January 24, 2021
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_h1525__
HB 1525

1
A bill to be entitled
2An act relating to motor vehicle dealerships; amending s.
3320.64, F.S.; revising provisions prohibiting certain acts
4by a motor vehicle manufacturer, factory branch,
5distributor, or importer licensed under specified
6provisions; revising conditions and procedures for certain
7audits; removing a presumption that a dealer had no actual
8knowledge that a customer intended to export or resell a
9motor vehicle; amending s. 320.642, F.S.; revising
10provisions for establishing an additional motor vehicle
11dealership in or relocating an existing dealer to a
12location within a community or territory where the same
13line-make vehicle is presently represented by a franchised
14motor vehicle dealer or dealers; revising notice
15requirements; revising provisions for denial of an
16application for a motor vehicle dealer license in any
17community or territory; revising provisions for evidence
18to be considered by the Department of Highway Safety and
19Motor Vehicles when evaluating the application; revising
20provisions under which a dealer has standing to protest a
21proposed additional or relocated motor vehicle dealer;
22revising provisions for a proposed addition or relocation
23concerning a dealership that performs only service;
24amending s. 320.643, F.S.; revising provisions for
25transfer, assignment, or sale of franchise agreements;
26prohibiting rejection of proposed transfer of interest in
27a motor vehicle dealer entity to a trust or other entity,
28or a beneficiary thereof, that is established for estate
29planning purposes; prohibiting placing certain conditions
30on such transfer; revising provisions for a hearing by the
31department or a court relating to a proposed transfer;
32providing for severability; providing an effective date.
33
34Be It Enacted by the Legislature of the State of Florida:
35
36     Section 1.  Subsections (25) and (26) of section 320.64,
37Florida Statutes, are amended to read:
38     320.64  Denial, suspension, or revocation of license;
39grounds.--A license of a licensee under s. 320.61 may be denied,
40suspended, or revoked within the entire state or at any specific
41location or locations within the state at which the applicant or
42licensee engages or proposes to engage in business, upon proof
43that the section was violated with sufficient frequency to
44establish a pattern of wrongdoing, and a licensee or applicant
45shall be liable for claims and remedies provided in ss. 320.695
46and 320.697 for any violation of any of the following
47provisions. A licensee is prohibited from committing the
48following acts:
49     (25)  The applicant or licensee has undertaken an audit of
50warranty, maintenance, and other service-related payments or of
51incentive payments, including payments to a motor vehicle dealer
52under any licensee-issued program, policy, or other benefit that
53previously have been paid to a motor vehicle dealer, in
54violation of this section or has failed to comply with any of
55its obligations under s. 320.696. An applicant or licensee may
56reasonably and periodically audit a motor vehicle dealer to
57determine the validity of paid claims as provided in s. 320.696.
58Audits Audit of warranty, maintenance, and other service-related
59payments shall only be performed by an applicant or licensee
60during for the 1-year period immediately following the date the
61claim was paid. Audits Audit of incentive payments shall only be
62performed by an applicant or licensee during for an 18-month
63period immediately following the date the incentive was paid.
64After those time periods have elapsed, all warranty,
65maintenance, and other service-related payments and incentive
66payments shall be deemed final and incontrovertible for any
67reason cognizant under any applicable law and the motor vehicle
68dealer shall not be subject to any charge back or repayment. An
69applicant or licensee may deny a claim or, as a result of a
70timely conducted audit, charge back a motor vehicle dealer for
71warranty, maintenance, or other service-related payments or
72incentive payments only if An applicant or licensee shall not
73deny a claim or charge a motor vehicle dealer back subsequent to
74the payment of the claim unless the applicant or licensee can
75show that the warranty, maintenance, or other service-related
76claim or incentive claim was false or fraudulent or that the
77motor vehicle dealer failed to substantially comply with the
78reasonable, written, and uniformly applied procedures of the
79applicant or licensee for such repairs or incentives. An
80applicant or licensee may not charge a motor vehicle dealer back
81subsequent to the payment of a warranty, maintenance, or
82service-related claim or incentive claim unless, within 30 days
83or a timely conducted audit, a representative of the applicant
84or licensee first meets in person, by telephone, or by video
85teleconference with an officer or employee of the dealer
86designated by the motor vehicle dealer. At such meeting the
87applicant or licensee must provide a detailed explanation, with
88supporting documentation, as to the basis for each of the claims
89for which the applicant or licensee proposed a charge-back to
90the dealer and a written statement containing the basis upon
91which the motor vehicle dealer was selected for audit or review.
