketing group’s advertising or marketing,
310 terminating or threatening to terminate the motor vehicle
311 dealer’s franchise agreement, reducing any incentive for which
312 the motor vehicle dealer is eligible, or engaging in any action
313 that fails to take into account the equities of the motor
314 vehicle dealer.
315 (b) The applicant or licensee requires a dealer to
316 participate in, or precludes a number of its motor vehicle
317 dealers in a designated market area from establishing, a
318 voluntary motor vehicle dealer advertising or marketing group,
319 fund, pool, association, or other entity. Except as provided in
320 an agreement, if a motor vehicle dealer chooses to form an
321 independent advertising or marketing group, the applicant or
322 licensee is not required to fund such group.
323 (c) This subsection does not prohibit an applicant or
324 licensee from offering advertising or promotional materials to a
325 motor vehicle dealer for a fee or charge, if the use of such
326 advertising or promotional materials is voluntary for the motor
327 vehicle dealer.
328
329 A motor vehicle dealer who can demonstrate that a violation of,
330 or failure to comply with, any of the preceding provisions by an
331 applicant or licensee will or can adversely and pecuniarily
332 affect the complaining dealer, shall be entitled to pursue all
333 of the remedies, procedures, and rights of recovery available
334 under ss. 320.695 and 320.697.
335 Section 2. This act applies to all franchise agreements
336 entered into, renewed, or amended after October 1, 1988, except
337 to the extent that such application would impair valid
338 contractual agreements in violation of the State Constitution or
339 the United States Constitution.
340 Section 3. If any provision of this act or its application
341 to any person or circumstances is held invalid, the invalidity
342 does not affect other provisions or applications of this act
343 which can be given effect without the invalid provision or
344 application, and to this end the provisions of this act are
345 severable.
346 Section 4. This act shall take effect upon becoming a law.