SB 604 — Motor vehicles; definitions; merging multiple versions of statues; termination, cancellation, or nonrenewal of a franchise; repealer. Effective date.

“Motor"Motor vehicle”vehicle" means any motor-driven vehicle required to be registered under the Oklahoma Vehicle License and Registration Act.

“New"New motor vehicle dealer”dealer" means any person, firm, association, corporation, or trust not excluded by this paragraph who sells, offers for sale, advertises to sell, receives deposits for vehicles, leases, or displays new motor vehicles and holds a bona fide contract or franchise in effect with a manufacturer or distributor authorized by the manufacturer to make predelivery preparation of such vehicles sold to purchasers and to perform post- sale work pursuant to the manufacturer’smanufacturer's or distributor’sdistributor's warranty.

As used herein, “authorized"authorized predelivery preparation”preparation" means the rendition by the dealer of services and safety adjustments on each new motor vehicle in accordance with the procedure and safety standards required by the manufacturer of the vehicle to be made before its delivery to the purchaser.

“Performance"Performance of authorized ENGR.post-sale work pursuant to the warranty", as used herein, means the rendition of services which are required by the terms of the warranty that stands extended to the vehicle at the time of its sale and are to be made in accordance with the safety standards prescribed by the manufacturer.

The term includes premises or facilities at which a person engages only in the repair of motor vehicles if repairs are performed pursuant to the terms of a franchise and motor vehicle manufacturer's warranty.

For the purpose of Sections 561 through 567, 572, 578.1, 579, and 579.1 of this title, the terms new motor vehicle dealer and "new motor vehicle dealership" shall be synonymous.

The term new motor vehicle dealer does not include:

ENR.

604 Page 2 post-salea. work pursuant to the warranty”, as used herein, means the rendition of services which are required by the terms of the warranty that stands extended to the vehicle at the time of its sale and are to be made in accordance with the safety standards prescribed by the manufacturer.

The term includes premises or facilities at which a person engages only in the repair of motor vehicles if repairs are performed pursuant to the terms of a franchise and motor vehicle manufacturer’s warranty.

For the purpose of Sections 561 through 567, 572, 578.1, 579, and 579.1 of this title, the terms new motor vehicle dealer and “new motor vehicle dealership” shall be synonymous.

The term new motor vehicle dealer does not include:

a.

“Motor"Motor vehicle salesperson”salesperson" "Salesperson" means any person, resident or nonresident, who, for gain or compensation of any kind, either ENGR.directly or indirectly, regularly or occasionally, by any form of agreement or arrangement, sells or negotiates for the sale, lease, or conveyance or arranges the financing of any new motor vehicle or powersports vehicle as an employee for any new motor vehicle dealer or powersports vehicle dealer to any one or more third parties;

S.

B.

NO.

604 Page 3 directly or indirectly, regularly or occasionally, by any form of agreement or arrangement, sells or negotiates for the sale, lease, or conveyance or arranges the financing of any new motor vehicle or powersports vehicle as an employee for any new motor vehicle dealer or powersports dealer to any one or more third parties;

“Commission”"Commission" means the Oklahoma New Motor Vehicle Commission;

“Manufacturer”"Manufacturer" means any person, firm, association, corporation, or partnership, trust, joint venture, or common entity thereof, resident or nonresident, that manufactures or assembles new and unused motor vehicles or new and unused powersport vehicles or that engages in the fabrication or assembly of motorized vehicles of a type required to be registered in this state;

“Distributor”"Distributor" means any person, firm, association, corporation, or partnership, trust, joint venture, or common entity thereof, resident or nonresident, that, being authorized by the original manufacturer, in whole or in part sells or distributes new and unused motor vehicles to new motor vehicle dealers or new and unused powersport vehicles to powersport vehicle dealers, or that maintains distributor representatives;

7.ENR.

“Factory branch” means any branch office maintained by a person, firm, association, corporation, or partnership, trust, joint venture, or common entity thereof that manufactures or assembles motor vehicles or powersport vehicles for the sale of motor vehicles or powersport vehicles to distributors, or for the sale of motor ENGR.

604 Page 43 vehicles7. to new motor vehicle dealers, or for the sale of powersport vehicles to new powersport vehicle dealers, or for directing or supervising, in whole or in part, its representatives;

"Factory branch" means any branch office maintained by a person, firm, association, corporation, partnership, trust, joint venture, or common entity thereof that manufactures or assembles motor vehicles or powersport vehicles for the sale of motor vehicles or powersport vehicles to distributors, or for the sale of motor vehicles to new motor vehicle dealers, or for the sale of powersport vehicles to new powersport vehicle dealers, or for directing or supervising, in whole or in part, its representatives;

“Distributor"Distributor branch”branch" means any branch office similarly maintained by a distributor for the same purposes a factory branch is maintained;

“Factory"Factory representative”representative" means any officer or, agent, employee or agentperson engaged as a representative of a manufacturer of motor vehicles or powersport vehicles or by a factory branch, for the purpose of making or promoting the sale of its motor vehicles or powersport vehicles, or for supervising or contacting its dealers or prospective dealers;

“Distributor"Distributor representative”representative" means any person, firm, association, corporation, or partnership, trust, joint venture, or common entity thereof, and each officer andand, agent, or employee thereof engaged as a representative of a distributor or distributor branch of motor vehicles or powersport vehicles, for the purpose of making or promoting the sale of its motor vehicles or powersport vehicles, or for supervising or contacting its dealers or prospective dealers;

“Franchise”"Franchise" means any contract or agreement between a new motor vehicle dealer or a powersports vehicle dealer and a manufacturer of a new motor vehicle or powersports vehicle or its distributor or factory branch by which the new motor vehicle dealer or new powersports vehicle dealer is authorized to engage in the ENGR.activities of a new motor vehicle dealer or new powersports vehicle dealer as defined by this section;

12.

"New or unused motor vehicle" means a vehicle which is in the possession of the manufacturer or distributor or has been sold only to the holder of a valid franchise granted by the manufacturer or distributor for the sale of that make of new vehicle so long as the manufacturer's statement of origin has not been assigned to ENR.

604 Page 54 activitiesanyone ofother than a newlicensed motorfranchised vehicle dealer or new powersportsmotor vehicle dealer asof definedthe bysame thisline-make; section;

12.

“New or unused motor vehicle” means a vehicle which is in the possession of the manufacturer or distributor or has been sold only to the holder of a valid franchise granted by the manufacturer or distributor for the sale of that make of new vehicle so long as the manufacturer’s statement of origin has not been assigned to anyone other than a licensed franchised new motor vehicle dealer of the same line-make;

“Area"Area of responsibility”responsibility" means the geographical area, as designated by the manufacturer, factory branch, factory representative, distributor, distributor branch, or distributor representative, in which the new motor vehicle dealer or powersports dealer is held responsible for the promotion and development of sales and rendering of service for the make of motor vehicle or powersports vehicle for which the new motor vehicle dealer or new powersports vehicle dealer holds a franchise or selling agreement;

“Off"Off premises”premises" means at a location other than the address designated on the new motor vehicle dealer’sdealer's or new powersports vehicle dealer’sdealer's license;

“Sponsoring"Sponsoring entity”entity" means any person, firm, association, corporation, or trust which has control, either permanently or temporarily, over the real property upon which the off-premises sale or display is conducted;

ENGR.16.

S."Product" means new motor vehicles and new motor vehicle parts or new powersports vehicle and new powersports vehicle parts;

B.

NO.