92Thereafter, the applicant or licensee must provide the motor
93vehicle dealer's representative a reasonable period after the
94meeting within which to respond to the proposed charge-backs,
95with such period to be commensurate with the volume of claims
96under consideration, but in no case less than 45 days after the
97meeting. The applicant or licensee is prohibited from changing
98or altering the basis for each of the proposed charge-backs as
99presented to the motor vehicle dealer's representative following
100the conclusion of the audit unless the applicant or licensee
101receives new information affecting the basis for one or more
102charge-backs and that new information is received within 60 days
103after the conclusion of the timely conducted audit. If the
104applicant or licensee claims the existence of new information,
105the dealer must be given the same right to a meeting within 30
106days after the applicant's or licensee's receipt of the new
107information and right to respond as when the charge-back was
108originally presented.
109     (26)  Notwithstanding the terms of any franchise agreement,
110including any licensee's program, policy, or procedure, the
111applicant or licensee has refused to allocate, sell, or deliver
112motor vehicles; charged back or withheld payments or other
113things of value for which the dealer is otherwise eligible under
114a sales promotion, program, or contest; prevented a motor
115vehicle dealer from participating in any promotion, program, or
116contest; or has taken or threatened to take any adverse action
117against a dealer, including charge-backs, reducing vehicle
118allocations, or terminating or threatening to terminate a
119franchise because the dealer sold or leased a motor vehicle to a
120customer who exported the vehicle to a foreign country or who
121resold the vehicle, unless the licensee proves that the dealer
122had actual knowledge that the customer intended to export or
123resell the motor vehicle. There is a conclusive presumption that
124the dealer had no actual knowledge if the vehicle is titled or
125registered in any state in this country.
126
127A motor vehicle dealer who can demonstrate that a violation of,
128or failure to comply with, any of the preceding provisions by an
129applicant or licensee will or can adversely and pecuniarily
130affect the complaining dealer, shall be entitled to pursue all
131of the remedies, procedures, and rights of recovery available
132under ss. 320.695 and 320.697.
133     Section 2.  Subsections (1) and (2), paragraph (a) of
134subsection (3), and paragraphs (b) and (c) of subsection (6) of
135section 320.642, Florida Statutes, are amended to read:
136     320.642  Dealer licenses in areas previously served;
137procedure.--
138     (1)  Any licensee who proposes to establish an additional
139motor vehicle dealership or permit the relocation of an existing
140dealer to a location within a community or territory where the
141same line-make vehicle is presently represented by a franchised
142motor vehicle dealer or dealers shall give written notice of its
143intention to the department. Such notice shall state:
144     (a)  The specific location at which the additional or
145relocated motor vehicle dealership will be established.
146     (b)  The date on or after which the licensee intends to be
147engaged in business with the additional or relocated motor
148vehicle dealer at the proposed location.
149     (c)  The identity of all motor vehicle dealers who are
150franchised to sell the same line-make vehicle with licensed
151locations in the county and or any contiguous county to the
152county where the additional or relocated motor vehicle dealer is
153proposed to be located.
154     (d)  The names and addresses of the dealer-operator and
155principal investors in the proposed additional or relocated
156motor vehicle dealership.
157
158Immediately upon receipt of such notice the department shall
159cause a notice to be published in the Florida Administrative
160Weekly. The published notice shall state that a petition or
161complaint by any dealer with standing to protest pursuant to
162subsection (3) must be filed not more than 45 30 days after from
163the date of publication of the notice in the Florida
164Administrative Weekly. The published notice shall describe and
165identify the proposed dealership sought to be licensed, and the
166department shall cause a copy of the notice to be mailed to
167those dealers identified in the licensee's notice under
168paragraph (c).
