Florida Senate - 2023                              CS for SB 712
       By the Committee on Transportation; and Senators Avila and
       596-02773-23                                           2023712c1
    1                        A bill to be entitled                      
    2         An act relating to motor vehicle sales; amending s.
    3         320.60, F.S.; revising and providing definitions;
    4         amending s. 320.605, F.S.; providing legislative
    5         intent; amending s. 320.64, F.S.; prohibiting an
    6         applicant or a licensee from certain actions in the
    7         allocation or distribution of motor vehicles to
    8         franchised motor vehicle dealers; revising the
    9         definition of the term “unfair”; prohibiting
   10         applicants and licensees from engaging in certain
   11         activities of motor vehicle dealers; authorizing an
   12         applicant, a licensee, or their common entity to sell
   13         or activate certain motor vehicle accessories or
   14         features through remote electronic transmission;
   15         providing for revenue-sharing regarding such sale or
   16         activation; providing for the calculation of the
   17         dealer margin structure; providing applicability;
   18         amending s. 320.642, F.S.; conforming cross
   19         references; amending s. 320.645, F.S.; revising
   20         provisions prohibiting a manufacturer, a distributor,
   21         or an importer from owning, operating, or controlling
   22         a motor vehicle dealership in this state; specifying
   23         when certain licenses may be and are prohibited from
   24         being issued; revising exceptions to certain
   25         prohibitions on licensees; providing applicability;
   26         providing that a motor vehicle dealer association has
   27         standing to intervene under certain circumstances;
   28         making technical changes; deleting the definition of
   29         the term “independent person”; conforming cross
   30         references; amending s. 320.67, F.S.; requiring the
   31         Department of Highway Safety and Motor Vehicles to
   32         conduct an inquiry relating to certain written
   33         complaints; providing purposes of the department’s use
   34         of a subpoena; authorizing the department to allow a
   35         written response to the complaint; requiring the
   36         department to commence the inquiry by a certain
   37         timeframe; requiring the department to provide a
   38         certain written response to the complainant by a
   39         certain date; requiring the department to take certain
   40         action if the department determines that a licensee
   41         violated certain statutes; authorizing a motor vehicle
   42         dealer association to file an administrative action
   43         regarding such complaint in certain circumstances;
   44         providing construction; amending ss. 681.102 and
   45         681.113, F.S.; conforming cross-references; providing
   46         an effective date.
   48  Be It Enacted by the Legislature of the State of Florida:
   50         Section 1. Present subsections (8), (9), (10), (11), (12),
   51  (13), (14), (15), and (16) of section 320.60, Florida Statutes,
   52  are redesignated as subsections (9), (11), (12), (13), (15),
   53  (18), (10), (16), and (17), respectively, new subsections (8)
   54  and (13) are added to that section, and subsection (2) and
   55  present subsection (15) of that section are amended, to read:
   56         320.60 Definitions for ss. 320.61-320.70.—Whenever used in
   57  ss. 320.61-320.70, unless the context otherwise requires, the
   58  following words and terms have the following meanings:
   59         (2) “Common entity” means a person:
   60         (a) Who is directly or indirectly either controlled by or
   61  has more than 30 percent of its equity interest directly or
   62  indirectly owned, beneficially or of record, through any form of
   63  ownership structure, by a manufacturer, an importer, a
   64  distributor, or a licensee, or an affiliate thereof.
   65         (b)Who has more than 30 percent of its equity interest
   66  directly or indirectly controlled or owned, beneficially or of
   67  record, through any form of ownership structure, by one or more
   68  persons who also directly or indirectly control or own,
   69  beneficially or of record, more than 30 40 percent of the voting
   70  equity interests of a manufacturer, an importer, a distributor,
   71  or a licensee, or an affiliate thereof; or
   72         (b)Who shares directors or officers or partners with a
   73  manufacturer.
   74         (c)Notwithstanding the foregoing, an entity that would
   75  otherwise be considered a common entity of a distributor under
   76  paragraph (a) or paragraph (b) because of its relation to a
   77  distributor is not considered a common entity of that
   78  distributor if:
   79         1.The distributor that the entity is related to was a
   80  licensed distributor on March 1, 2023;
   81         2.The entity is not a common entity of a manufacturer or
   82  importer; and
   83         3.The distributor that the entity is related to is not,
   84  and has never been, a common entity of a manufacturer or
   85  importer.
