Oklahoma Senate Bill SB2022 Amended / Bill

                     
 
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SENATE FLOOR VERSION 
February 19, 2024 
 
 
COMMITTEE SUBSTITUTE 
FOR 
SENATE BILL NO. 2022 	By: Thompson (Roger) of the 
Senate 
 
  and 
 
  Dobrinski of the Hou se 
 
 
 
 
An Act relating to motor vehicle dealers ; amending 47 
O.S. 2021, Section 562, as amended by Sect ion 3, 
Chapter 29, O.S.L. 2023 (47 O.S. Supp. 2023, Section 
562), which relates to definitions; modifying 
definition; amending 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), which relates to 
denial, revocation, or suspension of license; 
modifying entity subject to license denial, 
revocation, suspension, or fine; m odifying reasons 
for license denial, revocation, suspension, or fine; 
prohibiting certain withholding of proportionate 
share of vehicles; requiring certain considerations 
for location of dealership change; requiring purchase 
of dealership if certain conditions are met; setting 
value for purchase; setting process if parties cann ot 
agree; requiring certain maintenance of records for 
period of time; requiri ng certain written request be 
received within certain time frame; requiring certain 
written request conta in certain information; amending 
47 O.S. 2021, Section 565.2, as amended by Sectio n 
10, Chapter 29, O.S.L. 2023 (47 O.S. Supp. 2 023, 
Section 565.2), which relates to termination, 
cancellation, or nonrenewal of new motor vehicle 
dealer franchise; updating statutory reference; 
allowing franchise to remain in full force and effect 
through any appeal; modifying actions required to be 
taken when a factory terminates, cancel s, or does not 
renew a franchise; modifying actions required to be 
taken when a factory te rminates, cancels, or does not 
renew due to a discontinuance of product line;   
 
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requiring certain purchase at certain value; setting 
certain valuation; setting process if parties cannot 
agree; allowing for certain sole ownership, 
possession, use, and control of certain property; 
requiring payment of reasonable rent if certain 
conditions are met; requiring compensation for 
certain pecuniary loss; requiring certain documents 
be provided for payment to be made; providing for 
appraisal process; requiring certain oath be taken; 
requiring certain average be taken to determine 
value; allowing for appointment of third appraiser to 
determine fair market value if certain conditions are 
met; requiring appraisers make certain valuation; 
requiring payment within certain time frame; and 
providing an effective date . 
 
 
 
 
 
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: 
SECTION 1.     AMENDATORY    47 O.S. 2021, Section 562, as 
amended by Section 3, Chapter 29, O.S.L. 2023 (47 O.S. Supp. 2023, 
Section 562), is amended to read as follows: 
Section 562. The following words, terms, and phrases, when used 
in Sections 561 thro ugh 567, 572, 578.1, 579, and 579.1 of this 
title, shall have the mea nings respectively ascribed to them in this 
section, except where the context clearly in dicates a different 
meaning: 
1.  “Motor vehicle” means any motor-driven vehicle required to 
be registered under the Oklahoma Vehicle License and Registration 
Act.  The term motor vehicle does not include: 
a. recreational vehicles, as defined in the Recreational 
Vehicle Franchise Act, or   
 
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b. all-terrain vehicles, utility vehicles, and 
motorcycles used exc lusively for off-road use which 
are sold by a retail implement dealer; 
2.  “New motor vehicle dealer ” means any person, firm, 
association, corporation, or trust not excluded by this paragraph 
who sells, offers for sale, advertises to sell, leases , or displays 
new motor vehicles and holds a bona fide contract or franchise in 
effect with a manufacturer or di stributor authorized by the 
manufacturer to make predelivery preparation of such vehicles sol d 
to purchasers and to perform post-sale work pursuant to the 
manufacturer’s or distributor’s warranty.  As used h erein, 
“authorized predelivery 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 r equired by 
the manufacturer of the vehicle to be made before i ts delivery to 
the purchaser.  “Performance of authorized post-sale work pursuant 
to the warranty”, as used herein, means the rendition of ser vices 
which are required by the terms of the warrant y 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 manufac turer.  
The term includes premises or facilities at which a person engages 
only in the repair of motor vehicle s if repairs are performed 
pursuant to the terms of a franchis e and motor vehicle 
manufacturer’s warranty.  For the purpose of Sections 561 thr ough   
 