169     (2)(a)  An application for a motor vehicle dealer license
170in any community or territory shall be denied when:
171     1.  A timely protest is filed by a presently existing
172franchised motor vehicle dealer with standing to protest as
173defined in subsection (3); and
174     2.  The licensee fails to show that the existing franchised
175dealer or dealers who register new motor vehicle retail sales or
176retail leases of the same line-make in the community or
177territory of the proposed dealership are not providing adequate
178representation, adequate competition, and convenient customer
179service of such line-make motor vehicles in a manner beneficial
180to the public interest in such community or territory. The
181ultimate burden of proof in establishing inadequate
182representation, inadequate competition, and inconvenient
183customer service shall be on the licensee. Any geographic
184comparison area used to evaluate the performance of the line-
185make or of the existing motor vehicle dealer or dealers within
186the community or territory must be reasonably similar in
187demographic traits to the community or territory of the proposed
188site, including such factors as age, income, education, vehicle
189size, class, or model preference, and product popularity, and
190the comparison area must not be smaller than the largest entire
191county in which any of the protesting dealers are located.
192Reasonably expected market sales or service penetration must be
193measured with respect to the community or territory as a whole
194and not with respect to any part thereof or any identifiable
195plot therein.
196     (b)  In determining whether the existing franchised motor
197vehicle dealer or dealers are providing adequate representation,
198adequate competition, and convenient customer service in the
199community or territory for the line-make, the department may
200consider evidence of any factor deemed material by the finder of
201fact in the unique circumstances, which may include, but is not
202limited to:
203     1.  The market share and return on investment impact of the
204establishment of the proposed or relocated dealer on the
205consumers, public interest, existing dealers, and the licensee;
206provided, however, that financial impact other than return on
207investment may only be considered with respect to the protesting
208dealer or dealers.
209     2.  The size and permanency of investment reasonably made
210and reasonable obligations incurred by the existing dealer or
211dealers to perform their obligations under the dealer agreement,
212including requirements made by the licensee up to 5 years prior
213to the date of the publication of the notice.
214     3.  The reasonably expected market penetration of the line-
215make motor vehicle for the community or territory involved,
216after consideration of all factors which may affect such said
217penetration, including, but not limited to, demographic factors
218such as age, income, education, vehicle size, class, or model
219preference, line-make, product popularity, retail lease
220transactions, reasonably foreseeable economic projections,
221financial expectations, availability of reasonable terms and
222reasonable amounts of credit to prospective customers, or other
223factors affecting sales to consumers of the community or
224territory.
225     4.  Any actions by the licensee licensees in denying its
226existing dealer or dealers of the same line-make the opportunity
227for reasonable growth, market expansion, or relocation,
228including the availability of line-make vehicles by model, in
229keeping with the reasonable expectations of the licensee in
230providing an adequate number of dealers in the community or
231territory, and the licensee, its common entity, making or there
232otherwise being credit available to the existing dealers in
233reasonable amounts and on reasonable terms.
234     5.  Any attempts by the licensee to coerce the existing
235dealer or dealers into consenting to additional or relocated
236franchises of the same line-make in the community or territory.
237     6.  Distance, travel time, traffic patterns, and
238accessibility, between the existing dealer or dealers of the
239same line-make and the location of the proposed additional or
240relocated dealer, for prospective customers.
241     7.  Whether there will likely be a material positive impact
242and a material benefit benefits to consumers will likely occur
243from the establishment or relocation of the proposed dealership
244which will not cannot be obtained by other geographic or
245demographic changes or expected changes in the community or
246territory, or by a material increase in advertising by the
247licensee.
248     8.  Whether the protesting dealer or dealers are in
249substantial compliance with their dealer agreement.
250     9.  Whether there is adequate interbrand and intrabrand
251competition with respect to such said line-make in the community
252or territory and adequately convenient consumer care for the
253motor vehicles of the line-make, including the adequacy of sales
254and service facilities.
