Florida Senate - 2023                CS for CS for CS for SB 712
       By the Committees on Rules; Commerce and Tourism; and
       Transportation; and Senators Avila and Garcia
       595-04202-23                                           2023712c3
    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.; revising 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 within a certain timeframe; providing
   17         applicability; amending s. 320.642, F.S.; conforming
   18         cross-references; amending s. 320.645, F.S.; revising
   19         provisions prohibiting specified entities from owning,
   20         operating, or controlling a motor vehicle dealership
   21         in this state; specifying when certain licenses may be
   22         and are prohibited from being issued; revising
   23         exceptions to certain prohibitions on licensees;
   24         providing applicability; making technical changes;
   25         deleting the definition of the term “independent
   26         person”; conforming cross-references; prohibiting a
   27         distributor or affiliate thereof from receiving a
   28         certain license under certain circumstances; amending
   29         s. 320.67, F.S.; requiring the Department of Highway
   30         Safety and Motor Vehicles to conduct an inquiry
   31         relating to certain written complaints; providing
   32         purposes of the department’s use of a subpoena;
   33         requiring the department to commence the inquiry
   34         within a certain timeframe; authorizing the department
   35         to allow a written response to the complaint;
   36         requiring the department to provide a certain written
   37         response to the complainant within a certain date;
   38         requiring the department to take certain action if the
   39         department determines that a licensee violated certain
   40         statutes; providing construction; amending ss. 681.102
   41         and 681.113, F.S.; conforming cross-references;
   42         providing an effective date.
   44  Be It Enacted by the Legislature of the State of Florida:
   46         Section 1. Present subsections (8), (9), (10), (11), (12),
   47  (13), (14), (15), and (16) of section 320.60, Florida Statutes,
   48  are redesignated as subsections (9), (11), (12), (13), (15),
   49  (18), (10), (16), and (17), respectively, new subsections (8)
   50  and (14) are added to that section, and subsection (2) and
   51  present subsection (15) of that section are amended, to read:
   52         320.60 Definitions for ss. 320.61-320.70.—Whenever used in
   53  ss. 320.61-320.70, unless the context otherwise requires, the
   54  following words and terms have the following meanings:
   55         (2) “Common entity” means a person:
   56         (a) Who is directly or indirectly either controlled by or
   57  has more than 30 percent of its equity interest directly or
   58  indirectly owned, beneficially or of record, through any form of
   59  ownership structure, by a manufacturer, an importer, a
   60  distributor, or a licensee, or an affiliate thereof; or
   61         (b)Who has more than 30 percent of its equity interest
   62  directly or indirectly controlled or owned, beneficially or of
   63  record, through any form of ownership structure, by one or more
   64  persons who also directly or indirectly control or own,
   65  beneficially or of record, more than 30 40 percent of the voting
   66  equity interests of a manufacturer, an importer, a distributor,
   67  or a licensee, or an affiliate thereof; or
   68         (b)Who shares directors or officers or partners with a
   69  manufacturer.
   70         (c)Notwithstanding paragraphs (a) and (b), an entity that
   71  would otherwise be considered a common entity of a distributor
   72  under paragraph (a) or paragraph (b) because of its relation to
   73  a distributor is not considered a common entity of that
   74  distributor if:
   75         1.The distributor that the entity is related to was a
   76  licensed distributor on March 1, 2023;
   77         2.The entity is not a common entity of a manufacturer or
   78  importer; and
   79         3.The distributor that the entity is related to is not,
   80  and has never been, a common entity of a manufacturer or
   81  importer.
   82         (8)“Independent person” means a person who is not an
   83  agent, a parent, a subsidiary, a common entity, an officer, a
   84  director, or an employed representative of a licensee,
   85  manufacturer, importer, or distributor.