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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. receivers, trustees, administrators, executors, 
guardians, or other persons appointed by or acting 
under judgment or order of any court, 
b. public officers while performing or in operation of 
their duties, 
c. employees of persons, corporations, or associations 
enumerated in subparagraph a of this paragraph when 
engaged in the specific performance of their duties as 
such employees, or 
d. a powersports vehicl e dealer; 
3.  “Motor vehicle salesperson” means any person who, for gain 
or compensation of any kind, either direc tly or indirectly, 
regularly or occasionally, by any form o f agreement or arrangement, 
assists or offers assistance to customers in selecting a vehicle ; 
explains product performance, application, and benefits to 
customers; describes optional equipment available on the vehicle ; 
offers or coordinates t est drives to customers; explains the 
operating features of a vehicle, or paperwork to the customer; or 
sells or negotiates f or the sale, lease, or conveyance or arranges 
the financing of any new motor vehicle as an employee for any new 
motor vehicle dealer to any one or m ore third parties.  Provided,   
 
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this definition does not apply to employees of any manufacturer or 
distributor who has new motor vehicle sales and service agreements 
with new motor vehicle dealers in this state and does not sell motor 
vehicles directly to consumers; 
4.  “Commission” means the Oklahoma New Motor Vehicle 
Commission; 
5.  “Manufacturer” means any person, firm, association, 
corporation, or trust, resident or nonresident, that manufactures or 
assembles new and unused motor vehicles or that engages in the 
fabrication or assembly of motorized vehicles of a type required to 
be registered in this state; 
6.  “Distributor” means any person, firm, association, 
corporation, or trust, resident or nonresid ent, that, being 
authorized by the original manu facturer, in whole or in part sells 
or distributes new and unused motor vehicles to new motor vehicle 
dealers, or that maintains distributor representatives; 
7.  “Factory branch” means any branch office maintained by a 
person, firm, association, corporation , or trust that manufactures 
or assembles motor vehicles for the sale of motor vehicles to 
distributors, or for the sale of motor vehicles t o new motor vehicle 
dealers, or for directing or supervising, in wh ole or in part, its 
representatives;   
 
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8.  “Distributor branch” means any branch office similarly 
maintained by a distributor for the same p urposes a factory bra nch 
is maintained; 
9.  “Factory representative” means any officer or agent engaged 
as a representative of a manufacturer of motor vehicles or by a 
factory branch, for the purpose of making or promoting the sale of 
its motor vehicles, or for supervising or contacting its dealers or 
prospective dealers; 
10.  “Distributor representative” means any person, firm, 
association, corporation , or trust and each officer and employee 
thereof engaged as a re presentative of a distributor or distrib utor 
branch of motor vehicles, for the purpose of mak ing or promoting the 
sale of its motor vehicles, or for supervising o r contacting its 
dealers or prospective dealers; 
11.  “Franchise” means any contract or agreement between a new 
motor vehicle dealer and a manufacturer of a new motor vehicle or 
its distributor or factory branch by which the new motor vehicle 
dealer is authorized to engage in the activities of a new motor 
vehicle dealer as defined by this section; 
12.  “New or unused motor vehicle” means a vehicle which is in 
the possession of the manufac turer or distributor or has been sold 
only to the holder of a valid franchise granted by the manufac turer 
or distributor for the sale of that make o f new vehicle so long as 
the manufacturer’s statement of origin has not been assigned to   
 
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anyone other than a licensed franchised new motor vehicle dealer of 
the same line-make; 
13.  “Area of responsibility” means the geographical area, as 
designated by the manufacturer , factory branch, factory 
representative, distributor, distributor branc h, or distributor 
representative, in which the new mo tor vehicle dealer is held 
responsible for the promotion and developm ent of sales and rend ering 
of service for the mak e of motor vehicle for which the new motor 
vehicle dealer holds a franchise or sellin g agreement; 
14.  “Off premises” means at a location other than the address 
designated on the new motor vehicle dealer’s license; 
15.  “Sponsoring entity” means any person, firm, ass ociation, 
corporation, or trust which has control, either permanently or 
temporarily, over the rea l property upon which the off-premises sale 
or display is conduc ted; 
16.  “Product” means new motor vehi cles and new motor vehicle 
parts; 
17.  “Service” means motor vehicle warranty repairs including 
both parts and labor; 
18.  “Lead” means a consumer conta ct in response to a factory 
program designed to generate interest in purchasing or leasing a new 
motor vehicle; 
19.  “Sell” or “sale” means to sell or lease;   
 
