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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2158 By: Dobrinski of the House
and
Gollihare of the Senate
COMMITTEE SUBSTITUTE
An Act relating to motor vehicles; amending 47 O.S.
2021, Section 562, as last amended by Section 2,
Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024, Section
562), which relates to definitions; modifying
definitions; defining terms; amending 47 O.S. 2021,
Section 564, as last amended by Section 4, Chapter
240, O.S.L. 2024 (47 O.S. Supp. 2024, Section 564),
which relates to licenses; modifying list of entities
requiring licensure; deleting certain exception;
prohibiting factories from engaging in activities of
a dealer; amending Section 1, Chapter 29, O.S.L. 2023
(47 O.S. Supp. 2024, Section 564.3), which relates to
dealer management system providers; modifying
definition; requiring certain commercially reasonable
data security standards; modifying entities not
liable for certain actions; modifying entities
required to provide certain indemnification;
prohibiting certain actions by certain entities;
providing meaning for certain term; authorizing
certain charges; amending 47 O. S. 2021, Section 565,
as last amended by Se ction 7, Chapter 240, O.S.L.
2024 (47 O.S. Supp. 2024, Section 565), which relates
to the denial, revocation, or suspension of license;
modifying reasons for which a license may be denied,
revoked, or suspended; requiring certain factory
compliance; modifying certain factory compliance;
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removing language requiring certain dealer
compliance; 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 last
amended by Section 2, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 562), is amended to read as follows:
Section 562. The following words, terms, and phrases, when used
in Sections 561 through 567, 572, 578.1, 579, and 579.1 of this
title, shall have the meanings respectively ascribed to them in this
section, except where the context clearly indicates a different
meaning:
1. "Motor vehicle" means any motor -driven vehicle required to
be registered under the Oklahoma Vehicle License an d Registration
Act. The term motor vehicle does not include:
a. recreational vehicles, as defined in the Recreational
Vehicle Franchise Act, or
b. powersport vehicles;
2. "New motor vehicle dealer" means any person, firm,
association, corporation, or tru st not excluded by this paragraph
who sells, offers for sale, advertises to sell, receives deposits
for vehicles, leases, or displays new motor vehicles and holds a
bona fide contract or franchise in effect with a manufacturer or
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distributor authorized by the manufacturer to make predelivery
preparation of such vehicles sold to purchasers and to perform post -
sale work pursuant to the manufacturer's or distributor's warranty.
As used herein, "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 required by the manufacturer of the vehicle to be made
before its delivery to the purchaser. "Performance of authorized
post-sale work pursuant to the warranty", as used herein, means the
rendition of services which are required by the terms of the
warranty that stands extended to the vehicle at the time of its sale
and are to be made in accordance with the safety standards
prescribed by the manufacturer. The term includes premises or
facilities at which a person engages only in the repair of motor
vehicles if repairs are performed pursuant to the terms of a
franchise and motor vehicle manufacturer's warranty. For the
purpose of Sections 561 through 567, 572, 578.1, 579, and 579.1 of
this title, the terms new motor vehicle dealer and "new motor
vehicle dealership" shall be synonymous. The term new motor vehicle
dealer does not include:
a. receivers, trustees, administrators, executors,
guardians, or other persons appointed by or acting
under judgment or order of any court,
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b. public officers while performing or in op eration of
their duties,
c. employees of persons, corporations, or associations
enumerated in subparagraph a of this paragra ph when
engaged in the specific performance of their duties as
such employees, or
d. a powersports vehicle dealer;
3. "Motor vehicle salesperson" means any person, resident or
nonresident, who, for gain or compensation of any kind, either
directly or indirectly, regularly or occasionally, by any form of
agreement or arrangement, sells or negotiates for the sale, lease,
or conveyance or arranges the financing of any new motor vehicle or
powersports vehicle as an employee for any new motor vehicle dealer
or powersports dealer to any one or more third parties;
4. "Commission" means the Oklahoma New Motor Vehicle
Commission;
5. "Manufacturer" means any person, firm, association,
corporation, or partnership, trust, joint venture, or common entity
thereof, resident or nonresident, that manufactures or assembles new
and unused motor vehicles or new and unused powersport vehicles or
that engages in the fabrication or assembly of motorized vehicles of
a type required to be registered in this state;
6. "Distributor" means any person, firm, association,
corporation, or partnership, trust, joint venture, or common entity
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thereof, resident or nonresident, that, being authorized by the
original manufacturer, in whole or in part sells or distributes new
and unused motor vehicles to new motor vehicle dealers or powersport
dealers, or that maintains distributor representatives;
7. "Factory branch" mea ns any branch office maintained by a
person, firm, association, corporation, or partnership, trust, joint
venture, or common entity thereof that manufactures or assembles
motor vehicles or powersport vehicles for the sale of motor vehicles
or powersport vehicles to distributors, or for the sale of motor
vehicles to new motor vehicle dealers, or for the sale of powersport
vehicles to new powersport vehicle dealers, or for directing or
supervising, in whole or in part, its representatives;
8. "Distributor branch" means any branch office similarly
maintained by a distributor for the same purposes a factory branch
is maintained;
9. "Factory representative" means any officer or agent engaged
as a representative of a manufacturer of motor vehicles or
powersport vehicles or by a factory branch, for the purpose of
making or promoting the sale of its motor vehicles or powersport
vehicles, or for supervising or contacting its dealers or
prospective dealers;
10. "Distributor representative" means any person, firm,
association, corporation, or partnership, trust, joint venture, or
common entity thereof, and each officer and employee thereo f engaged
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as a representative of a distributor or distributor branch of motor
vehicles or powersport vehicles, for the purpose of making or
promoting the sale of its motor vehicles or powersport vehicles, or
for supervising or contacting its dealers or pro spective dealers;
