Florida Senate - 2023                       CS for CS for SB 712
       By the Committees on Commerce and Tourism; and Transportation;
       and Senators Avila and Garcia
       577-03494-23                                           2023712c2
    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; authorizing an applicant or a licensee, or
   12         a common entity thereof, to sell or activate certain
   13         motor vehicle features or improvements through remote
   14         electronic transmission; providing for a payment of
   15         the percentage of such sale or activation to a motor
   16         vehicle dealer; providing applicability; requiring
   17         certain payments to be made within a certain
   18         timeframe; amending s. 320.642, F.S.; conforming
   19         cross-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         making technical changes; deleting the definition of
   27         the term “independent person”; conforming cross
   28         references; prohibiting a distributor or affiliate
   29         thereof from receiving a certain license under certain
   30         circumstances; 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 within 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; providing construction;
   42         amending ss. 681.102 and 681.113, F.S.; conforming
   43         cross-references; providing an effective date.
   45  Be It Enacted by the Legislature of the State of Florida:
   47         Section 1. Present subsections (8), (9), (10), (11), (12),
   48  (13), (14), (15), and (16) of section 320.60, Florida Statutes,
   49  are redesignated as subsections (9), (11), (12), (13), (15),
   50  (18), (10), (16), and (17), respectively, new subsections (8)
   51  and (14) are added to that section, and subsection (2) and
   52  present subsection (15) of that section are amended, to read:
   53         320.60 Definitions for ss. 320.61-320.70.—Whenever used in
   54  ss. 320.61-320.70, unless the context otherwise requires, the
   55  following words and terms have the following meanings:
   56         (2) “Common entity” means a person:
   57         (a) Who is directly or indirectly either controlled by or
   58  has more than 30 percent of its equity interest directly or
   59  indirectly owned, beneficially or of record, through any form of
   60  ownership structure, by a manufacturer, an importer, a
   61  distributor, or a licensee, or an affiliate thereof; or
   62         (b)Who has more than 30 percent of its equity interest
   63  directly or indirectly controlled or owned, beneficially or of
   64  record, through any form of ownership structure, by one or more
   65  persons who also directly or indirectly control or own,
   66  beneficially or of record, more than 30 40 percent of the voting
   67  equity interests of a manufacturer, an importer, a distributor,
   68  or a licensee, or an affiliate thereof; or
   69         (b)Who shares directors or officers or partners with a
   70  manufacturer.
   71         (c)Notwithstanding paragraphs (a) and (b), an entity that
   72  would otherwise be considered a common entity of a distributor
   73  under paragraph (a) or paragraph (b) because of its relation to
   74  a distributor is not considered a common entity of that
   75  distributor if:
   76         1.The distributor that the entity is related to was a
   77  licensed distributor on March 1, 2023;
   78         2.The entity is not a common entity of a manufacturer or
   79  importer; and
   80         3.The distributor that the entity is related to is not,
   81  and has never been, a common entity of a manufacturer or
   82  importer.
   83         (8)“Independent person” means a person who is not an
   84  agent, a parent, a subsidiary, a common entity, an officer, a
   85  director, or an employed representative of a licensee,
   86  manufacturer, importer, or distributor.
   87         (14)“Motor vehicle dealer association” means a not-for
   88  profit entity organized under the laws of this state and
   89  qualified as tax-exempt under s. 501(c)(6) of the Internal
   90  Revenue Code which acts as a trade association that primarily
   91  represents the interests of franchised motor vehicle dealers and
   92  has a membership of at least 500 franchised motor vehicle
   93  dealers as defined in s. 320.27(1)(c)1.
   94         (16)(15) “Sell,” “selling,” “sold,” “exchange,” “retail
   95  sales,” and “leases” includes:
   96         (a)Accepting a deposit or receiving a payment for the
   97  retail purchase, lease, or other use of a motor vehicle, but
   98  does not include facilitating a motor vehicle dealer’s
   99  acceptance of a deposit or receipt of a payment from a consumer,
  100  and does not include receiving payment under a retail
  101  installment sale contract;
  102         (b)Accepting a reservation from a retail consumer for a
  103  specific motor vehicle identified by a vehicle identification
  104  number or other product identifier;
  105         (c)Setting the retail price for the purchase, lease, or
  106  other use of a motor vehicle, but does not include setting a
  107  manufacturer’s suggested retail price;
  108         (d)Offering or negotiating with a retail consumer terms
  109  for the purchase, lease, or other use of a motor vehicle;
  110         (e)Offering or negotiating with a retail consumer a value
  111  for a motor vehicle being traded in as part of the purchase,
  112  lease, or other use of a motor vehicle, but does not include a
  113  website or other means of electronic communication that
  114  identifies to a consumer a conditional trade-in value and that
  115  contains language informing the consumer that the trade-in value
  116  is not binding on any motor vehicle dealer;
  117         (f) Any transaction where the title of a motor vehicle or a
  118  used motor vehicle is transferred to a retail consumer; or, and
  119  also
  120         (g) Any retail lease transaction where a retail consumer
  121  customer leases a vehicle for a period of at least 12 months,
  122  but does not include administering lease agreements, taking
  123  assignments of leases, performing required actions pursuant to
  124  such leases, or receiving payments under a lease agreement that
  125  was originated by a motor vehicle dealer. Establishing a price
  126  for sale pursuant to s. 320.64(24) does not constitute a sale or
  127  lease.
