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ENGROSSED HOUSE
BILL NO. 2160 By: Dobrinski of the House
and
Coleman of the Senate
An Act relating to motor vehicles; 47 O.S. 2021,
Section 561, as amended by Section 1, Chapter 240,
O.S.L. 2024 (47 O.S. Supp. 2024, Section 561), which
relates to necessity for regulation; modifying
legislative intent and findings; 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; amending 47 O.S. 2021, Section 563, as
last amended by Section 3, Chapter 240, O.S.L. 2024
(47 O.S. Supp. 2024, Section 563), which relates to
the Oklahoma New Motor Vehicle Commission; requiring
Commission approve certain form; 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; requiring certain
licensure for certain persons and entities; modifying
requirements for certain applications; modifying
certain schedule of license fees; requiring certain
entities specify location of facilities; requiring
certain posting of license; requiring physical
possession of certain license; amending 47 O.S. 2021,
Section 564.2, as last amended by Section 6, Chapter
240, O.S.L. 2024 (47 O.S. Supp. 2024, Section 564.2),
which relates to certificates of registration;
modifying list of salesperson to obtain certificate
of registration; amending 47 O.S. 2021, Section 565,
as last amended by Section 7, Chapter 240, O.S.L.
2024 (47 O.S. Supp. 2024, Section 565), which relates
to denial, revocation, suspension of license;
requiring salespersons be employed by licensed
dealers; modifying requirements for certain right of
first refusal; requiring certain notice; outlining
details and requirements for certain purchase;
amending 47 O.S. 2021, Section 565.2, as last amended
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by Section 9, Chapter 240, O.S.L. 2024 (47 O.S. Supp.
2024, Section 565.2), which relates to terminating,
cancelling, or failing to renew franchise; modifying
types of entities subject to certain termination or
cancellation requirements; modifying description of
when good cause shall be required for certain
termination, cancellation, or nonrenewal; modifying
certain notice requirements; authorizing filing of
protest under certain circumstances; modifying
certain hearing provisions; modifying entities
entitled to certain fair and reasonable compensation;
modifying entities entitled to certain reasonable
rent; modifying entities entitled to certain fair
market value payment; a mending 47 O.S. 2021, Section
566, as last amended by Section 12, Chapter 240,
O.S.L. 2024 (47 O.S. Supp. 2024, Section 566), which
relates to denial, suspension, or revocation of
license; authorizing the denial, suspension,
revocation, or imposition of fi ne for certain
registration; detailing certain procedures; amending
47 O.S. 2021, Section 578.1, as last amended by
Section 15, Chapter 240, O.S.L. 2024 (47 O.S. Supp.
2024, Section 578.1), which relates to procedures for
establishing or relocating new veh icle dealers;
requiring certain measurement from nearest property
boundary; and providing an effe ctive date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 47 O.S. 2021, Section 561, as
amended by Section 1, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 561), is amended to read as follows:
Section 561. The Legislature finds and declares that the
distribution and sale of new motor vehicles and powersport vehicles
in the State of Oklahoma v itally affects the general economy of the
state and the public interest and the public welfare, and that in
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order to promote the public interest and the public welfare, and in
the exercise of its police powers, it is necessary to regulate and
to license motor vehicle manufacturers, factories, distributors, and
their respective representatives, new motor vehicle dealers, and
powersport vehicle dealers, and to register salespersons of new
motor vehicles and powersport vehicles doing business in Oklahoma,
in order to prevent frauds, impositions and other abuses upon its
citizens and to protect and preserve the inves tments and properties
of the citizens of this state, and in order to avoid undue control
of the independent new motor vehicle dealer or powersport vehicle
dealer by the motor vehicle or powersport vehicle manufacturing and
distributing organizations, and in order to foster and keep alive
vigorous and healthy competition by prohibiting unfair practices by
which fair and honest competition is destroyed or prevented, and to
protect the public against the creation or perpetuation of
monopolies and practices det rimental to the public welfare, to
prevent the practice of requiring the buying of special features,
appliances and equipment not desired or request ed by the purchaser,
to prevent false and misleading advertising, to prevent unfair
practices by new motor vehicle dealers , or powersports vehicle
dealers, manufacturers , factories, and distributing organizations,
to promote the public safety and prevent d isruption of the franchise
or dealership system of distribution of motor vehicles or and
powersports vehicles to the public and prevent deterioration of
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facilities for servicing new motor vehicles or powersport vehicles
and keeping the same safe and proper ly functioning, and prevent
bankrupting of new motor vehicle dealers and powersport dealers, who
might otherwise be caused to fail because of such unfair practices.
SECTION 2. 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 and 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 trust not excluded by thi s 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 distributor authorized by the
manufacturer to make predelivery preparation of su ch vehicles sold
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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 mo tor 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 r endition 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 facil ities 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 t itle, the terms new motor
vehicle dealer and "new motor vehicle dealership" shall be
synonymous. The term n ew 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,
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c. employees of persons, corporations, or associations
enumerated in subparagraph a of this paragraph when
engaged in the specific performance of their d uties as
such employees, or
d. a powersports vehicle dealer;
3. "Motor vehicle salesperson" "Salesperson" means any person,
resident or nonresident, who, for gain or compensation of any kind,
either directly or indirectly, regularly or occasionally, by an y
form of agreement or arrangement, sells or negotiates for the sale,
lease, or conveyance or arranges the financing of any new motor
vehicle or powersports vehicle as an employee for any new motor
vehicle dealer or powersports vehicle dealer to any one or more
third parties;
4. "Commission" means the Oklahoma New Motor Vehicle
Commission;
5. "Manufacturer" me ans any person, firm, association,
corporation, or trust, resident or nonresident, that manufactures or
assembles new and unused motor vehicles or n ew 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 trust, resident or nonresident, that, being
authorized by the original manufacturer, in whole or in part sells
or distributes new and unuse d motor vehicles to new motor vehicle
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dealers or new and unused powersport vehicles to powersport vehicle
dealers, or that maintains distributor rep resentatives;
7. "Factory branch" means any branch office maintained by a
person, firm, association, corporation, or trust that manufactures
or assembles motor vehicles or powersport vehicles for the sale of
motor vehicles or powersport vehicles to distri butors, or for the
sale of motor vehicles to new motor vehicle dealers, or for the sale
of powersport vehicl es 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,
employee, or person engaged as a representative of a manufacturer of
motor vehicles or power sport 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 trust and each officer and, agent or
employee thereof engaged as a representative of a distributor or
distributor branch of motor vehicles or powersport vehicles, for the
purpose of making or promoting the sale of its motor vehicles or
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powersport vehicles, or for supervising or contacting its dealers or
prospective dealers;
11. "Franchise" means any contract or agreement between a new
motor vehicle dealer or a powersports vehicle dealer and a
manufacturer of a new motor veh icle or powersports vehicle or its
distributor or factory branch by which the new motor vehicle dealer
or new powersports vehicle dealer is authorized to engage in the
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 manufact urer 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 and development of
sales and rendering o f service for the make of motor vehicle or
powersports vehicle for which the new motor vehicle dealer or new
powersports vehicle dealer holds a franchise or selling agreement;
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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 motor 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, factory representative, or distributor
representative, which manufactures or distributes vehicle products ,
motor vehicles or powersports vehicles, or that maintains factory
representatives;
21. "Powersports vehicle" means any new or unused motorcycles,
scooters, mopeds, all -terrain vehicles, and utility vehicles
required to be registered under the Oklahoma Vehicle License and
Registration Act, with the exception of all -terrain vehicles,
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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 power sports vehicles except for retail implement
dealers;
23. "Retail implement dealer" means a business engaged
primarily in the sale of farm tractors as defined in Section 1 -118
of this title or implements of husbandry as defined in Section 1 -125
of this title or a combination thereof and is exempt from licensing
by the Commission for the sale of all -terrain vehicles, utility
vehicles, and motorcycles used exclusively for off -road use;
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 deal er, and
b. provided by the new motor vehicle dealer directly to a
manufacturer or third party acting on behalf of a
manufacturer.