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20. “Factory” means a manufacturer, distributor, factory 
branch, distributor branch, factory repr esentative, or distributor 
representative, which manufactures or distributes vehicle products; 
21.  “Powersports vehicle” means motorcycles, sco oters, mopeds, 
all-terrain vehicles, and utility vehicles; 
22.  “Powersports vehicle dea ler” means any person, firm, or 
corporation that is in the business of selling any new powersports 
vehicles except for retail implement dea lers; 
23. “Retail implement dealer” means a business engaged 
primarily in the sale of farm tractors as defined in Se ction 1-118 
of this title or implements of husbandry as de fined in Section 1-125 
of this title or a combination thereof ; 
24.  “Consumer data” means nonpublic personal information as 
defined in 15 U.S.C., Section 6809(4) as it existed on January 1, 
2023, that is: 
a. collected by a new motor vehicle dealer, and 
b. provided by the new motor vehicle dealer directly to a 
manufacturer or third part y acting on behalf of a 
manufacturer. 
The term shall not include th e same or similar data obtained by 
a manufacturer from any source other than the new motor vehicle 
dealer or new motor vehicle dealer’s data management system; and 
25.  “Fleet vehicle” means a new motor vehicle sold and titled 
or registered to a business and used for business purposes only .   
 
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SECTION 2.     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: 
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 lic ense 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 titl e; 
4.  A change of cond ition 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   
 
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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 vehic le 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, 
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 a nd 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 necessa ry 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   
 
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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 
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   
 
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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 
f. fails to order and stock a reasonable number of new 
motor vehicles necessary to meet consumer demand for 
each of the new moto r 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 product ion; 
8.  Being a factory that has: 
a. either induced or attempted to induce by means 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,   
 
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(2) to order or accept delivery of any motor vehicle 
with special features, appliances, accessories, 
or equipment not included in the list 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, 
b. induced under threat or discrimination by the 
withholding from delivery to a new motor vehicle 
dealer certain models of moto r 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 facto ry 
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 allotmen t, to 
order a certain percentage of the vehicle s with   
 
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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 basis, 
c. used a performance standard, sales objective, or 
program for measuring dealer perfor mance 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 f or 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, 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 perf ormance of a vehicle dealer, 
vehicle allocation from the manufacturer , 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   
 
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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 different ial 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 c ompensation 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 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 rental o f 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 n ew 
vehicles distributed to sam e line-make dealers in this 
state, subject to the sam e reasonable terms, including   
 
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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 
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 wit h 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   
 
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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 manufac turer and 
performed by the dealer in order to satisfy th e 
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 deal er, be established 
by the new motor vehicle dealer submitting to the 
manufacturer or distributor one hundre d 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 establ ish its retail rates more   
 
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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, subtracting 
one (1), and multiplying by one hundred (100) to 
produce a percentage.  The new motor vehicle dealer 
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,   
 
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(4) factory-approved goodwill or policy repairs or 
replacements, 
(5) repairs with aftermarket parts, when c alculating 
the retail parts rate but not the re tail labor 
rate, 
(6) repairs on aftermarket pa rts, 
(7) replacement of or work on tires including front -
end alignments and wheel or tire rotations, 
(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 later 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 dealer pursuant to this section for 
a retail labor rate or retail parts markup rate is   
 
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substantially higher than the new motor 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 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 repa ir 
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 manufacturer or distributor requests 
supplemental repair orders, the manufactu rer 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, base d 
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   
 
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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 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 dealer ’s 
submitted parts markup rate or labor rate was 
inaccurate or not complete pursuant to the provisions 
of this section.  A manufacturer or dis tributor 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   
 
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retail rate for parts or labor not m ore often than 
once every twelve (12) months.  A manufacturer or 
distributor may not otherwise recover its costs from 
new motor vehicle dealers within this state including 
a surcharge imposed on a new motor vehicle 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 
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 delivery, 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   
 
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determine the validi ty 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 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 v ehicle dealer back subsequent to 
the payment of the claim unless the factory can show 
that the claim was false 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   
 
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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 
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 char ge-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   
 
