Florida Senate - 2017 CS for CS for SB 466 By the Committees on Commerce and Tourism; and Transportation; and Senators Hutson, Gainer, and Broxson 577-02916-17 2017466c2 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; requiring the manufacturer, factory 14 branch, distributor, or importer to pay the 15 compensation within a specified timeframe after the 16 motor vehicle dealer’s application for payment; 17 requiring such applications to be submitted monthly, 18 as necessary, through the manufacturer’s, factory 19 branch’s, distributor’s, or importer’s warranty 20 application system or certain other system or process; 21 providing for calculation of the amount of 22 compensation; providing applicability; reenacting s. 23 320.6992, F.S., relating to applicability of specified 24 provisions to systems of distribution of motor 25 vehicles in this state, to incorporate the amendment 26 made to s. 320.64, F.S., and to incorporate s. 27 320.6407, F.S., as created by the act, in references 28 thereto; 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 was originally manufactured, imported, or 75 distributed by the licensee; 76 (b) That is subject to a recall notice issued by the 77 licensee or an authorized governmental agency, including recalls 78 issued prior to July 1, 2017, regardless of whether the vehicle 79 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 trade-in, 84 lease return, or otherwise; 85 (d) That cannot be repaired due to the unavailability, 86 within 30 days after issuance of the recall notice, of remedy or 87 parts necessary for the motor vehicle dealer to make the recall 88 repair; and 89 (e) For which the licensee has not issued a written 90 statement to the motor vehicle dealer indicating that the used 91 motor vehicle may be sold or delivered to a retail customer 92 before completion of the recall repair. 93 (2) The licensee shall pay the required compensation within 94 30 days after the motor vehicle dealer’s application for 95 payment. Applications for compensation payments must be 96 submitted monthly, as necessary, through the licensee’s existing 97 warranty application system or another system or process 98 established by the licensee which is not unduly burdensome or 99 which does not require information unnecessary for the payment. 100 (3) Compensation under this section must be the greater of: 101 (a) Payment at a rate of at least 1.75 percent per month of 102 the motor vehicle value, as determined by the average Black Book 103 value of the corresponding model year vehicle of average 104 condition, of each eligible used motor vehicle in the motor 105 vehicle dealer’s inventory for each month that the dealer does 106 not receive a remedy or parts to complete the required repair. 107 Such payment must be prorated for any period less than a month 108 based on the number of days during the month each eligible used 109 motor vehicle is in the motor vehicle dealer’s inventory. 110 Payments shall be calculated from the date the recall was issued 111 or the vehicle was acquired, whichever is later. 112 (b) Payment under a national program applicable to all 113 motor vehicle dealers holding a franchise agreement with the 114 licensee for the motor vehicle dealer’s costs associated with 115 holding the eligible used motor vehicles. 116 (4) For purposes of this section, a licensee does not 117 include a motorcycle manufacturer, distributor, or importer. 118 Section 3. For the purpose of incorporating the amendment 119 made by this act to section 320.64, Florida Statutes, and 120 section 320.6407, Florida Statutes, as created by this act, in 121 references thereto, section 320.6992, Florida Statutes, is 122 reenacted to read: 123 320.6992 Application.—Sections 320.60-320.70, including 124 amendments to ss. 320.60-320.70, apply to all presently existing 125 or hereafter established systems of distribution of motor 126 vehicles in this state, except to the extent that such 127 application would impair valid contractual agreements in 128 violation of the State Constitution or Federal Constitution. 129 Sections 320.60-320.70 do not apply to any judicial or 130 administrative proceeding pending as of October 1, 1988. All 131 agreements renewed, amended, or entered into subsequent to 132 October 1, 1988, shall be governed by ss. 320.60-320.70, 133 including any amendments to ss. 320.60-320.70 which have been or 134 may be from time to time adopted, unless the amendment 135 specifically provides otherwise, and except to the extent that 136 such application would impair valid contractual agreements in 137 violation of the State Constitution or Federal Constitution. 138 Section 4. This act shall take effect July 1, 2017.