The term shall not include the same or similar data obtained by
a manufacturer from any source other than the new motor vehicle
dealer or new motor vehicle dealer'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 3. AMENDATORY 47 O.S. 2021, Section 563, as last
amended by Section 3, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 563), is amended to read as follows:
Section 563. A. There is hereby created the Oklahoma New Motor
Vehicle Commission, to be composed of nine (9) members. Seven of
the members shall have been engaged in the manufacture,
distribution, or sale of new motor vehicles and two members shall be
lay members, all to be appointed by the Governor of the State of
Oklahoma, with the advice and consent of the Senate. Ap pointments
shall be made within thirty (30) days after November 1, 1985. Each
of the Commissioners thus appointed shall, at the time of the
appointment, be a resident in good faith of this state, shall be of
good moral character, and each of the industry related Commissioners
shall have been actually engaged in the manufacture, distribution,
or sale of new motor vehicles, new powersport vehicles or n ew
recreational vehicles for not less than ten (10) years preceding the
appointment. The members of the Com mission shall serve at the
pleasure of the Governor.
B. 1. The Commissioners shall elect a chair from amongst them
whose term shall be for one (1) year with the right to succeed
himself or herself.
2. There shall be three at large members of the Commission.
Six members of the Commission shall be appointed from the following
geographical areas with at least one member from each area:
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a. four areas of the state shall be the northwest,
northeast, southwest, and southeast sections
designated by Interstate 3 5 dividing the state east
and west and Interstate 40 dividing the state north
and south, excluding Oklahoma County and Tulsa County,
and
b. two additional areas shall be Oklahoma County and
Tulsa County.
There shall not be more than two members of the Commission from any
one area.
C. The terms of office of the members first appointed to the
Commission shall be as follows:
1. The members appointed fr om the northwest, northeast, and
southwest areas shall serve until June 30, 1987;
2. The members appointed from the southeast area and Oklahoma
County and Tulsa County shall serve until June 30, 1989; and
3. The members appointed at large shall serve unt il June 30,
1991.
Each member shall serve until a successor is appointed and
qualifies. Thereafter, the term of office of each member of the
Commission shall be for six (6) years. The term of office of any
member will automatically expire if the member m oves out of the
geographical area from which the member was appointed. In event of
death, resignation, remo val, or term automatically expiring of any
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person serving on the Commission, the vacancy shall be filled by
appointment as provided for the unexpire d portion of the term. The
Commission shall meet at Oklahoma City and complete its organization
immediately after the membership has been appointed and has
qualified. The chair and each member of the Commission shall take
and subscribe to the oath of off ice required of public officers.
D. The members of the Commission shall receive reimbursement
for subsistence and traveling expenses necessarily incurred in the
performance of their duties as provided by the State Travel
Reimbursement Act.
E. The Commission shall appoint a qualified person to serve as
Executive Director thereof, which person shall have had not less
than ten (10) years of experience in the motor vehicle industry.
The Executive Director shall be appointed for a term of six (6)
years, and shall not be subject to dismissal or removal without
cause. The Commission shall fix the salary and prescrib e the duties
of the Executive Director. The Executive Director shall devote such
time as necessary to fulfill the duties thereof, and before enteri ng
upon such duties shall take and subscribe to the oath of office.
The Executive Director may employ such clerical, technical, and
other help and legal services and incur such expenses as may be
necessary for the proper discharge of the duties of the Exe cutive
Director under Section 561 et seq. of this title. The Commission
shall maintain its office and trans act its business in Oklahoma
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City, and it is authorized to adopt and use a seal. The Executive
Director is hereby authorized to hire, retain, or ot herwise acquire
the services of an attorney to represent the Commission in any and
all state and federal courts, and assist the Commission in any and
all business or legal matters that may come before it. The attorney
so representing the Commission shall discharge the duties under the
direction of the Executive Director.
F. The Commission is hereby vested with the powers necessary to
enable it to fully and effectively carry out the provisions and
objects of Section 561 et seq. of this title, and is hereby
authorized and empowered to make and enforce all reasonable rules
and to adopt and prescribe all forms necessary to accomplish such
purpose. All forms used by a new motor vehicle dealer or
powersports vehicle dealer to facilitate the delivery of a vehicl e
pending approval of financing shall be approved by the Commission.
Spot delivery agreement forms shall be required for all new motor
vehicle or powersport vehicle deliveries subject to dealers finding
lending institutions to purchase the retail or lease installment
contracts executed by the purchasing and selling parties.
G. All fees, charges and fines collected under the provisions
of Section 561 et seq. of this title shall be deposited by the
Executive Director in the State Treasury in accordance with the
depository laws of this state in a special fund to be known as the
"Oklahoma New Motor Vehicle Commissi on Fund", which is hereby
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created, and except as hereinafter provided the monies in the fund
shall be used by the Commission for the purpose of carr ying out and
enforcing the provisions of Section 561 et seq. of this title.
Expenditures from the fund shall be made upon vouchers approved by
the Commission or its authorized officers.
At the close of each fiscal year, the Commission shall file with
the Governor and the State Auditor and Inspector a true and correct
report of all fees, fines and charges collec ted and received by it
during the preceding fiscal year and shall at the same time pay into
the General Revenue Fund of the state a sum equal to ten percent
(10%) of the fees, fines, and charges collected and received.
All expenses incurred by the Commission in carrying out the
provisions of Section 561 et seq. of this title, including but not
limited to per diem, wages, salaries, rent, postage, adver tising,
supplies, bond premiums, travel, and subsistence for the
Commissioners, the Executive Director, empl oyees, and legal counsel,
and printing and utilities, shall be a proper charge against such
fund, exclusive of the portion thereof to be paid into t he General
Revenue Fund as above set out. In no event shall liability ever
accrue hereunder against this state in any sum whatsoever, or
against the Oklahoma New Motor Vehicle Commission Fund, in excess of
the ninety percent (90%) of the fees, fines, and charges deposited
therein.
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SECTION 4. AMENDATORY 47 O.S. 2021, Section 564, as las t
amended by Section 4, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 564), is amended to read as follows:
Section 564. A. It shall be unl awful for any person, firm,
association, corporation, or trust to engage in business as, or
serve in the capacity of, or act as a new motor vehicle dealer,
powersports vehicle dealer, or new motor vehicle manufacturer, or
distributor of new motor vehicles or powersports vehicles, or ,
factory branch, distributor branch or, factory representative , or
distributor representative, 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 trust
engaging in more than one of such capacities or having more than one
place where such business is carried on or conducted in this state,
shall be required to obtain and hold a current license for each
thereof. Provided that, a new motor vehicle dealer's or powersports
vehicle dealer's license shall authorize one person to sell in the
event without the necessity of registering as a salesperson, so long
as such person shall be the is an owner of a proprietorship the
dealership, 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 further provided that a
factory or an entity affiliated by any ownership or control by the
factory shall not be permitted to be licensed as a new motor vehicle
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dealer in this state, except as provided by subparagraph b of
paragraph 12 of Section 565 of this title.
B. Applications for licenses required 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 eligibility of the several applica nts 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, the applicant's criminal convictions or criminal or civil
court proceedings history, whether the applicant has an established
place of business and is primarily engaged in the pursuit ,
avocation, or business for which a license, or licenses, are applied
for, and whether the applicant is abl e to properly conduct the
business for which a license, or licenses, are applied for, and such
other pertinent information consistent with the safeg uarding of the
public interest and the public 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 deni ed and the license
applied for is not issued, the entire license fee shall be returned
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to the applicant. Al l 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 nontra nsferable. All applications
for renewal of a license for a new motor vehicle dealer, powersports
vehicle dealer, manufacturer, distributor, factory branch,
distributor branch, or manufacturer's or distributor's
representative shall be submitted by June 1 of each year, and such
license or licenses will be issued by July 1. If applications have
not been made for renewal of licenses at the times described in this
subsection, it shall be illegal for any person to represent himself
or herself and act as a deal er, manufacturer, distributor, or
manufacturer's or distributor's representative. Service Oklahoma
and licensed operators will be notified not to accept such dealers'
titles manufacturer's statements or certificates of origin for
unlicensed dealers until such time as their licenses have been
issued by the Commission.
C. The schedule of license fees to be charg ed and received by
the Commission for the licenses issued hereunder shall be as
follows:
1. For each manufacturer, distributor, factory branch, or
distributor branch of new motor vehicles or powersports vehicles ,
Four Hundred Dollars ($400.00) initial fee with annual renewal fee
of Three Hundred Dollars ($300.00);
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2. For each manufacturer or distributor of new motor vehicles
or new powersport vehicl es, 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. 3. For each new motor vehicle dealer, except powersports
vehicle dealers, initial fee of Three Hundred Dollars ($300.00) per
franchise sold at each location licensed, with an annual renewal fee
of One Hundred Dollars ($100.00) per franchise sold at each location
licensed per year; and
5. 4. For each powersports vehicle dealer, initial fee of Three
Hundred Dollars ($300.00) per manufacturer represen ted by the dealer
at each location licensed, with an annual renewal fee of One Hundred
Dollars ($100.00) per manufacturer represented by the dealer at each
location licensed per year.