604 Page 6 16.

“Product” means new motor vehicles and new motor vehicle parts or new powersports vehicle and new powersports vehicle parts;

“Service”"Service" means motor vehicle or powersports vehicle warranty repairs including both parts and labor;

“Lead”"Lead" means a consumer contact in response to a factory program designed to generate interest in purchasing or leasing a new motor vehicle or new powersports vehicle;

“Sell”"Sell" or “sale”"sale" means to sell or lease;

“Factory”"Factory" means a manufacturer, distributor, factory branch, distributor branch,;branch;

or any common entity of a manufacturer, distributor, factory branch,branch or distributor branch;

or factory representative, or distributor representative, which manufactures or distributes vehicle products;products, motor vehicles or powersports vehicles, or that maintains factory representatives;

“Powersports"Powersports vehicle”vehicle" means any new or unused motorcycles, scooters, mopeds, all-terrain vehicles, and utility vehicles requiredENR. to be registered under the Oklahoma Vehicle License and Registration Act, with the exception of all-terrain vehicles, utility vehicles, and motorcycles used exclusively for off-road use which are sold by a retail implement dealer;

22.

“Powersports vehicle dealer” means any person, firm, or corporation, resident or nonresident, that is in the business of selling any new powersports vehicles except for retail implement dealers;

ENGR.

604 Page 75 23.required to be registered under the Oklahoma Vehicle License and Registration Act, with the exception of all-terrain vehicles, utility vehicles, and motorcycles used exclusively for off-road use which are sold by a retail implement dealer;

“Retail22. implement dealer” means a business engaged primarily in the sale of farm tractors as defined in Section 1-118 of this title or implements of husbandry as defined in Section 1-125 of this title or a combination thereof and is exempt from licensing by the Commission for the sale of all-terrain vehicles, utility vehicles, and motorcycles used exclusively for off-road use;

"Powersports vehicle dealer" means any person, firm, or corporation, resident or nonresident, that is in the business of selling any new powersports vehicles except for retail implement dealers;

23.

"Retail implement dealer" means a business engaged primarily in the sale of farm tractors as defined in Section 1-118 of this title or implements of husbandry as defined in Section 1-125 of this title or a combination thereof and is exempt from licensing by the Commission for the sale of all-terrain vehicles, utility vehicles, and motorcycles used exclusively for off-road use;

“Consumer"Consumer data”data" means nonpublic personal information as defined in 15 U.S.C., Section 6809(4) as it existed on January 1, 2023, that is:

The term shall not include the same or similar data obtained by a manufacturer from any source other than the new motor vehicle dealer or new motor vehicle dealer’sdealer's data management system;

and 25.

“Fleet"Fleet vehicle”vehicle" means a new motor vehicle sold and titled or registered to a business and used for business purposes only;

“Common"Common entity”entity" means any person, firm, association, corporation, partnership, trust, or joint venture acting as a new motor vehicle dealer which:as defined by paragraph 20 2 of this section:

(1) which is directly or indirectly controlled by or has more than thirty percent (30%) of its equity interest directly or indirectly owned, ENGR.ENR.

604 Page 86 beneficially or of record, through any form of ownership structure, by a factory, manufacturer, manufacturer branch, distributor, or distributor branch, or (2) which has more than thirty percent (30%) of its equity interest directly or indirectly controlled or owned, beneficially or of record, through any form of ownership structure, by one or more persons who also directly or indirectly control or own, beneficially or of record, more than thirty percent (30%) of the equity interests of thea factory, manufacturer, manufacturer branch, distributor, or distributor branch.

AnNotwithstanding subdivision (1) or (2) of subparagraph a of this paragraph, an entity that would otherwise be considered a common entity of a distributor asunder providedsubdivision in(1) division 1 or 2(2) of subparagraph a of this paragraph because of its relation to a distributor is not considered a common entity of that distributor if:

(1) the distributor to which the entity is related was a licensed distributor on March 1, 2025, (2) the entity is not a common entity of a manufacturer or an importer, and ENGR.(3) the distributor to which the entity is related is not, and has never been, a common entity of a manufacturer or an importer.

S.

B.

NO.

604 Page 9 (3) the distributor to which the entity is related is not, and has never been, a common entity of a manufacturer or an importer.

2021, Section 564,565.2, as last amended by Section 4,2, Chapter 240,145, O.S.L.

2024,2025, Section 564),565.2), is amended to read as follows:

Section 564.565.2.

ItIrrespective shallof bethe unlawfulterms, forprovisions, anyor person,conditions firm,of association,any corporation,franchise, or partnership,the trust,terms joint venture, or commonprovisions entityof thereof,any towaiver, engageno inmanufacturer businessshall as,terminate, cancel, or servefail into therenew capacityany of,franchise orwith act as a licensed new motor vehicle dealer,dealer powersports dealer, or manufacturer or distributor of new motor vehicles or powersports vehicles,vehicle ordealer factoryunless branch,the distributormanufacturer branchhas orsatisfied factorythe representativenotice orrequirements distributor representative, as definedprovided in Section 562 of this title,section inand thishas stategood withoutcause firstENR. obtaining a license therefor as provided for by law.

Any person, firm, association, corporation, or partnership, trust, joint venture, or common entity thereof, engaging in more than one of such capacities or having more than one place where such business is carried on or conducted in this state shall be required to obtain and hold a current license for each thereof.

Provided that, a new motor vehicle dealer’s license shall authorize one person to sell in the event such person shall be the owner of a proprietorship, or the person designated as principal in the dealer’s franchise or the managing officer or one partner if no principal person is named in ENGR.

604 Page 107 thefor franchise.cancellation, termination, or nonrenewal.

ItThe ismanufacturer furthershall providednot thatattempt ato factorycancel or anfail entity affiliated by any ownership or control by the factory shall not be permitted to engagerenew in the activitiesfranchise agreement of a new motor vehicle dealer as defined in Section 562 of this titlestate orunfairly beand licensedwithout asjust aprovocation newor motorwithout vehicledue dealerregard into thisthe state,equities except as provided by subparagraph b of paragraphthe 12dealer ofor Sectionwithout 565good offaith thisas title.defined herein.

As used herein, "good faith" means the duty of each party to any franchise agreement to act in a fair and equitable manner toward each other, with freedom from coercion or intimidation or threats thereof from each other.

ApplicationsIrrespective forof licensesthe requiredterms, toprovisions, beor obtainedconditions underof any franchise, or the terms or provisions of Sectionany 561waiver, etgood seq.cause shall exist for the purpose of a termination, cancellation, or nonrenewal when:

of this title shall be verified by the oath or affirmation of the applicant and shall be on forms prescribed by the Oklahoma New Motor Vehicle Commission and furnished to the applicants, and shall contain information as the Commission deems necessary to enable it to fully determine the qualifications and eligibility of the several applicants to receive the license or licenses applied for.

The Commission shall require in such application, or otherwise, information relating to the applicant’s current financial standing, the applicant’s business integrity, whether the applicant has an established place of business and is primarily engaged in the pursuit, avocation, or business for which a license, or licenses, are applied for, and whether the applicant is able to properly conduct the business for which a license, or licenses, are applied for, and such other pertinent information consistent with the safeguarding of the public interest and the public welfare.

All applications for license or licenses shall be accompanied by the appropriate fee or fees ENGR.

S.

B.

NO.

604 Page 11 therefor in accordance with the schedule thereof hereinafter set out.

In the event any application is denied and the license applied for is not issued, the entire license fee shall be returned to the applicant.

All licenses issued under the provisions of Section 561 et seq.

of this title shall expire on June 30, following the date of issue and shall be nontransferable.