11. "Franchise" means any contract or agreement between a new
motor vehicle dealer or a powersports vehicle deale r and a
manufacturer of a new motor vehicle or powersports vehicle or its
distributor or factory branch by which the new mot or vehicle dealer
or new powersports vehicle dealer is authorized to engage in the
activities of a new motor vehicle dealer or new powersports vehicle
dealer as defined by this section;
12. "New or unused motor vehicle" means a vehicle which is in
the possession of the manufacturer or distributor or has been sold
only to the holder of a valid franchise granted by the manufacturer
or distributor for the sale of that make of new vehicle so long as
the manufacturer's statement of origin has not been assigned to
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 branch , or distributor
representative, in which the new motor vehicle dealer or powersports
dealer is held responsible for the promotion a nd development of
sales and rendering of service for the make of motor vehicle or
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powersports vehicle for which the new moto r vehicle dealer or new
powersports vehicle dealer holds a franchise or selling agreement;
14. "Off premises" means at a location other than the address
designated on the new motor vehicle dealer's or new powersports
vehicle dealer's license;
15. "Sponsoring entity" means any person, firm, association,
corporation, or trust which has control, either permanently or
temporarily, over the real property upon which the off -premises sale
or display is conducted;
16. "Product" means new motor vehicles and new m otor vehicle
parts or new powersports vehicle and new powersports vehicle parts;
17. "Service" means motor vehicle or powersports vehicle
warranty repairs including both parts and labor;
18. "Lead" means a consumer contact in response to a factory
program designed to generate interest in purchasing or leasing a new
motor vehicle or new powersports vehicle;
19. "Sell" or "sale" means to sell or lease;
20. "Factory" means a manufacturer, distributor, factory
branch, distributor branch ,; or any common enti ty of a manufacturer,
distributor, factory branch or distributor branch; or factory
representative, or distributor representative, which manufactures or
distributes vehicle products;
21. "Powersports vehicle" means any new or unused motorcycles,
scooters, mopeds, all-terrain vehicles, and utility vehicles
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required to be registered under the Oklahoma Vehicle License and
Registration Act, with the exception of all -terrain vehicles,
utility vehicles, and motorcycles used exclusively for off -road use
which are sold by a retail implement dealer;
22. "Powersports vehicle dealer" means any person, firm, or
corporation, resident or nonresident, that is in the business of
selling any new powersports vehicles except for retail implement
dealers;
23. "Retail impleme nt dealer" means a business engaged
primarily in the sale of farm tractors as defined in Section 1 -118
of this title or implements o f husbandry as defined in Section 1 -125
of this title or a combination thereof and is exempt from licensing
by the Commission for the sale of all -terrain vehicles, utility
vehicles, and motorcycles used exclusively for off -road use;
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 party act ing on behalf of a
manufacturer.
The term shall not include the same or similar data obtained by
a manufacturer from any sou rce other than the new motor vehicle
dealer or new motor vehicle dealer's data management system; and
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25. "Fleet vehicle" means a new motor vehicle sold and titled
or registered to a business and used for business purposes only ; and
26. a. "Common entity" means any person, firm, association,
corporation, partnership, trust, or joint venture:
(1) which is directly or indirectly control led by or
has more than thirty percent (30%) of its equity
interest directly or indirectly owned,
beneficially or of record, through any form of
ownership structure, by a factory, manufacturer;
manufacturer branch; distributor; or distributor
branch, or
(2) which has more than thirty percent (30%) of its
equity interest directly or indirectly controlled
or owned, beneficially o r of record, through any
form of ownership structure, by one or more
persons who also directly or indirectly control
or own, beneficially or of record, more than
thirty percent (30%) of the equity interests of a
factory, manufacturer; manufacturer branch;
distributor; or distributor branch.
b. Notwithstanding subdivision (1) or (2) of subparagraph
a of this paragraph, an entity that would otherwise be
considered a common entity of a distributor under
subdivision (1) or (2) of subparagraph a of this
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paragraph because of its relation to a distributor is
not considered a common entity of that distributor if:
(1) the distributor to which th e entity is related
was a licensed distributor on March 1, 2025,
(2) the entity is not a common entity of a
manufacturer or an importer, and
(3) the distributor to which the entity is related is
not, and has never been, a common entity of a
manufacturer or an importer .
SECTION 2. AMENDATORY 47 O.S. 2021, Section 564, as last
amended by Section 4, Chapt er 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 564), is amended to read as follows:
Section 564. A. It shall be unlawful for any person, firm,
association, corporation, or partnership, trust, joint venture, or
common entity thereof, to engage in business as, or serve in the
capacity of, or act as a new motor vehicle dealer, powersports
dealer, or manufacturer or distributor of new motor vehicles or
powersports vehicles, or factory branch, distributor branch or
factory representative or distributor repre sentative, as defined in
Section 562 of this title, in this state without first obtaining a
license therefor as provided for by law. Any person, firm,
association, corporation, or partnership, trust, joint venture, or
common entity thereof, engaging in more than one of such capacities
or having more than one place where such business is carried on or
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conducted in this state shall be required to obtain and hold a
current license for each thereof. Provided that, a new motor
vehicle dealer's license shall au thorize one person to sell in the
event such person shall be the owner of a proprietorship, or the
person designated as principal in the dealer's franchise or the
managing officer or one partner if no principal person is named in
the franchise. It is furt her provided that a factory or an entity
affiliated by any ownership or control by the factory shall not be
permitted engage in the activities of a dealer as defined in
paragraph 2 of Section 562 of this title or to be licensed as a new
motor vehicle dealer in this state, except as provided by
subparagraph b of paragraph 12 of Section 565 of this title.