D. The licenses issued to each new motor vehicle dealer, new
powersports vehicle dealer, manufacturer, distributor, factory
branch, or distributor branch shall specify the location of the
factory, office, or branch thereof. In case such location is
changed, the Commission may endorse the change of location on the
license without charge unless the change of address triggers a
relocation of a new motor vehicle dealer or new powersports vehicle
dealer pursuant to the provi sions of Section 578.1 of this title.
The licenses of each new vehicle dealer shall be posted in a
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conspicuous place in the dealer's licensee's place or places of
business.
Every motor vehicle representative of a factory representative
or distributor representative shall physically possess the license
when engaged in business and shall display such upon request . The
name of the employer of such factory representative or distributor
representative shall be stated on the representative's license.
E. The new powersports vehicle 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 5. AMENDATORY 47 O.S. 2021, Section 564.2 , as
last amended by Section 6, Chapter 240, O.S.L. 2024 (47 O.S. Supp.
2024, Section 564.2), is amended to read as follows:
Section 564.2. It shall be punishable by an administrative fine
not to exceed Five Hundred Dollars ($500.00) for any person,
resident, or nonresident to engage in business as, or serve in the
capacity of, a new motor vehicle salesperson or powersports vehicle
salesperson in this state without first obtaining a certificate of
registration with the Oklahoma New Motor Vehicle Commission . The
cost of registration for each new salesperson shall be set at
Twenty-five Dollars ($25.00) to be rene wed annually. The cost of
registration and any administrative fine is to be borne by the
salesperson's employing entity of the new salesperson . The
Commission shall promulgate rules and procedures necessary for the
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implementation and creation of the registry and the issuance of
certificates of registration.
SECTION 6. AMENDATORY 47 O.S. 2021, Section 565, as last
amended by Section 7, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 565), is amended to read as follows:
Section 565. A. The Oklahoma New Motor Vehicle Commission may
deny an application for a license, revoke or suspend a license, or
impose a fine against any person or entity, not to exceed Ten
Thousand Dollars ($10,000.00) per occurrence, that violates any
provision of Sections 561 through 567, 572, 578.1, 579, and 579.1 of
this title or for any of the following reasons:
1. On satisfactory proof of unfitn ess 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 provisions 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 re sulting in
failure to maintain the qualifications for license;
5. Being a new motor vehicle dealer or new p owersports vehicle
dealer who:
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a. has required a purchaser of a new motor vehicle or new
powersports 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
motor vehicle dealer or new powersports vehicle
dealer,
b. uses any false or misleading advertising in connec tion
with business as a new motor vehicle dealer or new
powersports vehicle dealer,
c. has committed any unl awful 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 or powersports vehicle,
e. has been convicted of a felony crime that
substantially relates to the occupation of a new motor
vehicle dealer or new powersports vehicle dealer and
poses a reasonable threat to public safety,
f. has committed a fraudulent act in selling, purchasing,
or otherwise dealing in new mot or vehicles or new
powersports vehicles or has misrepresented the terms
and conditions of a sale, purchase or contract for
sale or purchase of a new motor vehicle or new
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powersports vehicle or any interest therein including
an option to purchase such vehicle,
g. has failed to meet or maintain the conditions and
requirements necessary to qualify for the issuance of
a license, or
h. completes any sale o r transaction of an extended
service contract, extended maintenance plan, or
similar product using contract forms that do not
conspicuously disclose the identity of the service
contract provider;
6. Being a new motor vehicle salesperson who is not employe d as
such by a licensed new motor vehicle dealer or powersports vehicle
dealer;
7. Being a new motor vehicle dealer or new powersports vehicle
dealer who:
a. does not have an established place of business,
b. does not provide for a suitable repair shop se parate
from the display room with ample space to repair or
recondition one or more vehicles at the same time , and
which is staffed with properly trained and qualified
repair technicians and is equipped with such parts,
tools, and equipment as may be requis ite for the
servicing of motor vehicles in such a manner as to
make them comply with the safety laws of this state
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and to properly fulfill the dealer's or manufacturer's
warranty obligation,
c. does not hold a franchise in effect with a
manufacturer or distributor of new or unused vehicles
for the sale of the same and is not authorized by the
manufacturer or distributor to render predelivery
preparation of such vehicles sold to purchasers and to
perform any authorized post -sale work pursuant to the
manufacturer's or distributor's warranty,
d. employs or utilizes the services of used motor vehicle
lots or dealers or other unlicensed persons or
unregistered persons in connection with the sale of
new vehicles,
e. does not properly service a new motor vehicle or new
powersports vehicle before delivery of same to the
original purchaser thereof, or
f. fails to order and stock a reasonable number of new
motor vehicles necessary to meet consumer demand for
each of the new motor vehicles included in the new
motor vehicle dealer's franchise agreement, unless the
new motor vehicles are not readily available from the
manufacturer or distributor due to limited production;
8. Being a factory that has:
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a. either induced or attempted to induce by means of
coercion or intimidation, any new motor vehicle dealer
or powersports vehicle dealer:
(1) to accept delivery of any vehicle or vehicles,
parts, or accessories therefor, or any other
commodities including advertising material which
shall not have been ordered by the new motor
vehicle dealer,
(2) to order or accept delivery of any motor vehicle
or powersports vehicle with special features,
appliances, accessories, or equipment not
included in the list price of the vehicles as
publicly advertised by the manufacturer thereof,
or
(3) to order or accept delivery of any parts,
accessories, equipment, machinery, tools,
appliances, or any c ommodity whatsoever,
b. induced under threat or discrimination by the
withholding from delivery to a new motor vehicle
dealer or new powersports veh icle 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
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business, in order to induce by such coercion any new
motor vehicle dealer or new powersports vehicle dealer
to participate or contribute to any local or national
advertising fund controlled directly or indirectly by
the factory or for any other purposes such as contest,
"giveaways", or other so-called sales promotional
devices, and/or change of quotas in any sales contest;
or has required new motor vehicle dealers, as a
condition to receiving their vehicle allotment, to
order a certain percentage of the vehicles with
optional equipment not specified by the dealer;
however, nothing in this section shall prohibit a
factory from supporting an advertising association
which is open to all new motor vehicle dealers or new
powersports vehicle dealers on the same basis,
c. used a performance s tandard, sales objective, or
program for measuring dealer performance that may have
a material effect on a right of the dealer to vehicle
allocation; or payment under any incentive or
reimbursement program that is unfair, unreasonable,
inequitable, and not based on accurate information,
d. used a performance standard for measuring sales or
service performance of any new motor vehicle dealer or
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new powersports vehicle dealer under the terms of the
franchise agreement which:
(1) is unfair, unreasonable, arbit rary, or
inequitable, and
(2) does not consider the relevant and material local
and state or regional criteria, including
prevailing economic conditions affecting the
sales or service performance of a vehicle dealer
or any relevant and material data and fa cts
presented by the dealer in writing within thirty
(30) days of the written notice of the
manufacturer to the dealer of its intention to
cancel, terminate, or not renew the dealer's
franchise agreement,
e. failed or refused to sell, or offer for sale, ne w
motor vehicles to all of its authorized same line -make
franchised new motor vehicle dealers or new
powersports vehicle dealers at the same price for a
comparably equipped motor vehicle, on the same terms,
with no differential in functionally available
discount, allowance, credit, or bonus, except as
provided in subparagraph e of paragraph 9 of this
subsection,
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f. failed to provide reasonable compensation to a new
motor vehicle dealer substantially equivalent to the
actual cost of providing a manufacturer required
loaner or rental vehicle to any consumer who is having
a vehicle serviced at the dealership. For purposes of
this paragraph, actual cost is the average cost in the
new motor vehicle dealer's region for the rental of a
substantially similar make a nd model as the vehicle
being serviced, or
g. failed to make available to its new motor vehicle
dealers a fair and proportional share of all new
vehicles distributed to same line -make dealers in this