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by the Commission, whi chever 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 ve hicle 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 
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 a n 
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,   
 
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of a remedy or parts necessary for the new motor 
vehicle dealer to make the recall repair, an d 
(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 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 subparagraph, 
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 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   
 
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reimbursement claims made by new m otor vehicle 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 requirements as a warranty 
reimbursement claim made under subparagr aph b of this 
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 vehicle 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 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   
 
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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 obligations contained 
within the new motor vehicle dealer’s existing 
franchise agreement or which waives any right of the 
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 of 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 of materials, a freight 
embargo, or other cause over which the manufacturer 
has no control. However, this subparagraph shall not   
 
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apply to recreational vehicles, limited production 
model vehicles, a vehicle not advertised by th e 
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, 
e. except as necessary to comply with 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 authorized 
or licensed by the franchisor to sell or service, 
requires a new motor vehicle 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 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 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   
 
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the factory to compensate the new motor vehicle dealer 
for the cost of, or a portion of the cost of, the 
facility constructio n 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 that 
the franchised new motor vehicle dealer is authorized 
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 requir ed 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 t en (10) 
years and the construction or alteration was approved 
by the manufacturer as a p art 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   
 
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dealer completed a facility construction or 
substantial alteration doe s 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 discreti on 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 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 b enefit.  During the ten-year 
period following facility construction or substantial 
alteration, the manufacturer shall not withhold from 
the dealer its proportionate share of vehicles 
distributed to dealers of the same line-make, subject 
to the same reasonable terms, including vehicles 
distributed from a common new vehicle inventory pool 
outside of the factory’s ordinary allocation process,   
 
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such as any vehicles the factory reserves to 
distribute on a discretionary basis, 
f. requires a new motor vehicle dealer to establish an 
exclusive facility or to change the location of the 
dealership, unless supported by reasonable business, 
market, and economic considerations; provided, that 
this section shall not restrict the terms of any 
agreement for such exc lusive facility volun tarily 
entered into and supported by valuable consideration 
separate from the ne w motor vehicle dealer’s right to 
sell and service motor vehicles for the franchisor .  
If a dealer is required by the manufacturer or 
distributor to change a previously approved location 
of the dealership and has not sold its exi sting 
dealership facility and real estate within the l ater 
of one hundred eighty (180) days of listing the 
property for sale or ninety (90) days after the 
facility relocation, then, upon the written request of 
the dealer, the manufacturer or distributor shall 
purchase the existing dealership facility of the 
dealer and real estate.  The facility and rea l estate 
shall be valued as if a new motor vehicle dealers hip 
continues to operate on the property.  If the factory 
and dealer cannot agree on the value of the terminated   
 
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franchise, then the factory and dealer sh all utilize 
the process described in paragraph 6 of subsecti on G 
of Section 565.2 of this title.  If a manufacturer or 
distributor purchases a dealership facility and real 
estate, then it shall be entitled to sole own ership, 
possession, use, and contr ol of any items, buildings, 
or property that were included in the c ontract to 
purchase, 
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 
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 agreement are 
terminated by the factory as part of the 
discontinuance of a product line,   
 
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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 tha t, 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 rebu ttable 
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 
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 the factory’s approval, which   
 
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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) year s records 
that describe its metho ds or formula of allocation and 
distribution of its motor v ehicles and records of its 
actual allocation and distribution of motor v ehicles 
to its motor vehicle dealers.  Upon the written 
request of any new motor vehicle dealer franchised by 
it the manufacturer or distributor, received by the 
manufacturer or distributor within thirty (30) days of 
the written notice from the manufacturer or 
distributor to the dealer of the intention to cancel 
or terminate, or written notice from the manufact urer   
 
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or distributor of a sales performance deficiency 
requiring the dealer to take action to cure the 
alleged performance deficiency , a factory manufacturer 
or distributor 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, to among the new motor vehicle dealers 
of the same line-make for that factory manufacturer or 
distributor for the prior three (3) years, and the 
basis upon which the current allocatio n or 
distribution is being made or will be made to such 
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 distribution of the 
motor vehicles offered or previously offered for sale 
under the franchise agreement.  The appoint ment 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 establis hed plan or system of 
distribution.  The discontinuation of a line-make 
shall not be deemed to be a change of an established   
 
