Florida Senate - 2017 CS for CS for CS for SB 466 By the Committees on Rules; Commerce and Tourism; and Transportation; and Senators Hutson, Gainer, and Broxson 595-04439-17 2017466c3 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; specifying the purpose of a certain 14 written statement; requiring the manufacturer, factory 15 branch, distributor, or importer to pay the 16 compensation within a specified timeframe after the 17 motor vehicle dealer’s application for payment; 18 requiring such applications to be submitted monthly, 19 as necessary, through the manufacturer’s, factory 20 branch’s, distributor’s, or importer’s warranty 21 application system or certain other system or process; 22 providing for calculation of the amount of 23 compensation; providing applicability; reenacting s. 24 320.6992, F.S., relating to applicability of specified 25 provisions to systems of distribution of motor 26 vehicles in this state, to incorporate s. 320.6407, 27 F.S., as created by the act, in references thereto; 28 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 is of the same make and model manufactured, 75 imported, or distributed by the licensee; 76 (b) That is subject to a recall notice issued by the 77 licensee or an authorized governmental agency, including a 78 recall notice issued before July 1, 2017, regardless of whether 79 the vehicle 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 retail 84 consumer trade-in or a lease return to the dealer inventory in 85 accordance with an applicable lease contract; 86 (d) That cannot be repaired due to the unavailability, 87 within 30 days after issuance of the recall notice, of a remedy 88 or parts necessary for the motor vehicle dealer to make the 89 recall repair; and 90 (e) For which the licensee has not issued a written 91 statement to the motor vehicle dealer indicating that the used 92 motor vehicle may be sold or delivered to a retail customer 93 before completion of the recall repair. The purpose of such 94 written statement is to provide notice to the motor vehicle 95 dealer that the vehicle may be sold or delivered based solely on 96 the specific recall notice and is not intended to address any 97 other aspect of the vehicle unrelated to the recall notice. 98 (2) The licensee shall pay the required compensation within 99 30 days after the motor vehicle dealer’s application for 100 payment. Applications for payment must be submitted monthly, as 101 necessary, through the licensee’s existing warranty application 102 system or another system or process established by the licensee 103 which is not unduly burdensome or which does not require 104 information unnecessary for the payment. 105 (3) Compensation under this section must be the greater of: 106 (a) Payment at a rate of at least 1.5 percent per month of 107 the motor vehicle value, as determined by the average Black Book 108 value of the corresponding model year vehicle of average 109 condition, of each eligible used motor vehicle in the motor 110 vehicle dealer’s inventory for each month that the dealer does 111 not receive a remedy and parts to complete the required recall 112 repair. Such payment must be prorated for any period less than 1 113 month based on the number of days during the month each eligible 114 used motor vehicle is in the motor vehicle dealer’s inventory. 115 Payment shall be calculated from the 31st day after the recall 116 was issued, the 31st day after the vehicle was acquired, or July 117 1, 2017, whichever is latest. 118 (b) Payment under a national program applicable to all 119 motor vehicle dealers holding a franchise agreement with the 120 licensee for the motor vehicle dealer’s costs associated with 121 holding the eligible used motor vehicles. 122 (4) For purposes of this section, a licensee does not 123 include a motorcycle manufacturer, distributor, or importer. 124 Section 3. For the purpose of incorporating section 125 320.6407, Florida Statutes, as created by this act, in 126 references thereto, section 320.6992, Florida Statutes, is 127 reenacted to read: 128 320.6992 Application.—Sections 320.60-320.70, including 129 amendments to ss. 320.60-320.70, apply to all presently existing 130 or hereafter established systems of distribution of motor 131 vehicles in this state, except to the extent that such 132 application would impair valid contractual agreements in 133 violation of the State Constitution or Federal Constitution. 134 Sections 320.60-320.70 do not apply to any judicial or 135 administrative proceeding pending as of October 1, 1988. All 136 agreements renewed, amended, or entered into subsequent to 137 October 1, 1988, shall be governed by ss. 320.60-320.70, 138 including any amendments to ss. 320.60-320.70 which have been or 139 may be from time to time adopted, unless the amendment 140 specifically provides otherwise, and except to the extent that 141 such application would impair valid contractual agreements in 142 violation of the State Constitution or Federal Constitution. 143 Section 4. This act shall take effect July 1, 2017.