   86         (14)“Motor vehicle dealer association” means a not-for
   87  profit entity organized under the laws of this state and
   88  qualified as tax-exempt under s. 501(c)(6) of the Internal
   89  Revenue Code which acts as a trade association that primarily
   90  represents the interests of franchised motor vehicle dealers and
   91  has a membership of at least 500 franchised motor vehicle
   92  dealers as defined in s. 320.27(1)(c)1.
   93         (16)(15) “Sell,” “selling,” “sold,” “exchange,” “retail
   94  sales,” and “leases” includes:
   95         (a)Accepting a deposit or receiving a payment for the
   96  retail purchase, lease, or other use of a motor vehicle, but
   97  does not include facilitating a motor vehicle dealer’s
   98  acceptance of a deposit or receipt of a payment from a consumer,
   99  and does not include receiving payment under a retail
  100  installment sale contract;
  101         (b)Accepting a reservation from a retail consumer for a
  102  specific motor vehicle identified by a vehicle identification
  103  number or other product identifier;
  104         (c)Setting the retail price for the purchase, lease, or
  105  other use of a motor vehicle, but does not include setting a
  106  manufacturer’s suggested retail price;
  107         (d)Offering or negotiating with a retail consumer terms
  108  for the purchase, lease, or other use of a motor vehicle;
  109         (e)Offering or negotiating with a retail consumer a value
  110  for a motor vehicle being traded in as part of the purchase,
  111  lease, or other use of a motor vehicle, but does not include a
  112  website or other means of electronic communication that
  113  identifies to a consumer a conditional trade-in value and that
  114  contains language informing the consumer that the trade-in value
  115  is not binding on any motor vehicle dealer;
  116         (f) Any transaction where the title of a motor vehicle or a
  117  used motor vehicle is transferred to a retail consumer; or, and
  118  also
  119         (g) Any retail lease transaction where a retail consumer
  120  customer leases a vehicle for a period of at least 12 months,
  121  but does not include administering lease agreements, taking
  122  assignments of leases, performing required actions pursuant to
  123  such leases, or receiving payments under a lease agreement that
  124  was originated by a motor vehicle dealer. Establishing a price
  125  for sale pursuant to s. 320.64(24) does not constitute a sale or
  126  lease.
  127         Section 2. Section 320.605, Florida Statutes, is amended to
  128  read:
  129         320.605 Legislative intent.—It is the intent of the
  130  Legislature to protect the public health, safety, and welfare of
  131  the citizens of the state by regulating the licensing of motor
  132  vehicle dealers and manufacturers, maintaining competition,
  133  providing consumer protection and fair trade and providing
  134  minorities with opportunities for full participation as motor
  135  vehicle dealers. Sections 320.61-320.70 are intended to apply
  136  solely to the licensing of manufacturers, factory branches,
  137  distributors, and importers and do not apply to non-motor
  138  vehicle-related businesses.
