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.
   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 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.