Florida Senate - 2023                                     SB 712
       
       
        
       By Senator Avila
       
       
       
       
       
       39-00232C-23                                           2023712__
    1                        A bill to be entitled                      
    2         An act relating to motor vehicle sales; amending s.
    3         320.60, F.S.; revising definitions; defining the term
    4         “motor vehicle dealer association”; amending s.
    5         320.64, F.S.; prohibiting applicants and licensees
    6         from reserving a certain motor vehicle for a
    7         specifically named person; prohibiting applicants and
    8         licensees from requiring or incentivizing motor
    9         vehicle dealers to sell or lease particular motor
   10         vehicles to specifically named persons or at specific
   11         prices or profit margins; revising the definition of
   12         the term “unfair”; prohibiting applicants and
   13         licensees from engaging in certain activities of motor
   14         vehicle dealers; authorizing applicants, licensees,
   15         and common entities thereof to sell and activate
   16         remote electronic transmission of motor vehicle
   17         accessories, options, add-ons, features, improvements,
   18         or upgrades; providing procedures for sale or
   19         activation by applicants, licensees, and their common
   20         entities of permanent or temporary motor vehicle
   21         accessories, options, add-ons, features, improvements,
   22         or upgrades; amending s. 320.645, F.S.; authorizing
   23         specified entities without independent franchised
   24         dealers in this state to own, operate, or control a
   25         motor vehicle dealership in this state; making
   26         technical changes; revising exceptions for certain
   27         entities owning or operating a motor vehicle
   28         dealership in the state; requiring certain dealerships
   29         to be continually made available for sale under
   30         certain conditions; revising the definition of the
   31         term “independent person”; amending s. 320.695, F.S.;
   32         authorizing motor vehicle dealer associations to seek
   33         injunctive relief in the name of the Department of
   34         Highway Safety and Motor Vehicles; providing that the
   35         injunction may be issued without having to establish
   36         irreparable harm from a violation; providing an
   37         exception for motor vehicle dealer associations
   38         seeking injunctions; amending s. 320.699, F.S.;
   39         authorizing motor vehicle dealer associations to seek
   40         a declaration and adjudication of their members’
   41         rights with respect to certain alleged violations by
   42         an applicant or a licensee; providing an exception;
   43         providing an effective date.
   44          
   45  Be It Enacted by the Legislature of the State of Florida:
   46  
   47         Section 1. Present subsections (9), (10), (11), (12), (13),
   48  and (14) of section 320.60, Florida Statutes, are redesignated
   49  as subsections (10), (11), (12), (14), (17), and (9),
   50  respectively, a new subsection (13) is added to that section,
   51  and subsections (2) and (15) are amended, to read:
   52         320.60 Definitions for ss. 320.61-320.70.—Whenever used in
   53  ss. 320.61-320.70, unless the context otherwise requires, the
   54  following words and terms have the following meanings:
   55         (2) “Common entity” means a person:
   56         (a) Who is directly or indirectly either controlled by or
   57  has more than 30 percent of its equity interest directly or
   58  indirectly owned, beneficially or of record, through any form of
   59  ownership structure, by a manufacturer, an importer, a
   60  distributor, or a licensee, or an affiliate thereof; or
   61         (b)Who has more than 30 percent of its equity interest
   62  directly or indirectly controlled or owned, beneficially or of
   63  record, through any form of ownership structure, by one or more
   64  persons who also directly or indirectly control or own,
   65  beneficially or of record, more than 30 40 percent of the voting
   66  equity interests of a manufacturer, an importer, a distributor,
   67  or a licensee, or an affiliate thereof; or
   68         (b)Who shares directors or officers or partners with a
   69  manufacturer.
   70         (13)“Motor vehicle dealer association” means a not-for
   71  profit entity organized under the laws of this state and
   72  qualified as tax-exempt under s. 501(c)(6) of the Internal
   73  Revenue Code which acts as a trade association that primarily
   74  represents the interests of franchised motor vehicle dealers and
   75  has a membership of at least 500 franchised motor vehicle
   76  dealers as defined in s. 320.27(1)(c)1.