All applications for renewal of a license for a new motor vehicle dealer, powersports dealer, manufacturer, distributor, or manufacturer’s or distributor’s representative shall be submitted by June 1 of each year, and such license or licenses will be issued by July 1.

If applications have not been made for renewal of licenses at the times described in this subsection, it shall be illegal for any person to represent himself or herself and act as a dealer, manufacturer, distributor, or manufacturer’s or distributor’s representative.

Service Oklahoma and licensed operators will be notified not to accept such dealers’ titles until such time as licenses have been issued by the Commission.

C.

The schedule of license fees to be charged and received by the Commission for the licenses issued hereunder shall be as follows:

ForThe eachnew factorymotor branchvehicle dealer or distributornew branch,powersports Fourvehicle Hundreddealer Dollarshas ($400.00)failed initialto feecomply with annuala renewalprovision feeof the franchise, which provision is both reasonable and of Threematerial Hundredsignificance Dollarsto ($300.00);the franchise relationship, or the new motor vehicle dealer or new powersports vehicle dealer has failed to comply with reasonable performance criteria for sales or service established by the manufacturer, and the new motor vehicle dealer or new powersports vehicle dealer has been notified by written notice from the manufacturer;

ENGR.and 2.

The new motor vehicle dealer or new powersports vehicle dealer has received written notification of failure to comply with the manufacturer's reasonable sales performance standards, capitalization requirements, facility commitments, business-related equipment acquisitions, or other such remediable failings exclusive of those reasons enumerated in paragraph 1 of subsection C of this section, and the new motor vehicle dealer or new powersports vehicle dealer has been afforded a reasonable opportunity of not less than six (6) months to comply with such a provision or criteria.

C.

Irrespective of the terms, provisions, or conditions of any franchise agreement prior to the termination, cancellation, or nonrenewal of any franchise, the manufacturer shall furnish notification of such termination, cancellation, or nonrenewal to the new motor vehicle dealer or new powersports vehicle dealer and the Oklahoma New Motor Vehicle Commission as follows:

ENR.

604 Page 128 2.1.

ForNot eachless manufacturerthan orninety distributor(90) ofdays newprior motorto vehiclesthe oreffective newdate powersportof vehicles,the Fourtermination, Hundredcancellation, Dollarsor ($400.00)nonrenewal initialunless feefor witha annualcause renewaldescribed feein ofparagraph Three2 Hundredof Dollarsthis ($300.00);subsection;

3.

For each factory representative or distributor representative, One Hundred Dollars ($100.00) annually;

4.

For each new motor vehicle dealer, except powersports vehicle dealers, initial fee of Three Hundred Dollars ($300.00) per franchise sold at each location licensed, with an annual renewal fee of One Hundred Dollars ($100.00) per franchise sold at each location licensed per year;

and 5.

For each powersports vehicle dealer, initial fee of Three Hundred Dollars ($300.00) per manufacturer represented by the dealer at each location licensed, with an annual renewal fee of One Hundred Dollars ($100.00) per manufacturer represented by the dealer at each location licensed per year.

D.

The licenses issued to each new motor vehicle dealer, new powersports vehicle dealer, manufacturer, distributor, factory branch, or distributor branch shall specify the location of the factory, office, or branch thereof.

In case such location is changed, the Commission may endorse the change of location on the license without charge unless the change of address triggers a relocation of a new motor vehicle dealer or new powersports vehicle dealer pursuant to the provisions of Section 578.1 of this title.

ENGR.

S.

B.

NO.

604 Page 13 The licenses of each new vehicle dealer shall be posted in a conspicuous place in the dealer’s place or places of business.

Every motor vehicle factory representative or distributor representative shall physically possess the license when engaged in business and shall display such upon request.

The name of the employer of such factory representative or distributor representative shall be stated on the license.

E.

The new powersports dealer license shall only allow the sale of the specific types of powersports vehicles authorized by the manufacturer and agreed to by the powersports dealer.

SECTION 3.

AMENDATORY Section 1, Chapter 29, O.S.L.

2023 (47 O.S.

Supp.

2024, Section 564.3), is amended to read as follows:

Section 564.3.

A.

As used in this section:

1.

“Access fee” means a requirement to pay money for access to protected dealer data that is in addition to an amount specified in a written and executed contract for goods and services;

“AuthorizedNot integrator”less meansthan afifteen person(15) whodays aprior dealerto hasthe aeffective contractualdate relationshipof with or the dealertermination, otherwisecancellation, gives express written authorization to have access to protected dealer data stored on a dealer data system or tononrenewal writewith protectedrespect dealer data to theany dealer data system for the purpose of performing a specific function for the dealer;following:

ENGR.

S.

B.

NO.

604 Page 14 3.

“Dealer data system” means software, hardware, or firmware that a dealer leases or rents from a dealer management system provider for the purpose of storing protected dealer data;

4.

“Dealer management system provider” means a person who, for compensation, maintains and provides access to a dealer data system in which a dealer stores protected dealer data;

5.

“Protected dealer data” means:

consumerinsolvency dataof thatthe anew dealermotor generatedvehicle dealer or thatnew thepowersports consumervehicle provideddealer, toor the dealerfiling thatof isany notpetition otherwiseby publiclyor availableagainst and the consumernew hasmotor notvehicle otherwisedealer providedor consentnew orpowersports acknowledgmentvehicle todealer shareunder theany information,bankruptcy andor receivership law, b.

anyfailure otherof the new motor vehicle dealer dataor innew connectionpowersports withvehicle thedealer dealer’sto dailyconduct businessits customary sales and service operations induring whichits acustomary dealerbusiness hashours rightsfor inseven a(7) dealerconsecutive databusiness system;days, provided that such failure to conduct business shall not be due to an act of God or circumstances beyond the direct control of the new motor vehicle dealer, or c.

andconviction 6.of the new motor vehicle dealer or new powersports vehicle dealer of any felony which is punishable by imprisonment or a violation of the Federal Odometer Act;

Authorized integrator and dealer management system provider do not include:

a.

a manufacturer, distributor, importer, factory or any entity that is a subsidiary or affiliate of, or acts on behalf of, a manufacturer, distributor, or importer factory, including any subsidiary or affiliate of a factory, or ENGR.

S.

B.

NO.

604 Page 15 b.

a governmental body or other person that is acting in accordance with federal, state, or local law, or a valid court order.

B.

A dealer management system provider may:

1.

Condition access and ability of a dealer or authorized integrator to receive, share, copy, use, write, or transmit protected dealer data from or to a dealer data system on the dealer’s or authorized integrator’s compliance with commercially reasonable data security standards;

2.

Require an authorized integrator to have express written authorization from a dealer before allowing the authorized integrator to gain access to, receive, share, copy, use, or transmit protected dealer data;

DenyNot accessless tothan aone dealerhundred dataeighty system(180) todays aprior dealerto if the dealereffective failsdate toof paythe antermination amountor duecancellation towhere the dealermanufacturer management system provider under a lease, contract, or otherdistributor agreementis concerningdiscontinuing the dealer’ssale access to or use of the dealerproduct dataline. system.

C.The notification required by this subsection shall be by certified mail, return receipt requested, and shall contain a statement of intent to terminate, to cancel, or to not renew the franchise, a statement of the reasons for the termination, cancellation, or nonrenewal and the date the termination shall take effect.

ExceptD. as provided in subsection B of this section, a dealer management system provider shall not take any action that would limit or prohibit the ability of a dealer or an authorized integrator to receive, protect, store, copy, share, or use protected dealer data using means that include, but are not limited to:

1.Upon the affected new motor vehicle or new powersports vehicle dealer's receipt of the aforementioned notice of ENR.