state, subject to the same reasonable terms, including
any vehicles distributed from a common new vehicle
inventory pool outside of the factory's ordinary
allocation process such as any vehicles the factory
reserves to distribute on a discretionary basis;
9. Being a factory that:
a. has attempted to coerce or has coerced any new motor
vehicle dealer or new powersports vehicle dealer to
enter into any agreement or to cancel any agreement;
has failed to act in good faith and in a fair,
equitable, and nondiscriminatory manner; has directly
or indirectly coerced, i ntimidated, threatened, or
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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 f or labor, parts, and other
expenses incurred by the dealer to perform under and
comply with manufacturer's warranty agreements and
recall repairs which shall include diagnostic work as
applicable and assistance requested by a consumer
whose vehicle was sub jected 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 sh all 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
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labor for warranty and recall repairs shall, at the
option of the new motor vehicle dealer, be established
by the new motor veh icle dealer submitting to the
manufacturer or distributor one hundred sequential
nonwarranty consumer -paid service repair orders which
contain warranty-like repairs, or ninety (90)
consecutive days of nonwarranty consumer -paid service
repair orders which contain warranty -like repairs,
whichever is less, covering repairs made no more than
one hundred eighty (180) days before the submission
and declaring the average percentage labor rate and/or
markup rate. A motor vehicle dealer may not submit a
request to establish its retail rates more than once
in a twelve-month period. That request may establish
a parts markup rate, labor rate, or both. The new
motor vehicle dealer or new powersports vehicle dealer
shall calculate its retail parts rate by determining
the total charges for parts from the qualified repair
orders submitted, dividing that amount by the new
motor vehicle dealer's total cost of the purc hase of
those parts, subtracting one (1), and multiplying by
one hundred (100) to produce a percentage. The new
motor vehicle dealer or new powersports vehicle dealer
shall calculate its retail labor rate by dividing the
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amount of the new vehicle dealer's total labor sales
from the qualified repair orders by the total labor
hours charged for those sales. When submitting repair
orders to establish a retail parts and labor rate, a
new motor vehicle dealer or new powersports vehicle
dealer need not include r epairs 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 repairs,
(3) parts sold or repairs performed at wholesale,
(4) factory-approved goodwill or policy repairs or
replacements,
(5) repairs with aftermarket parts, when calculating
the retail parts rate but not the retail labor
rate,
(6) repairs on aftermarket parts,
(7) replacement of or work on tires including front -
end alignments and wheel or tire rotations,
(8) repairs of vehicles owned by the new motor
vehicle dealer or new powersports vehicle dealer
or employee thereof at the time of t he repair,
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(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 or new powersports vehicle
dealer pursuant to this section for a retail labor
rate or retail parts markup rate is substantially
higher than the new vehicle dealer's current warranty
rates, the manufacturer or distributor may request, in
writing, within forty -five (45) days after the
manufacturer's or distributor's receipt of the new
vehicle dealer's initial submission, all repair orders
closed within the period of thirty (30) days
immediately preceding, or thirty (30) days immediately
following, the set of repair orders initially
submitted by the new motor vehicle dealer. All time
periods under this section shall be suspended until
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the supplemental repair orders are provided. If the
manufacturer or distributor requests supplemental
repair orders, the manufacturer or distributor may,
within thirty (30) days after receiving the
supplemental repair orders and in accordance with the
formula described in this subsection, calculate a
proposed adjusted retail labor rate or retail parts
markup rate, as applicable, based upon any set of the
qualified repair orders submitted by the franchisee
and following the formula set forth herein to
establish the rate. The retail labor and parts rates
shall go into effect thirty (30) days following the
approval by the manufacturer or distributor. If the
declared rate is rebutted, the manufacturer or
distributor shall provide written notice stating the
reasons for the rebuttal, an explanation of the
reasons for the rebuttal, and a copy of all
calculations used by the franchisor in determining the
manufacturer or distributor's position and propose an
adjustment in writing of the average percentage markup
or labor rate based on that rebuttal not later than
forty-five (45) days after submission. If the new
motor vehicle dealer or new powersports vehicle dealer
does not agree with the proposed average percentage
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markup or labor rate, the new vehicle dealer may file
a protest with the Commission not later than thirty
(30) days after receipt of that proposal by th e
manufacturer or distributor. In the event a protest
is filed, the manufacturer or distributor shall have
the burden of proof to establish the new vehicle
dealer's submitted parts markup rate or labor rate was
inaccurate or not complete pursuant to the p rovisions
of this section. A manufacturer or distributor may
not retaliate against any new motor vehicle de aler or
new powersports vehicle dealer seeking to exercise its
rights under this section. A manufacturer or
distributor may require a dealer to sub mit 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 fro m new vehicle
dealers within this state including a surcharge
imposed on a new motor vehicle dealer solely i ntended
to recover the cost of reimbursing a dealer for parts
and labor pursuant to this section; provided, a
manufacturer or distributor shall not be prohibited
from increasing prices for vehicles or parts in the
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normal course of business or from auditing and
charging back claims in accordance with this section.
All claims made by dealers for compensation for
delivery, preparation, warranty, or reca ll repair work
shall be paid within thirty (30) days after approval
and shall be approved or disapproved wit hin thirty
(30) days after receipt. When any claim is
disapproved, the dealer shall be notified in writing
of the grounds for disapproval. The dea ler's
delivery, preparation, and warranty obligations as
filed with the Commission shall constitute the
dealer's sole responsibility for product liability as
between the dealer and manufacturer. A factory may
reasonably and periodically audit a new motor vehicle
dealer or new powersports vehicle dealer to determine
the validity of paid claims for dealer compens ation 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 incen tives. Except in
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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 paymen t of the claim unless the
factory can show that the claim was false or
fraudulent or that the new motor vehicle dealer or new
powersports vehicle dealer failed to reasonably
substantiate the claim by the written reasonable
procedures of the factory. A fac tory shall not deny a
claim or implement a charge -back against a new vehicle
dealer after payment of a claim in the event a
purchaser of a new vehicle that is the subject of a
claim fails to comply with titling or registration
laws of this state and is not prevented from
compliance by any action of the dealer; provided, that
the factory may require the dealer to provide, within
thirty (30) days of notice of charge -back, withholding
of payment, or denial of claim, the documentation to
demonstrate the vehicle sale, delivery, and customer
qualification for an incentive as reported, including
consumer name and addres s and written attestation
signed by the dealer operator or general manager
stating the consumer was not on the export control
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list and the dealer di d not know or have reason to
know the vehicle was being exported or resold.
The factory shall provide written notice to a dealer
of a proposed charge -back that is the result of an
audit along with the specific audit results and
proposed charge-back amount. A dealer that receives
notice of a proposed charge -back pursuant to a
factory's audit has the right to fil e a protest with
the Commission within thirty (30) days after receipt
of the notice of the charge -back or audit results,
whichever is later. The fa ctory is prohibited from
implementing the charge -back or debiting the dealer's
account until either the time frame for filing a
protest has passed or a final adjudication is rendered
by the Commission, whichever is later, unless the
dealer has agreed to th e 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 i s
franchised to sell or on which the new motor
vehicle dealer is authorized to perform recall
repairs,
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(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 ve hicle 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 the new moto r
vehicle dealer to make the recall repair, and
(5) that is not at least in the prorated amount of
one percent (1.00%) of the value of the vehicle
per month beginning on the date that is thirty
(30) days after the date on which the stop -sale
order was provided to the new motor vehicle
dealer until the earlier of either of the
following:
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(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 vehi cle.