  128         Section 2. Section 320.605, Florida Statutes, is amended to
  129  read:
  130         320.605 Legislative intent.—It is the intent of the
  131  Legislature to protect the public health, safety, and welfare of
  132  the citizens of the state by regulating the licensing of motor
  133  vehicle dealers and manufacturers, maintaining competition,
  134  providing consumer protection and fair trade and providing
  135  minorities with opportunities for full participation as motor
  136  vehicle dealers. Sections 320.61-320.70 are intended to apply
  137  solely to the licensing of manufacturers, factory branches,
  138  distributors, and importers and do not apply to non-motor
  139  vehicle-related businesses.
  140         Section 3. Subsections (18), (23), and (24) of section
  141  320.64, Florida Statutes, are amended to read:
  142         320.64 Denial, suspension, or revocation of license;
  143  grounds.—A license of a licensee under s. 320.61 may be denied,
  144  suspended, or revoked within the entire state or at any specific
  145  location or locations within the state at which the applicant or
  146  licensee engages or proposes to engage in business, upon proof
  147  that the section was violated with sufficient frequency to
  148  establish a pattern of wrongdoing, and a licensee or applicant
  149  shall be liable for claims and remedies provided in ss. 320.695
  150  and 320.697 for any violation of any of the following
  151  provisions. A licensee is prohibited from committing the
  152  following acts:
  153         (18) The applicant or licensee has established a system of
  154  motor vehicle allocation or distribution or has implemented a
  155  system of allocation or distribution of motor vehicles to one or
  156  more of its franchised motor vehicle dealers which:
  157         (a) Reduces or alters allocations or supplies of new motor
  158  vehicles to the dealer to achieve, directly or indirectly, a
  159  purpose that is prohibited by ss. 320.60-320.70;
  160         (b)Conditionally or unconditionally reserves a specific
  161  motor vehicle identified by vehicle identification number or
  162  other unique identifier for a specifically named person, except
  163  for purposes of replacing a consumer’s vehicle pursuant to
  164  chapter 681;
  165         (c)Requires or incentivizes motor vehicle dealers to sell
  166  or lease, or to negotiate the sale or lease of, a specific motor
  167  vehicle identified by vehicle identification number or other
  168  unique identifier to a specifically named person;
  169         (d)Requires or incentivizes motor vehicle dealers to sell
  170  or lease a motor vehicle at a specified price or profit margin
  171  or restricts the price at which a motor vehicle dealer may sell
  172  or lease a motor vehicle; or
  173         (e)Is, or which otherwise is unfair, inequitable,
  174  unreasonably discriminatory, or not supportable by reason and
  175  good cause after considering the equities of the affected motor
  176  vehicles dealer or dealers. As used in this paragraph, the term
  177  “unfair” includes, but is not limited to, refusing or failing to
  178  offer to any dealer an equitable supply of new vehicles under
  179  its franchise, by model, mix, or color, as the licensee offers
  180  or allocates to its other same line-make dealers in this state
  181  or using the number of motor vehicles preordered or reserved by
  182  consumers as a factor in determining the allocation of motor
  183  vehicles to motor vehicle dealers.
  185  An applicant or licensee shall maintain for 3 years records that
  186  describe its methods or formula of allocation and distribution
  187  of its motor vehicles and records of its actual allocation and
  188  distribution of motor vehicles to its motor vehicle dealers in
  189  this state. As used in this subsection, “unfair” includes,
  190  without limitation, the refusal or failure to offer to any
  191  dealer an equitable supply of new vehicles under its franchise,
  192  by model, mix, or colors as the licensee offers or allocates to
  193  its other same line-make dealers in the state.
