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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 604 By: Gollihare
COMMITTEE SUBSTITUTE
An Act relating to motor vehicles; a mending 47 O.S.
2021, Sections 562 and 564, as last amended by
Sections 2 and 4, Chapter 240, O.S.L. 2024 (47 O.S.
Supp. 2024, Sections 562 and 564), which relate to
definitions and licenses; modifying definitions;
defining terms; modifying list of entities requiring
licensure; removing certain exception; amending
Section 1, Chapter 29, O.S.L. 2023 (47 O.S. Supp.
2024, Section 564.3), which relates to dealer
management system providers; modifying definitions;
requiring certain commercially reasonable data
security standards; modifying entities not liable for
certain actions; modifying entities required to
provide certain indemnification; prohibiting certain
actions by certain entities; defining certain term;
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 the denial,
revocation, or suspension of license; modifying
reasons for which a license may be denied, revoked,
or suspended; removing language requiring certain
dealer compliance; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 47 O.S. 2021, Section 562, as last
amended by Section 2, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 562), is amended to read as follows:
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Section 562. The following words, terms, and phrases, when used
in Sections 561 through 567, 572, 578.1, 579, an d 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 this paragraph
who sells, offers for sale, advertises to sell, receives deposits
for vehicles, leases, or displays new motor vehicles and holds a
bona fide contract or franchise in effect with a manufacturer or
distributor authorized by the manufacturer to make predelivery
preparation of such vehicles sold to purchasers and to perform post -
sale work pursuant to the m anufacturer’s or distributor’s warranty.
As used herein, “authorized predelivery preparation ” means the
rendition by the dealer of services and safety adjustments on each
new motor vehicle in accordance with the procedure and safety
standards required by the manufacturer of the vehicle to be made
before its delivery to the purchaser. “Performance of authorized
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post-sale work pursuant to the warranty ”, as used herein, means the
rendition of services which are required by the terms of the
warranty that stands extended to the vehicle at the time of its sale
and are to be made in accordance with the safety standard s
prescribed by the manufacturer. The term includes premises or
facilities at which a person engages only in the repair of motor
vehicles if repairs ar e performed pursuant to the terms of a
franchise and motor vehicle manufacturer ’s warranty. For the
purpose of Sections 561 through 567, 572, 578.1, 579, and 579.1 of
this title, the terms new motor vehicle dealer and “new motor
vehicle dealership” shall be synonymous. The term new motor vehicle
dealer does not include:
a. receivers, trustees, administrato rs, executors,
guardians, or other persons appointed by or acting
under judgment or order of any court,
b. public officers while performing or in operat ion of
their duties,
c. employees of persons, corporations, or associations
enumerated in subparagraph a of this paragraph when
engaged in the specific performance of their duties as
such employees, or
d. a powersports vehicle dealer;
3. “Motor vehicle salesperson” means any person, resident or
nonresident, who, for gain or compensation of any kind, either
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directly or indirectly, regularly or occasionally, by any form of
agreement or arrangement, sells or negotiates for the sale, lease,
or conveyance or arranges the financing of any new motor vehicle or
powersports vehicle as an employee for any new motor vehicle dealer
or powersports dealer to any one or more third parties;
4. “Commission” means the Oklahoma New Motor Vehicle
Commission;
5. “Manufacturer” means any person, firm, association,
corporation, or partnership, trust, joint venture, or common enti ty
thereof, resident or nonresident, that manufactures or assembles new
and unused motor vehicles or new and unused powersport vehicles or
that engages in the fabrication or assembly of motorized vehicles of
a type required to be registered in this state;
6. “Distributor” means any person, firm, association,
corporation, or partnership, trust, joint venture, or common entity
thereof, resident or nonresident, that, being authorized by the
original manufacturer, in whole or in part sells or distributes new
and unused motor vehicles to new motor vehicle dealers or powersport
dealers, or that maintains distributor representatives;
7. “Factory branch” means any branch office maintained by a
person, firm, association, corporation, or partnership, trust, joint
venture, or common entity thereof that manufactures or assembles
motor vehicles or powersport vehicles for the sale of motor vehicles
or powersport vehicles to distributors, or for the sale of motor
