Req. No. 2733 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
SENATE BILL 2022 By: Thompson (Roger)
AS INTRODUCED
An Act relating to motor vehicle dealers,
salespersons, distributors, and manufacturers;
amending 47 O.S. 2021, Section 565, a s last amended
by Section 8, Chapter 29, O.S.L. 2023 (47 O.S. Supp.
2023, Section 565), which relates to license
application, denial, revocation, and suspension and
penalties; requiring certain records of allocation
and distribution to be maintained for certain period;
modifying certain disclosure requirem ent; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 47 O.S. 2021, Section 565, as last
amended by Section 8, Chapter 29, O.S.L. 2023 (47 O.S. Supp. 2023,
Section 565), is amended to read as follows:
Section 565. A. The Oklahoma New Motor Vehicle Commis sion 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:
Req. No. 2733 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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;
2. For any material misstat ement made by an applicant in any
application for any license under the provisio ns of Section 561 et
seq. of this title;
3. For any failure to comply with any provision of Section 561
et seq. of this title or any rule promulgated by the Commission
under authority vested in it by Section 561 et seq. of this title;
4. A change of condition after license is granted resulting in
failure to maintain the qualifications for license;
5. Being a new motor vehicle dealer who :
a. has required a purchaser of a new m otor vehicle, as a
condition of sale and delivery thereof, to also
purchase special features, appliance s, accessories, or
equipment not desired or requested by the purchaser
and installed by the new motor vehicle dealer,
b. uses any false or misleading adv ertising in connection
with business as a new motor vehicle dealer,
c. has committed any unlawful act w hich resulted in the
revocation of any similar license in another state,
d. has failed or refused to perform any written agreement
with any retail buyer involving the sale of a motor
vehicle,
Req. No. 2733 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
e. has been convicted of a felony crime t hat
substantially relates to the occupation of a new motor
vehicle dealer and poses a reasonable threat to public
safety,
f. has committed a fraudulent act in selling, purchasi ng,
or otherwise dealing in new motor vehicles or has
misrepresented the terms and conditions of a sale,
purchase or contract for sale or purchase of a new
motor 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 i ssuance 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;
7. Being a new motor vehicle dealer w ho:
a. does not have an established plac e of business,
b. does not provide for a suitable repair shop separate
from the display room with ample sp ace to repair or
Req. No. 2733 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
recondition one or more v ehicles 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 motor
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 a person without obtaining a cert ificate of
registration for the person, or utilizes the services
of used motor vehicle lots or dealers or ot her
unlicensed persons in connection with the sale of new
motor vehicles,
e. does not properly service a new motor vehicle before
delivery of same to the original purchaser thereof, or
Req. No. 2733 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 inc luded 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 m eans of
coercion or intimidation, any new motor vehicle
dealer:
(1) to accept delivery of any motor 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
with special features, appliances, accessories ,
or equipment not included in the lis t price of
the motor vehicles as publicly advertised by the
manufacturer thereof, or
(3) to order or accept delivery of any parts,
accessories, equipment, machinery, tools,
appliances, or any commodity whatsoever,
Req. No. 2733 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. induced under threat or discrimination by the
withholding from delivery to a new motor 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 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 vehicle s with
optional equipment not specified by the new motor
vehicle dealer; however, nothing in this section shall
prohibit a factory from supporting an advertising
association which is open to all new motor vehicle
dealers on the same bas is,
c. used a performance standard, sales objective, or
program for measuring dealer performance tha t may have
a material effect on a right of the dealer to vehicle
Req. No. 2733 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 o f any new motor vehicle dealer
under the terms of the franchise agreement which:
(1) is unfair, unreasonable, arbitrary, o r
inequitable, and
(2) does not consider the relevant and material local
and state or regional crite ria, including
prevailing economic conditions affecting the
sales or service performance of a vehicle dealer
or 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
cancel, terminate, or not renew the dealer’s
franchise agreement,