Imposing an access fee on a dealer or authorized integrator;

and ENGR.

604 Page 169 2.termination, cancellation, or nonrenewal, the new motor vehicle dealer shall have the right to file a protest of such threatened termination, cancellation, or nonrenewal with the Commission within thirty (30) days and request a hearing.

RestrictingThe ahearing dealershall orbe anheld authorizedwithin integratorone fromhundred sharingeighty protected(180) days of the date of the timely protest by the dealer dataand orin writingaccordance datawith the provisions of the Administrative Procedures Act, Sections 250 through 323 of Title 75 of the Oklahoma Statutes, to determine if the threatened cancellation, termination, or havingnonrenewal accessof the franchise has been for good cause and if the factory has complied with its obligations pursuant to asubsections dealerA, dataB, system.and C of this section and the factory shall have the burden of proof.

ProhibitedEither restrictionsparty pursuantmay torequest thisan paragraphadditional include,one-hundred-eighty-day butextension areof notthe limitedhearing to:date from the Commission.

a.Approval of the requested extension may not be unreasonably withheld or delayed.

limitsIf onthe Commission finds that the scopethreatened cancellation, termination, or naturenonrenewal of protectedthe dealerfranchise datahas tonot whichbeen afor dealergood cause or authorizedviolates integratorsubsection hasA, accessB, or mayC shareof orthis writesection, tothen it shall issue a dealerfinal dataorder system,stating andthat b.the threatened termination is wrongful.

aA requirementfactory forshall ahave dealerthe orright authorized integrator to provideappeal sensitivesuch ororder. confidential business information or information that a dealer or authorized integrator uses for competitive purposes in return for access to protected dealer data or an authorization to share or write protected dealer data to a dealer data system.

D.During the pendency of the hearing and after the decision, through any appeal, the franchise shall remain in full force and effect, including the right to transfer the franchise.

ExceptIf asthe otherwiseCommission providedfinds inthat thisthe section,threatened anycancellation, termtermination, or conditionnonrenewal ofis afor contractgood withcause aand dealerdoes managementnot systemviolate providersubsection thatA, conflictsB, withor theC requirementsof setthis forthsection, inthe subsectionnew Cmotor ofvehicle thisor sectionnew ispowersports voidvehicle anddealer unenforceableshall tohave the extentright ofto thean conflict.appeal.

During the pendency of the action, including the final decision or appeal, the franchise shall remain in full force and effect, including the right to transfer the franchise.

If the new motor vehicle dealer prevails in the threatened termination action, the Commission shall award to the new motor vehicle dealer the attorney fees and costs incurred to defend the action.

AnIf authorizedthe integratorfactory shall:prevails in an action to terminate, cancel, or not renew any franchise, the new motor vehicle or new powersports vehicle dealer shall be allowed fair and reasonable compensation by the manufacturer for:

ObtainNew, expresscurrent, writtenand authorizationprevious model year vehicle inventory which has been acquired from athe dealermanufacturer, beforeand gainingwhich accessis to,unused receiving,and sharing,has copying,not using,been writing,damaged or transmittingaltered protectedwhile dealerin data;the new motor vehicle dealer's possession;

ENGR.ENR.

604 Page 1710 2.

ComplySupplies withand securityparts standardswhich inhave gainingbeen accessacquired to,from receiving,the sharing,manufacturer, copying,for using,the writing,purpose orof transmittingthis protectedsection, dealerlimited data;to any and all supplies and parts that are listed on the current parts price sheet available to the new motor vehicle dealer;

and 3.

AllowEquipment aand dealerfurnishings, toprovided withdraw,the revoke,new ormotor amendvehicle anydealer expresspurchased writtenthem authorizationfrom the dealermanufacturer providesor underits paragraphapproved 1sources; of this subsection:

and 4.

Special tools, with such fair and reasonable compensation to be paid by the manufacturer within ninety (90) days of the effective date of the termination, cancellation, or nonrenewal, provided the new motor vehicle dealer has clear title to the inventory and other items and is in a position to convey that title to the manufacturer.

atFor the solepurposes discretionof paragraph 1 of thethis dealer,subsection, iffair and reasonable compensation shall be no less than the dealernet givesacquisition aprice thirty-dayof priorthe noticevehicle topaid anby authorizedthe integrator,new ormotor b.vehicle dealer.

immediately,b. for good cause.

For the purposes of paragraphs 2, 3, and 4 of this subsection, fair and reasonable compensation shall be the net acquisition price paid by the new motor vehicle dealer less a twenty-percent (20%) straight- line depreciation for each year following the dealer's acquisition of the supplies, parts, equipment, furnishings, and/or special tools.

ThisIf sectiona doesfactory notprevails preventin aan dealer,action ato dealerterminate, managementcancel, system provider, or annot authorizedrenew integratorany fromfranchise dischargingand the obligationsnew ofmotor avehicle dealer, dealer management system provider, or ofnew anpowersports authorizedvehicle integratordealer underis federal,leasing state,the ordealership localfacilities, lawthe tomanufacturer secureshall andpay preventa unauthorizedreasonable accessrent to protected dealer data, or from limiting the scopelessor of the obligations, in accordance with federal,and state,subject orto localthe law.provisions of this subsection.

2.Nothing in this section shall be construed to relieve a new motor vehicle or new powersports vehicle dealer of its duty to mitigate damages.

ASuch dealerreasonable managementrental systemvalue providershall isbe notpaid liableonly for any action that a dealer takes directly with respect to securing or preventing unauthorized access to protected dealer data, or for actions that an authorized integrator takes in appropriately following the writtenextent instructions of the dealerdealership forpremises securingare orrecognized preventingin unauthorized access to protected dealer data, to the extentfranchise thatand theonly actionsif preventthey theare: dealer management system ENGR.

ENR.

604 Page 1811 providera. from meeting a legal obligation to secure or prevent unauthorized access to protected dealer data.

3.used solely for performance in accordance with the franchise.

AIf dealerthe facility is notused liable for anythe actionoperation thatof anmore authorizedthan integratorone takesfranchise, directlythe withreasonable respectrent toshall securingbe orpaid preventingbased unauthorizedupon access to protected dealer data, or for actions that the authorizedportion integrator takes in appropriately following the written instructions of the dealerfacility forutilized securingby or preventing unauthorized access to protected dealer data, to the extentfranchise thatbeing theterminated, actionscanceled, prevent the dealer from meeting a legal obligation to secure or preventnonrenewed, unauthorizedand accessb. to protected dealer data.

4.not substantially in excess of facilities recommended by the manufacturer.

An authorized integrator is not liable for any action that a dealer takes directly with respect to securing or preventing unauthorized access to protected dealer data, or for actions that the dealer takes in appropriately following the written instructions of the authorized integrator for securing or preventing unauthorized access to protected dealer data, to the extent that the actions prevent the authorized integrator from meeting a legal obligation to secure or prevent unauthorized access to protected dealer data.

5.

A manufacturer, distributor, importer, factory or any entity that is a subsidiary or affiliate of, or acts on behalf of, a manufacturer, distributor, or importer factory, including any subsidiary or affiliate of a factory, is not liable for any action that a dealer, dealer management system provider, authorized integrator, or other third party, except for a third party who the ENGR.

S.

B.

NO.

604 Page 19 manufacturer has provided the data to as provided for in paragraph 7 of this subsection, takes directly with respect to securing or preventing unauthorized access to protected dealer data or for actions that an authorized integrator, dealer management system provider, or other third party takes in appropriately following the written instructions of the dealer for securing or preventing unauthorized access to protected dealer data.