B. Applications for licenses re quired to be obtained under the
provisions of Section 561 et seq. of this title shall be verified by
the oath or affirmation of the applicant and shall be on forms
prescribed by the Oklahoma New Motor Vehicle Commission and
furnished to the applicants, and shall contain information as the
Commission deems necessary to enable it to fully determine the
qualifications and eligibil ity of the several applicants to receive
the license or licenses applied for. The Commission shall require
in such application, or otherwise, information relating to the
applicant's current financial standing, the applicant's business
integrity, whether t he applicant has an established place of
business and is primarily engaged in the pursuit, avocation, or
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business for which a license, or licenses, are applied for, and
whether the applicant is able to properly conduct the business for
which a license, or licenses, are applied for, and such other
pertinent information consistent with the safeguarding of the public
interest and the publ ic welfare. All applications for license or
licenses shall be accompanied by the appropriate fee or fees
therefor in accordance with the schedule thereof hereinafter set
out. In the event any application is denied and the license applied
for is not issued, the entire license fee shall be returned to the
applicant. All licenses issued under the provisions of Section 561
et seq. of this title shall expire on June 30, following the date of
issue and shall be nontransferable. All applications for renewal of
a license for a new motor vehicle dealer, powersports dealer,
manufacturer, distributor, or manufacturer's or distributor's
representative shall be submitted by June 1 of each year, and such
license or licenses will be issued by July 1. If applications have
not been made for renewal of licenses at the times described in this
subsection, it shall be illegal for any person to r epresent himself
or herself and act as a dealer, manufacturer, distributor, or
manufacturer's or distributor's representative. Serv ice Oklahoma
and licensed operators will be notified not to accept such dealers'
titles until such time as licenses have bee n issued by the
Commission.
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C. The schedule of license fees to be charged and received by
the Commission for the licenses issued hereunder shall be as
follows:
1. For each factory branch or distributor branch, Four Hundred
Dollars ($400.00) initial fee w ith annual renewal fee of Three
Hundred Dollars ($300.00);
2. For each manufacturer or distributor of new motor vehicles
or new powersport vehicles, Four Hundred Dollars ($400.00) initial
fee with annual renewal fee of Three Hundred Dollars ($300.00);
3. For each factory representative or distributor
representative, One Hundred Dollars ($100.00) annually;
4. For each new motor vehicle dealer, except powersports
vehicle dealers, initial fee of Three Hundred Dollars ($300.00) per
franchise sold at each loc ation licensed, with an annual renewal fee
of One Hundred Dollars ($100.00) per franchise sold at each location
licensed per year; a nd
5. For each powersports vehicle dealer, initial fee of Three
Hundred Dollars ($300.00) per manufacturer represented by t he dealer
at each location licensed, with an annual renewal fee of One Hundred
Dollars ($100.00) per manufacturer represented by the dealer at each
location licensed per year.
D. The licenses issued to each new motor vehicle dealer, new
powersports vehicle dealer, manufacturer, distributor, factory
branch, or distributor branch shall specify the location of the
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factory, office, or bra nch thereof. In case such location is
changed, the Commission may endorse the change of location on the
license without charge unless the change of address triggers a
relocation of a new motor vehicle dealer or new powersports vehicle
dealer pursuant to the provisions of Section 578.1 of this title.
The licenses of each new vehicle dealer shall be posted in a
conspicuous place in the dealer's place or places of business.
Every motor vehicle factory representative or distributor
representative shall physic ally possess the license when engaged in
business and shall display such upon request. The name of the
employer of such fac tory representative or distributor
representative shall be stated on the license.
E. The new powersports dealer license shall only allow the sale
of the specific types of powersports vehicles authorized by the
manufacturer and agreed to by the powersports dealer.
SECTION 3. AMENDATORY Section 1, Chapter 29, O.S.L. 2023
(47 O.S. Supp. 2024, Section 564.3), is amended to read as follows:
Section 564.3. A. As used in this section:
1. "Access fee" means a requirement to pay money f or access to
protected dealer data that is in addition to an amount specified in
a written and executed contract for goods and services ;
2. "Authorized integrator" means a person who a dealer has a
contractual relationship with or the dealer otherwise giv es express
written authorization to have access to protected dealer data stored
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on a dealer data system or to write protected dealer data to the
dealer data system for the purpose of performing a specific function
for the dealer;
3. "Dealer data system" m eans software, hardware, or firmware
that a dealer leases or rents from a dealer management system
provider for the purpose of storing protected dealer data;
4. "Dealer management system provider" means a person who, for
compensation, maintains and provid es access to a dealer data system
in which a dealer stores protected dealer data;
5. "Protected dealer data" means:
a. consumer data that a dealer generated or that the
consumer provided to the dealer that is not otherwise
publicly available and the consu mer has not otherwise
provided consent or acknowledgment to share the
information, and
b. any other dealer data in connection with the dealer's
daily business operations in which a dealer has rights
in a dealer data system; and
6. Authorized integrator an d dealer management system provider
do not include:
a. a manufacturer, distributor, importer, factory or any
entity that is a subsidiary or affiliate of, or acts
on behalf of, a manufacturer, distributor, or importer
factory, or
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b. a governmental body or o ther person that is acting in
accordance with federal, state, or local law, or a
valid court order.
B. A dealer management system provider may:
1. Condition access and ability of a dealer or authorized
integrator to receive, share, copy, use, write, or t ransmit
protected dealer data from or to a dealer data system on the
dealer's or authorized integrator's compliance with commercially
reasonable data security standards;
2. Require an authorized integrator to have express written
authorization from a deal er before allowing the authorized
integrator to gain access to, receive, share, copy, use, or transmit
protected dealer data; and
3. Deny access to a dealer data system to a dealer if the
dealer fails to pay an amount due to the dealer management system
provider under a lease, contract, or other agreement concerning the
dealer's access to or use of the dealer data system.
C. Except as provided in subsection B of this section, a dealer
management system provider shall not take any action that would
limit or prohibit the ability of a dealer or an authorized
integrator to receive, protect, store, copy, share, or use protected
dealer data using means that include, but are not limited to:
1. Imposing an access fee on a dealer or authorized integrator;
and
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2. Restricting a dealer or an authorized integrator from
sharing protected dealer data or writing data or having access to a
dealer data system. Prohibited restrictions pursuant to this
paragraph include, but are not limited to:
a. limits on the scope or nat ure of protected dealer data
to which a dealer or authorized integrator has access
or may share or write to a dealer data system, and
b. a requirement for a dealer or authorized integrator to
provide sensitive or confidential business information
or information that a dealer or authorized integrator
uses for competitive purposes in return for access to
protected dealer data or an autho rization to share or
write protected dealer data to a dealer data system.