  139         Section 3. Subsections (18), (23), and (24) of section
  140  320.64, Florida Statutes, are amended to read:
  141         320.64 Denial, suspension, or revocation of license;
  142  grounds.—A license of a licensee under s. 320.61 may be denied,
  143  suspended, or revoked within the entire state or at any specific
  144  location or locations within the state at which the applicant or
  145  licensee engages or proposes to engage in business, upon proof
  146  that the section was violated with sufficient frequency to
  147  establish a pattern of wrongdoing, and a licensee or applicant
  148  shall be liable for claims and remedies provided in ss. 320.695
  149  and 320.697 for any violation of any of the following
  150  provisions. A licensee is prohibited from committing the
  151  following acts:
  152         (18) The applicant or licensee has established a system of
  153  motor vehicle allocation or distribution or has implemented a
  154  system of allocation or distribution of motor vehicles to one or
  155  more of its franchised motor vehicle dealers which:
  156         (a) Reduces or alters allocations or supplies of new motor
  157  vehicles to the dealer to achieve, directly or indirectly, a
  158  purpose that is prohibited by ss. 320.60-320.70;
  159         (b)Conditionally or unconditionally reserves a specific
  160  motor vehicle identified by vehicle identification number or
  161  other unique identifier for a specifically named person, except
  162  for purposes of replacing a consumer’s vehicle pursuant to
  163  chapter 681;
  164         (c)Requires or incentivizes motor vehicle dealers to sell
  165  or lease, or to negotiate the sale or lease of, a specific motor
  166  vehicle identified by vehicle identification number or other
  167  unique identifier to a specifically named person;
  168         (d)Requires or incentivizes motor vehicle dealers to sell
  169  or lease a motor vehicle at a specified price or profit margin
  170  or restricts the price at which a motor vehicle dealer may sell
  171  or lease a motor vehicle; or
  172         (e)Is, or which otherwise is unfair, inequitable,
  173  unreasonably discriminatory, or not supportable by reason and
  174  good cause after considering the equities of the affected motor
  175  vehicles dealer or dealers. As used in this paragraph, the term
  176  “unfair” includes, but is not limited to, refusing or failing to
  177  offer to any dealer an equitable supply of new vehicles under
  178  its franchise, by model, mix, or color, as the licensee offers
  179  or allocates to its other same line-make dealers in this state
  180  or using the number of motor vehicles preordered or reserved by
  181  consumers as a factor in determining the allocation of motor
  182  vehicles to motor vehicle dealers.
  184  An applicant or licensee shall maintain for 3 years records that
  185  describe its methods or formula of allocation and distribution
  186  of its motor vehicles and records of its actual allocation and
  187  distribution of motor vehicles to its motor vehicle dealers in
  188  this state. As used in this subsection, “unfair” includes,
  189  without limitation, the refusal or failure to offer to any
  190  dealer an equitable supply of new vehicles under its franchise,
  191  by model, mix, or colors as the licensee offers or allocates to
  192  its other same line-make dealers in the state.
  193         (23) The applicant or licensee has engaged in any of the
  194  activities of a motor vehicle dealer as defined in s.
  195  320.60(13)(a) or any activities described in s. 320.60(16) or
  196  has competed or is competing with respect to any activity
  197  covered by the franchise agreement with a motor vehicle dealer
  198  of the same line-make located in this state with whom the
  199  applicant or licensee has entered into a franchise agreement,
  200  except as permitted in s. 320.645 or in subsection (24) with
  201  respect to the remote electronic transmission of a permanent or
  202  temporary feature or improvement of a motor vehicle.
  203         (24) The applicant or licensee, or common entity thereof,
  204  has sold or leased a motor vehicle to any retail consumer in
  205  this state, or has sold or activated for a fee to any retail
  206  consumer in the state any permanent or temporary motor vehicle
  207  feature or improvement that functions through hardware or
  208  components installed on the motor vehicle, except through a
  209  motor vehicle dealer properly licensed pursuant to s. 320.27 and
  210  holding a franchise agreement for the line-make that includes
  211  the motor vehicle. Notwithstanding this subsection, an applicant
  212  or a licensee, or a common entity thereof, may sell or activate
  213  for a fee a permanent or temporary motor vehicle feature or
  214  improvement to a retail consumer in this state only if the
  215  feature or improvement is provided directly to the motor vehicle
  216  through remote electronic transmission, provided that if such
  217  motor vehicle was sold or leased as new by a motor vehicle
  218  dealer in this state within the 2-year period preceding such
  219  remote electronic transmission, and the ownership of the vehicle
  220  has not changed, the applicant or licensee must pay such motor
  221  vehicle dealer a minimum of 8 percent of the payment received by
  222  the applicant, licensee, or common entity from the sale of the
  223  feature or improvement. As used in this subsection, the term
  224  “feature or improvement” includes the activation or use of motor
  225  vehicle components or hardware, but does not include services
  226  that require the transmission of data or information to or from
  227  the motor vehicle while the service is being used. Payments
  228  required under this subsection must be made within 60 days after
  229  the date of sale of the feature or improvement. This subsection
  230  section does not apply to sales by the applicant or licensee of
  231  motor vehicles to its current employees, employees of companies
  232  affiliated by common ownership, charitable not-for-profit
  233  organizations, and the Federal Government.