6.

Notwithstanding any other agreement, an authorized integrator shall indemnify and hold the new motor vehicle dealer harmless from any third-party claims asserted against or damages incurred by the new motor vehicle dealer to the extent caused by access to, use of, or disclosure of consumer data in violation of this section.

7.

Notwithstanding any other agreement, a manufacturer, distributor, importer, factory or any entity that is a subsidiary or affiliate of, or acts on behalf of, a manufacturer, distributor, or importer factory, including any subsidiary or affiliate of a factory, shall indemnify the dealer for any third-party claims asserted against or damages incurred by the dealer to the extent the claims or damages are caused by the access to and unlawful disclosure of protected dealer data resulting from a breach caused by the manufacturer or distributor or a third party to which the manufacturer or distributor has provided the protected dealer data ENGR.

S.

B.

NO.

604 Page 20 in violation of this section, the written consent granted by the dealer, or other applicable state or federal law.

G.

A factory or any entity that acts on behalf of a factory shall not prohibit an authorized integrator that has satisfied, or is compliant with, commercially reasonable data security standards and that the dealer has identified as one of its authorized integrators from integrating into the dealer’s dealer data system or place an unreasonable restriction on integration by an authorized integrator or other third party that the dealer wishes to be an authorized integrator.

For the purposes of this subsection, “unreasonable restriction” includes:

1.

Imposing an access fee on a dealer or authorized integrator;

however, a franchisor or third party may charge a franchise or authorized integrator for actual costs associated with modifications to a franchisor’s electronic systems to enable a secure interface with the authorized integrator’s system and software;

AnIf unreasonablethe limitationfacilities are owned by the new motor vehicle or conditionnew onpowersports vehicle dealer, or a related entity as defined in 26 U.S.C.A., Section 267(b), or a member, partner or shareholder of the scopedealership, within ninety (90) days following the effective date of the termination, cancellation, or naturenonrenewal, except a termination, cancellation, or nonrenewal for a cause listed in paragraph 2 of subsection C of this section, at the datadealer thator isrelated sharedentity's withwritten anrequest, authorizedthe integrator;manufacturer shall either:

3.a.

Anlocate unreasonablea limitationqualified onpurchaser thewho abilitywill ofoffer theto authorizedpurchase integratorthe todealership writefacilities dataat to a dealerreasonable dataprice, system;b.

4.locate a qualified lessee who will offer to lease the premises for the remaining lease term at the rent set forth in the lease, or c.

Anlease unreasonablethe limitationdealership orfacilities conditionat ona anreasonable authorizedrental integratorvalue for the portion of the facility that accessesis orrecognized sharesin protectedthe dealerfranchise dataagreement orfor thatone writesand dataone- tohalf a(1.5) dealeryears, dataor system;d.

purchase the dealer's existing dealership facility and ENGR.real estate at its fair market value.

If the factory and dealer cannot agree on the fair market value of the terminated franchise or agree to a process to determine the fair market value, then the factory and dealer shall utilize the process described in paragraph 6 of subsection G of this section.

If a manufacturer or distributor purchases a dealership facility and real estate, then it shall be entitled to sole ownership, possession, use, and control of any ENR.

604 Page 2112 5.items, buildings, or property that were included in the contract to purchase.

Requiring unreasonable access to an authorized integrator’s sensitive, competitive, or other confidential business information as a condition for accessing protected dealer data or sharing protected dealer data with an authorized integrator.

Notwithstanding paragraph 1 of this subsection, a factory or entity that acts on behalf of a factory, including any subsidiary or affiliate of a factory, may charge a motor vehicle dealer or authorized integrator for costs associated with modifications to a franchisor’s electronic systems to enable a functional and secure interface with the authorized integrator’s system and software.

SECTION 4.

AMENDATORY 47 O.S.

2021, Section 565, as last amended by Section 7, Chapter 240, O.S.L.

2024 (47 O.S.

Supp.

2024, Section 565), is amended to read as follows:

Section 565.

A.

The Oklahoma New Motor Vehicle Commission may deny an application for a license, revoke or suspend a license, or impose a fine against any person or entity, not to exceed Ten Thousand Dollars ($10,000.00) per occurrence, that violates any provision of Sections 561 through 567, 572, 578.1, 579, and 579.1 of this title or for any of the following reasons:

1.

On satisfactory proof of unfitness of the applicant in any application for any license under the provisions of Section 561 et seq.

of this title;

ENGR.

S.

B.

NO.

604 Page 22 2.

For any material misstatement made by an applicant in any application for any license under the provisions of Section 561 et seq.

of this title;

ForIf anythe failurefacilities toare complyleased withby anythe provisionnew ofmotor vehicle or new powersports vehicle dealer from an entity other than a related entity as defined in 26 U.S.C.A., Section 561267(b), etor seq.a member, partner, or shareholder of the dealership, within ninety (90) days following the effective date of the termination, cancellation, or nonrenewal the manufacturer will either:

ofa. this title or any rule promulgated by the Commission under authority vested in it by Section 561 et seq.

locate a tenant or tenants satisfactory to the lessor, who will sublet or assume the balance of thisthe title;lease, b.

arrange with the lessor for the cancellation of the lease without penalty to the new motor vehicle dealer, or c.

failing the foregoing, lease the dealership facilities at a reasonable rent for the portion of the facility that is recognized in the franchise agreement for one (1) year or the remainder of the lease, whichever is less.

AThe changemanufacturer ofshall conditionnot afterbe licenseobligated isto grantedprovide resultingassistance inunder failurethis tosection maintainif the qualificationsnew formotor license;vehicle or new powersports vehicle dealer:

5.

Being a new motor vehicle dealer or new powersports vehicle dealer who:

hasfails requiredto aaccept purchaser of a newbona motorfide vehicleoffer orfrom new powersports vehicle, as a conditionprospective ofpurchaser, salesublessee, and delivery thereof, to also purchase special features, appliances, accessories, or equipmentassignee, not desired or requested by the purchaser and installed by the new motor vehicle dealer or new powersports vehicle dealer, b.

usesrefuses anyto falseexecute a settlement agreement with the manufacturer or misleadinglessor advertisingif insuch connectionagreement with businessthe asmanufacturer aor newlessor motorwould vehiclebe dealerwithout orcost to the new powersportsmotor vehicle dealer, or c.

hasfails committedto anymake unlawfulwritten actrequest whichfor resultedassistance inunder thethis revocationsection ofwithin anyninety similar(90) licensedays inafter anotherthe state,effective ENGR.date of the termination, cancellation, or nonrenewal.

5.

The manufacturer shall be entitled to occupy and use any space for which it pays rent required by this section.

ENR.

604 Page 2313 d.G.

hasIn failedaddition orto refusedthe torepurchase performrequirements anyset writtenforth agreementin withsubsections anyE retailand buyerF involvingof this section, in the saleevent the termination, cancellation, or nonrenewal is the result of a discontinuance of a product line, the manufacturer or distributor shall compensate the new motor vehicle or new powersports vehicle,vehicle e.dealer as follows:

has been convicted of a felony crime that substantially relates to the occupation of a new motor vehicle dealer or new powersports vehicle dealer and poses a reasonable threat to public safety, f.

has committed a fraudulent act in selling, purchasing, or otherwise dealing in new motor vehicles or new powersports vehicles or has misrepresented the terms and conditions of a sale, purchase or contract for sale or purchase of a new motor vehicle or new powersports vehicle or any interest therein including an option to purchase such vehicle, g.

has failed to meet or maintain the conditions and requirements necessary to qualify for the issuance of a license, or h.

completes any sale or transaction of an extended service contract, extended maintenance plan, or similar product using contract forms that do not conspicuously disclose the identity of the service contract provider;

6.