  194         (23) The applicant or licensee has engaged in any of the
  195  activities of a motor vehicle dealer as defined in s.
  196  320.60(13)(a) or any activities described in s. 320.60(16) or
  197  has competed or is competing with respect to any activity
  198  covered by the franchise agreement with a motor vehicle dealer
  199  of the same line-make located in this state with whom the
  200  applicant or licensee has entered into a franchise agreement,
  201  except as permitted in s. 320.645 or in subsection (24) with
  202  respect to the remote electronic transmission of a permanent or
  203  temporary feature or improvement of a motor vehicle.
  204         (24) The applicant or licensee, or common entity thereof,
  205  has sold or leased a motor vehicle to any retail consumer in
  206  this state, or has sold or activated for a fee to any retail
  207  consumer in the state any permanent or temporary motor vehicle
  208  feature or improvement that functions through hardware or
  209  components installed on the motor vehicle, except through a
  210  motor vehicle dealer properly licensed pursuant to s. 320.27 and
  211  holding a franchise agreement for the line-make that includes
  212  the motor vehicle. Notwithstanding this subsection, an applicant
  213  or a licensee, or a common entity thereof, may sell or activate
  214  for a fee a permanent or temporary motor vehicle feature or
  215  improvement to a retail consumer in this state only if the
  216  feature or improvement is provided directly to the motor vehicle
  217  through remote electronic transmission, provided that if such
  218  motor vehicle was sold or leased as new by a motor vehicle
  219  dealer in this state within the 3-year period preceding such
  220  remote electronic transmission, the applicant or licensee must
  221  pay such motor vehicle dealer a minimum of 8 percent of the
  222  payment received by the applicant, licensee, or common entity
  223  from the sale of the feature or improvement. As used in this
  224  subsection, the term “feature or improvement” includes the
  225  activation or use of motor vehicle components or hardware, but
  226  does not include services that require the transmission of data
  227  or information to or from the motor vehicle while the service is
  228  being used. Payments required under this subsection must be made
  229  within 30 days after the date of sale of the feature or
  230  improvement. This subsection section does not apply to sales by
  231  the applicant or licensee of motor vehicles to its current
  232  employees, employees of companies affiliated by common
  233  ownership, charitable not-for-profit organizations, and the
  234  Federal Government.
  236  A motor vehicle dealer who can demonstrate that a violation of,
  237  or failure to comply with, any of the preceding provisions by an
  238  applicant or licensee will or may adversely and pecuniarily
  239  affect the complaining dealer, shall be entitled to pursue all
  240  of the remedies, procedures, and rights of recovery available
  241  under ss. 320.695 and 320.697.
  242         Section 4. Subsection (6) of section 320.642, Florida
  243  Statutes, is amended to read:
  244         320.642 Dealer licenses in areas previously served;
  245  procedure.—
  246         (6) When a proposed addition or relocation concerns a
  247  dealership that performs or is to perform only service, as
  248  defined in s. 320.60 s. 320.60(16), and will not or does not
  249  sell or lease new motor vehicles, as defined in s. 320.60 s.
  250  320.60(15), the proposal shall be subject to notice and protest
  251  pursuant to the provisions of this section.
  252         (a) Standing to protest the addition or relocation of a
  253  service-only dealership shall be limited to those instances in
  254  which the applicable mileage requirement established in
  255  subparagraphs (3)(a)2. and (3)(b)1. is met.
  256         (b) The addition or relocation of a service-only dealership
  257  shall not be subject to protest if:
  258         1. The applicant for the service-only dealership location
  259  is an existing motor vehicle dealer of the same line-make as the
  260  proposed additional or relocated service-only dealership;
  261         2. There is no existing dealer of the same line-make closer
  262  than the applicant to the proposed location of the additional or
  263  relocated service-only dealership; and
  264         3. The proposed location of the additional or relocated
  265  service-only dealership is at least 7 miles from all existing
  266  motor vehicle dealerships of the same line-make, other than
  267  motor vehicle dealerships owned by the applicant.
  268         (c) In determining whether existing franchised motor
  269  vehicle dealers are providing adequate representations in the
  270  community or territory for the line-make in question in a
  271  protest of the proposed addition or relocation of a service-only
  272  dealership, the department may consider the elements set forth
  273  in paragraph (2)(b), provided:
  274         1. With respect to subparagraph (2)(b)1., only the impact
  275  as it relates to service may be considered;
  276         2. Subparagraph (2)(b)3. shall not be considered;
  277         3. With respect to subparagraph (2)(b)9., only service
  278  facilities shall be considered; and
  279         4. With respect to subparagraph (2)(b)11., only the volume
  280  of service business transacted shall be considered.