   77         (15) “Sell,” “selling,” “sold,” “exchange,” “retail sales,”
   78  and “leases” includes:
   79         (a)Accepting a deposit or receiving a payment for the
   80  purchase, lease, exchange, subscription, or use of a motor
   81  vehicle;
   82         (b)Accepting a reservation from a retail consumer for a
   83  specific motor vehicle identified by a vehicle identification
   84  number or other product identifier;
   85         (c)Setting the retail price for the purchase, lease, or
   86  exchange of a motor vehicle;
   87         (d)Offering or negotiating with a retail consumer the
   88  terms for the purchase, lease, financing, or exchange of a motor
   89  vehicle;
   90         (e)Negotiating directly with a retail consumer the value
   91  of a motor vehicle being traded in as part of the purchase,
   92  lease, exchange, subscription, or use of a motor vehicle;
   93         (f)Offering or negotiating directly with a retail consumer
   94  any service contract, extended warranty, vehicle maintenance
   95  contract, or guaranteed asset protection agreement or any other
   96  vehicle-related products or services in connection with the
   97  purchase, lease, or exchange of a motor vehicle;
   98         (g) Any transaction where the title of a motor vehicle or a
   99  used motor vehicle is transferred to a retail consumer; or, and
  100  also
  101         (h) Any retail lease transaction where a retail consumer
  102  customer leases a vehicle for a period of at least 12 months,
  103  but the transaction does not include administering lease
  104  agreements, taking assignments of leases, or receiving payments
  105  under a lease agreement that was originated by a motor vehicle
  106  dealer. Establishing a price for sale pursuant to s. 320.64(24)
  107  does not constitute a sale or lease.
  108         Section 2. Subsections (18), (23), and (24) of section
  109  320.64, Florida Statutes, are amended to read:
  110         320.64 Denial, suspension, or revocation of license;
  111  grounds.—A license of a licensee under s. 320.61 may be denied,
  112  suspended, or revoked within the entire state or at any specific
  113  location or locations within the state at which the applicant or
  114  licensee engages or proposes to engage in business, upon proof
  115  that the section was violated with sufficient frequency to
  116  establish a pattern of wrongdoing, and a licensee or applicant
  117  shall be liable for claims and remedies provided in ss. 320.695
  118  and 320.697 for any violation of any of the following
  119  provisions. A licensee is prohibited from committing the
  120  following acts:
  121         (18) The applicant or licensee has established a system of
  122  motor vehicle allocation or distribution or has implemented a
  123  system of allocation or distribution of motor vehicles to one or
  124  more of its franchised motor vehicle dealers which:
  125         (a) Reduces or alters allocations or supplies of new motor
  126  vehicles to the dealer to achieve, directly or indirectly, a
  127  purpose that is prohibited by ss. 320.60-320.70;
  128         (b)Conditionally or unconditionally reserves a specific
  129  motor vehicle identified by vehicle identification number or
  130  other unique identifier for a specifically named person;
  131         (c)Requires or incentivizes motor vehicle dealers to sell
  132  or lease, or to negotiate the sale or lease of, a specific motor
  133  vehicle identified by vehicle identification number or other
  134  unique identifier to a specifically named person;
  135         (d)Requires or incentivizes motor vehicle dealers to sell
  136  or lease a motor vehicle at a specified price or profit margin;
  137  or
  138         (e)Is, or which otherwise is unfair, inequitable,
  139  unreasonably discriminatory, or not supportable by reason and
  140  good cause after considering the equities of the affected motor
  141  vehicles dealer or dealers. As used in this paragraph, “unfair”
  142  includes, but is not limited to, refusing or failing to offer to
  143  any dealer an equitable supply of new vehicles under its
  144  franchise, by model, mix, or color, as the licensee offers or
  145  allocates to its other same line-make dealers in this state or
  146  using the number of motor vehicles pre-ordered or reserved by
  147  consumers as a factor in determining the allocation of motor
  148  vehicles to motor vehicle dealers.