Being a new motor vehicle salesperson who is not employed as such by a licensed new motor vehicle dealer;

ENGR.

S.

B.

NO.

604 Page 24 7.

Being a new motor vehicle dealer or new powersports vehicle dealer who:

a.

does not have an established place of business, b.

does not provide for a suitable repair shop separate from the display room with ample space to repair or recondition one or more vehicles at the same time, and which is staffed with properly trained and qualified repair technicians and is equipped with such parts, tools, and equipment as may be requisite for the servicing of motor vehicles in such a manner as to make them comply with the safety laws of this state and to properly fulfill the dealer’s or manufacturer’s warranty obligation, c.

does not hold a franchise in effect with a manufacturer or distributor of new or unused vehicles for the sale of the same and is not authorized by the manufacturer or distributor to render predelivery preparation of such vehicles sold to purchasers and to perform any authorized post-sale work pursuant to the manufacturer’s or distributor’s warranty, d.

employs or utilizes the services of used motor vehicle lots or dealers or other unlicensed persons or unregistered persons in connection with the sale of new vehicles, ENGR.

S.

B.

NO.

604 Page 25 e.

does not properly service a new motor vehicle or new powersports vehicle before delivery of same to the original purchaser thereof, or f.

fails to order and stock a reasonable number of new motor vehicles necessary to meet consumer demand for each of the new motor vehicles included in the new motor vehicle dealer’s franchise agreement, unless the new motor vehicles are not readily available from the manufacturer or distributor due to limited production;

8.

Being a factory that has:

a.

either induced or attempted to induce by means of coercion or intimidation, any new motor vehicle dealer or powersports vehicle dealer:

(1) to accept delivery of any vehicle or vehicles, parts, or accessories therefor, or any other commodities including advertising material which shall not have been ordered by the new motor vehicle dealer, (2) to order or accept delivery of any motor vehicle or powersports vehicle with special features, appliances, accessories, or equipment not included in the list price of the vehicles as publicly advertised by the manufacturer thereof, or ENGR.

S.

B.

NO.

604 Page 26 (3) to order or accept delivery of any parts, accessories, equipment, machinery, tools, appliances, or any commodity whatsoever, b.

induced under threat or discrimination by the withholding from delivery to a new motor vehicle dealer or new powersports vehicle dealer certain models of motor vehicles, changing or amending unilaterally the new motor vehicle dealer’s allotment of motor vehicles, and/or withholding and delaying delivery of the vehicles out of the ordinary course of business, in order to induce by such coercion any new motor vehicle dealer or new powersports vehicle dealer to participate or contribute to any local or national advertising fund controlled directly or indirectly by the factory or for any other purposes such as contest, “giveaways”, or other so-called sales promotional devices, and/or change of quotas in any sales contest;

or has required new motor vehicle dealers, as a condition to receiving their vehicle allotment, to order a certain percentage of the vehicles with optional equipment not specified by the dealer;

however, nothing in this section shall prohibit a factory from supporting an advertising association ENGR.

S.

B.

NO.

604 Page 27 which is open to all new motor vehicle dealers or new powersports vehicle dealers on the same basis, c.

used a performance standard, sales objective, or program for measuring dealer performance that may have a material effect on a right of the dealer to vehicle allocation;

or payment under any incentive or reimbursement program that is unfair, unreasonable, inequitable, and not based on accurate information, d.

used a performance standard for measuring sales or service performance of that results in penalizing any new motor vehicle dealer or new powersports vehicle dealer under the terms of the franchise agreement which:

(1) is unfair, unreasonable, arbitrary, or inequitable, and (2) does not consider the relevant and material local and state or regional criteria, including prevailing economic conditions affecting the sales or service performance of a vehicle dealer or and any relevant and material data and facts presented by the dealer in writing within thirty (30) days of the written notice of the manufacturer to the dealer of its intention to ENGR.

S.

B.

NO.

604 Page 28 cancel, terminate, or not renew the dealer’s franchise agreement, and (3) does not consider the actual vehicle allocation offered or otherwise made available to the dealer by the manufacturer or distributor, as well as the dealer’s inventory levels relevant to achieve any minimum performance standards to which the manufacturer or distributor holds the dealer accountable, e.

failed or refused to sell, or offer for sale, new motor vehicles to all of its authorized same line-make franchised new motor vehicle dealers or new powersports vehicle dealers at the same price for a comparably equipped motor vehicle, on the same terms, with no differential in functionally available discount, allowance, credit, or bonus, except as provided in subparagraph e of paragraph 9 of this subsection, f.

failed to provide reasonable compensation to a new motor vehicle dealer substantially equivalent to the actual cost of providing a manufacturer required loaner or rental vehicle to any consumer who is having a vehicle serviced at the dealership.

For purposes of this paragraph, actual cost is the average cost in the ENGR.

S.

B.

NO.

604 Page 29 new motor vehicle dealer’s region for the rental of a substantially similar make and model as the vehicle being serviced, or g.

failed to make available to its new motor vehicle dealers a fair and proportional share of all new vehicles distributed to same line-make dealers in this state, subject to the same reasonable terms, including any vehicles distributed from a common new vehicle inventory pool outside of the factory’s ordinary allocation process such as any vehicles the factory reserves to distribute on a discretionary basis;

9.

Being a factory that:

a.

has attempted to coerce or has coerced any new motor vehicle dealer or new powersports vehicle dealer to enter into any agreement or to cancel any agreement;

has failed to act in good faith and in a fair, equitable, and nondiscriminatory manner;

has directly or indirectly coerced, intimidated, threatened, or restrained any new motor vehicle dealer;

has acted dishonestly;

or has failed to act in accordance with the reasonable standards of fair dealing, b.

has failed to compensate its dealers for the work and services they are required to perform in connection with the dealer’s delivery and preparation obligations ENGR.

S.

B.

NO.

604 Page 30 according to the agreements on file with the Commission which must be found by the Commission to be reasonable, or has failed to adequately and fairly compensate its dealers for labor, parts, and other expenses incurred by the dealer to perform under and comply with manufacturer’s warranty agreements and recall repairs which shall include diagnostic work as applicable and assistance requested by a consumer whose vehicle was subjected to an over-the-air or remote change, repair, or update to any part, system, accessory, or function by the manufacturer and performed by the dealer in order to satisfy the consumer.

Time allowances for the diagnosis and performance of repair work shall be reasonable and adequate for the work to be performed.

Adequate and fair compensation, which under this provision shall be no less than the rates customarily charged for retail consumer repairs as calculated herein, for parts and labor for warranty and recall repairs shall, at the option of the new motor vehicle dealer, be established by the new motor vehicle dealer submitting to the manufacturer or distributor one hundred sequential nonwarranty consumer-paid service repair orders which contain warranty-like repairs, or ninety (90) ENGR.

S.

B.

NO.

604 Page 31 consecutive days of nonwarranty consumer-paid service repair orders which contain warranty-like repairs, whichever is less, covering repairs made no more than one hundred eighty (180) days before the submission and declaring the average percentage labor rate and/or markup rate.

A motor vehicle dealer may not submit a request to establish its retail rates more than once in a twelve-month period.

That request may establish a parts markup rate, labor rate, or both.