   86         (8)“Independent person” means a person who is not an
   87  agent, parent, subsidiary, common entity, officer, director, or
   88  employee of the licensee or an employed representative of a
   89  licensee, manufacturer, importer, or distributor.
   90         (14)“Motor vehicle dealer association” means a not-for
   91  profit entity organized under the laws of this state and
   92  qualified as tax-exempt under s. 501(c)(6) of the Internal
   93  Revenue Code which acts as a trade association that primarily
   94  represents the interests of franchised motor vehicle dealers and
   95  has a membership of at least 500 franchised motor vehicle
   96  dealers as defined in s. 320.27(1)(c)1.
   97         (16)(15) “Sell,” “selling,” “sold,” “exchange,” “retail
   98  sales,” and “leases” includes:
   99         (a)Accepting a deposit or receiving a payment for the
  100  purchase, lease, or other use of a motor vehicle, but does not
  101  include facilitating a motor vehicle dealer’s acceptance or a
  102  deposit or receipt of a payment from a consumer;
  103         (b)Accepting a reservation from a retail consumer for a
  104  specific motor vehicle identified by a vehicle identification
  105  number or other product identifier;
  106         (c)Setting the retail price for the purchase, lease, or
  107  other use of a motor vehicle;
  108         (d)Offering or negotiating with a retail consumer terms
  109  for the purchase, lease, financing, or other use of a motor
  110  vehicle;
  111         (e)Offering or negotiating with a retail consumer a value
  112  for a motor vehicle being traded in as part of the purchase,
  113  lease, or other use of a motor vehicle, but does not include a
  114  website or other means of electronic communication that
  115  identifies to a consumer a conditional trade-in value and that
  116  contains language informing the consumer that the trade-in value
  117  is not binding on any motor vehicle dealer;
  118         (f)Offering or negotiating with a retail consumer any
  119  service contract, extended warranty, vehicle maintenance
  120  contract, guaranteed asset protection agreement, or any other
  121  vehicle-related products or services in connection with the
  122  purchase or lease of a motor vehicle;
  123         (g) Any transaction where the title of a motor vehicle or a
  124  used motor vehicle is transferred to a retail consumer; or, and
  125  also
  126         (h) Any retail lease transaction where a retail consumer
  127  customer leases a vehicle for a period of at least 12 months,
  128  but does not include administering lease agreements, taking
  129  assignments of leases, performing required actions pursuant to
  130  such leases, or receiving payments under a lease agreement that
  131  was originated by a motor vehicle dealer. Establishing a price
  132  for sale pursuant to s. 320.64(24) does not constitute a sale or
  133  lease.
  134         Section 2. Section 320.605, Florida Statutes, is amended to
  135  read:
  136         320.605 Legislative intent.—It is the intent of the
  137  Legislature to protect the public health, safety, and welfare of
  138  the citizens of the state by regulating the licensing of motor
  139  vehicle dealers and manufacturers, maintaining competition,
  140  providing consumer protection and fair trade and providing
  141  minorities with opportunities for full participation as motor
  142  vehicle dealers. Sections 320.61-320.70 are intended to apply
  143  solely to the licensing of motor vehicle dealers and
  144  manufacturers and do not apply to non-motor-vehicle-related
  145  businesses.