255     10.  Whether the establishment or relocation of the
256proposed dealership is appears to be warranted and justified
257based on economic and marketing conditions pertinent to dealers
258competing in the community or territory, including anticipated
259future changes.
260     11.  The volume of registrations and service business
261transacted by the existing dealer or dealers of the same line-
262make in the relevant community or territory of the proposed
263dealership.
264     12.  The past and reasonably foreseeable expected growth or
265decline in population, density of population, and new motor
266vehicle registrations in the community or territory of the
267proposed dealership for competing motor vehicles, and whether
268existing same line-make dealers will be unable to adjust their
269dealership operations to adequately deal with such changes.
270     13.  Whether the licensee has provided marketing and
271advertising support of its line-make in the community or
272territory on a basis comparable to its interbrand competitors.
273     14.  Whether the economic conditions reasonably forecasted
274by the licensee for the foreseeable future will enable all
275existing same line-make dealers and the proposed new or
276relocated dealership the opportunity for a reasonable return on
277their investment, including supplying an adequate number of
278every model of the licensee's new motor vehicles to them.
279     (3)  An existing franchised motor vehicle dealer or dealers
280shall have standing to protest a proposed additional or
281relocated motor vehicle dealer where the existing motor vehicle
282dealer or dealers have a franchise agreement for the same line-
283make vehicle to be sold or serviced by the proposed additional
284or relocated motor vehicle dealer and are physically located so
285as to meet or satisfy any of the following requirements or
286conditions:
287     (a)  If the proposed additional or relocated motor vehicle
288dealer is to be located in a county with a population of less
289than 300,000 according to the most recent data of the United
290States Census Bureau or the data of the Bureau of Economic and
291Business Research of the University of Florida:
292     1.  The proposed additional or relocated motor vehicle
293dealer is to be located in the area designated or described as
294the area of responsibility, or such similarly designated area,
295including the entire area designated as a multiple-point area,
296in the franchise agreement or in any related document or
297commitment with the existing motor vehicle dealer or dealers of
298the same line-make as such agreement existed on or after July 1,
2992009 upon October 1, 1988;
300     2.  The existing motor vehicle dealer or dealers of the
301same line-make have a licensed franchise location within a
302radius of 20 miles of the location of the proposed additional or
303relocated motor vehicle dealer; or
304     3.  Any existing motor vehicle dealer or dealers of the
305same line-make can establish that during any 12-month period of
306the 36-month period preceding the filing of the licensee's
307application for the proposed dealership, such dealer or its
308predecessor made 25 percent of its retail sales of new motor
309vehicles to persons whose registered household addresses were
310located within a radius of 20 miles of the location of the
311proposed additional or relocated motor vehicle dealer; provided
312such existing dealer is located in the same county or any county
313contiguous to the county where the additional or relocated
314dealer is proposed to be located.
315     (6)  When a proposed addition or relocation concerns a
316dealership that performs or is to perform only service, as
317defined in s. 320.60(16), and will not or does not sell or lease
318new motor vehicles, as defined in s. 320.60(15), the proposal
319shall be subject to notice and protest pursuant to the
320provisions of this section.
321     (b)  The addition or relocation of a service-only
322dealership shall not be subject to protest if:
323     1.  The applicant for the service-only dealership location
324is an existing motor vehicle dealer of the same line-make as the
325proposed additional or relocated service-only dealership;
326     2.  There is no existing dealer of the same line-make
327closer than the applicant to the proposed location of the
328additional or relocated service-only dealership; and
329     3.  The proposed location of the additional or relocated
330service-only dealership is at least 15 7 miles from all existing
331motor vehicle dealerships of the same line-make, other than
332motor vehicle dealerships owned by the applicant.