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 at the same p rice
for a comparably equipped m otor vehicle, on the same
terms, with no differential in functionally available
discount, allowance, credit, or bonus, except as
Req. No. 2733 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 c onsumer who is havin g
a vehicle serviced at the dealership. For purposes of
this paragraph, actual cost is the average cost in the
new motor vehicle dealer’s region for the ren tal 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 proporti onal share of all new
vehicles distributed to sam e 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 distribut e on a discretionary basis;
9. Being a factory that:
a. has attempted to coerce or has coerced any new motor
vehicle dealer to enter into any agr eement or to
cancel any agreement; has failed to act in good faith
and in a fair, equitable, and nondiscriminatory
Req. No. 2733 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 connecti on
with the dealer’s delivery and preparation obligation s
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 a nd
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
Req. No. 2733 Page 10 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 deal er, 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)
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 percentag e labor rate and/or
markup rate. A new 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 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, subtra cting
one (1), and multiplying by one hundred (100) to
produce a percentage. The new motor vehicle dealer
Req. No. 2733 Page 11 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
shall calculate its retail labor rate by dividing the
amount of the new motor 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 need not include
repairs for:
(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 r epair,
(2) factory special events, specials, or promotional
discounts for retail consumer rep airs,
(3) parts sold or repairs performed at wholesale,
(4) factory-approved goodwill or policy repairs or
replacements,
(5) repairs with afterma rket parts, when calculating
the retail parts rate but not the retail labor
rate,
(6) repairs on aftermarket pa rts,
(7) replacement of or work on tires including front -
end alignments and wheel or tire rotations,
Req. No. 2733 Page 12 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(8) repairs of motor vehicles owned by the new motor
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 late r than
forty-five (45) days after submission, rebut that
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 deale r pursuant to this section for
a retail labor rate or retail parts markup rate is
substantially higher than the new motor vehicle
dealer’s current warranty rates, the m anufacturer or
distributor may request, in writing, within forty-five
(45) days after the manufacturer’s or distributor’s
receipt of the new motor vehicle dealer’s initial
submission, all repair orders closed within the period
of thirty (30) days immediate ly preceding, or thirty
(30) days immediately following, the set of repair
Req. No. 2733 Page 13 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
orders initially submitted by the new motor vehicle
dealer. All time periods under this sectio n shall be
suspended until the supplemental repair orders are
provided. If the manufa cturer 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 proposed adj usted 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 formul a 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.
Req. No. 2733 Page 14 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
If the new motor vehicle dealer does not agree with
the proposed average percentage ma rkup or labor rate,
the new motor 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 motor vehicle deal er’s
submitted parts markup rate or labor rate was
inaccurate or not complete pursuant to the provisions
of this section. A manufacturer or distri butor may
not retaliate against any new motor vehicle d ealer
seeking to exercise its rights u nder this section. A
manufacturer or dist ributor may require a d ealer 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 m ore often than
once every twelve (12) months. A manufacturer or
distributor may not otherwise recover i ts costs from
new motor vehicle dealers within this state including
a surcharge imposed on a new motor vehic le dealer
solely intended to recover the cos t of reimbursing a
new motor vehicle dealer for parts and labor pursuant
to this section; provided, a ma nufacturer or
Req. No. 2733 Page 15 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
distributor shall not be prohibited from increasing
prices for vehicles or parts in the normal course of
business or from auditing and cha rging back claims in
accordance with this section. All claims made by
dealers for compensation for deli very, preparation,
warranty, or recall repair work shall be paid within
thirty (30) days after approval and shall be approved
or disapproved within thi rty (30) days after receipt.
When any claim is disapproved, the dealer shall be
notified in writing of the grounds for di sapproval.