D. Except as otherwise provided in this section, any term or
condition of a contract with a dealer management system provider
that conflicts with the requirements set forth in subsection C of
this section is void and unenforceable to the extent of the
conflict.
E. An authorized integrator shall:
1. Obtain express written authorization from a dealer before
gaining access to, receiving, sharing, copying, using, writing, or
transmitting protected dealer data;
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2. Comply with security standards in gaining access to,
receiving, sharing, copying, using, writi ng, or transmitting
protected dealer data; and
3. Allow a dealer to withdraw, revoke, or amend any express
written authorization the dealer provides under paragraph 1 of this
subsection:
a. at the sole discretion of the dealer, if the dealer
gives a thirty-day prior notice to an authorized
integrator, or
b. immediately, for good cause.
F. 1. This section does not prevent a dealer, a dealer
management system provider, or an authorized integrator from
discharging the obligations of a dealer, dealer managem ent system
provider, or of an authorized integrator under federal, state, or
local law to secure and prevent unauthorized access to protected
dealer data, or from limiting the scope of the obligations, in
accordance with federal, state, or local law.
2. A dealer management system provider is not liable for any
action that a dealer takes directly with respect to securing or
preventing unauthorized access to protected dealer data, or for
actions that an authorized integrator takes in appropriately
following the written instructions of the dealer for securing or
preventing unauthorized access to protected dealer data, to the
extent that the actions prevent the dealer management system
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provider from meeting a legal obligation to secure or prevent
unauthorized access to protected dealer data.
3. A dealer is not liable for any action that an authorized
integrator takes directly with respect to securing or preventing
unauthorized access to protected dealer data, or for actions that
the authorized integrator takes in appropriately following the
written instructions of the dealer for securing or preventing
unauthorized access to protected dealer data, to the extent that the
actions prevent the dealer from meeting a legal obligation to secure
or prevent unauthorized a ccess to protected dealer data.
4. An authorized integrator is not liable for any action that a
dealer takes directly with respect to securing or preventing
unauthorized access to protected dealer data, or for actions that
the dealer takes in appropriatel y following the written instructions
of the authorized integrator for securing or preventing unauthorized
access to protected dealer data, to the extent that the actions
prevent the authorized integrator from meeting a legal obligation to
secure or prevent unauthorized access to protected dealer data.
5. A manufacturer, distributor, importer, factory or any entity
that is a subsidiary or affiliate of, or acts on behalf of, a
manufacturer, distributor, or importer factory is not liable for any
action that a dealer, dealer management system provider, authorized
integrator, or other third party, except for a third party who the
manufacturer has provided the data to as provided for in paragraph 7
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of this subsection, takes directly with respect to securing or
preventing unauthorized access to protected dealer data or for
actions that an authorized integrator, dealer management system
provider, or other third party takes in appropriately following the
written instructions of the dealer for securing or preventing
unauthorized access to protected dealer data.
6. Notwithstanding any other agreement, an authorized
integrator shall indemnify and hold the new motor vehicle dealer
harmless from any third -party claims asserted against or damages
incurred by the new motor vehicle dealer to the extent caused by
access to, use of, or disclosure of consumer data in violation of
this section.
7. Notwithstanding any other agreement, a manufacturer,
distributor, importer, factory or any entity that is a subsidiary or
affiliate of, or acts on behalf of, a manufacturer, distributor, or
importer factory shall indemnify the dealer for any third -party
claims asserted against or damages incurred by the dealer to the
extent the claims or damages are caused by the access to and
unlawful disclosure of protected dealer data resulting from a breach
caused by the manufacturer or distributor or a third party to which
the manufacturer or distributor has provided the protected dealer
data in violation of this section, the written consent granted by
the dealer, or other applicable state or federal law.
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G. A factory or entity that acts on behalf of, a factory may
not prohibit an Authorized Integrator that has satisfied or is
compliant with commercially reasonable data security standards and
that the dealer has identified as one of its authorized integrators
from integrating into the dealer's dealer data system or place an
unreasonable restriction on integration by an authorized integrator
or other third party that the dealer wishes to be an authori zed
integrator. For the purposes of this subsection, "unreasonable
restriction" includes:
1. Imposing an access fee on a dealer or authorized integrator;
2. An unreasonable limitation or condition on the scope or
nature of the data that is shared with a n authorized integrator;
3. An unreasonable limitation on the ability of the authorized
integrator to write data to a dealer data s ystem;
4. An unreasonable limitation or condition on an authorized
integrator that accesses or shares protected dealer data or that
writes data to a dealer data system; and
5. Requiring unreasonable access to an authorized integrator's
sensitive, competitive, or other confidential business information
as a condition for accessing protected dealer data or sharing
protected dealer data with an authorized integrator.
Notwithstanding paragraph 1 of this subsection, a franchisor or
third party may charge a fra nchise or authorized integrator for
actual costs associated with modifications to a franchisor’s
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electronic systems to enabl e a secure interface with the authorized
integrator’s system and software.