  146         Section 3. Subsections (18), (23), and (24) of section
  147  320.64, Florida Statutes, are amended to read:
  148         320.64 Denial, suspension, or revocation of license;
  149  grounds.—A license of a licensee under s. 320.61 may be denied,
  150  suspended, or revoked within the entire state or at any specific
  151  location or locations within the state at which the applicant or
  152  licensee engages or proposes to engage in business, upon proof
  153  that the section was violated with sufficient frequency to
  154  establish a pattern of wrongdoing, and a licensee or applicant
  155  shall be liable for claims and remedies provided in ss. 320.695
  156  and 320.697 for any violation of any of the following
  157  provisions. A licensee is prohibited from committing the
  158  following acts:
  159         (18) The applicant or licensee has established a system of
  160  motor vehicle allocation or distribution or has implemented a
  161  system of allocation or distribution of motor vehicles to one or
  162  more of its franchised motor vehicle dealers which:
  163         (a) Reduces or alters allocations or supplies of new motor
  164  vehicles to the dealer to achieve, directly or indirectly, a
  165  purpose that is prohibited by ss. 320.60-320.70;
  166         (b)Conditionally or unconditionally reserves a specific
  167  motor vehicle identified by vehicle identification number or
  168  other unique identifier for a specifically named person, except
  169  for purposes of replacing a consumer’s vehicle pursuant to
  170  chapter 681;
  171         (c)Requires or incentivizes motor vehicle dealers to sell
  172  or lease, or to negotiate the sale or lease of, a specific motor
  173  vehicle identified by vehicle identification number or other
  174  unique identifier to a specifically named person;
  175         (d)Requires or incentivizes motor vehicle dealers to sell
  176  or lease a motor vehicle at a specified price or profit margin
  177  or restricts the price at which a motor vehicle dealer may sell
  178  or lease a motor vehicle; or
  179         (e)Is, or which otherwise is unfair, inequitable,
  180  unreasonably discriminatory, or not supportable by reason and
  181  good cause after considering the equities of the affected motor
  182  vehicles dealer or dealers. As used in this paragraph, “unfair”
  183  includes, but is not limited to, refusing or failing to offer to
  184  any dealer an equitable supply of new vehicles under its
  185  franchise, by model, mix, or color, as the licensee offers or
  186  allocates to its other same line-make dealers in this state or
  187  using the number of motor vehicles preordered or reserved by
  188  consumers as a factor in determining the allocation of motor
  189  vehicles to motor vehicle dealers.
  191  An applicant or licensee shall maintain for 3 years records that
  192  describe its methods or formula of allocation and distribution
  193  of its motor vehicles and records of its actual allocation and
  194  distribution of motor vehicles to its motor vehicle dealers in
  195  this state. As used in this subsection, “unfair” includes,
  196  without limitation, the refusal or failure to offer to any
  197  dealer an equitable supply of new vehicles under its franchise,
  198  by model, mix, or colors as the licensee offers or allocates to
  199  its other same line-make dealers in the state.
  200         (23) The applicant or licensee has engaged in any of the
  201  activities of a motor vehicle dealer as defined in s. 320.60 or
  202  has competed or is competing with respect to any activity
  203  covered by the franchise agreement with a motor vehicle dealer
  204  of the same line-make located in this state with whom the
  205  applicant or licensee has entered into a franchise agreement,
  206  except as permitted in s. 320.645 or in subsection (24) with
  207  respect to the remote electronic transmission of a motor vehicle
  208  accessory, option, add-on, feature, improvement, or upgrade.