For the purposes of division (5) of this subparagraph,
the value of a used vehicle shall be the average Black
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 de aler 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 pr ovide. All
reimbursement claims made by new motor vehicle dealers
pursuant to this section for recall remed ies or
repairs, or for compensation where no part or repair
is reasonably available and the vehicle is subject to
a stop-sale or do-not-drive order, shall be subject to
the same limitations and requirements as a warranty
reimbursement claim made under subparagraph b of this
paragraph. In the alternative, a manufacturer may
compensate its franchised new motor vehicle dealers
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under a national recall co mpensation program;
provided, the compensation under the program is equal
to or greater than that provided u nder 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 fed eral compensation remedy,
d. unreasonably fails or refuses to offer to its same
line-make franchised dealers a reasonable supply and
mix of all models manufactured for that line -make, or
unreasonably requires a dealer to pay any extra fee,
purchase unreasonable advertising displays or other
materials, or enter into a separate agreement which
adversely alters the rights or obligations contained
within the dealer's existing franchise agreement or
which waives any right of the new motor vehicle dealer
or new powersports vehicle dealer as protected by
Section 561 et seq. of this title, or remodel,
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renovate, or recondition the dealer's existing
facilities as a prerequisite to receiving a model or
series of vehicles, except as may be necessary to sell
or service the model or series of vehicles as provided
by subparagraph e of this paragraph. It shall be a
violation of this section for new vehicle allocation
to be withheld subject to any requirement to purchase
or sell any number of used or off -lease vehicles. The
failure to deliver any such new motor vehicle shall
not be considered a violation of the section if the
failure is not arbitrary or is due to lack of
manufacturing capacity or to a strike or labor
difficulty, a shortage of materials, a freight
embargo, or other cause over which the manufacturer
has no control. However, this subparagraph shall not
apply to limited production model vehicles, a vehicle
not advertised by the factory for sale in this state,
vehicles that are subject to allocation affected by
federal environmental laws or environmental laws of
this state, or vehicles allocated in response to an
unforeseen event or circumstance,
e. except as necessary to comply with a health or safety
law, or to comply with a technology requirement which
is necessary to sell or service a vehicle that the
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franchised new motor vehicle dealer or new powersports
vehicle dealer is authorized or licensed by the
franchisor to sell or service, requires a dealer to
construct a new facility or substantially renovate the
dealer's existing facility unless the facility
construction or renovation is justified by the
economic conditions existing at the time, as well as
the reasonably foreseeable projections, in the new
motor vehicle dealer's market and in the automotive
industry. However, this subparagraph shall not apply
if the new motor vehicle dealer or new powersports
vehicle dealer voluntarily agrees to facility
construction or renovation in exchange for money,
credit, allowance, reimbursement, or additional
vehicle allocation to a dealer from the factory to
compensate the dealer for the cost of, or a portion of
the cost of, the facility construction or renovation.
Except as necessary to comply with a health or safety
law, or to comply with a technology or safety
requirement which is necessary to sell or service a
motor vehicle or powersports vehicle that the
franchised dealer is authorized or licensed by the
franchisor to sell or service, a new vehicle dealer
which completes a facility construction or renovation
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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 premise s
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, "substantia lly
altered" means to perform an alteration that
substantially impacts the architectural features,
characteristics, or integrity of a structure or lot.
The term shall not include routine maintenance
reasonably necessary to maintain a dealership in
attractive condition. If a facility upgrade program,
standard, or policy under which the dealer completed a
facility construction or substantial alteration does
not contain a specific time period during which the
manufacturer or distributor shall provide payment s or
benefits to a participating dealer, or the time frame
specified under the program is reduced or cancele d
prematurely in the unilateral discretion of the
manufacturer or distributor, the manufacturer or
distributor shall not deny the participating deal er
any payment or benefit under the terms of the program,
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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,
f. requires a new motor vehicle dealer or new powersports
vehicle dealer to establish an exclusive f acility,
unless supported by reasonable business, market, and
economic considerations; provided, that this section
shall not restrict the terms of any agreement for such
exclusive facility voluntarily entered into and
supported by valuable consideration se parate from the
new motor vehicle dealer's right to sell and service
motor vehicles for the franchisor,
g. requires a new motor vehicle dealer or new powersports
vehicle dealer to enter into a site -control agreement
covering any or all of the new motor veh icle 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
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vehicle dealer's right to sell and ser vice 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 o f the site-control
agreement are terminated by the factory as part of the
discontinuance of a product line,
h. refuses to pay, or claims reimbursement from, a new
motor vehicle dealer or new powersports vehicle dealer
for sales, incentives, or other paymen ts related to a
vehicle sold by the dealer because the purchaser of
the new vehicle exported or resold the v ehicle in
violation of the policy of the factory unless the
factory can show that, at the time of the sale, the
new vehicle dealer knew or reasonabl y should have
known of the purchaser's intention to export or resell
the vehicle. There is a rebuttable presumption that
the new vehicle dealer did not know or could not have
known that the vehicle would be exported if the
vehicle is titled and registered in any state of the
United States, or
i. requires a new motor vehicle dealer or new powersports
vehicle dealer to purchase goods or services for the
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construction, renovation, or improvement of the new
dealer's facility from a vendor chosen by the factory
if goods or services available from other 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 vehicle
dealer has received the factory's approval, which
approval may not be unreasonably withheld. Nothi ng in
this subparagraph may be construed to allow a new
motor vehicle dealer or new powersports vehicle dealer
to impair or eliminate a factory's in tellectual
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 vehicle dealer where separate and
valuable consideration has been offered an d accepted;
10. Being a factory that:
a. establishes a system of motor vehicle allocation or
distribution which is unfair, inequitable, or
unreasonably discriminatory. Upon the request of any
new motor vehicle dealer or new powersports vehicle
dealer franchised by it, a factory shall disclose in
writing to the dealer the basis upon which new
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vehicles are allocated, scheduled, and delivered among
the new motor vehicle dealers of the same line -make
for that factory, or
b. changes an established plan or syst em of new motor
vehicle or new powersports vehicle distribution. A
new motor vehicle dealer or new powerspo rts vehicle
dealer franchise agreement shall continue in full
force and operation notwithstanding a change, in whole
or in part, of an established p lan or system of
distribution of the motor vehicles or new powersports
vehicles offered or previously offered for sale under
the franchise agreement. The appointment of a new
importer or distributor for motor vehicles or new
powersports vehicle offered fo r sale under the
franchise agreement shall be deemed to be a change of
an established plan or system of dist ribution. The
discontinuation of a line -make shall not be deemed to
be a change of an established plan or system of motor
vehicle or new powersport s 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 substantially the same
vehicle or vehicles previ ously sold through another
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line-make by new motor vehicle dealers or new
powersports vehicle dealers with an active franchise
agreement for the other line -make in the state if such
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 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
agreement;
11. Being a factory that sells directly or indirectly new motor
vehicles or new powersports vehicles to any retail consumer in the
state except through a new motor vehicle dealer or new powersports
vehicle dealer holding a fr anchise for the line -make that includes
the new motor vehicle or new powersports vehicle. This paragraph
does not apply to factory sales of new vehicles to its employees,
family members of employees, retirees and family members of
retirees, not-for-profit organizations, or the federal, state, or
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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 vehicle or from
establishing a program to sell or offer to sell new motor vehicles
or new powersports vehicle through participating dealer s 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 new
powersports 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 de aler
or new powersports vehicle dealer, or
(3) acts in the capacity of a new motor vehicle
dealer or new powersports vehicle dealer.
b. (1) This paragraph does not prohibit a factory from
owning or controlling a new motor vehicle dealer
or new powersports vehicle dealer while in a bona
fide relationship with a dealer development
candidate who has made a substantial initial
investment in the franchise and whose initial
investment is subject to potential loss. The
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dealer development candidate can reasonably
expect to acquire full ownership of a new 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 or new
powersports 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 exceed twelve (12) months.
(3) This paragraph does not prohibit a factory from
owning, operating, or controlling or acting in
the capacity of a new motor vehicle dealer or new
powersports vehicle dealer which was in operation
prior to January 1, 2000.