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 to
determine the validity of paid claims for new motor
vehicle 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 p ayment. A manufactu rer
shall reserve the right to reasonable, periodic audits
to determine the validity of paid claims for dealer
Req. No. 2733 Page 16 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 v ehicle dealer back subsequent to
the payment of the claim unless the factory can show
that the claim was fa lse or fraudulent or that the new
motor vehicle dealer failed t o 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 motor 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 new motor vehicle
dealer; provided, that the factory may require the new
motor vehicle dealer to provide, w ithin 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 a ttestation signed by the
Req. No. 2733 Page 17 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
dealer operator or general manager stating the
consumer was not on the export control list and th e
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 spec ific audit results and
proposed charge-back amount. A dealer that receives
notice of a proposed charge -back pursuant to a
factory’s audit has the right to file a protest wi th
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 fil ing a
protest has passed or a final adjudication is rendered
by the Commission, whi chever is later, unless the
dealer has agreed to the charge-back or charge-backs,
c. fails to compensate th e 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 ve hicle dealer is
franchised to sell or on which the new motor
Req. No. 2733 Page 18 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 s top-sale
or do-not-drive order is issued or that is taken
by the new motor vehicle dealer into the dealer’s
inventory after the recall notice as a re sult 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
Req. No. 2733 Page 19 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
dealer until the earlier o f either of the
following:
(a) the date the recall remedy o r 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 subparagra ph,
the value of a used vehicle shall be the average Blac k
Book value for the year, make, and model of the
recalled vehicle. A factory may direct th e manner and
method in which a new motor vehicle dealer must
demonstrate the inventory status of an affecte d 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 un duly burdensome to provide. All
reimbursement claims made by new motor vehic le dealers
pursuant to this section for recall remedies o r
repairs, or for compensation where no part or repair
is reasonably available and the vehic le is subject to
a stop-sale or do-not-drive order, shall be subject to
the same limitations and requiremen ts as a warranty
reimbursement claim made under subparagr aph b of this
Req. No. 2733 Page 20 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
paragraph. In the alternative, a manufacturer may
compensate its franchised n ew 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 other wise agree. Nothing in this
section shall require a factory to provide total
compensation to a new motor v ehicle dealer which would
exceed the total average Black Book value of the
affected used motor vehicle as originally determined
under division (5) of this subparagraph. Any remed y
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 unreasonabl e advertising displays or other
materials, or enter into a separate agreement which
adversely alters the rights or obligat ions contained
within the new motor vehicle dealer’s existing
franchise agreement or which waives any right of the
Req. No. 2733 Page 21 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
new motor vehicle dealer as protected by Section 561
et seq. of this title, or remodel, renovate, or
recondition the new motor vehicle 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
or sell any number o f used or off-lease vehicles. The
failure to deliver any such new motor vehicle shall
not be considered a violation of the secti on if the
failure is not arbitrary or is due to lack of
manufacturing capacity or to a strike or labor
difficulty, a shortage o f materials, a freight
embargo, or other cause over which the manufacturer
has no control. However, this subparagraph shall not
apply to recreational vehicle s, 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 t o an
unforeseen event or circumstance,
Req. No. 2733 Page 22 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
e. except as necessary to comply wit h a health or safety
law, or to comply with a technology re quirement which
is necessary to sell or service a motor vehicle that
the franchised new motor vehicle dealer is author ized
or licensed by the franchisor to sell or service,
requires a new motor veh icle dealer to construct a new
facility or substantially re novate the new motor
vehicle dealer’s existing facility unless the facility
construction or reno vation is justified by the
economic conditions existing at the time, as well as
the reasonably forese eable 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 voluntarily agrees to
facility construction or renovation in exchange f or
money, credit, allowance, reimbursement, or additional
vehicle allocation to a new motor vehicle dealer from
the factory to compensate the new motor vehicle 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 safe ty law, or to
comply with a technology or safety requirement which
is necessary to sell or servi ce a motor vehicle that
the franchised new motor vehicle dealer is authorized
Req. No. 2733 Page 23 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or licensed by the franchisor to sell or service, a
new motor vehicle dealer which completes a facility
construction or renovation pursuant to factory
requirements shall not be r equired 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. For purposes of this
subparagraph, “substantially altered” means to perform
an alteration that substantially impacts t he
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 paym ents or benefits to a
participating dealer, or the time frame specified
under the program is reduced or canceled prematurely
in the unilateral dis cretion of the manufacturer or
Req. No. 2733 Page 24 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
distributor, the manufacturer or distributor shall not
deny the participati ng dealer any payment or benefit
under the terms of th e program, standard, or p olicy 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 dealer agree, in writing, to the
change in payment or benefit,
f. requires a new motor vehicle dealer to establish an
exclusive facility, unless supported b y reasonable
business, market, and economic considerat ions;
provided, that this section shall not restrict the
terms of any agreement for such exc lusive 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 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
Req. No. 2733 Page 25 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
entered into and supported by valuable consideration
separate from the new motor vehicle dealer’s right to
sell and service motor vehicles for the franch isor.