  209         (24) The applicant or licensee, or common entity thereof,
  210  has sold or leased a motor vehicle of a line-make to any retail
  211  consumer in this state, or has sold or activated for a fee any
  212  permanent or temporary motor vehicle accessory, option, add-on,
  213  feature, improvement, or upgrade to any retail consumer in the
  214  state, except through a motor vehicle dealer properly licensed
  215  pursuant to s. 320.27 and holding a franchise agreement for the
  216  line-make that includes the motor vehicle. Notwithstanding this
  217  subsection, an applicant, a licensee, or their common entity may
  218  sell or activate for a fee a permanent or temporary motor
  219  vehicle accessory, option, add-on, feature, improvement, or
  220  upgrade for a motor vehicle of a line-make manufactured,
  221  imported, or distributed by the applicant or licensee and
  222  registered in this state only if the accessory, option, add-on,
  223  feature, improvement, or upgrade is provided directly to the
  224  motor vehicle through remote electronic transmission, provided
  225  that if such motor vehicle was sold or leased as new by a
  226  Florida-franchised motor vehicle dealer within the 3-year period
  227  preceding such remote electronic transmission, the applicant or
  228  licensee must pay the Florida-franchised motor vehicle dealer a
  229  percentage of the gross sale price for the accessory, option,
  230  add-on, feature, improvement, or upgrade which is at least
  231  commensurate with the dealer margin structure established by the
  232  applicant or licensee for the sale of the vehicle to which the
  233  accessory, option, add-on, feature, improvement, or upgrade was
  234  remotely transmitted. As used in this subsection, the dealer
  235  margin structure is calculated by the applicant or licensee
  236  subtracting the invoiced vehicle wholesale price from the
  237  manufacturer’s suggested retail price, then adding to that
  238  figure all monetary per vehicle incentives offered by the
  239  applicant or licensee whether or not received by the motor
  240  vehicle dealer, and then dividing that sum by the invoiced
  241  vehicle wholesale price. This subsection section does not apply
  242  to sales by the applicant or licensee of motor vehicles to its
  243  current employees, employees of companies affiliated by common
  244  ownership, charitable not-for-profit organizations, and the
  245  Federal Government.
  247  A motor vehicle dealer who can demonstrate that a violation of,
  248  or failure to comply with, any of the preceding provisions by an
  249  applicant or licensee will or may adversely and pecuniarily
  250  affect the complaining dealer, shall be entitled to pursue all
  251  of the remedies, procedures, and rights of recovery available
  252  under ss. 320.695 and 320.697.
  253         Section 4. Subsection (6) of section 320.642, Florida
  254  Statutes, is amended to read:
  255         320.642 Dealer licenses in areas previously served;
  256  procedure.—
  257         (6) When a proposed addition or relocation concerns a
  258  dealership that performs or is to perform only service, as
  259  defined in s. 320.60 s. 320.60(16), and will not or does not
  260  sell or lease new motor vehicles, as defined in s. 320.60 s.
  261  320.60(15), the proposal shall be subject to notice and protest
  262  pursuant to the provisions of this section.
  263         (a) Standing to protest the addition or relocation of a
  264  service-only dealership shall be limited to those instances in
  265  which the applicable mileage requirement established in
  266  subparagraphs (3)(a)2. and (3)(b)1. is met.
  267         (b) The addition or relocation of a service-only dealership
  268  shall not be subject to protest if:
  269         1. The applicant for the service-only dealership location
  270  is an existing motor vehicle dealer of the same line-make as the
  271  proposed additional or relocated service-only dealership;
  272         2. There is no existing dealer of the same line-make closer
  273  than the applicant to the proposed location of the additional or
  274  relocated service-only dealership; and
  275         3. The proposed location of the additional or relocated
  276  service-only dealership is at least 7 miles from all existing
  277  motor vehicle dealerships of the same line-make, other than
  278  motor vehicle dealerships owned by the applicant.
  279         (c) In determining whether existing franchised motor
  280  vehicle dealers are providing adequate representations in the
  281  community or territory for the line-make in question in a
  282  protest of the proposed addition or relocation of a service-only
  283  dealership, the department may consider the elements set forth
  284  in paragraph (2)(b), provided:
  285         1. With respect to subparagraph (2)(b)1., only the impact
  286  as it relates to service may be considered;
  287         2. Subparagraph (2)(b)3. shall not be considered;
  288         3. With respect to subparagraph (2)(b)9., only service
  289  facilities shall be considered; and
  290         4. With respect to subparagraph (2)(b)11., only the volume
  291  of service business transacted shall be considered.
  292         (d) If an application for a service-only dealership is
  293  granted, the department shall issue a license which permits only
  294  service, as defined in s. 320.60 s. 320.60(16), and does not
  295  permit the selling or leasing of new motor vehicles, as defined
  296  in s. 320.60 s. 320.60(15). If a service-only dealership
  297  subsequently seeks to sell new motor vehicles at its location,
  298  the notice and protest provisions of this section shall apply.
