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.
   30  Be It Enacted by the Legislature of the State of Florida:
   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.
   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.