333     (c)  In determining whether existing franchised motor
334vehicle dealers are providing adequate representation, adequate
335competition, and convenient customer service representations in
336the community or territory for the line-make in question in a
337protest of the proposed addition or relocation of a service-only
338dealership, the department may consider the elements set forth
339in paragraph (2)(b), provided:
340     1.  With respect to subparagraph (2)(b)1., only the impact
341as it relates to service may be considered;
342     2.  Subparagraph (2)(b)3. shall not be considered;
343     3.  With respect to subparagraph (2)(b)9., only service
344facilities shall be considered; and
345     4.  With respect to subparagraph (2)(b)11., only the volume
346of service business transacted shall be considered.
347     Section 3.  Section 320.643, Florida Statutes, is amended
348to read:
349     320.643  Transfer, assignment, or sale of franchise
350agreements.--
351     (1)(a)  Notwithstanding the terms of any franchise
352agreement, a licensee shall not, by contract or otherwise, fail
353or refuse to give effect to, prevent, prohibit, or penalize or
354attempt to refuse to give effect to, prohibit, or penalize any
355motor vehicle dealer from selling, assigning, transferring,
356alienating, or otherwise disposing of its franchise agreement to
357any other person or persons, including a corporation established
358or existing for the purpose of owning or holding a franchise
359agreement, unless the licensee proves at a hearing pursuant to a
360complaint filed by a motor vehicle dealer under this section
361that such sale, transfer, alienation, or other disposition is to
362a person who is not, or whose controlling executive management
363is not, of good moral character or does not meet the written,
364reasonable, and uniformly applied standards or qualifications of
365the licensee relating to financial qualifications of the
366transferee and business experience of the transferee or the
367transferee's executive management. A motor vehicle dealer who
368desires to sell, assign, transfer, alienate, or otherwise
369dispose of a franchise shall notify, or cause the proposed
370transferee to notify, the licensee, in writing, setting forth
371the prospective transferee's name, address, financial
372qualifications, and business experience during the previous 5
373years. A licensee who receives such notice may, within 60 days
374following such receipt, notify the motor vehicle dealer, in
375writing, that the proposed transferee is not a person qualified
376to be a transferee under this section and setting forth the
377material reasons for such rejection. Failure of the licensee to
378notify the motor vehicle dealer within the 60-day period of such
379rejection shall be deemed an approval of the transfer. No such
380transfer, assign, or sale shall be valid unless the transferee
381agrees in writing to comply with all requirements of the
382franchise then in effect.
383     (b)  A motor vehicle dealer whose proposed sale is rejected
384may, within 60 days following such receipt of such rejection,
385file with the department a complaint for a determination that
386the proposed transferee has been rejected in violation of this
387section. The licensee has the burden of proof with respect to
388all issues raised by such complaint. The department shall
389determine, and enter an order providing, that the proposed
390transferee is either qualified or is not and cannot be qualified
391for specified reasons, or the order may provide the conditions
392under which a proposed transferee would be qualified. If the
393licensee fails to file such a response to the motor vehicle
394dealer's complaint within 30 days after receipt of the
395complaint, unless the parties agree in writing to an extension,
396or if the department, after a hearing, renders a decision other
397than one disqualifying the proposed transferee, the franchise
398agreement between the motor vehicle dealer and the licensee
399shall be deemed amended to incorporate such transfer or amended
400in accordance with the determination and order rendered,
401effective upon compliance by the proposed transferee with any
402conditions set forth in the determination or order.