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 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 fo r sales, incentives, or other
payments related to a motor vehicle sold by the new
motor vehicle dealer because the purchaser of the
motor vehicle exported or resold the motor vehicle in
violation of the policy of the factory unless the
factory can show that, at the time of the sale, the
new motor vehicle dealer knew or reasonably should
have known of the pu rchaser’s intention to export or
resell the motor vehicle. There is a rebuttable
presumption that the new motor 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
Req. No. 2733 Page 26 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
i. requires a new motor vehicle dealer to purchase goods
or services for the construction, renovation, or
improvement of the new motor vehicle dealer’s facility
from a vendor chosen by the factory if goods or
services available from o ther sources are of
substantially similar quality and design and comply
with all applicable laws; provided, however, that such
goods are not subject to the factory’s intellectual
property or trademark rights and the new motor vehicle
dealer has received th e factory’s approval, which
approval may not be unreasonably withheld. Nothing in
this subparagraph may be construed to allow a new
motor vehicle dealer to impair or elimin ate a
factory’s intellectual property, trademark rights, or
trade dress usage guide lines. Nothing in this section
prohibits the enforcement of a voluntary agreement
between the factory and the new motor vehicle dealer
where separate and valuable considera tion has been
offered and accepted;
10. Being a factory that:
a. establishes a system of motor vehicle allocation or
distribution which is unfair, inequitable , or
unreasonably discriminatory. A manufacturer and
distributor shall maintain for three (3) years r ecords
Req. No. 2733 Page 27 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
that describe methods or the formula of allocation and
distribution of motor vehicles of the manufacturer or
distributor and records of actual allocation and
distribution of motor vehicles to motor vehicle
dealers in this state. Upon the request of any new
motor vehicle dealer franchised by it, a factory shall
disclose in writing to the new motor vehicle dealer
the basis upon which new motor vehicles are allocated,
scheduled, and delivered, by vehicle model, t o each
among the new motor vehicle dealers dealer of the same
line-make for that factory for the prior three (3)
years, and the basis upon which the current allocation
or distribution is being made or wil l be made to the
dealer, or
b. changes an established plan or system of motor vehicle
distribution. A new motor vehicle dealer franchi se
agreement shall continue in full force and operation
notwithstanding a change, in whole or in part, of an
established plan or system of distributi on of the
motor vehicles offered or previously offered for sale
under the franchise agreement. The appointment of a
new importer or distributor for motor vehicles offered
for sale under the franchise agreement shall be deemed
to be a change of an est ablished plan or system of
Req. No. 2733 Page 28 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
distribution. The discontinuation of a line-make
shall not be deemed to be a change of an established
plan or system of motor vehicle distribution. The
creation of a line-make shall not be deemed to be a
change of an established pla n or system of motor
vehicle distribution as long as the new line-make is
not selling the same, or s ubstantially the same
vehicle or vehicles previously sold through another
line-make by new motor veh icle dealers with an active
franchise agreement for the other line-make in the
state if such new motor vehicle dealers are no longer
authorized to sell the compara ble vehicle previously
sold through their line-make. Changing a vehicle ’s
powertrain is not sufficient to show it is
substantially different. Upon the occurrence of suc h
change, the manufacturer or distributor shall be
prohibited from obtaining a license to distribute
vehicles under the new plan or system of distribution
unless the manufacturer or distributor offers to each
new motor vehicle dea ler who is a party to the
franchise agreement a new franchise agreement
containing substantially the same provis ions which
were contained in the previous franchise agreement ;
Req. No. 2733 Page 29 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
11. Being a factory that sells directly or indirectly new motor
vehicles to any reta il consumer in the st ate except through a new
motor vehicle dealer holding a franchise for the line -make that
includes the new motor vehicle. This paragraph does not apply to
factory sales of new moto r vehicles to its employees, family members
of employees, retirees and famil y members of retirees, not-for-
profit organizations, or the federal, state , or local governments.