SECTION 4. AMENDATORY 47 O.S. 2021, Section 565, as last
amended by Section 1, Chapter 145, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 565), is amended to re ad as follows:
Section 565. A. The Oklahoma New Motor Vehicle Commission may
deny an application for a license, revoke or suspend a license, or
impose a fine against any person or entity, not to exceed Ten
Thousand Dollars ($10,000.00) per occurrence, th at 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 misstatement made by an applicant in any
application for any license under the provi sions 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 veh icle dealer who:
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a. has required a purchaser of a new motor vehicle, as a
condition of sale and delivery thereof, to also
purchase special features, appliances, accessories, or
equipment not desired or requested by the purchaser
and installed by the new mo tor vehicle dealer,
b. uses any false or misleading advertising in connection
with business as a new motor vehicle dealer,
c. has committed any unlawful act which 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 crim e that
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, purchasing,
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 includi ng an
option to purchase such vehicle,
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g. has failed to meet or maintain the conditions and
requirements necessary to qualify for th e issuance of
a license, or
h. completes any sale or transaction of an extended
service contract, extended maintenance plan, or
similar product using contract forms that do not
conspicuously disclose the identity of the service
contract provider;
6. Being a motor vehicle salesperson who is not employed as
such by a licensed new motor vehicle dealer;
7. Being a new motor vehic le dealer who:
a. does not have an established place of business,
b. does not provide for a suitable repair shop separate
from the display room with ample space to repair or
recondition one or more vehicles at the same time, and
which is staffed with prope rly 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 th e dealer's or manufacturer's
warranty obligation,
c. does not hold a franchise in effect with a
manufacturer or distributor of new o r unused motor
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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 certificate of
registration for the person, or utilizes the s ervices
of used motor vehicle lots or dealers or other
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 motor vehicles included in the new
motor vehicle dealer's franchise agreement, unless the
new motor vehicles are not readily available from the
manufacturer or distributor due to limited production;
8. Being a factory that has:
a. either induced or attempted to induce by means of
coercion or intimidation, any new motor vehicle
dealer:
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(1) to accept delivery of any motor vehicle or
vehicles, parts, or acc essories 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 list price of
the motor vehicles as publicly advertised by the
manufacturer thereof, or
(3) to order or accept d elivery 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 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 participa te
or contribute to any local or national advertising
fund controlled directly or indirectly by the factory
or for any other purposes such as contest,
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"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 percentag e of the vehicles 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 basis,
c. used a performance standard, sales objective, or
program for measuring dealer performance that may have
a material effect on a right of the dealer to vehicle
allocation; or payment under any incentive or
reimbursement program that is unfair, unreasonabl e,
inequitable, and not based on accurate information,
d. used a performance standard for measuring sales or
service performance of , or which results in penalizing
or withholding a benefit from, any new motor vehicle
dealer under the terms of the franchise agreement
which:
(1) is unfair, unreasonable, arbitrary, or
inequitable, and
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(2) does not consider the relevant and material local
and state or regional criteria, prevailing
economic conditions affecting the sales or
service performance of a vehicle deale r, vehicle
allocation from the manufacturer, and any
relevant and material data and facts presented by
the dealer in writing within thirty (30) days of
the written notice of the manufacturer to the
dealer of its intention to cancel, terminate, or
not renew the dealer's franchise agreement, and
(3) does not consider the actual vehicle allocation
offered or otherwise made available to the dealer
by the manufacturer or distributor, as well as
the dealer's inventory levels relevant to achieve
any minimum performance standards to which the
manufacturer or distributor holds the dealer
accountable,
e. failed or refused to sell, or offer for sa le, new
motor vehicles to all of its authorized same line -make
franchised new motor vehicle dealers at the same price
for a comparably equipped motor vehicle, on the same
terms, with no differential in functionally available
discount, allowance, credit, or bonus, except as
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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 veh icle to any consumer who is having
a vehicle serviced at the dealership. For purposes of
this paragraph, actual cost is the average cost in the
new motor vehicle dealer's region for the rental of a
substantially similar make and model as the vehicle
being serviced, or
g. failed to make available to its new motor vehicle
dealers a fair and proportional share of all new
vehicles distributed to same line -make dealers in this
state, subject to the same reasonable terms, including
any vehicles distributed from a common new vehicle
inventory pool outside of the factory's ordinary
allocation process such as any vehicles the factory
reserves to distribute on a discretionary basis;
9. Being a factory that:
a. has attempted to coerce or has coerced any new motor
vehicle dealer to enter into any agreement or to
cancel any agreement; has failed to act in good faith
and in a fair, equitable , and nondiscriminatory
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manner; has directly or indirectly coerced,
intimidated, threatened, or restrained any new motor
vehicle dealer; has acted dishonestly; or has failed
to act in accordance with the reasonable standards of
fair dealing,
b. has failed to compensate its dealers for the work and
services they are required to perform in connection
with the dealer's delivery and preparation obligations
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 p erform under and
comply with manufacturer's warranty agreements and
recall repairs which shall include diagnostic work as
applicable and assistance requested by a consumer
whose vehicle was subjected to an over -the-air or
remote change, repair, or update to any part, system,
accessory, or function by the manufacturer and
performed by the dealer in order to satisfy the
consumer. Time allowances for the diagnosis and
performance of repair work shall be reasonable and
adequate for the work to be performed. A dequate and
fair compensation, which under this provision shall be
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no less than the rates customarily charged for retail
consumer repairs as calculated herein, for parts and
labor for warranty and recall repairs shall, at the
option of the new motor vehicle dealer, be established
by the new motor vehicle dealer submitting to the
manufacturer or distributor one hundred sequentia l
nonwarranty consumer -paid service repair orders which
contain warranty-like repairs, or ninety (90)
consecutive days of nonwarrant y consumer-paid service
repair orders which contain warranty -like repairs,
whichever is less, covering repairs made no more than
one hundred eighty (180) days before the submission
and declaring the average percentage labor rate and/or
markup rate. A new motor vehicle dealer may not
submit a request to establish its retail rates more
than once in a twelve -month period. That r equest 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
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shall calculate its retail labor rate by dividing the
amount of the new motor vehic le 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 repair,
(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 aftermarket 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,
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(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
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 distributo r's
receipt of the new motor vehicle dealer's initial
submission, all repair orders closed within the period
of thirty (30) days immediately preceding, or thirty
(30) days immediately following, the set of repair
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orders initially submitted by the new motor vehicle
dealer. All time periods under this section shall be
suspended until the supplemental repair orders are
provided. If the manufacturer or distributor requests
supplemental repair orders, the manufacturer or
distributor may, within thirty (30) day s after
receiving the supplemental repair orders and in
accordance with the formula described in this
subsection, calculate a proposed adjusted retail labor
rate or retail parts markup rate, as applicable, based
upon any set of the qualified repair orders submitted
by the franchisee and following the formula set forth
herein to establish the rate. The retail labor and
parts rates shall go into effect thirty (30) days
following the approval by the manufacturer or
distributor. If the declared rate is rebutt ed, 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 po sition
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.