  149  
  150  An applicant or licensee shall maintain for 3 years records that
  151  describe its methods or formula of allocation and distribution
  152  of its motor vehicles and records of its actual allocation and
  153  distribution of motor vehicles to its motor vehicle dealers in
  154  this state. As used in this subsection, “unfair” includes,
  155  without limitation, the refusal or failure to offer to any
  156  dealer an equitable supply of new vehicles under its franchise,
  157  by model, mix, or colors as the licensee offers or allocates to
  158  its other same line-make dealers in the state.
  159         (23) The applicant or licensee has engaged in any of the
  160  activities of a motor vehicle dealer as defined in s.
  161  320.60(11)(a) or (15) or has competed or is competing with
  162  respect to any activity covered by the franchise agreement with
  163  a motor vehicle dealer of the same line-make located in this
  164  state with whom the applicant or licensee has entered into a
  165  franchise agreement, except as permitted in s. 320.645 or in
  166  subsection (24) with respect to the remote electronic
  167  transmission of a motor vehicle accessory, option, add-on,
  168  feature, improvement, or upgrade.
  169         (24) The applicant or licensee, or common entity thereof
  170  has sold or leased a motor vehicle of a line-make manufactured,
  171  imported, or distributed by the applicant or licensee, or has
  172  for a motor vehicle of such line-make sold or activated for a
  173  fee any permanent or temporary motor vehicle accessory, option,
  174  add-on, feature, improvement, or upgrade, to any retail consumer
  175  in the state except through a motor vehicle dealer properly
  176  licensed pursuant to s. 320.27 and holding a franchise agreement
  177  for the line-make that includes the motor vehicle.
  178  Notwithstanding this subsection, an applicant, licensee, or
  179  their common entity may sell or activate for a fee a permanent
  180  or temporary motor vehicle accessory, option, add-on, feature,
  181  improvement, or upgrade for a motor vehicle of a line-make
  182  manufactured, imported, or distributed by the applicant or
  183  licensee and registered in Florida only if the accessory,
  184  option, add-on, feature, improvement, or upgrade is provided
  185  directly to the motor vehicle through remote electronic
  186  transmission, provided that if such motor vehicle was sold or
  187  leased as new by a Florida franchised motor vehicle dealer
  188  within the 3-year period preceding such remote electronic
  189  transmission, then the applicant or licensee must pay such
  190  Florida franchised motor vehicle dealer a minimum of 10 percent
  191  of the gross revenue received by the applicant, licensee, or
  192  common entity for such sale or activation and renewals during
  193  such 3-year period. The applicant or licensee must provide each
  194  of its franchised dealers with a quarterly statement of the
  195  revenue received by the applicant, licensee, or their common
  196  entity during that quarter for such sales or activations and
  197  renewals relating to those vehicles sold or leased by the dealer
  198  during the preceding 3 years. This section does not apply to
  199  sales by the applicant or licensee of motor vehicles to its
  200  current employees, employees of companies affiliated by common
  201  ownership, charitable not-for-profit organizations, and the
  202  Federal Government.
  203  
  204  A motor vehicle dealer who can demonstrate that a violation of,
  205  or failure to comply with, any of the preceding provisions by an
  206  applicant or licensee will or may adversely and pecuniarily
  207  affect the complaining dealer, shall be entitled to pursue all
  208  of the remedies, procedures, and rights of recovery available
  209  under ss. 320.695 and 320.697.