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plan or system of motor vehicle distribution.  The 
creation of a line-make shall not be deemed to be a 
change of an established plan or system of motor 
vehicle distribution as long as the new line-make is 
not selling the same, or substant ially the same 
vehicle or vehicles previously sold through another 
line-make by new motor vehicle 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 dealer w ho 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 ; 
11.  Being a factory that sells directly or indirectly new motor 
vehicles to any retail consumer in the st ate except through a new 
motor vehicle dealer holding a franchise for the line -make that   
 
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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 whic h 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 motor 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 
while in a bona fide r elationship with a dealer 
development candidate wh o has made a substant ial 
initial investment in the franchise and whose   
 
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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 period of time 
not to exceed ten (10) years and on 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. 
(3) This paragraph does no t 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.   
 
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(4) This paragraph does not pr ohibit a factory from 
owning, directly or indirectly, a minority 
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 trade 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 facilities 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 
owned or operated and the neare st 
unaffiliated new motor vehicle dealership 
trading in the same line-make is not less 
than seventy (70) miles,   
 
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(d) during any period in which the manufacturer 
has such an ownership interest, the 
manufacturer has no more than three 
franchise agreements with 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 thereunder, 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 
to the factory by a new motor vehicle dealer, other t han 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.    
 
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Proprietary information 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 doe s not provide or direct leads in a 
fair, equitable, and timely manner.  Nothing in this paragraph shall 
be construed to require a factory to d isregard 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 p roposed new location satisfies 
or meets the written reasonable guidelines of the 
factory.  Reasonable guidelines do not include 
exclusivity or site control unless agreed to as set 
forth in subparagraphs f and g of paragraph 9 of this 
subsection, 
b. the proposed new location is within the a rea of 
responsibility of the new motor vehicle dealer 
pursuant to Section 578 .1 of this title, and   
 
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c. the factory has sixty (60) days from receipt of the 
new motor vehicle dealer’s relocation request to 
approve or deny the request.  The failure to approve 
or deny the request within the sixty-day time frame 
shall constitute approval of the request; 
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 guidelines 
of each factory.  Reasonable facility guidelines do not include a 
requirement to maintain exclusivity or site control unless agreed to 
by the dealer as set forth in subparagraphs f and g of paragraph 9 
of this subsection; 
18.  Being a factory tha t 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 mo dels or series 
motor vehicles at the time of the introduction of new models or 
series shall not be considered a price increase for purposes of this   
 
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paragraph.  Price changes ca used 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 case 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 co ntest, or 
purchase any promotional materials, showroom, or other display 
decoration or materials at the expense of the new motor vehicle 
dealer without consent of the new motor vehicle dealer, which 
consent shall not be unreasonably wi thheld; 
20.  Being a factory that denies any new motor vehicle deale r 
the right of free association with any other n ew 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 dealer to 
sell, offer to sell, or sell exclusively an extended service 
contract, extended maintenance plan, or similar product, such as gap 
products offered, endorsed, or sponsored by the factory by the 
following means:   
 
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a. by an act or statement from the 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 offered, e ndorsed, 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 distributor shall be permitted to exer cise 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 refusal, the factory must 
notify the new motor vehicle dealer in writing within six ty (60) 
days of receipt of the completed proposal 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 
receiving the same or greater consideration as they have contracted   
 
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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 corporation controlled by such pe rsons; 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 sha ll be required 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 section shall prohibit, limit, restrict, or 
impose conditions on : 
1.  Business activities, including without limitation the 
dealings with motor vehicle manufacturers and t he representatives 
and affiliates of motor v ehicle manufacturers, of any person that is   
 
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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 limited to 
used motor vehicles that have been previously used 
exclusively and regular ly by that person in the 
conduct of business and used motor 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 owned, 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 conduct of 
business; or 
2.  The direct or indirect ownership, affi liation, 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 more of the duties or 
responsibilities necessarily related to the occupation; and   
 