  281         (d) If an application for a service-only dealership is
  282  granted, the department must shall issue a license which permits
  283  only service, as defined in s. 320.60 s. 320.60(16), and does
  284  not permit the selling or leasing of new motor vehicles, as
  285  defined in s. 320.60 s. 320.60(15). If a service-only dealership
  286  subsequently seeks to sell new motor vehicles at its location,
  287  the notice and protest provisions of this section shall apply.
  288         Section 5. Subsection (1), paragraph (a) of subsection (2),
  289  and subsection (4) of section 320.645, Florida Statutes, are
  290  amended to read:
  291         320.645 Restriction upon ownership of dealership by
  292  licensee.—
  293         (1) A No licensee, manufacturer, importer, or distributor,
  294  manufacturer, or agent of the licensee, a manufacturer,
  295  importer, or distributor, or any parent, subsidiary, common
  296  entity, or officer, or employed representative of the licensee,
  297  manufacturer, importer, or distributor, may not directly or
  298  indirectly shall own, or operate, or control, by contract,
  299  agreement, or otherwise either directly or indirectly, a motor
  300  vehicle dealership for any line-make in this state if the
  301  licensee, manufacturer, importer, or distributor has
  302  manufactured, imported, or distributed for the sale or service
  303  of motor vehicles of any line-make which have been or are
  304  offered for sale under a franchise agreement with a motor
  305  vehicle dealer in this state with an independent person. Any
  306  person who is not prohibited by this section from owning,
  307  operating, or controlling a motor vehicle dealership may be
  308  issued a license pursuant to s. 320.27. Any person prohibited by
  309  this section from owning, operating, or controlling a motor
  310  vehicle dealership. A licensee may not be issued a motor vehicle
  311  dealer license pursuant to s. 320.27. However, a no such
  312  licensee subject to the prohibition in this section is not will
  313  be deemed to be in violation of this section:
  314         (a) When operating a motor vehicle dealership for a
  315  temporary period, not to exceed 1 year, during the transition
  316  from one owner of the motor vehicle dealership to another;
  317         (b) When operating a motor vehicle dealership temporarily
  318  for a reasonable period for the exclusive purpose of broadening
  319  the diversity of its dealer body and enhancing opportunities for
  320  qualified persons who are part of a group that has historically
  321  been underrepresented in its dealer body, or for other qualified
  322  persons who the licensee deems lack the resources to purchase or
  323  capitalize the dealership outright, in a bona fide relationship
  324  with an independent person, other than a licensee or its agent
  325  or affiliate, who has made a significant investment that is
  326  subject to loss in the dealership within the dealership’s first
  327  year of operation and who can reasonably expect to acquire full
  328  ownership of the dealership on reasonable terms and conditions;
  329  or
  330         (c) If the department determines, after a hearing on the
  331  matter, pursuant to chapter 120, at the request of any person,
  332  that there is no independent person available in the community
  333  or territory to own and operate the motor vehicle dealership in
  334  a manner consistent with the public interest. This paragraph
  335  applies only if the motor vehicle dealership at issue sells
  336  motor vehicles of a line-make that, at the time of the hearing,
  337  is offered for sale by at least one other existing motor vehicle
  338  dealership not owned, operated, or controlled by the licensee,
  339  an officer or employed representative of the licensee, a parent,
  340  subsidiary, or common entity of the licensee, or a manufacturer,
  341  importer, or distributor.
  343  In the any such case of a, the licensee must continue to make
  344  the motor vehicle dealership owned or operated pursuant to
  345  paragraph (a), paragraph (b), or paragraph (c), the dealership
  346  must be continually made available for sale to an independent
  347  person at a fair and reasonable price. Approval of the sale of
  348  such a motor vehicle dealership to a proposed motor vehicle
  349  dealer shall not be unreasonably withheld.
  350         (2) As used in this section, the term:
  351         (a) “Independent person” is a person who is not an officer,
  352  director, or employee of the licensee.