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(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 or powersports
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 or new
powersports vehicle dealerships selling the
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 t he 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 nearest
unaffiliated new motor vehicle or new
powersports vehicle dealership trading in
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the same line-make is not less than seventy
(70) miles,
(d) during any period in which the manufacturer
has such an ownership interest, the
manufacturer has no more than three
franchise agreements with new mot or vehicle
dealers or new powersports vehicle dealers
licensed by the Oklahoma New Motor Vehicle
Commission to do business within the state,
and
(e) prior to January 1, 2000, the factory shall
have furnished or made available to
prospective new vehicle dea lers 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 or new po wersports
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vehicle dealer, other than in composite form to new vehicle dealers
in the 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 or new powersports
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 p reference of a
consumer in providing or directing a lead;
15. Being a factory which used the consumer list of a new motor
vehicle dealer or new pow ersports vehicle dealer for the purpose of
unfairly competing with dealers;
16. Being a factory which prohibits a new motor vehicle dealer
or new powersports vehicle dealer from relocating after a written
request by such dealer if:
a. the facility and the proposed new location satisfies
or meets the written reasonable guidelines of the
factory. Reasonable guid elines do not include
exclusivity or site control unless agreed to as set
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forth in subparagraphs f and g of paragraph 9 of this
subsection,
b. the proposed new location is within the area of
responsibility of the new motor vehicle dealer or new
powersports 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 reloc ation 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
or new powersports vehicle d ealer 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 vehicles
or new powersports v ehicles which the dealer had ordered for retail
consumers and notified the factory prior to the dealer's receipt of
the written official price increase notification. A sales contract
signed by a retail consumer accompanied with proof of order
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submission to the factory shall constitute evidence of each such
order, provided that the vehicle is in fact delivered t o the
consumer. Price differences applicable to new models 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
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 or powersports vehicle
of required or optional equi pment 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 or
new powersports 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 or powersports vehicle dealer
without consent of the dealer, which consent shall not be
unreasonably withheld;
20. Being a factory that denies any new motor vehicle dealer or
new powersports vehicle dealer the right of free associatio n with
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any other dealer for any lawful purpose, unless otherwise permitted
by this chapter; or
21. Being a factory that requires a new motor vehicle dealer or
new powersports vehicle dealer to sell, offer to sell, or sell
exclusively an extended service c ontract, extended maintenance plan,
or similar product, such as gap 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 dealer's performance under the franchise
based on the sale of extended service contracts,
extended maintenance plans, or similar products
offered, endorsed, or sponsored by the manufacturer or
distributor.
B. Notwithstanding the t erms of any franchise agreement, in the
event of a proposed sale or transfer of a new motor vehicle
dealership, the manufacturer or distributor shall be permitted to
exercise a right of first refusal to acquire the assets or ownership
interest of the deale r of the new motor vehicle or new powersports
vehicle dealership, if such sale or transfer is conditioned upon the
manufacturer or dealer entering into a dealer agreement with the
proposed new owner or transferee, only if all the following
requirements are met:
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1. To exercise its right of first refusal, the factory must
notify the new motor vehicle dealer or new powersports 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 or new powersports 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 . If the proposed new
motor vehicle dealership sale or transfer includes the sal e,
transfer, or lease of the real property and improvements thereon,
then the right of first refusal shall include the same terms for the
purchase or lease of the real property and all improvements thereon
for the same or greater consideration as the new motor vehicle
dealer has contracted to receive in connection with the proposed
sale 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 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, includ ing
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
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exercise by the factory of its right of first refusal in negotiat ing
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 submitte d 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 by a factory before
exercising its right of first refusal ; and
5. a. If a proposed sale or transfer (the transaction) by a
new motor vehicle dealer (selling dealer) of a new
motor vehicle dealership owned in whole or in part by
a selling dealer, is part of a sale or transfer of
more than one new motor vehicle dealership owned in
whole or in part by a selling dealer, then any right
of first refusal of any manufacturer or distributor
(factory) shall not be exercised or otherwise enforced
unless the purchaser (purchasing dealer) of a selling
dealer's dealerships agrees in wr iting to proceed with
the purchase of the dealerships that are the subject
of the transaction without the de alerships subject to
the right of first refusal.
b. In order for any selling dealer to seek enforcement of
the provisions of this paragraph 5, the s elling dealer
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shall follow the notice provisions of this section.
The selling dealer shall notify the purchasing dealer
within seven (7) days of the selling dealer's receipt
in writing of any factory's intent to exercise any
right of first refusal with re gard to any new motor
vehicle dealership or dealerships that is part of the
transaction.
c. Within thirty (30) days of the purchasing dealer's
receipt from the selling dealer of notice of the
factory's written notification to the selling dealer
of a factory's intent to exercise its right of first
refusal, the purchasing dealer shall notify the
selling dealer in writing of the purchasing dealer's
intent to continue or not continue with the
transaction without the new motor vehicle dealership
or dealerships which are subject to the factory's
right of first refusal. If purchasing dealer fails to
provide a written response within said thirty -day
timeframe, it shall be presumed that the purchasing
dealer is not willing to proceed with the transaction
subject to the factory's right of first refusal. The
selling dealer shall notify factory of the purchasing
dealer's written response or failure to respond within
three (3) business days of receipt of the purchasing
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dealer's written response or of the purchasing
dealer's failure to respond in writing within the
thirty-day timeframe.
d. If the purchasing dealer agrees to pr oceed with the
transaction subject to the factory exercising its
right of first refusal on the dealership or
dealerships subject to said right of fi rst refusal,
the factory's right to exercise its right of first
refusal shall not be valid, exercised, or enforced
until such time as the transaction between the selling
dealer and the purchasing dealer has been closed or
finalized. If the transaction is not closed or
finalized for any reason or the purchasing dealer does
not agree to proceed with the transacti on subject to
the factory's right of first refusal, then the selling
dealer shall not be bound to the factory's right of
first refusal, the factory shall not have any right to
enforce any right of first refusal, and the selling
dealer shall not proceed with the transaction so long
as it includes the dealership or dealerships subject
to the factory's right of first refusal without the
written consent of the factory.
C. Nothing in this section shall prohibit, limit, restrict, or
impose conditions on:
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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 , powersports vehicles,
and industrial and construction equipment and activities incidental
to that business, provided that:
a. any motor vehicle or powersports vehicle sold by that
person is limited to used motor vehic les or
powersports vehicles that have been previously used
exclusively and regularly by that person in the
conduct of business and used motor vehicl es or used
powersports vehicles traded in on motor vehicles or
powersports vehicles sold by that person,
b. warranty repairs performed by that person on motor
vehicles or powersports vehicles are limited to those
vehicles that the person owns, previously o wned, or
takes in trade, and
c. motor vehicle or powersports vehicle financing
provided by that person to re tail consumers for motor
vehicles or powersports vehicles is limited to used
vehicles sold by that person in the conduct of
business; or
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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 bearin g 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 threa t
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 authorized to sell a make and model based on
applicable reasonable standards and requ irements that include but
are not limited to any facility, technology, or training
requirements necessary to sell or service a vehicle, in order to be
eligible for delivery or allotment of a make or model of a new motor
vehicle or new powersports vehicle or an incentive.
SECTION 7. AMENDATORY 47 O.S. 2021, Section 565.2, as
last amended by Section 9, Chapter 240, O.S.L. 2024 (47 O.S. Supp.
2024, Section 565.2), is amended to read as follows:
Section 565.2. Termination, cancellatio n or nonrenewal of new
motor vehicle or new powersports vehicle dealer franchise.
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A. Irrespective of the terms, provisions, or conditions of any
franchise, or the terms or provisions of any waiver, no manufacturer
or distributor shall terminate, cancel, or fail to renew any
franchise with a licensed new motor vehicle dealer or new
powersports vehicle dealer (hereafter, in this section only,
referred to jointly as "dealer"), unless the manufacturer or
distributor has satisfied the notice and procedural requirements as
provided in this section and has good cause for cancellation,
termination, or nonrenewal. The manufacturer , or distributor, shall
not attempt to cancel or fail to renew the franchise or dealer
agreement of a new motor vehicle dealer in this state unfairly and
without just provocation or without due regard to the equities of
the dealer or without good faith as defined herein. As used here in,
"good faith" means the duty of each party to any franchise or dealer
agreement to act in a fair and equi table manner toward each other,
with freedom from coercion or intimidation or threats thereof from
each other.