  210         Section 3. Subsections (1) and (2) of section 320.645,
  211  Florida Statutes, are amended to read:
  212         320.645 Restriction upon ownership of dealership by
  213  licensee.—
  214         (1) No licensee, manufacturer, importer, or distributor,
  215  manufacturer, or agent of the licensee, a manufacturer,
  216  importer, or distributor, or any parent, subsidiary, common
  217  entity, or officer, or employed representative of the licensee,
  218  manufacturer, importer, or distributor shall directly or
  219  indirectly shall own, or operate, or control by contract,
  220  agreement, or otherwise either directly or indirectly, a motor
  221  vehicle dealership for any line-make in this state if the
  222  licensee, manufacturer, importer, or distributor has
  223  manufactured, imported, or distributed for the sale or service
  224  of motor vehicles of any line-make which have been or are
  225  offered for sale under a franchise agreement with a motor
  226  vehicle dealer in this state with an independent person. Any
  227  person who is not prohibited by this section from owning,
  228  operating, or controlling a motor vehicle dealership may be
  229  issued a license pursuant to s. 320.27. Any person prohibited by
  230  this section from owning, operating, or controlling a motor
  231  vehicle dealership. A licensee may not be issued a motor vehicle
  232  dealer license pursuant to s. 320.27. However, no such licensee
  233  subject to the prohibition in this section will be deemed to be
  234  in violation of this section:
  235         (a) When operating a motor vehicle dealership for a
  236  temporary period, not to exceed 1 year, during the transition
  237  from one owner of the motor vehicle dealership to another;
  238         (b) When operating a motor vehicle dealership temporarily
  239  for a reasonable period for the exclusive purpose of broadening
  240  the diversity of its dealer body and enhancing opportunities for
  241  qualified persons who are part of a group that has historically
  242  been underrepresented in its dealer body, or for other qualified
  243  persons who the licensee deems lack the resources to purchase or
  244  capitalize the dealership outright, in a bona fide relationship
  245  with an independent person, other than a licensee or its agent
  246  or affiliate, who has made a significant investment that is
  247  subject to loss in the dealership within the dealership’s first
  248  year of operation and who can reasonably expect to acquire full
  249  ownership of the dealership on reasonable terms and conditions;
  250  or
  251         (c) If the department determines, after a hearing on the
  252  matter, pursuant to chapter 120, at the request of any person,
  253  that there is no independent person available in the community
  254  or territory to own and operate the motor vehicle dealership in
  255  a manner consistent with the public interest. This subsection
  256  shall only apply if the motor vehicle dealership at issue sells
  257  motor vehicles of a line-make which, at the time of the hearing,
  258  are offered for sale by at least one other existing motor
  259  vehicle dealership not owned, operated, or controlled by the
  260  licensee, an officer or employed representative of the licensee,
  261  a parent, subsidiary, or common entity of the licensee, or a
  262  manufacturer, importer, or distributor. A motor vehicle dealer
  263  association shall have standing to intervene in any hearing held
  264  pursuant to this subsection.
  265  
  266  In the any such case of a, the licensee must continue to make
  267  the motor vehicle dealership owned or operated pursuant to
  268  paragraph (a), paragraph (b), or paragraph (c), the dealership
  269  must be continually made available for sale to an independent
  270  person at a fair and reasonable price. Approval of the sale of
  271  such a motor vehicle dealership to a proposed motor vehicle
  272  dealer shall not be unreasonably withheld.
  273         (2) As used in this chapter section, the term:
  274         (a) “Independent person” is a person who is not an agent,
  275  parent, subsidiary, common entity, officer, director, or
  276  employee of the licensee or employed representative of a
  277  licensee, manufacturer, importer, or distributor.
  278         (b) “Reasonable terms and conditions” requires that profits
  279  from the dealership are reasonably expected to be sufficient to
  280  allow full ownership of the dealership by the independent person
  281  within a reasonable time period not to exceed 10 years, which
  282  time period may be extended if there is a reasonable basis to do
  283  so and is not being sought to evade the purpose of this section;
  284  that the independent person has sufficient control to permit
  285  acquisition of ownership; and that the relationship cannot be
  286  terminated solely to avoid full ownership. The terms and
  287  conditions are not reasonable if they preclude the independent
  288  person from an expedited purchase of the dealership using a
  289  monetary source other than profits from the dealership’s
  290  operation; provided, however, that the independent person must
  291  pay or make an agreement to pay to the licensee any and all
  292  reasonable prepayment charges and costs, including all
  293  unrecouped restored losses, associated with the expedited
  294  purchase of the dealership. For the purpose of this section,
  295  unrecouped restored losses are moneys that the manufacturer has
  296  provided to the dealership to restore losses of the dealership
  297  that the manufacturer has not been paid back through profits of
  298  the dealership.
  299         (c) “Significant investment” means a reasonable amount,
  300  considering the reasonable capital requirements of the
  301  dealership, acquired and obtained from sources other than the
  302  licensee or any of its affiliates and not encumbered by the
  303  person’s interest in the dealership.