  353         (4) Nothing in this chapter shall prohibit a distributor as
  354  defined in s. 320.60 s. 320.60(5) or an affiliate thereof which
  355  common entity that is not a manufacturer or importer, a division
  356  of a manufacturer or importer, an entity that is controlled by a
  357  manufacturer or importer, or a common entity of a manufacturer
  358  or importer, and that is not owned, in whole or in part,
  359  directly or indirectly, by a manufacturer or importer, as
  360  defined in s. 320.60 s. 320.60(9), from receiving a license or
  361  licenses as defined in s. 320.27 and owning and operating a
  362  motor vehicle dealership or dealerships that sell or service
  363  motor vehicles other than any line-make of motor vehicles
  364  distributed by the distributor. A distributor or an affiliate
  365  thereof may not receive a license pursuant to s. 320.27 for a
  366  motor vehicle dealership, or own or operate a motor vehicle
  367  dealership, that sells or services motor vehicles of the line
  368  make of motor vehicles distributed by the distributor.
  369         Section 6. Section 320.67, Florida Statutes, is amended to
  370  read:
  371         320.67 Inquiry and inspection of books or other documents
  372  of licensee.—
  373         (1) The department shall conduct an inquiry of a licensee
  374  may inspect the pertinent books, records, letters, and contracts
  375  of a licensee relating to any written complaint alleging a
  376  violation of ss. 320.61-320.70 made to it against such licensee
  377  made by a motor vehicle dealer with a current franchise
  378  agreement issued by the licensee, or a motor vehicle dealer
  379  association with at least one member with a current franchise
  380  agreement issued by the licensee.
  381         (2) In the exercise of its duties under this section, the
  382  department is granted and authorized to exercise the power of
  383  subpoena for the purposes of compelling production of and
  384  inspecting pertinent books, records, letters, and contracts of a
  385  licensee and compelling the attendance of witnesses at
  386  deposition and the production of any documentary evidence
  387  necessary to the disposition by it of any written complaint
  388  under this section. The inquiry required by this section must be
  389  commenced within 30 days after receipt of the written complaint.
  390  The department may allow the licensee that is the subject of the
  391  complaint no more than 60 days after commencement of the inquiry
  392  to provide a written response. Within 30 days after the deadline
  393  for a written response by the licensee, the department shall
  394  provide a written response to the complainant stating whether
  395  the department intends to take action against the licensee under
  396  subsection (3) and, if so, what action the department intends to
  397  take. Any information obtained may not be used against the
  398  licensee as the basis for a criminal prosecution under the laws
  399  of this state.
  400         (3)If, as the result of an inquiry conducted under this
  401  section, the department determines that a licensee has violated
  402  ss. 320.61-320.70, the department must take appropriate action
  403  against the licensee, which may include license suspension or
  404  revocation; denial of a license renewal application; assessment,
  405  imposition, levy, and collection of an appropriate civil fine;
  406  or instituting a civil action for issuance of an injunction
  407  pursuant to s. 320.695.
  408         (4)This section does not alter or affect the rights of a
  409  motor vehicle dealer to bring a claim or action against a
  410  licensee pursuant to any other provision of ss. 320.60-320.70.
  411         Section 7. Subsection (13) of section 681.102, Florida
  412  Statutes, is amended to read:
  413         681.102 Definitions.—As used in this chapter, the term:
  414         (13) “Manufacturer” means any person, whether a resident or
  415  nonresident of this state, who manufactures or assembles motor
  416  vehicles, or who manufactures or assembles chassis for
  417  recreational vehicles, or who manufactures or installs on
  418  previously assembled truck or recreational vehicle chassis
  419  special bodies or equipment which, when installed, forms an
  420  integral part of the motor vehicle, or a distributor or an
  421  importer as those terms are defined in s. 320.60 s. 320.60(5),
  422  or an importer as defined in s. 320.60(7). A dealer as defined
  423  in s. 320.60 may not s. 320.60(11)(a) shall not be deemed to be
  424  a manufacturer, distributor, or importer as provided in this
  425  section.
  426         Section 8. Section 681.113, Florida Statutes, is amended to
  427  read:
  428         681.113 Dealer liability.—Except as provided in ss.
  429  681.103(3) and 681.114(2), nothing in this chapter imposes any
  430  liability on a dealer as defined in s. 320.60 s. 320.60(11)(a)
  431  or creates a cause of action by a consumer against a dealer,
  432  except for written express warranties made by the dealer apart
  433  from the manufacturer’s warranties. A dealer may not be made a
  434  party defendant in any action involving or relating to this
  435  chapter, except as provided in this section. The manufacturer
  436  shall not charge back or require reimbursement by the dealer for
  437  any costs, including, but not limited to, any refunds or vehicle
  438  replacements, incurred by the manufacturer arising out of this
  439  chapter, in the absence of evidence that the related repairs had
  440  been carried out by the dealer in a manner substantially
  441  inconsistent with the manufacturer’s published instructions.
  442         Section 9. This act shall take effect July 1, 2023.