  235  A motor vehicle dealer who can demonstrate that a violation of,
  236  or failure to comply with, any of the preceding provisions by an
  237  applicant or licensee will or may adversely and pecuniarily
  238  affect the complaining dealer, shall be entitled to pursue all
  239  of the remedies, procedures, and rights of recovery available
  240  under ss. 320.695 and 320.697.
  241         Section 4. Subsection (6) of section 320.642, Florida
  242  Statutes, is amended to read:
  243         320.642 Dealer licenses in areas previously served;
  244  procedure.—
  245         (6) When a proposed addition or relocation concerns a
  246  dealership that performs or is to perform only service, as
  247  defined in s. 320.60 s. 320.60(16), and will not or does not
  248  sell or lease new motor vehicles, as defined in s. 320.60 s.
  249  320.60(15), the proposal shall be subject to notice and protest
  250  pursuant to the provisions of this section.
  251         (a) Standing to protest the addition or relocation of a
  252  service-only dealership shall be limited to those instances in
  253  which the applicable mileage requirement established in
  254  subparagraphs (3)(a)2. and (3)(b)1. is met.
  255         (b) The addition or relocation of a service-only dealership
  256  shall not be subject to protest if:
  257         1. The applicant for the service-only dealership location
  258  is an existing motor vehicle dealer of the same line-make as the
  259  proposed additional or relocated service-only dealership;
  260         2. There is no existing dealer of the same line-make closer
  261  than the applicant to the proposed location of the additional or
  262  relocated service-only dealership; and
  263         3. The proposed location of the additional or relocated
  264  service-only dealership is at least 7 miles from all existing
  265  motor vehicle dealerships of the same line-make, other than
  266  motor vehicle dealerships owned by the applicant.
  267         (c) In determining whether existing franchised motor
  268  vehicle dealers are providing adequate representations in the
  269  community or territory for the line-make in question in a
  270  protest of the proposed addition or relocation of a service-only
  271  dealership, the department may consider the elements set forth
  272  in paragraph (2)(b), provided:
  273         1. With respect to subparagraph (2)(b)1., only the impact
  274  as it relates to service may be considered;
  275         2. Subparagraph (2)(b)3. shall not be considered;
  276         3. With respect to subparagraph (2)(b)9., only service
  277  facilities shall be considered; and
  278         4. With respect to subparagraph (2)(b)11., only the volume
  279  of service business transacted shall be considered.
  280         (d) If an application for a service-only dealership is
  281  granted, the department must shall issue a license which permits
  282  only service, as defined in s. 320.60 s. 320.60(16), and does
  283  not permit the selling or leasing of new motor vehicles, as
  284  defined in s. 320.60 s. 320.60(15). If a service-only dealership
  285  subsequently seeks to sell new motor vehicles at its location,
  286  the notice and protest provisions of this section shall apply.