The new motor vehicle dealer or new powersports vehicle dealer shall calculate its retail parts rate by determining the total charges for parts from the qualified repair orders submitted, dividing that amount by the new motor vehicle dealer’s total cost of the purchase of those parts, subtracting one (1), and multiplying by one hundred (100) to produce a percentage.

The new motor vehicle dealer or new powersports vehicle dealer shall calculate its retail labor rate by dividing the amount of the new vehicle dealer’s total labor sales from the qualified repair orders by the total labor hours charged for those sales.

When submitting repair orders to establish a retail parts and labor rate, a new motor vehicle dealer or new powersports vehicle dealer need not include repairs for:

ENGR.

S.

B.

NO.

604 Page 32 (1) routine maintenance including but not limited to the replacement of bulbs, fluids, filters, batteries, and belts that are not provided in the course of and related to a repair, (2) factory special events, specials, or promotional discounts for retail consumer repairs, (3) parts sold or repairs performed at wholesale, (4) factory-approved goodwill or policy repairs or replacements, (5) repairs with aftermarket parts, when calculating the retail parts rate but not the retail labor rate, (6) repairs on aftermarket parts, (7) replacement of or work on tires including front- end alignments and wheel or tire rotations, (8) repairs of vehicles owned by the new motor vehicle dealer or new powersports vehicle dealer or employee thereof at the time of the repair, (9) vehicle reconditioning, or (10) items that do not have individual part numbers including, but not limited to, nuts, bolts, and fasteners.

A manufacturer or distributor may, not later than forty-five (45) days after submission, rebut that ENGR.

S.

B.

NO.

604 Page 33 declared retail parts and labor rate in writing by reasonably substantiating that the rate is not accurate or is incomplete pursuant to the provisions of this section.

If the manufacturer or distributor determines the set of repair orders submitted by the new motor vehicle dealer or new powersports vehicle dealer pursuant to this section for a retail labor rate or retail parts markup rate is substantially higher than the new vehicle dealer’s current warranty rates, the manufacturer or distributor may request, in writing, within forty-five (45) days after the manufacturer’s or distributor’s receipt of the new vehicle dealer’s initial submission, all repair orders closed within the period of thirty (30) days immediately preceding, or thirty (30) days immediately following, the set of repair orders initially submitted by the new motor vehicle dealer.

All time periods under this section shall be suspended until the supplemental repair orders are provided.

If the manufacturer or distributor requests supplemental repair orders, the manufacturer or distributor may, within thirty (30) days after receiving the supplemental repair orders and in accordance with the formula described in this subsection, calculate a ENGR.

S.

B.

NO.

604 Page 34 proposed adjusted retail labor rate or retail parts markup rate, as applicable, based upon any set of the qualified repair orders submitted by the franchisee and following the formula set forth herein to establish the rate.

The retail labor and parts rates shall go into effect thirty (30) days following the approval by the manufacturer or distributor.

If the declared rate is rebutted, the manufacturer or distributor shall provide written notice stating the reasons for the rebuttal, an explanation of the reasons for the rebuttal, and a copy of all calculations used by the franchisor in determining the manufacturer or distributor’s position and propose an adjustment in writing of the average percentage markup or labor rate based on that rebuttal not later than forty-five (45) days after submission.

If the new motor vehicle dealer or new powersports vehicle dealer does not agree with the proposed average percentage markup or labor rate, the new vehicle dealer may file a protest with the Commission not later than thirty (30) days after receipt of that proposal by the manufacturer or distributor.

In the event a protest is filed, the manufacturer or distributor shall have the burden of proof to establish the new vehicle ENGR.

S.

B.

NO.

604 Page 35 dealer’s submitted parts markup rate or labor rate was inaccurate or not complete pursuant to the provisions of this section.

A manufacturer or distributor may not retaliate against any new motor vehicle dealer or new powersports vehicle dealer seeking to exercise its rights under this section.

A manufacturer or distributor may require a dealer to submit repair orders in accordance with this section in order to validate the reasonableness of a dealer’s retail rate for parts or labor not more often than once every twelve (12) months.

A manufacturer or distributor may not otherwise recover its costs from new vehicle dealers within this state including a surcharge imposed on a new motor vehicle dealer solely intended to recover the cost of reimbursing a dealer for parts and labor pursuant to this section;

provided, a manufacturer or distributor shall not be prohibited from increasing prices for vehicles or parts in the normal course of business or from auditing and charging back claims in accordance with this section.

All claims made by dealers for compensation for delivery, preparation, warranty, or recall repair work shall be paid within thirty (30) days after approval and shall be approved or disapproved within thirty ENGR.

S.

B.

NO.

604 Page 36 (30) days after receipt.

When any claim is disapproved, the dealer shall be notified in writing of the grounds for disapproval.

The dealer’s delivery, preparation, and warranty obligations as filed with the Commission shall constitute the dealer’s sole responsibility for product liability as between the dealer and manufacturer.

A factory may reasonably and periodically audit a new motor vehicle dealer or new powersports vehicle dealer to determine the validity of paid claims for dealer compensation or any charge-backs for warranty parts or service compensation.

Except in cases of suspected fraud, audits of warranty payments shall only be for the one- year period immediately following the date of the payment.

A manufacturer shall reserve the right to reasonable, periodic audits to determine the validity of paid claims for dealer compensation or any charge- backs for consumer or dealer incentives.

Except in cases of suspected fraud, audits of incentive payments shall only be for a one-year period immediately following the date of the payment.

A factory shall not deny a claim or charge a new motor vehicle dealer back subsequent to the payment of the claim unless the factory can show that the claim was false or ENGR.

S.

B.

NO.

604 Page 37 fraudulent or that the new motor vehicle dealer or new powersports vehicle dealer failed to reasonably substantiate the claim by the written reasonable procedures of the factory.

A factory shall not deny a claim or implement a charge-back against a new vehicle dealer after payment of a claim in the event a purchaser of a new vehicle that is the subject of a claim fails to comply with titling or registration laws of this state and is not prevented from compliance by any action of the dealer;

provided, that the factory may require the dealer to provide, within thirty (30) days of notice of charge-back, withholding of payment, or denial of claim, the documentation to demonstrate the vehicle sale, delivery, and customer qualification for an incentive as reported, including consumer name and address and written attestation signed by the dealer operator or general manager stating the consumer was not on the export control list and the dealer did not know or have reason to know the vehicle was being exported or resold.

The factory shall provide written notice to a dealer of a proposed charge-back that is the result of an audit along with the specific audit results and proposed charge-back amount.

A dealer that receives ENGR.

S.

B.

NO.

604 Page 38 notice of a proposed charge-back pursuant to a factory’s audit has the right to file a protest with the Commission within thirty (30) days after receipt of the notice of the charge-back or audit results, whichever is later.

The factory is prohibited from implementing the charge-back or debiting the dealer’s account until either the time frame for filing a protest has passed or a final adjudication is rendered by the Commission, whichever is later, unless the dealer has agreed to the charge-back or charge-backs, c.

fails to compensate the new motor vehicle dealer for a used motor vehicle:

(1) that is of the same make and model manufactured, imported, or distributed by the factory and is a line-make that the new motor vehicle dealer is franchised to sell or on which the new motor vehicle dealer is authorized to perform recall repairs, (2) that is subject to a stop-sale or do-not-drive order issued by the factory or an authorized governmental agency, (3) that is held by the new motor vehicle dealer in the dealer’s inventory at the time the stop-sale or do-not-drive order is issued or that is taken ENGR.

S.

B.

NO.