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2.  “Poses a reasonable threat” means the nature of criminal 
conduct for which the person was convicted involved an act or threat 
of harm against another and h as a bearing on the 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 authoriz ed 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 all otment of a make or model of a new motor 
vehicle or an incentive. 
SECTION 3.     AMENDATORY     47 O.S. 2021, Section 565.2, as 
amended by Section 10, Chapter 29, O.S.L. 2023 (47 O.S. Supp. 2 023, 
Section 565.2), is amended to read as foll ows: 
Section 565.2. A.  Irrespective of the terms, provisions, or 
conditions of any franchise, or the terms or provisions of any 
waiver, no manufacturer shall terminate, cancel, or fail to renew 
any franchise with a licensed new motor vehicle dealer unles s the 
manufacturer has satisfied the notice requirements as provided in 
this section and has good cause for cancellation, termination, or 
nonrenewal.  The manufacturer shall not a ttempt to cancel or fail to 
renew the franchise agreement of a new motor vehi cle dealer in this 
state unfairly and without just provocation or without due regard to   
 
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the equities of the dea ler or without good faith as defined herein.  
As used herein, “good faith” means the duty of each party to any 
franchise agreement to act in a fa ir and equitable manner toward 
each other, with freedom from coercion or intimidation or threats 
thereof from each other. 
B.  Irrespective of the terms, provisions , or conditions of any 
franchise, or the terms or provisions of any waiver, good cause 
shall exist for the purpose of a termination, cancellation, or 
nonrenewal when: 
1.  The new motor vehicle dealer has failed to comply with a 
provision of the franchise, which p rovision is both reasonable and 
of material significance to the franchise relationship , or the new 
motor vehicle dealer has failed to comply with reasonable 
performance criteria for sales or se rvice established by the 
manufacturer, and the new motor vehicle dealer has been notified by 
written notice from the manufacturer; and 
2.  The new motor vehicle dealer has received written 
notification of failure to comply with the manufacturer ’s reasonable 
sales performance standards, capitalization requirements, fac ility 
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 has been afforded a reasonable oppo rtunity of not   
 
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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 termin ation, cancellation, or 
nonrenewal of any franchise, the manufacture r shall furnish 
notification of such termination, cancel lation, or nonrenewal to the 
new motor vehicle dealer and the Oklahoma New Motor Vehicle 
Commission as follows: 
1.  Not less than ni nety (90) days prior to the effective date 
of the termination, cancellation, or nonrenewal unless for a cause 
described in paragraph 2 of this subse ction; 
2.  Not less than fifteen (15) days prior to the effec tive date 
of the termination, cancell ation, or nonrenewal with respect to any 
of the following: 
a. insolvency of the new motor vehicle dealer, or the 
filing of any petitio n by or against the new motor 
vehicle dealer under any bankruptcy or receivership 
law, 
b. failure of the new motor vehicle dealer to conduct its 
customary sales and service operations during its 
customary business hours for seven (7) consecutive 
business days, provided th at such failure to conduct 
business shall not be due to an act of God or   
 
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circumstances beyond the direct control of the new 
motor vehicle dealer, or 
c. conviction of the new motor vehicle dealer of any 
felony which is punishable by imprison ment or a 
violation of the Federal Odometer Act federal odometer 
law, 49 U.S.C., Section 32701 et seq. ; and 
3.  Not less than one hundred ei ghty (180) days prior to the 
effective date of the termination or cancellation where the 
manufacturer or distributor is discontinuing the sale of the product 
line. 
The notification required by this subsection shall be by 
certified mail, return receipt requ ested, 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. 
D.  Upon the affected new mot or vehicle dealer’s receipt of the 
aforementioned notice of 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.  The 
hearing shall be held within one hundred eighty (180) days of the 
date of the timely protest by the dealer and in accordance with the 
provisions of the Administrative Procedures Act, Sections 250   
 
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through 323 of Title 75 of the Oklahoma Statutes, to determine if 
the threatened cancellation, termination, or nonrenewal of the 
franchise has been for good cause and if the factory has complied 
with its obligations pursuant to subsections A, B , and C of this 
section and the factory shall have the burden of proof.  Either 
party may request an additional one-hundred-eighty-day extension of 
the hearing date from the Commission.  Approval of the requested 
extension may not be unreasonab ly withheld or delayed. If the 
Commission finds that the threatened cancellation, termination, or 
nonrenewal of the franchise has not been for good cause or violates 
subsection A, B, or C of this section, then it shall issue a final 
order stating that the threatened termination is wrongful.  A 
factory shall have the right to appeal such order.  During the 
pendency of the hearing and after the decision, through any appeal, 
the franchise shall r emain in full force and effect, including the 
right to transfer the franchise.  If the Commission find s that the 
threatened cancellation, term ination, or nonrenewal is for good 
cause and does not violate subse ction A, B, or C of this section, 
the new motor vehicle dealer shall have the right to an appeal.  
During the pendency of the action, including the f inal decision or 
appeal, the franchise s hall 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   
 