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If the new motor vehicle dealer does not agree with
the proposed average percentage mar kup 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 shal l 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 distributor may
not retaliate against any new mot or vehicle dealer
seeking to exercise its rights under this section. A
manufacturer or distributor may require a dealer to
submit repair orders in accordance with this section
in order to validate the reasonableness of a dealer's
retail rate for parts or labor not more often than
once every twelve (12) months. A manufacturer or
distributor may not otherwise recover its costs from
new motor vehicle dealers within this state including
a surcharge imposed on a new motor vehicle dealer
solely intended to reco ver the cost of reimbursing a
new motor vehicle dealer for parts and labor pursuant
to this section; provided, a manufacturer or
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distributor shall not be prohibited from increasing
prices for vehicles or parts in the normal course of
business or from audit ing and charging back claims in
accordance with this section. All claims made by
dealers for compensation for delivery, preparation ,
warranty, or recall repair work shall be paid within
thirty (30) days after approval and shall be approved
or disapproved within thirty (30) days after receipt.
When any claim is disapproved, the dealer shall be
notified in writing of the grounds for disapproval.
The dealer's delivery, preparation, and warranty
obligations as filed with the Commission shall
constitute the dealer's sole responsibility for
product liability as between the dealer and
manufacturer. A factory may reasonably and
periodically audit a new motor vehicle dealer 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 payment. A manufacturer
shall reserve the right to reason able, periodic audits
to determine the validity of paid claims for dealer
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compensation or any charge -backs for consumer or
dealer incentives. Except in cases of suspected
fraud, audits of incentive payments shall only be for
a one-year period immediately following the date of
the payment. A factory shall not deny a claim or
charge a new motor vehicle dealer back subsequent to
the payment of the claim unless the factory can show
that the claim was false or fraudulent or that the new
motor vehicle dealer fa iled to reasonably substantiate
the claim by the written reasonable procedures of the
factory. A factory shall not deny a claim or
implement a charge-back against a new motor vehicle
dealer after payment of a claim in the event a
purchaser of a new vehicl e 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 prov ide, within thirty (30)
days of notice of charge -back, withholding of payment,
or denial of claim, the documentation to demonstrate
the vehicle sale, delivery, and customer qualification
for an incentive as reported, including consumer name
and address and written attestation signed by the
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dealer operator or general manager stating the
consumer was not on the export control list and the
dealer did not know or have reason to know the vehicle
was being exported or resold.
The factory shall provide written not ice to a dealer
of a proposed charge -back that is the result of an
audit along with the specific audit results and
proposed charge-back amount. A dealer that receives
notice of a proposed charge -back pursuant to a
factory's audit has the right to file a p rotest with
the Commission within thirty (30) days after receipt
of the notice of the charge -back or audit results,
whichever is later. The factory is prohibited from
implementing the charge -back or debiting the dealer's
account until either the time fram e for filing a
protest has passed or a final adjudication is rendered
by the Commission, whichever is later, unless the
dealer has agreed to the charge-back or charge-backs,
c. fails to compensate the new motor vehicle dealer for a
used motor vehicle:
(1) that is of the same make and model manufactured,
imported, or distributed by the factory and is a
line-make that the new motor vehicle dealer is
franchised to sell or on which the new motor
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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 n ew 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 result of
a retail consumer trade -in or a lease return to
the dealer inventory in accordance with an
applicable lease contract,
(4) that cannot be repaired due to the
unavailability, within thirty (30) days after
issuance of the stop -sale or do-not-drive order,
of a remedy or parts necessary for t he 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
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dealer until the earlier of either of the
following:
(a) the date the recall remedy or parts are made
available, or
(b) the date the new motor vehicle dealer sells,
trades, or otherwise disposes of the
affected used motor vehicle.
For the purposes of division (5) of this subparagraph,
the value of a used vehicle shall be the average Blac k
Book value for the year, make, and model of the
recalled vehicle. A factory may direct the manner and
method in which a new motor vehicle dealer must
demonstrate the inventory status of an affected used
motor vehicle to determine eligibility under this
subparagraph; provided, that the manner and method may
not be unduly burdensome and may not require
information that is unduly burde nsome to provide. All
reimbursement claims made by new motor 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 vehicle is subject to
a stop-sale or do-not-drive order, shall be subject to
the same limitations and requirements as a warranty
reimbursement claim made under subparagr aph b of this
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paragraph. In the alternative, a manufacturer may
compensate its franchised new motor vehicle dealers
under a national recall compensation program;
provided, the compensation under the program is equal
to or greater than that provided under division (5) of
this subparagraph, or as the manufacturer and new
motor vehicle dealer otherwise agree. Nothing in this
section shall require a factory to provide total
compensation to a new motor vehicle dealer which would
exceed the total average Black Book value of the
affected used motor vehicle as originally determined
under division (5) of this subparagraph. Any remedy
provided to a new motor vehicle dealer under this
subparagraph is exclusive and may not be combined with
any other state or federal compensation remedy,
d. unreasonably fails or refuses to offer to its same
line-make franchised dealers a reasonable supply and
mix of all models manufactured for that line -make, or
unreasonably requires a dealer to pay any extra fee,
purchase unreasonable advertising displays or other
materials, or enter into a separate agreement which
adversely alters the rights or obligations contai ned
within the new motor vehicle dealer's existing
franchise agreement or which waives any right of the
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new motor vehicle de aler 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 vehicl e 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 section if the
failure is not arbitrary or is due to lack of
manufacturing capacity or to a strike or labor
difficulty, a shortage of materials, a freight
embargo, or other cause over which the manufacturer
has no control. However, this subparagraph shall not
apply to recreational vehicles, limited production
model vehicles, a vehicle not advertised by the
factory for sale in this state, vehicles that are
subject to allocation affected by federal
environmental laws or environmental laws of this
state, or vehicles allocated in response to an
unforeseen event or circumstance,
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e. except as necessary to comply with a health or safety
law, or to comply with a technology requir ement 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 renova te the new motor
vehicle dealer's existing facility unless the facility
construction or renovation 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 for
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 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
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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 required to construct a new
facility or renovate the existing facility if the same