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vehicles to new motor vehicle dealers, or for the sale of p owersport
vehicles to new powersport vehicle dealers, or for directing or
supervising, in whole or in part, its representatives;
8. “Distributor branch” means any branch office similarly
maintained by a distributor for the same purposes a factory branch
is maintained;
9. “Factory representative ” means any officer or agent engaged
as a representative of a manufacturer of motor vehicles or
powersport vehicles or by a factory branch, for the purpose of
making or promoting the sale of its motor vehicles or po wersport
vehicles, or for supervising or contacting its dealers or
prospective dealers;
10. “Distributor representative ” means any person, firm,
association, corporation, or partnership, trust, joint venture, or
common entity thereof, and each officer and employee thereof engaged
as a representative of a distributor or distributor branch of motor
vehicles or powersport vehicles, for the purpose of ma king or
promoting the sale of its motor vehicles or powersport vehicles, or
for supervising or contacting it s dealers or prospective dealers;
11. “Franchise” means any contract or agreement between a new
motor vehicle dealer or a powersports vehicle dealer an d a
manufacturer of a new motor vehicle or powersports vehicle or its
distributor or factory branch by which the new motor vehicle dealer
or new powersports vehicle dealer is authorized to engage in the
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activities of a new motor vehicle dealer or new p owersports vehicle
dealer as defined by this section;
12. “New or unused motor vehicle ” means a vehicle which is in
the possession of the manufacturer or distributor or has been sold
only to the holder of a valid franchise granted by the manufacturer
or distributor for the sale of that make of new vehicle so long as
the manufacturer’s statement of origin has not been assigned to
anyone other than a licensed franchised new motor vehicle dealer of
the same line-make;
13. “Area of responsibility ” means the geographical area, as
designated by the manufacturer, factory branch, factory
representative, distributor, di stributor branch, or distributor
representative, in which the new motor vehicle dealer or powersports
dealer is held responsible for the promotion and d evelopment of
sales and rendering of service for the make of motor vehicle or
powersports vehicle for which the new motor vehicle dealer or new
powersports vehicle dealer holds a franchise or selling agreement;
14. “Off premises” means at a location o ther 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 r eal property upon which the off -premises sale
or display is conducted;
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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 v ehicle
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 ,; any common entity of a manufacturer,
distributor, factory branch, or distributor branch ; or factory
representative, or distributor representative, whi ch manufactures or
distributes vehicle products;
21. “Powersports vehicle” means any new or unused motorcyc les,
scooters, mopeds, all -terrain vehicles, and utility vehicles
required to be registered under the Oklahoma Vehicle License and
Registration Act, wit h the exception of all -terrain vehicles,
utility vehicles, and motorcycles used exclusively for off -road use
which are sold by a retail implement dealer;
22. “Powersports vehicle dealer ” means any person, firm, or
corporation, resident or nonresident, that is in the business of
selling any new powersports vehicles except for retail implement
dealers;
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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 husb andry as defined in Section 1 -125
of this title or a combination thereof and is exempt from licensing
by the Commission for the sale of all -terrain vehicles, utility
vehicles, and motorcycles used exclusively for off -road use;
24. “Consumer data” means nonpublic personal information as
defined in 15 U.S.C., Section 6809(4) as it existed on January 1,
2023, that is:
a. collected by a new motor vehicle dealer, and
b. provided by the new motor vehicle dealer directly to a
manufacturer or third party 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 ; and
26. a. “Common entity” means any person, firm, association,
corporation, partnership, trust, or joint venture
which:
(1) is directly or indirectly controlled by or has
more than thirty percent (30%) of its equity
interest directly or indirectly owned,
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beneficially or of record, through any form of
ownership structure, by a factory, manufacturer,
manufacturer branch, distributor, or distributor
branch, or
(2) has more than thirty percent (30%) of its equity
interest directly or indirectly controlled or
owned, beneficially or of record, through any
form of ownership structure, by one or more
persons who also directly or indirectly control
or own, beneficially or of record, more than
thirty percent (30%) of the equity interests of
the factory, manufacturer, manufacturer branch,
distributor, or distributor branch.