  287         Section 5. Subsection (1), paragraph (a) of subsection (2),
  288  and subsection (4) of section 320.645, Florida Statutes, are
  289  amended to read:
  290         320.645 Restriction upon ownership of dealership by
  291  licensee.—
  292         (1) A No licensee, manufacturer, importer, or distributor,
  293  manufacturer, or agent of the licensee, a manufacturer,
  294  importer, or distributor, or any parent, subsidiary, common
  295  entity, or officer, or employed representative of the licensee,
  296  manufacturer, importer, or distributor, may not directly or
  297  indirectly shall own, or operate, or control, by contract,
  298  agreement, or otherwise either directly or indirectly, a motor
  299  vehicle dealership for any line-make in this state if the
  300  licensee, manufacturer, importer, or distributor has
  301  manufactured, imported, or distributed for the sale or service
  302  of motor vehicles of any line-make which have been or are
  303  offered for sale under a franchise agreement with a motor
  304  vehicle dealer in this state with an independent person. Any
  305  person who is not prohibited by this section from owning,
  306  operating, or controlling a motor vehicle dealership may be
  307  issued a license pursuant to s. 320.27. Any person prohibited by
  308  this section from owning, operating, or controlling a motor
  309  vehicle dealership. A licensee may not be issued a motor vehicle
  310  dealer license pursuant to s. 320.27. However, a no such
  311  licensee subject to the prohibition in this section is not will
  312  be deemed to be in violation of this section:
  313         (a) When operating a motor vehicle dealership for a
  314  temporary period, not to exceed 1 year, during the transition
  315  from one owner of the motor vehicle dealership to another;
  316         (b) When operating a motor vehicle dealership temporarily
  317  for a reasonable period for the exclusive purpose of broadening
  318  the diversity of its dealer body and enhancing opportunities for
  319  qualified persons who are part of a group that has historically
  320  been underrepresented in its dealer body, or for other qualified
  321  persons who the licensee deems lack the resources to purchase or
  322  capitalize the dealership outright, in a bona fide relationship
  323  with an independent person, other than a licensee or its agent
  324  or affiliate, who has made a significant investment that is
  325  subject to loss in the dealership within the dealership’s first
  326  year of operation and who can reasonably expect to acquire full
  327  ownership of the dealership on reasonable terms and conditions;
  328  or
  329         (c) If the department determines, after a hearing on the
  330  matter, pursuant to chapter 120, at the request of any person,
  331  that there is no independent person available in the community
  332  or territory to own and operate the motor vehicle dealership in
  333  a manner consistent with the public interest. This paragraph
  334  applies only if the motor vehicle dealership at issue sells
  335  motor vehicles of a line-make that, at the time of the hearing,
  336  is offered for sale by at least one other existing motor vehicle
  337  dealership not owned, operated, or controlled by the licensee,
  338  an officer or employed representative of the licensee, a parent,
  339  subsidiary, or common entity of the licensee, or a manufacturer,
  340  importer, or distributor.
  342  In the any such case of a, the licensee must continue to make
  343  the motor vehicle dealership owned or operated pursuant to
  344  paragraph (a), paragraph (b), or paragraph (c), the dealership
  345  must be continually made available for sale to an independent
  346  person at a fair and reasonable price. Approval of the sale of
  347  such a motor vehicle dealership to a proposed motor vehicle
  348  dealer shall not be unreasonably withheld.
  349         (2) As used in this section, the term:
  350         (a) “Independent person” is a person who is not an officer,
  351  director, or employee of the licensee.
  352         (4) Nothing in this chapter shall prohibit a distributor as
  353  defined in s. 320.60 s. 320.60(5) or an affiliate thereof which
  354  common entity that is not a manufacturer or importer, a division
  355  of a manufacturer or importer, an entity that is controlled by a
  356  manufacturer or importer, or a common entity of a manufacturer
  357  or importer, and that is not owned, in whole or in part,
  358  directly or indirectly, by a manufacturer or importer, as
  359  defined in s. 320.60 s. 320.60(9), from receiving a license or
  360  licenses as defined in s. 320.27 and owning and operating a
  361  motor vehicle dealership or dealerships that sell or service
  362  motor vehicles other than any line-make of motor vehicles
  363  distributed by the distributor. A distributor or an affiliate
  364  thereof may not receive a license pursuant to s. 320.27 for a
  365  motor vehicle dealership, or own or operate a motor vehicle
  366  dealership, that sells or services motor vehicles of the line
  367  make of motor vehicles distributed by the distributor.