area of the facility or premises has been constructed
or substantially altered within the last ten (10)
years and the construction or alteration was approved
by the manufacturer as a part of a facility upgrade
program, standard, or policy. For purposes of this
subparagraph, "substantially altered" means to perform
an alteration that substantially impacts the
architectural features, characteristics, or integrity
of a structure or lot. The term shall not include
routine maintenance reasonably necessary to maintain a
dealership in attractive condition. If a facility
upgrade program, standard, or policy under whic h the
dealer completed a facility construction or
substantial alteration does not contain a specific
time period during which the ma nufacturer or
distributor shall provide payments or benefits to a
participating dealer, or the time frame specified
under the program is reduced or canceled prematurely
in the unilateral discretion of the manufacturer or
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distributor, the manufacturer or distributor shall not
deny the participating dealer any payment or benefit
under the terms of the program, standard, or policy as
it existed when the dealer began to perform under the
program, standard, or policy for the balance of the
ten-year period, regardless of whether the
manufacturer's or distributor's program, standard, or
policy has been changed or canceled, unless the
manufacturer and dealer agree, in writing, to the
change in payment or benefit. During the ten -year
period following facility construction or substantial
alteration, the manufacturer shall not fail to make
available to the dealer a fair and proportionate s hare
of all new vehicles distributed to dealers of the same
line-make in this state, subject to the same
reasonable terms, including vehicles distributed from
a common new vehicle inventory pool outside of the
factory's ordinary allocation process, such as any
vehicles the factory reserves to distribute on a
discretionary basis,
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
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this section shall not restrict the terms of any
agreement for such exclusive facility voluntarily
entered into and supported by valuable consideration
separate from the new motor vehicle dealer's right to
sell and service motor vehicles for the franchisor.
If a dealer is required by the manufacturer or
distributor to change an existing, previously approved
location of the dealership and has not sold its
existing dealership facility and real estate within
the later of one hun dred eighty (180) days of listing
the property for sale or ninety (90) days after the
facility relocation, then, upon the written re quest of
the dealer, the manufacturer or distributor shall
purchase the dealer's existing dealership facility and
real estate as if the new motor vehicle dealership
continues to operate on the property. If the factory
and dealer cannot agree on the value of the dealership
facilities and real estate, then the factory and
dealer shall utilize the process described in
paragraph 6 of subsection 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 ownership, possession, use, and
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control of any items, buildings, or property that were
included in the contract 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 l ine,
h. refuses to pay, or claims reimbursement from, a new
motor vehicle dealer for 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 moto r vehicle in
violation of the policy of the factory unless the
factory can show that, at the time of the sale, the
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new motor vehicle dealer knew or reasonably should
have known of the purchaser'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
i. (1) notwithstanding the terms of a franchise
agreement or other agreement providing otherwise,
requires a new motor vehicle dealer to purchase
or utilize goods or services, or contract with
any vendor, identified, selected or designated by
the factory for the:
(a) operation of the dealership includin g
electronic services such as websites, data
management or storage systems, digital
retail platforms, software, or other digital
services or platforms, or
(b) 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 other sources a
vendor that the new motor vehicle dealer
chooses, are of substantially similar
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quality and design and comply with all
applicable laws; provided, however, that
such goods are not sub ject to the factory's
intellectual property or trademark rights
and the new motor vehicle dealer has
received the factory's approval , which
approval may not be unreasonably withheld.
Nothing in this subparagraph may be
construed to allow a new motor vehic le
dealer to impair or eliminate a factory's
intellectual property, trademark rights, or
trade dress usage guidelines. Nothing in
this section prohibits the enforcement of a
voluntary agreement between the factory and
the new motor vehicle dealer where se parate
and valuable consideration has been offered
and accepted. It is a violation of this
subparagraph for a factory, or any entity
that acts on behalf of, a factory to coerce
a new motor vehicle dealer to purchase or
utilize certain goods or services by the
withholding of any benefit, including
monetary incentives paid on a per vehicle
basis and vehicle allocation the new motor
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vehicle dealer is otherwise eligible to
receive, and
(2) for the purposes of this subparagraph, "goods and
services" do not inclu de:
(a) moveable displays, brochures, or promotional
materials containing material subject to the
intellectual property rights of a factory or
parts to be used in repairs under warranty
obligations of a factory, or
(b) special tools or training required by the
factory to perform warranty or recall
repairs;
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 records
that describe its methods or formula of allocation and
distribution of its motor vehicles and records of its
actual allocation and distribution of motor vehicles
to its motor vehicle dealers. Upon the written
request of any new motor vehicle dealer franchised by
the manufacturer or distributor, received by the
manufacturer or distributor within thirty (30) days of
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the manufacturer's or distributor's written notice to
the dealer of its intention to cancel or terminate, or
written notice from the manufacturer or distributor of
a sales performance deficiency requiring the dealer to
take action to cure the alleg ed performance
deficiency, a 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 new
motor vehicle dealers of the same line -make for that
manufacturer or distributor for the prior three (3)
years, and the basis upon which the current allocation
or distribution is being made or will be made based on
existing information to such dealer, or
b. changes an established plan or sy stem of motor vehicle
distribution. A new motor vehicle dealer franchise
agreement shall continue in full force and operati on
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 appointment of a
new importer or distributor for motor vehic les offered
for sale under the franchise agreement shall be deemed
to be a change of an established plan or system of
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distribution. The discontinuation of a line -make
shall not be deemed to be a change of an established
plan or system of motor vehicle dis tribution. 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 substantially the same
vehicle or vehicles previously sold th rough 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 comparable 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 such
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 who is a party to the
franchise agreement a new franchise agreement
containing substantially the same provisions which
were contained in the previous franchise a greement;
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11. Being a factory that sells directly or indirectly new motor
vehicles to any retail consumer in the state except through a new
motor vehicle dealer holding a franchise for the line -make that
includes the new motor vehicle. This paragraph doe s not apply to
factory sales of new motor vehicles to its employees, family members
of employees, retirees and family members of ret irees, not-for-
profit organizations, or the federal, state, or local governments.