604 Page 39 by the new motor vehicle dealer into the dealer’s inventory after the recall notice as a result of a retail consumer trade-in or a lease return to the dealer inventory in accordance with an applicable lease contract, (4) that cannot be repaired due to the unavailability, within thirty (30) days after issuance of the stop-sale or do-not-drive order, of a remedy or parts necessary for the new motor vehicle dealer to make the recall repair, and (5) that is not at least in the prorated amount of one percent (1.00%) of the value of the vehicle per month beginning on the date that is thirty (30) days after the date on which the stop-sale order was provided to the new motor vehicle dealer until the earlier of either of the following:

(a) the date the recall remedy or parts are made available, or (b) the date the new motor vehicle dealer sells, trades, or otherwise disposes of the affected used motor vehicle.

For the purposes of division (5) of this subparagraph, the value of a used vehicle shall be the average Black ENGR.

S.

B.

NO.

604 Page 40 Book value for the year, make, and model of the recalled vehicle.

A factory may direct the manner and method in which a new motor vehicle dealer must demonstrate the inventory status of an affected used motor vehicle to determine eligibility under this subparagraph;

provided, that the manner and method may not be unduly burdensome and may not require information that is unduly burdensome to provide.

All reimbursement claims made by new motor vehicle dealers pursuant to this section for recall remedies or repairs, or for compensation where no part or repair is reasonably available and the vehicle is subject to a stop-sale or do-not-drive order, shall be subject to the same limitations and requirements as a warranty reimbursement claim made under subparagraph b of this paragraph.

In the alternative, a manufacturer may compensate its franchised new motor vehicle dealers under a national recall compensation program;

provided, the compensation under the program is equal to or greater than that provided under division (5) of this subparagraph, or as the manufacturer and new motor vehicle dealer otherwise agree.

Nothing in this section shall require a factory to provide total compensation to a new motor vehicle dealer which would ENGR.

S.

B.

NO.

604 Page 41 exceed the total average Black Book value of the affected used motor vehicle as originally determined under division (5) of this subparagraph.

Any remedy provided to a new motor vehicle dealer under this subparagraph is exclusive and may not be combined with any other state or federal compensation remedy, d.

unreasonably fails or refuses to offer to its same line-make franchised dealers a reasonable supply and mix of all models manufactured for that line-make, or unreasonably requires a dealer to pay any extra fee, purchase unreasonable advertising displays or other materials, or enter into a separate agreement which adversely alters the rights or obligations contained within the dealer’s existing franchise agreement or which waives any right of the new motor vehicle dealer or new powersports vehicle dealer as protected by Section 561 et seq.

of this title, or remodel, renovate, or recondition the dealer’s existing facilities as a prerequisite to receiving a model or series of vehicles, except as may be necessary to sell or service the model or series of vehicles as provided by subparagraph e of this paragraph.

It shall be a violation of this section for new vehicle allocation to be withheld subject to any requirement to purchase ENGR.

S.

B.

NO.

604 Page 42 or sell any number of used or off-lease vehicles.

The failure to deliver any such new motor vehicle shall not be considered a violation of the section if the failure is not arbitrary or is due to lack of manufacturing capacity or to a strike or labor difficulty, a shortage of materials, a freight embargo, or other cause over which the manufacturer has no control.

However, this subparagraph shall not apply to limited production model vehicles, a vehicle not advertised by the factory for sale in this state, vehicles that are subject to allocation affected by federal environmental laws or environmental laws of this state, or vehicles allocated in response to an unforeseen event or circumstance, e.

except as necessary to comply with a health or safety law, or to comply with a technology requirement which is necessary to sell or service a vehicle that the franchised new motor vehicle dealer or new powersports vehicle dealer is authorized or licensed by the franchisor to sell or service, requires a dealer to construct a new facility or substantially renovate the dealer’s existing facility unless the facility construction or renovation is justified by the economic conditions existing at the time, as well as ENGR.

S.

B.

NO.

604 Page 43 the reasonably foreseeable projections, in the new motor vehicle dealer’s market and in the automotive industry.

However, this subparagraph shall not apply if the new motor vehicle dealer or new powersports vehicle dealer voluntarily agrees to facility construction or renovation in exchange for money, credit, allowance, reimbursement, or additional vehicle allocation to a dealer from the factory to compensate the dealer for the cost of, or a portion of the cost of, the facility construction or renovation.

Except as necessary to comply with a health or safety law, or to comply with a technology or safety requirement which is necessary to sell or service a motor vehicle or powersports vehicle that the franchised dealer is authorized or licensed by the franchisor to sell or service, a new vehicle dealer which completes a facility construction or renovation pursuant to factory requirements shall not be required to construct a new facility or renovate the existing facility if the same area of the facility or premises has been constructed or substantially altered within the last ten (10) years and the construction or alteration was approved by the manufacturer as a part of a facility upgrade program, standard, or policy.

ENGR.

S.

B.

NO.

604 Page 44 For purposes of this subparagraph, “substantially altered” means to perform an alteration that substantially impacts the architectural features, characteristics, or integrity of a structure or lot.

The term shall not include routine maintenance reasonably necessary to maintain a dealership in attractive condition.

If a facility upgrade program, standard, or policy under which the dealer completed a facility construction or substantial alteration does not contain a specific time period during which the manufacturer or distributor shall provide payments or benefits to a participating dealer, or the time frame specified under the program is reduced or canceled prematurely in the unilateral discretion of the manufacturer or distributor, the manufacturer or distributor shall not deny the participating dealer any payment or benefit under the terms of the program, standard, or policy as it existed when the dealer began to perform under the program, standard, or policy for the balance of the ten-year period, regardless of whether the manufacturer’s or distributor’s program, standard, or policy has been changed or canceled, unless the manufacturer and ENGR.

S.

B.

NO.

604 Page 45 dealer agree, in writing, to the change in payment or benefit, f.

requires a new motor vehicle dealer or new powersports vehicle dealer to establish an exclusive facility, unless supported by reasonable business, market, and economic considerations;

provided, that this section shall not restrict the terms of any agreement for such exclusive facility voluntarily entered into and supported by valuable consideration separate from the new motor vehicle dealer’s right to sell and service motor vehicles for the franchisor, g.

requires a new motor vehicle dealer or new powersports vehicle dealer to enter into a site-control agreement covering any or all of the new motor vehicle dealer’s facilities or premises;

provided, that this section shall not restrict the terms of any site-control agreement voluntarily entered into and supported by valuable consideration separate from the new motor vehicle dealer’s right to sell and service motor vehicles for the franchisor.

Notwithstanding the foregoing or the terms of any site-control agreement, a site-control agreement automatically extinguishes if all of the factory’s franchises that operated from the location that are the subject of the site-control ENGR.

S.

B.

NO.

604 Page 46 agreement are terminated by the factory as part of the discontinuance of a product line, h.

refuses to pay, or claims reimbursement from, a new motor vehicle dealer or new powersports vehicle dealer for sales, incentives, or other payments related to a vehicle sold by the dealer because the purchaser of the new vehicle exported or resold the vehicle in violation of the policy of the factory unless the factory can show that, at the time of the sale, the new vehicle dealer knew or reasonably should have known of the purchaser’s intention to export or resell the vehicle.

There is a rebuttable presumption that the new vehicle dealer did not know or could not have known that the vehicle would be exported if the vehicle is titled and registered in any state of the United States, or i.

(1) notwithstanding the terms of a franchise agreement or other agreement except as provided in this subsection, requires a new motor vehicle dealer or new powersports vehicle dealer to purchase or utilize goods or services, or contract with any vendor, identified, selected, or designated by the factory for the:

ENGR.

S.