The provisions of this paragraph shall not preclude a factory from
providing information to a consumer for the purpose of marketing or
facilitating a sale of a new motor vehicle or from establishing a
program to sell or offer to sell new motor vehicles through
participating dealers subject to the limitations provided in
paragraph 2 of Section 562 of this title;
12. a. Being a factory which directly or indirec tly:
(1) owns any ownership interest or has any financial
interest in a new motor vehicl e dealer or any
person who sells products or services pursuant to
the terms of the franchise agreement,
(2) operates or controls a new mot or vehicle dealer,
or
(3) acts in the capacity of a new motor vehicle
dealer.
b. (1) This paragraph does not pr ohibit a factory from
owning or controlling a new motor vehicle dealer
Req. No. 2733 Page 30 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
while in a bona fide r elationship with a dealer
development candidate who has made a substantial
initial investment i n the franchise and whose
initial investment is subject to potential loss.
The dealer development candidate can reasonably
expect to acquire full o wnership of a new motor
vehicle dealer within a reasonable peri od of time
not to exceed ten (10) years and o n reasonable
terms and conditions. The ten-year acquisition
period may be expanded for good cause shown.
(2) This paragraph does not prohibit a factory from
owning, operating, controlling, or acting in the
capacity of a new motor vehicle dealer for a
period not to exceed twelve (12) months during
the transition from one independent dealer to
another independent dealer if the dealership is
for sale at a reasonable price and on reasonable
terms and conditions to an independent qualified
buyer. On showing by a factory of good cause,
the Oklahoma New Motor Vehicle Commission may
extend the time limit set forth above; extensions
may be granted for periods not to excee d twelve
(12) months.
Req. No. 2733 Page 31 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(3) This paragraph does not prohibit a factory from
owning, operating, or controlling or acting in
the capacity of a new motor vehicle dealer which
was in operation prior to January 1, 2000.
(4) This paragraph does not pr ohibit a factory from
owning, directly or indirectly, a mino rity
interest in an entity that owns, operates , or
controls motor vehicle dealerships of the same
line-make franchised by the manufacturer,
provided that each of the following conditions
are met:
(a) all of the new motor vehicle dealerships
selling the motor vehicles of that
manufacturer in this state t rade exclusively
in the line-make of that manufacturer,
(b) all of the franchise agreements of the
manufacturer confer rights on the dealer of
the line-make to develop and operate, within
a defined geographic territory or area, as
many dealership facilitie s as the dealer and
manufacturer shall agree are appropriate,
(c) at the time the manufacturer first acquires
an ownership interest or assumes operation,
the distance between any dealership thus
Req. No. 2733 Page 32 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
owned or operated and the nearest
unaffiliated new motor vehicle dealership
trading in the same line-make is not less
than seventy (70) miles,
(d) during any period in which the manufacturer
has such an ownership interest, the
manufacturer has no more than three
franchise agreements wi th new motor vehicle
dealers licensed by the Oklahoma New Motor
Vehicle Commission to do business w ithin the
state, and
(e) prior to January 1, 2000, the factory shall
have furnished or made available to
prospective new motor vehicle dealers an
offering circular in accordance with the
Trade Regulation Rule on Franchising of the
Federal Trade Commission, and any guidelines
and exemptions issued t hereunder, which
disclose the possibility that the factory
may from time to time seek to own or
acquire, directly or indirectly , ownership
interests in retail dealerships;
13. Being a factory which directly or indirectly makes
available for public disclosure any proprietary information provided
Req. No. 2733 Page 33 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
to the factory by a new motor vehicle dealer, other than in
composite form to new motor vehicle dealers in the same line-make or
in response to a subpoena or order of the Commission or a court.