B. Irrespective of the terms, provis ions, 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 or new powersports vehicle
dealer has failed to comp ly with a provision of the franchise or
dealer agreement, which provision is both reasonable and of material
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significance to the franchise or dealer relationship, or the new
motor vehicle dealer or new powersports vehicle dealer has failed to
comply with reasonable performance criteria for sales or service
established by the manufacturer , and the new motor vehicle dealer or
new powersports vehicle dealer has been notified by written notice
from the manufacturer or distributor sales or service performance
standards, capitalization requirements, facility commitments,
business-related equipment acquisitions, or othe r similar reasonable
performance criteria ; and
2. The new motor vehicle dealer or new powersports vehicle
dealer has received written notification of failure to comply with
the manufacturer's reasonable sales performance standards,
capitalization requirements, facility commitments, business -related
equipment acquisitions, or other such remediable failings exclusive
of those reasons enumerated in para graph 1 of subsection C of this
section, and the new motor vehicle dealer or new powersports vehicle
dealer has been afforded a reasonable opportunity of not less than
six (6) months to comply with such a provision or criteria.
manufacturer or distributor has provided the dealer written
notification of the potential termination, cancellation, or
nonrenewal of their franchise or dealer agreement (hereafter, in
this section only, referred to as "deficiency notice"). This
deficiency notice shall be sent by ce rtified mail, return receipt
requested, to the dealer at its current business address and to the
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Commission, and shall contain a statement the manufacturer or
distributor may seek to terminate, cancel, or not renew the dealer's
franchise or dealer agreemen t, a detailed statement of the specific
reasons for the potential termination, cancellation, or nonrenewal,
and the beginning and ending dates of the compliance period. The
dealer shall be afforded a reasonable opportunity of not less than
one hundred eighty (180) days, starting the day after the dealer's
receipt of the deficiency notice, to cure all specific r easons
stated by the manufacturer or distributor for the potential
termination, cancellation, or nonrenewal in the deficiency notice
(hereafter, in this section only, referred to as "compliance
period"); or
3. The reason for the termination, cancellation, or nonrenewal
is for any of the reasons set forth in subparagraphs a, b, and c of
paragraph 3 of subsection C of this section or the circumstances
described in paragraph 4 of subsection C of this section. No
deficiency notice or compliance period is requ ired if the
termination, cancellation, or nonrenewal is premised on the grounds
set forth in subparagraphs a, b, and c of paragraph 3 of subsection
C of this section or the circumstances described in paragraph 4 of
subsection C of this section.
C. Irrespective of the terms, provisions, or conditions of any
franchise or dealer agreement and prior to the termination,
cancellation, or nonrenewal of any franchise or dealer agreement,
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the manufacturer or distributor shall furnish notification of such
termination, cancellation, or nonrenewal their intent to terminate,
cancel, or not renew the franchise or dealer agreement (hereafter,
in this section only, r eferred to as "notification") to the new
motor vehicle dealer or new powersports vehicle dealer and the
Oklahoma New Motor Vehicle Commission as follows:
1. Not less than ninety (90) days prior to the effective date
of the termination, cancellation, or no nrenewal unless for a cause
described in paragraph 2 of this subsection The notification
required by this subsection shall be in writing via certified mail,
return receipt requested, to the dealer at the dealer's current
business address, and to the Commis sion, and shall contain a
statement of the manufacturer's or distributor's intent to
terminate, to cancel, or to not renew the franchise or dealer
agreement, a detailed statement of the specific reasons for the
termination, cancellation, or nonrenewal, and the date the
termination, cancellation, or nonrenewal shall take effect
(hereafter, in this section only, r eferred to as the "effective
date");
2. Not less than fifteen (15) days prior to the effective date
of the termination, cancellation, or nonrenewal with respect to any
of the following: If the termination, cancellation, or nonrenewal is
based upon any reason stated under paragraph 1 of subsection B of
this section, the manufacturer or distributor shall provide the
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notification to the dealer and the C ommission within twenty (20)
days following the last day of the compliance period and the
effective date shall not be less than thirty -one (31) days following
the dealer's receipt of the notification ;
3. If the termination, cancellation, or nonrenewal is based
upon any of the reasons described in subparagraphs a, b, and c of
this paragraph (hereafter, in this section only, referred to as
"triggering events"), the manufacturer or distributor shall provide
the notification to the dealer and the Commission wi thin fifteen
(15) days of the manufacturer's or distributor's receipt of written
notice from the dealer, any government agency, any state or federal
courts, including bankruptcy courts, or the Commission, of the
occurrence of any of the triggering events a nd the effective date
shall not be less than fifteen (15) days following the dealer's
receipt of said notification. As used herein, triggering events
are:
a. insolvency of the new motor vehicle dealer or new
powersports vehicle dealer, or the filing of an y
petition by or against the new motor vehicle dealer or
new powersports vehicle dealer under any bankruptcy or
receivership law, or
b. failure of the new motor vehicle dealer or new
powersports vehicle dealer to conduct its customary
sales and service ope rations during its customary
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business hours for seven (7) consecutive business
days, provided that such failure to conduct business
shall not be due to an act of God or circumstances
beyond the direct control of the new vehicle dealer,
or
c. conviction of the new vehicle dealer or new
powersports vehicle dealer of any felony which is
punishable by imprisonment o r a violation of the
Federal Odometer Act; and
3. Not less than one hundred eighty (180) days prior to the
effective date of the termination or can cellation where the
manufacturer or distributor is discontinuing the sale of the product
line
4. If the reason for the termination, cancellation, or
nonrenewal is because the manufacturer or distributor, is
discontinuing the sale of the product line sold by the dealer,
notification shall be provided at least one hundred eighty (180)
days before the effective da te.
The notification required by this subsection shall be by
certified mail, return receipt requested, and shall contain a
statement of intent to te rminate, 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.
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D. Upon the affected new motor vehicle or new powersports
vehicle dealer's recei pt 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 req uest a hearing. Upon the affected dealer's
receipt of the aforementioned notification, the dealer shall have
the right to file a protest of such threatened termination,
cancellation or nonrenewal with the Commission and request a hearing
under the following circumstances:
1. If the dealer has received a deficiency notice, has been
provided a compliance period, and has received a notification that
is based on any reason stated under paragraph 1 of subsection B of
this section or the dealer has received a no tification based upon
the circumstances stated in paragraph 4 of subsection C of this
section, the dealer shall file a protest within thirty (30) days of
receipt of the notification; or
2. If the dealer has received notification that is based on any
of the triggering events set forth in subparagraphs a, b, and c, of
paragraph 3 of subsection C of this section, the dealer shall file a
protest within fourteen (14) days of their receipt of said
notification.
E. The hearing on any protest held pursuant to thi s section
shall be held within one hundred eighty (180) days of the date of
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the timely protest by the dealer and in accordance with the
provisions of the Administrative Procedures Act, Sections 250
through 323 of Title 75 of the Oklahoma Statutes, to deter mine if
the threatened cancellation, termination, or nonrenewal of the
franchise or dealer agreement has been for good cause and if the
factory manufacturer or distributor has complied with its
obligations pursuant to subsections A, B, and C of this sectio n and
the factory manufacturer or distributor 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 unreasonably wit hheld or delayed.
If the Commission finds that the threatened cancellation,
termination, or nonrenewal of t he franchise or dealer agreement has
not been for good cause or violates subsection A, B, or C of this
section, then it shall issue a final order st ating that the
threatened termination is wrongful. A factory manufacturer or
distributor shall have the right to appeal such order. During the
pendency of the hearing and after the decision, the franchise or
dealer agreement shall remain in full force an d effect, including
the right to transfer the franchise or dealer agreement. If the
Commission finds that t he threatened cancellation, termination, or
nonrenewal is for good cause and does not violate subsection A, B,
or C of this section, the new motor vehicle or new powersports
vehicle dealer shall have the right to an appeal. During the
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pendency of the action, including the final decision or appeal, the
franchise or dealer agreement shall remain in full force and effect,
including the right to transfer the franchise or dealer agreement.
If the dealer prevails in the threatened termination action, the
Commission shall award to the dealer the attorney fees and costs
incurred to defend the action.
E. F. If the factory manufacturer or distributor prevails in an
action to terminate, cancel, or not renew any franchise or dealer
agreement, the new motor vehicle or new powersports vehicle dealer
shall be allowed fair and reasonable compensation by the
manufacturer or distributor for:
1. New, current, and prev ious model year vehicle inventory
which has been acquired from the manufacturer or distributor and
which is unused and has not been damaged or altered while in the
dealer's possession;
2. Supplies and parts which have been acquired from the
manufacturer, or distributor 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 dealer;
3. Equipment and furnishings, provided the dealer purchased
them from the manufacturer or distributor or its approved sources;
and
4. Special tools, with such fair and reasonable compensation to
be paid by the manufacturer or distributor within ninety (90) days
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of the effective date of the termination, cancellation, or
nonrenewal, provided the dealer has clear title to the inventory and
other items and is in a position to convey that title to the
manufacturer or distributor.
a. For the purposes of paragraph 1 of this subsection,
fair and reasonable compensation shall be no less than
the net acquisition price of the vehicle paid by the
dealer.
b. For the purposes of paragraphs 2, 3, and 4 of this
subsection, fair and reasonable compensation shall be
the net acquisition price paid by the 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. G. If a factory manufacturer or distributor prevails in an
action to terminate, cancel, or not renew any franchise or dealer
agreement and the new motor vehicle or new powersports vehicle
dealer is leasing the dealership facilities, the man ufacturer or
distributor shall pay a reasonable rent to the lessor in accordance
with and subject to the provisions of subsection G of this section.