  299         Section 5. Subsection (1), paragraph (a) of subsection (2),
  300  and subsection (4) of section 320.645, Florida Statutes, are
  301  amended to read:
  302         320.645 Restriction upon ownership of dealership by
  303  licensee.—
  304         (1) A No licensee, manufacturer, importer, or distributor,
  305  manufacturer, or agent of the licensee, a manufacturer,
  306  importer, or distributor, or any parent, subsidiary, common
  307  entity, or officer, or employed representative of the licensee,
  308  manufacturer, importer, or distributor may not directly or
  309  indirectly shall own, or operate, or control, by contract,
  310  agreement, or otherwise either directly or indirectly, a motor
  311  vehicle dealership for any line-make in this state if the
  312  licensee, manufacturer, importer, or distributor has
  313  manufactured, imported, or distributed for the sale or service
  314  of motor vehicles of any line-make which have been or are
  315  offered for sale under a franchise agreement with a motor
  316  vehicle dealer in this state with an independent person. Any
  317  person who is not prohibited by this section from owning,
  318  operating, or controlling a motor vehicle dealership may be
  319  issued a license pursuant to s. 320.27. Any person prohibited by
  320  this section from owning, operating, or controlling a motor
  321  vehicle dealership. A licensee may not be issued a motor vehicle
  322  dealer license pursuant to s. 320.27. However, a no such
  323  licensee subject to the prohibition in this section is not will
  324  be deemed to be in violation of this section:
  325         (a) When operating a motor vehicle dealership for a
  326  temporary period, not to exceed 1 year, during the transition
  327  from one owner of the motor vehicle dealership to another;
  328         (b) When operating a motor vehicle dealership temporarily
  329  for a reasonable period for the exclusive purpose of broadening
  330  the diversity of its dealer body and enhancing opportunities for
  331  qualified persons who are part of a group that has historically
  332  been underrepresented in its dealer body, or for other qualified
  333  persons who the licensee deems lack the resources to purchase or
  334  capitalize the dealership outright, in a bona fide relationship
  335  with an independent person, other than a licensee or its agent
  336  or affiliate, who has made a significant investment that is
  337  subject to loss in the dealership within the dealership’s first
  338  year of operation and who can reasonably expect to acquire full
  339  ownership of the dealership on reasonable terms and conditions;
  340  or
  341         (c) If the department determines, after a hearing on the
  342  matter, pursuant to chapter 120, at the request of any person,
  343  that there is no independent person available in the community
  344  or territory to own and operate the motor vehicle dealership in
  345  a manner consistent with the public interest. This paragraph
  346  shall apply only if the motor vehicle dealership at issue sells
  347  motor vehicles of a line-make that, at the time of the hearing,
  348  is offered for sale by at least one other existing motor vehicle
  349  dealership not owned, operated, or controlled by the licensee,
  350  an officer or employed representative of the licensee, a parent,
  351  subsidiary, or common entity of the licensee, or a manufacturer,
  352  importer, or distributor. A motor vehicle dealer association has
  353  standing to intervene in any hearing held pursuant to this
  354  subsection.
  356  In the any such case of a, the licensee must continue to make
  357  the motor vehicle dealership owned or operated pursuant to
  358  paragraph (a), paragraph (b), or paragraph (c), the dealership
  359  must be continually made available for sale to an independent
  360  person at a fair and reasonable price. Approval of the sale of
  361  such a motor vehicle dealership to a proposed motor vehicle
  362  dealer shall not be unreasonably withheld.
  363         (2) As used in this section, the term:
  364         (a) “Independent person” is a person who is not an officer,
  365  director, or employee of the licensee.
  366         (4) Nothing in this chapter shall prohibit a distributor as
  367  defined in s. 320.60 s. 320.60(5) or common entity an affiliate
  368  thereof that is not a manufacturer or importer, a division of a
  369  manufacturer or importer, an entity that is controlled by a
  370  manufacturer or importer, or a common entity of a manufacturer
  371  or importer, and that is not owned, in whole or in part,
  372  directly or indirectly, by a manufacturer or importer, as
  373  defined in s. 320.60 s. 320.60(9), from receiving a license or
  374  licenses as defined in s. 320.27 and owning and operating a
  375  motor vehicle dealership or dealerships that sell or service
  376  motor vehicles other than any line-make of motor vehicles
  377  distributed by the distributor. Neither a distributor nor an
  378  affiliate thereof may receive a license pursuant to s. 320.27
  379  for a motor vehicle dealership, or own or operate a motor
  380  vehicle dealership, that sells or services motor vehicles of the
  381  line-make of motor vehicles distributed by the distributor.