Proprietary informat ion includes, but is not limited to,
information:
a. derived from monthly financial statement s provided to
the factory, and
b. regarding any aspect of the profitability of a
particular new motor vehicle dealer;
14. Being a factory which does not p rovide or direct leads in a
fair, equitable, and timely manner. Nothing in this paragraph shall
be construed to require a factory to disregard the preference of a
consumer in providing or directing a lead;
15. Being a factory which used the consumer list of a new motor
vehicle dealer for the purpose of unfairly competing with dealers;
16. Being a factory which prohibits a new motor vehicle dealer
from relocating after a written request by such new motor vehicle
dealer if:
a. the facility and the proposed new location satisfies
or meets the written reasonable guidelines of the
factory. Reasonable guidelines do not inc lude
exclusivity or site control unless agreed to as set
forth in subparagraphs f and g of paragraph 9 of this
subsection,
Req. No. 2733 Page 34 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. the proposed new locat ion is within the area of
responsibility of the new motor vehicle dealer
pursuant to Section 578.1 of this title, and
c. the factory has sixty (60) days from receipt of the
new motor vehicle dealer’s relocation request to
approve or deny the reques t. The failure to approve
or deny the request within the sixty-day time frame
shall constitute approval of the requ est;
17. Being a factory which prohibits a new motor vehicle dealer
from adding additional line-makes to its existing facility, if,
after adding the additional line-makes, the facility satisfies the
written reasonable capitalization standards and facility guide lines
of each factory. Reasonable facility guidelines do not include a
requirement to maintain exclusivity or site control unless agr eed to
by the dealer as set forth in subparagraphs f and g of paragraph 9
of this subsection;
18. Being a factory t hat increases prices of new motor vehicles
which the new motor vehicle dealer had ordered for retail consumers
and notified the factory prior to the new motor vehicle dealer’s
receipt of the written official price increase notification. A
sales contract signed by a retail consumer accompanied with proof of
order submission to the factory shall constitute evidence of each
such order, provided that the vehicle is in fact delivered to the
consumer. Price differences applicable to new m odels or series
Req. No. 2733 Page 35 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
motor vehicles at the time of the introduction of new models or
series shall not be considered a price increase for purposes of this
paragraph. Price chan ges caused by any of the following shall not
be subject to the provisions of this paragraph:
a. the addition to a motor vehicle of required or
optional equipment pursua nt to state or federal law,
b. revaluation of the United States dollar in the ca se of
foreign-made vehicles or components, or
c. an increase in transportation charges due to increased
rates imposed by common or contract carriers;
19. Being a factory that requires a new motor vehicle dealer to
participate monetarily in an advertising campaign or contest, or
purchase any promotional materials, sh owroom, or other display
decoration or material s at the expense of the new motor vehicle
dealer without consent of the new motor vehicle dealer, which
consent shall not be unreasonably withheld;
20. Being a factory that denies any new motor vehicle deale r
the right of free association with any other new motor vehicle
dealer for any lawful purpose, unless otherwise pe rmitted by this
chapter; or
21. Being a factory that requires a new motor vehicle deale r to
sell, offer to sell, or sell exclusively an ext ended service
contract, extended maintenance plan , or similar product, such as gap
Req. No. 2733 Page 36 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
products offered, endorsed, or sponsored by the factory by the
following means:
a. by an act or statement from th e factory that will in
any manner adversely impact the new motor vehicle
dealer, or
b. by measuring the new motor vehicle dealer’s
performance under the franchise based on the sale of
extended service contracts, extended maintenance
plans, or similar products offe red, endorsed, or
sponsored by the manufacturer or distributor.
