Florida Senate - 2017 CS for CS for CS for SB 466
By the Committees on Rules; Commerce and Tourism; and
Transportation; and Senators Hutson, Gainer, and Broxson
595-04439-17 2017466c3
1 A bill to be entitled
2 An act relating to motor vehicle warranty repairs and
3 recall repairs; amending s. 320.64, F.S.; prohibiting
4 a manufacturer, factory branch, distributor, or
5 importer from denying a claim of a motor vehicle
6 dealer, reducing compensation to a motor vehicle
7 dealer, or processing a chargeback to a motor vehicle
8 dealer because of specified circumstances; creating s.
9 320.6407, F.S.; requiring a manufacturer, factory
10 branch, distributor, or importer to compensate a motor
11 vehicle dealer for a used motor vehicle under
12 specified circumstances; providing retroactive
13 applicability; specifying the purpose of a certain
14 written statement; requiring the manufacturer, factory
15 branch, distributor, or importer to pay the
16 compensation within a specified timeframe after the
17 motor vehicle dealer’s application for payment;
18 requiring such applications to be submitted monthly,
19 as necessary, through the manufacturer’s, factory
20 branch’s, distributor’s, or importer’s warranty
21 application system or certain other system or process;
22 providing for calculation of the amount of
23 compensation; providing applicability; reenacting s.
24 320.6992, F.S., relating to applicability of specified
25 provisions to systems of distribution of motor
26 vehicles in this state, to incorporate s. 320.6407,
27 F.S., as created by the act, in references thereto;
28 providing an effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
32 Section 1. Subsection (41) is added to section 320.64,
33 Florida Statutes, to read:
34 320.64 Denial, suspension, or revocation of license;
35 grounds.—A license of a licensee under s. 320.61 may be denied,
36 suspended, or revoked within the entire state or at any specific
37 location or locations within the state at which the applicant or
38 licensee engages or proposes to engage in business, upon proof
39 that the section was violated with sufficient frequency to
40 establish a pattern of wrongdoing, and a licensee or applicant
41 shall be liable for claims and remedies provided in ss. 320.695
42 and 320.697 for any violation of any of the following
43 provisions. A licensee is prohibited from committing the
44 following acts:
45 (41) Notwithstanding the terms of any franchise agreement,
46 and except as authorized under subsection (25), a licensee may
47 not deny a claim of a motor vehicle dealer, reduce the amount of
48 compensation to a motor vehicle dealer, or process a chargeback
49 to a motor vehicle dealer for performing covered warranty
50 repairs or required recall repairs on a used motor vehicle due
51 to either of the following circumstances:
52 (a) Discovery by the motor vehicle dealer of the need for
53 warranty or recall repairs during the course of a separate
54 repair requested by the consumer.
55 (b) Notification by the motor vehicle dealer to the
56 consumer of the need for recall repairs after the licensee or an
57 authorized governmental agency issues a notice of an outstanding
58 recall for a safety-related defect.
59
60 A motor vehicle dealer who can demonstrate that a violation of,
61 or failure to comply with, any of the preceding provisions by an
62 applicant or licensee will or can adversely and pecuniarily
63 affect the complaining dealer, shall be entitled to pursue all
64 of the remedies, procedures, and rights of recovery available
65 under ss. 320.695 and 320.697.
66 Section 2. Section 320.6407, Florida Statutes, is created
67 to read:
68 320.6407 Recall notices under franchise agreements;
69 compensation.—
70 (1) As provided in subsection (3), a licensee that has
71 entered into a franchise agreement with a motor vehicle dealer
72 must compensate the motor vehicle dealer for a used motor
73 vehicle:
74 (a) That is of the same make and model manufactured,
75 imported, or distributed by the licensee;
76 (b) That is subject to a recall notice issued by the
77 licensee or an authorized governmental agency, including a
78 recall notice issued before July 1, 2017, regardless of whether
79 the vehicle is identified by its vehicle identification number;
80 (c) That is held by the motor vehicle dealer in the
81 dealer’s inventory at the time the recall notice is issued or
82 that is taken by the motor vehicle dealer into the dealer’s
83 inventory after the recall notice as a result of a retail
84 consumer trade-in or a lease return to the dealer inventory in
85 accordance with an applicable lease contract;
86 (d) That cannot be repaired due to the unavailability,
87 within 30 days after issuance of the recall notice, of a remedy
88 or parts necessary for the motor vehicle dealer to make the
89 recall repair; and
90 (e) For which the licensee has not issued a written
91 statement to the motor vehicle dealer indicating that the used
92 motor vehicle may be sold or delivered to a retail customer
93 before completion of the recall repair. The purpose of such
94 written statement is to provide notice to the motor vehicle
95 dealer that the vehicle may be sold or delivered based solely on
96 the specific recall notice and is not intended to address any
97 other aspect of the vehicle unrelated to the recall notice.
98 (2) The licensee shall pay the required compensation within
99 30 days after the motor vehicle dealer’s application for
100 payment. Applications for payment must be submitted monthly, as
101 necessary, through the licensee’s existing warranty application
102 system or another system or process established by the licensee
103 which is not unduly burdensome or which does not require
104 information unnecessary for the payment.
105 (3) Compensation under this section must be the greater of:
106 (a) Payment at a rate of at least 1.5 percent per month of
107 the motor vehicle value, as determined by the average Black Book
108 value of the corresponding model year vehicle of average
109 condition, of each eligible used motor vehicle in the motor
110 vehicle dealer’s inventory for each month that the dealer does
111 not receive a remedy and parts to complete the required recall
112 repair. Such payment must be prorated for any period less than 1
113 month based on the number of days during the month each eligible
114 used motor vehicle is in the motor vehicle dealer’s inventory.
115 Payment shall be calculated from the 31st day after the recall
116 was issued, the 31st day after the vehicle was acquired, or July
117 1, 2017, whichever is latest.
118 (b) Payment under a national program applicable to all
119 motor vehicle dealers holding a franchise agreement with the
120 licensee for the motor vehicle dealer’s costs associated with
121 holding the eligible used motor vehicles.
122 (4) For purposes of this section, a licensee does not
123 include a motorcycle manufacturer, distributor, or importer.
124 Section 3. For the purpose of incorporating section
125 320.6407, Florida Statutes, as created by this act, in
126 references thereto, section 320.6992, Florida Statutes, is
127 reenacted to read:
128 320.6992 Application.—Sections 320.60-320.70, including
129 amendments to ss. 320.60-320.70, apply to all presently existing
130 or hereafter established systems of distribution of motor
131 vehicles in this state, except to the extent that such
132 application would impair valid contractual agreements in
133 violation of the State Constitution or Federal Constitution.
134 Sections 320.60-320.70 do not apply to any judicial or
135 administrative proceeding pending as of October 1, 1988. All
136 agreements renewed, amended, or entered into subsequent to
137 October 1, 1988, shall be governed by ss. 320.60-320.70,
138 including any amendments to ss. 320.60-320.70 which have been or
139 may be from time to time adopted, unless the amendment
140 specifically provides otherwise, and except to the extent that
141 such application would impair valid contractual agreements in
142 violation of the State Constitution or Federal Constitution.
143 Section 4. This act shall take effect July 1, 2017.