403     (2)(a)  Notwithstanding the terms of any franchise
404agreement, a licensee shall not, by contract or otherwise, fail
405or refuse to give effect to, prevent, prohibit, or penalize, or
406attempt to refuse to give effect to, prevent, prohibit, or
407penalize, any motor vehicle dealer or any proprietor, partner,
408stockholder, owner, or other person who holds or otherwise owns
409an interest therein from selling, assigning, transferring,
410alienating, or otherwise disposing of, in whole or in part, the
411equity interest of any of them in such motor vehicle dealer to
412any other person or persons, including a corporation established
413or existing for the purpose of owning or holding the stock or
414ownership interests of other entities, unless the licensee
415proves at a hearing pursuant to a complaint filed by a motor
416vehicle dealer under this section that such sale, transfer,
417alienation, or other disposition is to a person who is not, or
418whose controlling executive management is not, of good moral
419character. A motor vehicle dealer, or any proprietor, partner,
420stockholder, owner, or other person who holds or otherwise owns
421an interest in the motor vehicle dealer, who desires to sell,
422assign, transfer, alienate, or otherwise dispose of any interest
423in such motor vehicle dealer shall notify, or cause the proposed
424transferee to so notify, the licensee, in writing, of the
425identity and address of the proposed transferee. A licensee who
426receives such notice may, within 60 days following such receipt,
427notify the motor vehicle dealer in writing that the proposed
428transferee is not a person qualified to be a transferee under
429this section and setting forth the material reasons for such
430rejection. Failure of the licensee to notify the motor vehicle
431dealer within the 60-day period of such rejection shall be
432deemed an approval of the transfer. Any person whose proposed
433sale of stock is rejected may file within 60 days of receipt of
434such rejection a complaint with the department alleging that the
435rejection was in violation of the law or the franchise
436agreement. The licensee has the burden of proof with respect to
437all issues raised by such complaint. The department shall
438determine, and enter an order providing, that the proposed
439transferee either is qualified or is not and cannot be qualified
440for specified reasons; or the order may provide the conditions
441under which a proposed transferee would be qualified. If the
442licensee fails to file a response to the motor vehicle dealer's
443complaint within 30 days of receipt of the complaint, unless the
444parties agree in writing to an extension, or if the department,
445after a hearing, renders a decision on the complaint other than
446one disqualifying the proposed transferee, the transfer shall be
447deemed approved in accordance with the determination and order
448rendered, effective upon compliance by the proposed transferee
449with any conditions set forth in the determination or order.
450     (b)  Notwithstanding paragraph (a), neither a licensee nor
451the department shall reject a proposed transfer of a legal,
452equitable, or beneficial interest in a motor vehicle dealer to a
453trust or other entity, or to any beneficiary thereof, that is
454established by an owner of any interest in a motor vehicle
455dealer for estate planning purposes provided the controlling
456person or entity thereof is of good moral character; nor shall a
457licensee or the department condition any proposed transfer under
458this section upon a relocation of, construction of any addition
459or modification to, or any refurbishing or remodeling of any
460dealership structure, facility, or building of the existing
461motor vehicle dealer, or upon any modification of the existing
462franchise agreement.
463     (3)  During the pendency of any such department or court
464hearing, the franchise agreement of the motor vehicle dealer
465shall continue in effect in accordance with its terms. The
466department or any court shall use reasonable efforts to expedite
467any determination requested under this section.
468     (4)  Notwithstanding the terms of any franchise agreement,
469the acceptance by the licensee of the proposed transferee shall
470not be unreasonably withheld, delayed, or conditioned. For the
471purposes of this section, the refusal by the licensee to accept,
472in a timely manner, a proposed transferee who satisfies the
473criteria set forth in subsection (1) or subsection (2) is
474presumed to be unreasonable.
475     (5)  It shall be a violation of this section for the
476licensee to reject, or withhold, delay, or condition approval of
477a proposed transfer unless the licensee can prove in any court
478of competent jurisdiction in defense of any claim brought
479pursuant to s. 320.697 that, in fact, the rejection or
480withholding of approval of the proposed transfer was not in
481violation of or precluded by this section and was reasonable.
482The determination of whether such rejection or withholding was
483reasonable shall be based on a preponderance of the evidence
484presented during the proceeding on an objective standard.
485Alleging the permitted statutory grounds by the licensee in the
486written rejection of the proposed transfer shall not constitute
487a defense of the licensee, or protect the licensee from
488liability for violating this section.
489     Section 4.  If any provision of this act or the application
490thereof to any person or circumstance is held invalid, the
491invalidity shall not affect other provisions or applications of
492the act which can be given effect without the invalid provision
493or application, and to this end the provisions of this act are
494declared severable.
495     Section 5.  This act shall take effect upon becoming a law.


CODING: Words stricken are deletions; words underlined are additions.
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