  382         Section 6. Section 320.67, Florida Statutes, is amended to
  383  read:
  384         320.67 Inquiry and inspection of books or other documents
  385  of licensee.—
  386         (1) The department shall conduct an inquiry of a licensee
  387  may inspect the pertinent books, records, letters, and contracts
  388  of a licensee relating to any written complaint alleging a
  389  violation of any provision of ss. 320.60-320.70 made to it
  390  against such licensee made by a motor vehicle dealer with a
  391  current franchise agreement issued by the licensee, or a motor
  392  vehicle dealer association with at least one member with a
  393  current franchise agreement issued by the licensee.
  394         (2) In the exercise of its duties under this section, the
  395  department is granted and authorized to exercise the power of
  396  subpoena for the purposes of compelling production of and
  397  inspecting pertinent books, records, letters, and contracts of a
  398  licensee and compelling the attendance of witnesses at
  399  deposition and the production of any documentary evidence
  400  necessary to the disposition by it of any written complaint
  401  under this section. The inquiry required by this section must be
  402  commenced within 30 days after receipt of the written complaint.
  403  The department may allow the licensee that is the subject of the
  404  complaint no more than 60 days from commencement of the inquiry
  405  to provide a written response. Within 30 days after the deadline
  406  for a written response by the licensee, the department must
  407  provide a written response to the complainant stating whether
  408  the department intends to take action against the licensee under
  409  subsection (3) and, if so, what action the department intends to
  410  take. Any information obtained may not be used against the
  411  licensee as the basis for a criminal prosecution under the laws
  412  of this state.
  413         (3)If, as the result of an inquiry conducted under this
  414  section, the department determines that a licensee has violated
  415  ss. 320.60-320.70, the department must take appropriate action
  416  against the licensee, which may include license suspension or
  417  revocation; denial of a license renewal application; assessment,
  418  imposition, levy, and collection of an appropriate civil fine;
  419  or instituting a civil action for issuance of an injunction
  420  pursuant to s. 320.695.
  421         (4)If the complainant is a motor vehicle dealer
  422  association and the department’s inquiry determines that a
  423  licensee has violated ss. 320.60-320.70, the motor vehicle
  424  dealer association may seek a declaration and adjudication that
  425  the alleged conduct of the licensee violated ss. 320.60-320.70
  426  by filing with the department a request for a proceeding and an
  427  administrative hearing which conforms substantially with the
  428  requirements of ss. 120.569 and 120.57.
  429         (5)This section does not alter or affect the rights of a
  430  motor vehicle dealer to bring a claim or action against a
  431  licensee pursuant to any other provision of ss. 320.60-320.70.
  432         Section 7. Subsection (13) of section 681.102, Florida
  433  Statutes, is amended to read:
  434         681.102 Definitions.—As used in this chapter, the term:
  435         (13) “Manufacturer” means any person, whether a resident or
  436  nonresident of this state, who manufactures or assembles motor
  437  vehicles, or who manufactures or assembles chassis for
  438  recreational vehicles, or who manufactures or installs on
  439  previously assembled truck or recreational vehicle chassis
  440  special bodies or equipment which, when installed, forms an
  441  integral part of the motor vehicle, or a distributor or an
  442  importer as those terms are defined in s. 320.60 s. 320.60(5),
  443  or an importer as defined in s. 320.60(7). A dealer as defined
  444  in s. 320.60 s. 320.60(11)(a) shall not be deemed to be a
  445  manufacturer, distributor, or importer as provided in this
  446  section.
  447         Section 8. Section 681.113, Florida Statutes, is amended to
  448  read:
  449         681.113 Dealer liability.—Except as provided in ss.
  450  681.103(3) and 681.114(2), nothing in this chapter imposes any
  451  liability on a dealer as defined in s. 320.60 s. 320.60(11)(a)
  452  or creates a cause of action by a consumer against a dealer,
  453  except for written express warranties made by the dealer apart
  454  from the manufacturer’s warranties. A dealer may not be made a
  455  party defendant in any action involving or relating to this
  456  chapter, except as provided in this section. The manufacturer
  457  shall not charge back or require reimbursement by the dealer for
  458  any costs, including, but not limited to, any refunds or vehicle
  459  replacements, incurred by the manufacturer arising out of this
  460  chapter, in the absence of evidence that the related repairs had
  461  been carried out by the dealer in a manner substantially
  462  inconsistent with the manufacturer’s published instructions.
  463         Section 9. This act shall take effect July 1, 2023.