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Commission shall award to the new motor vehicle dealer the attorney 
fees and costs incurred to defend the action. 
E.  If the factory prevails in an action to terminate, cancel, 
or not renew any franchi se, the new motor vehicle deal er shall be 
allowed fair and reasonable compensation by the manufacturer for: 
1.  New, current, and previous model year vehicle inventory 
which has been acquired from the manufacturer, and which is unused 
and has not been dama ged or altered while in the new motor vehicle 
dealer’s possession; 
2.  Supplies and parts which have b een acquired from the 
manufacturer, for the purpose of this section, limited to any and 
all supplies and parts that are listed on the current parts price 
sheet available to the new motor vehicle dealer; 
3.  Equipment and furnishings, provided the new motor vehicle 
dealer purchased them from the manufacturer or its approved sources; 
and 
4.  Special tools, with such fair and reasonable compensation to 
be paid by the manufacturer withi n 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 manu facturer. 
a. For the purposes of paragraph 1 o f this subsection, 
fair and reasonable compensation shal l be no less than   
 
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the net acquisition pr ice of the vehicle paid by the 
new motor vehicle dealer. 
b. For the purposes of paragraphs 2, 3, and 4 of this 
subsection, fair and reason able 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. 
F.  1.  If a factory prevails in an action to terminate, cancel , 
or not renew any franchise and the new motor vehi cle dealer is 
leasing the dealership facilities, the manufacturer s hall pay a 
reasonable rent to the lessor in accordance with and subject to the 
provisions of this subsection G of this section.  Nothing in this 
section shall be construed to relieve a new motor vehicle dealer of 
its duty to mitigate damages. 
G.  1. Such reasonable rental value shall be paid only to the 
extent the dealership premises are recognized in the franchise and 
only if they are: 
a. used solely for performance in accordance with the 
franchise.  If the facility is used for the operation 
of more than one franchise, the reasonable rent shall 
be paid based upon the portion of the facility   
 
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utilized by the franchise being terminated, canceled , 
or nonrenewed, and 
b. not substantially in excess of facilities recommended 
by the manufacturer. 
2.  If the facilities are owned by the new motor vehicle dealer, 
an entity considered a relationship as defined in 26 U.S.C., Section 
267(b), or a member, partner, or shareholder of the dealership, 
within ninety (90) days following the effective date of the 
termination, cancellation, or nonrenewal, at the option of the 
dealer or related ent ity, the manufacturer will shall either: 
a. locate a qualified purchaser who will offer to 
purchase the dealership facilities at a reasonable 
price, 
b. 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. failing the foregoing, lease the dealership facilities 
at a reasonable rental value for the portion of the 
facility that is recognized in the franchise agreement 
for one (1) year 
purchase the existing dealership facility of the 
dealer and real estate at its fair market value .  If 
the factory and dealer can not agree on the fair market 
value of the terminated franchise or agree to a   
 
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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 pur chases a dealership 
facility and real estate, then it shall be entitled to 
sole ownership, posse ssion, use, and control of any 
items, buildings, or property that were included in 
the contract to purchase, or 
b. locate a qualified purchaser who will offer to 
purchase the dealership facilities and property at a 
reasonable price. 
3.  If the facilities are leased by the new motor ve hicle dealer 
from an entity other than an entity considered a relationship as 
defined in 26 U.S.C., Section 267(b), or a member, partner or 
shareholder of the d ealership, within ninety (90) days following the 
effective date of the termination, cancellation , or nonrenewal the 
manufacturer will either: 
a. locate a tenant or tenants satisfactory to the lessor, 
who will sublet or assume the balance of the 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   
 