The provisions of this paragraph shall no t 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 indirectly:
(1) owns any ownership interest or has any financial
interest in a new motor vehicle 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 prohibit a factory from
owning or controlling a new motor vehi cle dealer
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while in a bona fide relationship with a dealer
development candidate who has made a substantial
initial investment in th e franchise and whose
initial investment is subject to potential loss.
The dealer development candidate can reasonably
expect to acquire full ownership 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 deale rship 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 exceed twelve
(12) months.
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(3) This paragraph does not prohibit a factory from
owning, operating, or con trolling 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 prohibit 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
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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 manufacture r
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 within the
state, and
(e) prior to January 1, 2000, the facto ry 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 proprieta ry information provided
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to the factory by a new motor vehicle dealer, other than in
composite form to new motor vehicle dealers in t he same line-make or
in response to a subpoena or order of the Commission or a court.
Proprietary information includes, but is not limited to,
information:
a. derived from monthly financial statements 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 provide or direct leads in a
fair, equitable, and timely manner. Nothing in this paragraph shall
be construed to require a factory to disregard the preferenc e 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 include
exclusivity or site control unless a greed to as set
forth in subparagraphs f and g of paragraph 9 of this
subsection,
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b. the proposed new location 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 request. The failure to approv e
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 that increases prices of new motor vehicle s
which the new motor vehicle dealer had ordered for retail consumers
and notified the factory prior to the new motor vehicl e 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 fa ct delivered to the
consumer. Price differences applicable to new models or series
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motor vehicles at the time of the introduction o f new models or
series shall not be considered a price increase for purposes of this
paragraph. Price changes 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 pursuant 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 contest, 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 withheld;
20. Being a factory tha t denies any new motor vehicle dealer
the right of free association with any other new motor vehicle
dealer for any lawful purpose, unless otherwise permitted 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
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products offered, endorsed, or sponsored by the factory by the
following means:
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 fran chise based on the sale of
extended service contracts, extended maintenance
plans, or similar products offered, endorsed, or
sponsored by the manufacturer or distributor ;
22. Being a factory that requires or coerces a new motor
vehicle dealer in this state to purchase or lease any electric
vehicle charging stations at the new motor vehicle dealer's expense
unless the franchise agreement, including any related addendums,
with the new motor vehicle dealer identifies electric vehicle models
among the vehicles available for sale under the dealer’s franchised
line-make, or the new motor vehicle dealer has notified the
manufacturer or distributor of the new motor vehicle dealer's
intention to begin selling and servicing electric vehicles
manufactured or distributed by that factory. If the new motor
vehicle dealer's franchise identifies electric vehicle models or the
dealer is actually offering for sale to the public or providing
warranty service on electric vehicles manufactured or distributed by
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that factory, the new motor vehicle dealer may not be required to
purchase or lease, at the new motor vehicle dealer's expense:
a. more than the number and type of electric vehicle
charging stations based upon the reasonable estimate
by the new motor vehicle dealer sales and service
volume for those vehicles, or
b. to make electric vehicle charging stations located at
the new motor vehicle dea lership available for use by
the general public. Nothing in this paragraph shall
prohibit a factory from offering financial assista nce
through a lump-sum payment to new motor vehicle
dealers that purchase or install electric charging
stations; and
23. Being a factory that withdraws all or a material part of
its stated electric vehicle distribution plan and fails or refuses,
at the written request of the new motor vehicle dealer, to accept
the return or otherwise fully reimburse a new motor vehicle dealer
for the cost of parts, tools, equipment, chargers and other
returnable items required as a part of that distribution plan,
program, policy or other initiative related to the sale or service
of electric motor vehicles, provided that:
a. the dealer demonstra tes that the volume of electric
motor vehicle sales or service is no longer adequate
to allow the dealer to realize a positive return on
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the investment over the useful life of the parts,
tools, equipment, chargers, or other returnable items,
and
b. the dealer submits its request to the manufacturer or
distributor in writing and within twenty -four (24)
months of dealer's receipt of the part, tools,
equipment, charger or other returnable items .
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 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 tra nsfer
is conditioned upon the manufacturer or dealer entering into a
dealer agreement with the proposed new owner or transferee, onl y 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 sixty (60)
days of receipt of the completed proposal for the proposed sale
transfer;
2. The exercise of the right of first refusal will result in
the new motor vehicle dealer and the owner of the dealership
receiving the same or greater consideration as they have contracted
to receive in connection with the proposed change of ownership or
transfer;
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3. The proposed sale or transfer of the dealership does not
involve the transfer or sale to a member or members of the fami ly of
one or more dealer owners, or to a qualified manager or a
partnership or corporation 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 similar 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 dealership assets. Notwithstanding the foregoing,
no payment of expenses and attorney fees shall be required if the
proposed new dealer or transferee has not submitted or caused to be
submitted an accounting of those expenses within thirt y (30) days of
receipt of the written request of the factory for such an
accounting. The accounting may be requested by a factory b efore
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 the representatives
and affiliates of motor vehicle 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
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construction equipment and activities incidental to that busi ness,
provided that:
a. any motor vehicle sold by that person is limited to
used motor vehicles that have been previously us ed
exclusively and regularly 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 v ehicles is limited to used
vehicles sold by that person in the conduct 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 was 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
2. "Poses a reasonable threat " means the nature of criminal
conduct for which the person was convicted involved an act or threat
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of harm against another and has 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 aut horized to sell a make and model based on
applicable reasonable standards and requirements that include but
are not limited to any f acility, technology, or training
requirements necessary to sell or service a vehicle, in order to be
eligible for delivery o r allotment of a make or model of a new motor
vehicle or an incentive.
SECTION 5. This act shall become effective November 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT
OVERSIGHT, dated 03/06/2025 - DO PASS, As Amended.