Florida Senate - 2017 CS for SB 466 By the Committee on Transportation; and Senators Hutson, Gainer, and Broxson 596-02448-17 2017466c1 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; requiring the manufacturer, 13 factory branch, distributor, or importer to pay the 14 compensation within a specified timeframe after the 15 motor vehicle dealer’s application for payment; 16 requiring such applications to be submitted monthly, 17 as necessary, through the manufacturer’s, factory 18 branch’s, distributor’s, or importer’s warranty 19 application system or certain other system or process; 20 providing for calculation of the amount of 21 compensation; reenacting s. 320.6992, F.S., relating 22 to applicability of specified provisions to systems of 23 distribution of motor vehicles in this state, to 24 incorporate the amendments made to s. 320.64, F.S., 25 and to incorporate s. 320.6407, F.S., as created by 26 the act, in references thereto; providing an effective 27 date. 28 29 Be It Enacted by the Legislature of the State of Florida: 30 31 Section 1. Subsection (41) is added to section 320.64, 32 Florida Statutes, to read: 33 320.64 Denial, suspension, or revocation of license; 34 grounds.—A license of a licensee under s. 320.61 may be denied, 35 suspended, or revoked within the entire state or at any specific 36 location or locations within the state at which the applicant or 37 licensee engages or proposes to engage in business, upon proof 38 that the section was violated with sufficient frequency to 39 establish a pattern of wrongdoing, and a licensee or applicant 40 shall be liable for claims and remedies provided in ss. 320.695 41 and 320.697 for any violation of any of the following 42 provisions. A licensee is prohibited from committing the 43 following acts: 44 (41) Notwithstanding the terms of any franchise agreement, 45 and except as authorized under subsection (25), a licensee may 46 not deny a claim of a motor vehicle dealer, reduce the amount of 47 compensation to a motor vehicle dealer, or process a chargeback 48 to a motor vehicle dealer for performing covered warranty 49 repairs or required recall repairs on a used motor vehicle due 50 to either of the following circumstances: 51 (a) Discovery by the motor vehicle dealer of the need for 52 warranty or recall repairs during the course of a separate 53 repair requested by the consumer. 54 (b) Notification by the motor vehicle dealer to the 55 consumer of the need for recall repairs after the licensee or an 56 authorized governmental agency issues a notice of an outstanding 57 recall for a safety-related defect. 58 59 A motor vehicle dealer who can demonstrate that a violation of, 60 or failure to comply with, any of the preceding provisions by an 61 applicant or licensee will or can adversely and pecuniarily 62 affect the complaining dealer, shall be entitled to pursue all 63 of the remedies, procedures, and rights of recovery available 64 under ss. 320.695 and 320.697. 65 Section 2. Section 320.6407, Florida Statutes, is created 66 to read: 67 320.6407 Recall notices under franchise agreements; 68 compensation.— 69 (1) As provided in subsection (3), a licensee that has 70 entered into a franchise agreement with a motor vehicle dealer 71 must compensate the motor vehicle dealer for a used motor 72 vehicle: 73 (a) That was originally manufactured, imported, or 74 distributed by the licensee; 75 (b) That is subject to a recall notice issued by the 76 licensee or an authorized governmental agency, regardless of 77 whether the vehicle is identified by its vehicle identification 78 number; 79 (c) That is held by the motor vehicle dealer in the 80 dealer’s inventory at the time the recall notice is issued or 81 that is taken by the motor vehicle dealer into the dealer’s 82 inventory after the recall notice as a result of a trade-in, 83 lease return, or otherwise; 84 (d) That cannot be repaired due to the unavailability, 85 within 30 days after issuance of the recall notice, of remedy or 86 parts necessary for the motor vehicle dealer to make the recall 87 repair; and 88 (e) For which the licensee has not issued a written 89 statement to the motor vehicle dealer indicating that the used 90 motor vehicle may be sold or delivered to a retail customer 91 before completion of the recall repair. 92 (2) The licensee shall pay the required compensation within 93 30 days after the motor vehicle dealer’s application for 94 payment. Applications for compensation payments must be 95 submitted monthly, as necessary, through the licensee’s existing 96 warranty application system or another system or process 97 established by the licensee which is not unduly burdensome or 98 which does not require information unnecessary for the payment. 99 (3) Compensation under this section must be the greater of: 100 (a) Payment at a rate of at least 2 percent per month of 101 the motor vehicle value, as determined by the average Black Book 102 value of corresponding model year vehicle of average condition, 103 of each eligible used motor vehicle in the motor vehicle 104 dealer’s inventory for each month that the dealer does not 105 receive a remedy or parts to complete the required repair. Such 106 payment must be prorated for any period less than a month based 107 on the number of days during the month each eligible used motor 108 vehicle is in the motor vehicle dealer’s inventory. Payments 109 shall be calculated from the date the recall was issued or the 110 vehicle was acquired, whichever is later. 111 (b) Payment under a national program applicable to all 112 motor vehicle dealers holding a franchise agreement with the 113 licensee for the motor vehicle dealer’s costs associated with 114 holding the eligible used motor vehicles. 115 Section 3. For the purpose of incorporating the amendment 116 made by this act to section 320.64, Florida Statutes, and 117 section 320.6407, Florida Statutes, as created by this act, in 118 references thereto, section 320.6992, Florida Statutes, is 119 reenacted to read: 120 320.6992 Application.—Sections 320.60-320.70, including 121 amendments to ss. 320.60-320.70, apply to all presently existing 122 or hereafter established systems of distribution of motor 123 vehicles in this state, except to the extent that such 124 application would impair valid contractual agreements in 125 violation of the State Constitution or Federal Constitution. 126 Sections 320.60-320.70 do not apply to any judicial or 127 administrative proceeding pending as of October 1, 1988. All 128 agreements renewed, amended, or entered into subsequent to 129 October 1, 1988, shall be governed by ss. 320.60-320.70, 130 including any amendments to ss. 320.60-320.70 which have been or 131 may be from time to time adopted, unless the amendment 132 specifically provides otherwise, and except to the extent that 133 such application would impair valid contractual agreements in 134 violation of the State Constitution or Federal Constitution. 135 Section 4. This act shall take effect upon becoming a law.