B. Notwithstanding the terms of any franchise agreement, in the
event of a proposed sale or transfer of a dealership, the
manufacturer or distributo r shall be permitted to exercise a right
of first refusal to acquire the assets or ownership interest of the
dealer of the new motor vehicle dealership, if such sale or transfer
is conditioned upon the manufactu rer or dealer entering into a
dealer agreement with the proposed new owner or transferee , only if
all the following requirements are met:
1. To exercise its right of first refu sal, the factory must
notify the new motor vehicle dealer in writing within six ty (60)
days of receipt of the completed prop osal for the proposed sale
transfer;
2. The exercise of the right of first refusal will r esult in
the new motor vehicle dealer and the owner of the dealership
Req. No. 2733 Page 37 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
receiving the same or greater consideration as they have contracted
to receive in connection with the proposed change of ownership or
transfer;
3. The proposed sale or transfer of the dealership does not
involve the transfer or sale to a member or members of the family of
one or more dealer o wners, or to a qualified manager or a
partnership or corpo ration controlled by such persons; and
4. The factory agrees to pay the reasonable expenses, including
attorney fees which do not exceed the usual, customary, and
reasonable fees charged for simila r work done for other clients
incurred by the proposed new owner and transferee prior to the
exercise by the factory of its right of first refusal in negotiating
and implementing the contract for the proposed sale or transfer of
the dealership or dealershi p assets. Notwithstanding the foregoing,
no payment of expenses and attorney fees shall be r equired if the
proposed new dealer or t ransferee has not submitted or caused to be
submitted an accounting of those expenses within thirty (30) days of
receipt of the written request of the factory for such an
accounting. The accounting may be requested b y a factory before
exercising its right of first refusal.
C. Nothing in this secti on shall prohibit, limit, restrict, or
impose conditions on:
1. Business activities, including without limitation the
dealings with motor vehicle manufacturers and the repr esentatives
Req. No. 2733 Page 38 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
and affiliates of motor v ehicle manufacturers, of any person that is
primarily engaged in the business of short-term, not to exceed
twelve (12) months, rental of motor vehicles and industrial and
construction equipment and activities incidental to that business,
provided that:
a. any motor vehicle sold by that person is limit ed to
used motor vehicles that have been previously used
exclusively and regular ly by that person in the
conduct of business and used moto r vehicles traded in
on motor vehicles sold by that person,
b. warranty repairs performed by that person on motor
vehicles are limited to those motor vehicles that the
person owns, previously own ed, or takes in trade, and
c. motor vehicle financing provided by that person to
retail consumers for motor vehicles is limited to used
vehicles sold by that person in the cond uct of
business; or
2. The direct or indirect ownership, affiliation , or control of
a person described in paragraph 1 of this subsection.
D. As used in this section:
1. “Substantially relates” means the nature of criminal conduct
for which the person wa s convicted has a direct bearing on the
fitness or ability to perform one or mor e of the duties or
responsibilities necessarily related to the occupation; and
Req. No. 2733 Page 39 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. “Poses a reasonable threat” means the nature of criminal
conduct for which the person was con victed involved an act or threat
of harm against another and has a bearing on th e fitness or ability
to serve the public or work with others in the occupation.
E. Nothing in this section shall prohibit a manufacturer or
distributor from requiring a dealer to be in compliance with the
franchise agreement and authorized to sell a make and model based on
applicable reasonable standards and requirements that include but
are not limited to any facility, technology, or training
requirements necessary to sell or service a vehicle, in order to be
eligible for delivery or allotment of a make o r model of a new motor
vehicle or an incentive.
SECTION 2. This act shall become effective November 1, 2024.
59-2-2733 QD 1/18/2024 3:39:56 PM