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that is recognized in the franchise agreement for one 
(1) year or the remainder of the lease, whichever is 
less. 
4.  The manufacturer shall not be obligated to provide 
assistance under this section if the new motor vehicle dealer: 
a. fails to accept a bona fide offer from a p rospective 
purchaser, sublessee, or assignee, 
b. refuses to execute a settlement agreement with the 
manufacturer or lessor if such agreement with the 
manufacturer or lessor would be without cost to th e 
new motor vehicle dealer, or 
c. fails to make written request for assistance under 
this section within ninety (90) days after the 
effective date of the termination, cancellatio n, or 
nonrenewal. 
5.  The manufacturer shall be entitled to occupy and use any 
space for which it pays rent required by this section . 
H. G.  In addition to the repurchase requirements set forth in 
subsections E and G F of this section, in the event the ter mination, 
or cancellation, or nonrenewal is the result of a discontinuance of 
a product line, the manufacturer or distributor shall compensate the 
new motor vehicle dealer in as follows: 
1.  In an amount equivalent to the fair market value of the 
terminated franchise as of the date immediately preceding the   
 
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manufacturer’s or distributor’s announcement or provid e the new 
motor vehicle dealer with a replacement franchise on substantially 
similar terms and conditions as those offered to other same line -
make dealers.; 
2.  If the facilities are owned by the new motor vehicle dealer 
or an entity considered a relationship as defined in 26 U.S.C., 
Section 267(b), or a member, partner, or shareholder of the 
dealership, and the owner has not sold the existing dealership 
facility and real estate within the later of one hundred eighty 
(180) days of listing the propert y for sale or ninety (90) days 
after the effective date of the termi nation, then, upon the written 
request of the dealer, the manufact urer or distributor sh all 
purchase the existing dealership facility of the dealer and real 
estate.  The facility and real estate shall be valued as if a new 
motor vehicle dealership continues to operate on the property.  If 
the factory and dealer ca nnot agree on the value of the terminated 
franchise or agree to a process to determine the value, then the 
factory and dealer shall utilize the process described in paragraph 
6 of this subsection .  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 items, 
buildings, or property that were included in the contract to 
purchase;   
 
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3.  If the facilities are leased by the new motor vehicle dealer 
from an entity other than an entity considered a relationshi p as 
defined in 26 U.S.C., Section 267(b), or a member, partner, or 
shareholder of the dealership, lease the dealership facilities at a 
reasonable rent for the remainder of the lease; 
4.  Any amount of pecuniary loss to the new motor vehicle 
dealership as a result of the discontinuation of a product line, 
including but not limited to the cost of terminating services such 
as the dealership management system contract; 
5.  The new motor vehicle dealer may immediately request payment 
under this section following the announcement in exchange for 
canceling any further franchise right s, except payments owed to the 
new motor vehicle dealer in the ordinary course of business, or may 
request payment under this section upon the final termination, 
cancellation, or nonrenewal of the franchise.  In either ca se, 
payment under this section shall be made not later than ninety (90) 
days after the fair market value is determined., the lease agreement 
is provided, or other reasonable documentation is provided to the 
manufacturer or distributor supporting other pecuniary losses; and 
6. If the factory and new motor vehicle dealer cannot agree on 
the fair market value of the terminated franchise or real estate, or 
agree to a process to determine the f air market value, then, within 
thirty (30) days of a written request by dealer, the factory and new 
motor vehicle dealer shall utilize a neutral third-party mediator to   
 
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resolve the disagreement shall select one appraiser, and the dealer 
shall select one appraiser who shall make an independent appraisal .  
The appraisers shall be state-certified general real estate 
appraisers and in good standing with the Real Estate Appraiser 
Board.  Before entering upon their duties, such appraisers shall 
take and subscribe an oath , before a notary public or some other 
person authorized to administer oaths, that they will perform their 
duties faithfully and impartially to the best of their ability.  If 
the appraisals are within ten percent (10%) of each other, the 
average of the two appraisals shall constitute the value.  If the 
two appraisals differ by more than ten percent (10%), the two 
appraisers may appoint a third appraiser who shall review the two 
appraisals.  The third appraisal, when taken with the first two 
appraisals and averaged among the three, shall establish the value.  
The cost of the third appraiser shall be shared equally by the 
factory and dealer.  The appraisers shall make a val uation and 
determine the amount of compensation to be paid by the factory to 
the dealer.  The factory will then have ninety (90) days to complete 
the transaction, unless otherwise agreed to by the parties.  The 
factory and the dealer shall each be responsible for the costs of 
their retained appraisers . 
SECTION 4.  This act shall become effective November 1, 2024. 
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE 
February 19, 2024 - DO PASS AS AMENDED BY CS