  304         Section 4. Section 320.695, Florida Statutes, is amended to
  305  read:
  306         320.695 Injunction.—In addition to the remedies provided in
  307  this chapter, and notwithstanding the existence of any adequate
  308  remedy at law, the department, or any motor vehicle dealer, or
  309  any motor vehicle dealer association in the name of the
  310  department and state and for the use and benefit of the motor
  311  vehicle dealer or motor vehicle dealer association, is
  312  authorized to make application to any court of competent
  313  jurisdiction circuit court of the state for the grant, upon a
  314  hearing and for cause shown, of a temporary or permanent
  315  injunction, or both, restraining any person from acting as a
  316  licensee under the terms of ss. 320.60-320.70 without being
  317  properly licensed hereunder, or from violating or continuing to
  318  violate any of the provisions of ss. 320.60-320.70, or from
  319  failing or refusing to comply with the requirements of this law
  320  or any rule or regulation adopted hereunder. Such injunction
  321  shall be issued without bond. A single act in violation of the
  322  provisions of ss. 320.60-320.70 shall be sufficient to authorize
  323  the issuance of an injunction without the necessity of
  324  establishing irreparable harm therefrom. However, this statutory
  325  remedy shall not be applicable to any motor vehicle dealer after
  326  final determination by the department under s. 320.641(3).
  327  Notwithstanding this subsection, a motor vehicle dealer
  328  association may not seek an injunction pursuant to this section
  329  for a violation of any provision of ss. 320.61-320.70 against an
  330  applicant, licensee, manufacturer, importer, or distributor that
  331  has never, and has no common entity that has ever, manufactured,
  332  imported, or distributed motor vehicles that were offered for
  333  sale pursuant to a franchise agreement in this state with an
  334  independent person.
  335         Section 5. Section 320.699, Florida Statutes, is amended to
  336  read:
  337         320.699 Administrative hearings and adjudications;
  338  procedure.—
  339         (1) A motor vehicle dealer, or person with entitlements to
  340  or in a motor vehicle dealer, who is directly and adversely
  341  affected by the action or conduct of an applicant or licensee
  342  which is alleged to be in violation of any provision of ss.
  343  320.60-320.70, or a motor vehicle dealer association with one or
  344  more members who are directly and adversely affected by the
  345  action or conduct of an applicant or licensee which is alleged
  346  to be in violation of any provision of ss. 320.60-320.70, may
  347  seek a declaration and adjudication of its rights or the rights
  348  of its member with respect to the alleged action or conduct of
  349  the applicant or licensee by:
  350         (a) filing with the department a request for a proceeding
  351  and an administrative hearing which conforms substantially with
  352  the requirements of ss. 120.569 and 120.57. Notwithstanding this
  353  subsection, a motor vehicle dealer association may not seek a
  354  declaration or adjudication pursuant to this section for a
  355  violation of any provision of ss. 320.61-320.70 against an
  356  applicant or licensee that has never, and has no common entity
  357  that has ever, manufactured, imported, or distributed motor
  358  vehicles that were offered for sale pursuant to a franchise
  359  agreement in this state with an independent person.; or
  360         (2)(b)A motor vehicle dealer with standing pursuant to s.
  361  320.642(3) may file Filing with the department a written
  362  objection or notice of protest pursuant to s. 320.642.
  363         (3)(2) If a written objection or notice of protest is filed
  364  with the department under subsection (2) paragraph (1)(b), a
  365  hearing shall be held not sooner than 180 days nor later than
  366  240 days from the date of filing of the first objection or
  367  notice of protest, unless the time is extended by the
  368  administrative law judge for good cause shown. This subsection
  369  shall govern the schedule of hearings in lieu of any other
  370  provision of law with respect to administrative hearings
  371  conducted by the Department of Highway Safety and Motor Vehicles
  372  or the Division of Administrative Hearings, including
  373  performance standards of state agencies, which may be included
  374  in current and future appropriations acts.
  375         Section 6. This act shall take effect July 1, 2023.