Nothing in this section shall be construed to relieve a new motor
vehicle or new powersports vehicle dealer of its duty to mitigate
damages.
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G. H. 1. Such reasonable rental value shall be paid only to
the extent the dealership premises are recognized i n the franchise
or dealer agreement and only if they are:
a. used solely for performance in accordance with the
franchise or dealer agreement. If the facility is
used for the operation of more than one franchise, the
reasonable rent shall be paid based up on the portion
of the facility utilized by the franchise being
terminated, canceled, or nonrenewed, and
b. not substantially in excess of facilities recommended
by the manufacturer or distributor.
2. If the facilities are owned by the new motor vehicle or new
powersports vehicle dealer, within ninety (90) days following the
effective date of the termination, ca ncellation, or nonrenewal, the
manufacturer or distributor will either:
a. locate a qualified purchaser who will offer to
purchase the dealership fa cilities 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
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facility that is recognized in the franchise agreement
for one (1) year.
3. If the facilities are leased by the new motor vehicle or new
powersports vehicle dealer, within ninety (90) days following the
effective date of the terminatio n, cancellation, or nonrenewal the
manufacturer or distributor 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 dealer, or
c. failing the foregoing, lease the dealership facilities
at a reasonable rent for the portion of the facility
that is recognized in the franchise or dealer
agreement for one (1) year.
4. The manufacturer or distributor shall not be obligated to
provide assistance under this section if the new motor vehicle or
new powersports vehicle dealer:
a. fails to accept a bona fide offer from a prospective
purchaser, sublessee, or assignee,
b. refuses to execute a settlement agreement with t he
lessor if such agreement with the lessor would be
without cost to the dealer, or
c. fails to make written request for assistance under
this section within ninety (90) days after the
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effective date of the termination, cancellation, or
nonrenewal.
5. The manufacturer or distributor shall be entitled to occupy
and use any space for which it pays rent required by this section.
H. I. In addition to the repurchase requirements set forth in
subsections E F and G H of this section, in the event the
termination or cancellation is the result of a discontinuance of a
product line, the manufacturer or distributor shall compensate the
new motor vehicle or new powersports vehicle dealer in an amount
equivalent to the fair market value of the terminated franchise or
dealer agreement as of the date immediately preceding the
manufacturer's or distributor's announcement or provide the dealer
with a replacement franchise or dealer agreement on substantially
similar terms and conditions as those offered to other same line -
make dealers. The dealer may immediately request payment under this
section following the announcement in ex change for canceling any
further franchise rights or dealer agreement rights , except payments
owed to the new motor vehicle dealer in the ordinary c ourse of
business, or may request payment under this section upon the final
termination, cancellation, or nonrenewal of the franchise or dealer
agreement. In either case, payment under this section shall be made
not later than ninety (90) days after the f air market value is
determined. If the factory manufacturer or distributor and dealer
cannot agree on the f air market value of the terminated franchise or
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dealer agreement or agree to a process to determine the fair market
value, then the factory manufacturer or distributor and dealer shall
utilize a neutral third -party mediator to resolve the disagreement.
SECTION 8. AMENDATORY 47 O.S. 2021, Section 566, as last
amended by Section 12, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 566), is amended to read as follows:
Section 566. The Oklahoma New Motor Vehicle Commission may de ny
any application for license or registration, or suspend or revoke a
license or registration issued or impose a fine, only after a
hearing of which the applicant, registrant, or licensee affected,
shall be given at least ten (10) days' written notice specifying the
reason for denying the applicant a license or registration, or, in
the case of a revocation or suspension or imposition of a fine, the
offenses of which the licensee or registrant is charged. The
notices may be served as provided by law for th e service of notices,
or mailing a copy by certified mail to the last -known residence or
business address of the applicant , registrant, or licensee. The
hearing on the charges shall be at such time and place as the
Commission may prescribe and the aforementioned notice shall further
specify the time and place. If the applicant, registrant, or
licensee is a salesperson, or factory representative, or distributor
representative, the Commission shall in like manner also notify the
person, firm, association, c orporation, or trust with whom he or she
is associated, or in whose association he or she is about to enter.
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The Commission shall have the power to compel the production of all
records, papers, and other documents which may be deemed relevant to
the proceeding bearing upon the complaints. The Commission shall
have the power to subpoena and bring before it any person, or take
testimony of any such pe rson by deposition, with the same fees and
mileage and in the same manner as prescribed in proceedings befor e
courts of the state in civil cases. Any party to the hearing shall
have the right to the attendance of witnesses on his or her behalf
upon designating to the Commission the person or persons sought to
be subpoenaed.
SECTION 9. AMENDATORY 47 O.S. 2021, Section 578.1, as
last amended by Section 15, Chapter 240, O.S.L. 2024 (47 O.S. Supp.
2024, Section 578.1), is amended to r ead as follows:
Section 578.1. A. Notwithstanding the terms of a franchise and
notwithstanding the terms o f a waiver, if a factory intends or
proposes to enter into a franchise to establish an additional new
motor vehicle or powersports vehicle dealer or to relocate an
existing new motor vehicle or powersports vehicle dealer within or
into a relevant market area in which the same line -make of motor
vehicle is currently represented, the factory shall provide at least
sixty (60) days advance written notice to the Commission and to each
new motor vehicle or powersports vehicle dealer of the same line -
make in the relevant market area, of the intention of the factory to
establish an additional dealer or to relocate an existing dealer
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within or into the relevant market area. For purposes of this
section, any mileage distance shall be measured on a straight line
from the nearest property boundary points for the dealership
properties at issue. Further, for purposes of this section, the
"relevant market area" mean s the area within a radius of fifteen
(15) miles around the site of the proposed new motor vehicle or
powersports vehicle dealership measured from the property boundary
of primary dealership property. The notice shall be sent by
certified mail to each par ty and shall include the following
information:
1. The specific location at which the additional or relocated
dealer will be established;
2. The date on or after which the additional or relocated
dealer intends to commence business at the proposed locati on;
3. The identity of all dealers who are franchised to sell the
same line-make vehicles as the proposed d ealer and who have licensed
locations within the relevant market area;
4. The names and addresses of the person intended to be
franchised as the pr oposed additional or relocated dealership, the
principal investors in the proposed additional or relocated
dealership, and the proposed dealer operator of the proposed
additional or relocated dealership; and
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5. The specific grounds or reasons for the prop osed
establishment of an additional dealer or relocation of an existing
dealer.
B. The notification require ments prescribed in subsection A of
this section shall not apply if:
1. The relocation of an existing dealer is within the relevant
market area of that dealer; provided, that the relocation not be at
a site within ten (10) miles of a licensed dealer for the same line -
make of vehicle;
2. A proposed additional dealer which is to be established at
or within two (2) miles of a location at which a former licensed
dealer for the same line -make of vehicle had ceased operating within
the previous two (2) years;
3. The relocation of an existing dealer is within two (2) miles
of the existing site of the dealership; or
4. The proposed site for the relocation of an existing dealer
is farther away from all other dealers of the same line -make in that
relevant market area.
C. Within thirty (30) days after receipt of the notice, or
within thirty (30) days after the end of an appeal procedure
provided by the factor y, whichever is greater, a new motor vehicle
dealer or new powersports vehicle dealer so notified or entitle d to
notice may file a petition with the Commission protesting the
proposed establishment or relocation. The petition shall contain a
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short statement setting forth the reasons for the objection of the
new motor vehicle dealer to the proposed establishment or
relocation. Upon filing of a protest, the Commission shall promptly
notify the factory that a timely protest has been filed and shall
schedule a hearing, which shall be held within one hundred twenty
(120) days of the filing of a timely protest. The factory shall not
establish or relocate the dealer until the Commission has held a
hearing and has determined that there is good cause for permittin g
the proposed establishment or relocation. When more than one
protest is filed against the establishment or relocation of the same
dealer, the Commission shall consolidate the hearings to expedite
disposition of the matter.
D. The burden of proof to est ablish that good cause exists for
permitting the proposed establishment of a new motor vehicle or new
powersports vehicle dealer or relocating an existing dealership
shall be on the applicant who seeks to establish a dealership or the
relocation of an exis ting dealership.
SECTION 10. This act shall become effective November 1, 2025.
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Passed the House of Representatives the 26th day of March, 2025.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2025.
Presiding Officer of the Senate