  368         Section 6. Section 320.67, Florida Statutes, is amended to
  369  read:
  370         320.67 Inquiry and inspection of books or other documents
  371  of licensee.—
  372         (1) The department shall conduct an inquiry of a licensee
  373  may inspect the pertinent books, records, letters, and contracts
  374  of a licensee relating to any written complaint alleging a
  375  violation of ss. 320.61-320.70 made to it against such licensee
  376  made by a motor vehicle dealer with a current franchise
  377  agreement issued by the licensee, or a motor vehicle dealer
  378  association with at least one member with a current franchise
  379  agreement issued by the licensee.
  380         (2) In the exercise of its duties under this section, the
  381  department is granted and authorized to exercise the power of
  382  subpoena for the purposes of compelling production of and
  383  inspecting pertinent books, records, letters, and contracts of a
  384  licensee and compelling the attendance of witnesses at
  385  deposition and the production of any documentary evidence
  386  necessary to the disposition by it of any written complaint
  387  under this section. The inquiry required by this section must be
  388  commenced within 30 days after receipt of the written complaint.
  389  The department may allow the licensee that is the subject of the
  390  complaint no more than 60 days after commencement of the inquiry
  391  to provide a written response. Within 30 days after the deadline
  392  for a written response by the licensee, the department shall
  393  provide a written response to the complainant stating whether
  394  the department intends to take action against the licensee under
  395  subsection (3) and, if so, what action the department intends to
  396  take. Any information obtained may not be used against the
  397  licensee as the basis for a criminal prosecution under the laws
  398  of this state.
  399         (3)If, as the result of an inquiry conducted under this
  400  section, the department determines that a licensee has violated
  401  ss. 320.61-320.70, the department must take appropriate action
  402  against the licensee, which may include license suspension or
  403  revocation; denial of a license renewal application; assessment,
  404  imposition, levy, and collection of an appropriate civil fine;
  405  or instituting a civil action for issuance of an injunction
  406  pursuant to s. 320.695.
  407         (4)This section does not alter or affect the rights of a
  408  motor vehicle dealer to bring a claim or action against a
  409  licensee pursuant to any other provision of ss. 320.60-320.70.
  410         Section 7. Subsection (13) of section 681.102, Florida
  411  Statutes, is amended to read:
  412         681.102 Definitions.—As used in this chapter, the term:
  413         (13) “Manufacturer” means any person, whether a resident or
  414  nonresident of this state, who manufactures or assembles motor
  415  vehicles, or who manufactures or assembles chassis for
  416  recreational vehicles, or who manufactures or installs on
  417  previously assembled truck or recreational vehicle chassis
  418  special bodies or equipment which, when installed, forms an
  419  integral part of the motor vehicle, or a distributor or an
  420  importer as those terms are defined in s. 320.60 s. 320.60(5),
  421  or an importer as defined in s. 320.60(7). A dealer as defined
  422  in s. 320.60 may not s. 320.60(11)(a) shall not be deemed to be
  423  a manufacturer, distributor, or importer as provided in this
  424  section.
  425         Section 8. Section 681.113, Florida Statutes, is amended to
  426  read:
  427         681.113 Dealer liability.—Except as provided in ss.
  428  681.103(3) and 681.114(2), nothing in this chapter imposes any
  429  liability on a dealer as defined in s. 320.60 s. 320.60(11)(a)
  430  or creates a cause of action by a consumer against a dealer,
  431  except for written express warranties made by the dealer apart
  432  from the manufacturer’s warranties. A dealer may not be made a
  433  party defendant in any action involving or relating to this
  434  chapter, except as provided in this section. The manufacturer
  435  shall not charge back or require reimbursement by the dealer for
  436  any costs, including, but not limited to, any refunds or vehicle
  437  replacements, incurred by the manufacturer arising out of this
  438  chapter, in the absence of evidence that the related repairs had
  439  been carried out by the dealer in a manner substantially
  440  inconsistent with the manufacturer’s published instructions.
  441         Section 9. This act shall take effect July 1, 2023.