b. An entity that would otherwise be considered a common
entity of a distributor as provided in divisi on 1 or 2
of subparagraph a of this paragraph because of its
relation to a distributor is not considered a c ommon
entity of that distributor if:
(1) the distributor to which the entity is related
was a licensed distributor on March 1, 2025,
(2) the entity is not a common entity of a
manufacturer or an importer, and
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(3) the distributor to which the entity is related is
not, and has never been, a common entity of a
manufacturer or an importer .
SECTION 2. AMENDATORY 47 O.S. 2021, Sect ion 564, as last
amended by Section 4, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 564), is amende d to read as follows:
Section 564. A. It shall be unlawful for any person, firm,
association, corporation, or partnership, trust, joint venture, or
common entity thereof, to engage in business as, or serve in the
capacity of, or act as a new motor vehicle dealer, powersports
dealer, or manufacturer or distributor of new motor vehicles or
powersports vehicles, or factory branch, distributor branch or
factory representative or distributor representative, as defined in
Section 562 of this title, in this stat e without first obtaining a
license therefor as provided for by law. Any person, firm,
association, corporation, or partnership, trust, joint venture, or
common entity thereof, engaging in more than one of such capacities
or having more than one place where such business is carried on or
conducted in this state shall be required to obtain and hold a
current license for each thereof. Provided that, a new motor
vehicle dealer’s license shall authorize one person to sell in the
event such person shall be the owner of a proprietorship, or the
person designated as principal in the dealer ’s franchise or the
managing officer or one partner if no principal perso n is named in
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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 engage in the activities of a new motor vehicle dealer
as defined in Section 562 of this ti tle or be licensed as a new
motor vehicle dealer in this state, except as provided by
subparagraph b of para graph 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 s hall be verified by
the oath or affirmation of the applicant and shall be on forms
prescribed by the Oklahoma New Motor Vehicle Commission and
furnished to the applicants, and shall contain information as the
Commission deems necessary to enable it to fully determine the
qualifications and eligibility of the several applicants to receive
the license or licen ses applied for. The Commission shall require
in such application, or otherwise, information relating to the
applicant’s current financial standing, th e applicant’s business
integrity, whether the applicant has an established place of
business and is primarily engaged in the pursuit, avocation, or
business for which a license, or licenses, are applied for, and
whether the applicant is able to properl y conduct the business for
which a license, or licenses, are applied for, and such other
pertinent information consistent with the safeguarding of the public
interest and the public welfare. All applications for license or
licenses shall be accompanied by the appropriate fee or fees
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therefor in accordance with the schedule thereof hereinafter set
out. In the event any application is denied and the license applied
for is not issued, the entire license fee shall be returned to the
applicant. All licenses i ssued under the provisions of Section 561
et seq. of this title shall expire on June 30, following the date of
issue and shall be nontransferable. All applications for renewal of
a license for a new motor vehicle dealer, powersports dealer,
manufacturer, distributor, or manufacturer ’s or distributor’s
representative shall be submitted by June 1 of each year, and such
license or licenses will be issued by July 1. If applications have
not been made for renewal of licenses at the times described in this
subsection, it shall be illegal for any person to represent himself
or herself and act as a dealer, manufacturer , distributor, or
manufacturer’s or distributor’s representative. Service Oklahoma
and licensed operators will be notified not to accept such dealers ’
titles until such time as licenses have been issued by the
Commission.
C. The schedule of license fees to be charged and received by
the Commission for the licenses issued hereunder shall be as
follows:
1. For each factory branch or distributor branc h, 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 vehicles, Four Hundred Dollars ($400.00) initial
fee with annual renewal fee of Three Hundred Dollars ($300.00);
3. For each factory representative or distributor
representative, One Hundred Dollars ($100.00) annually;
4. For each new motor vehicle dealer, except powersports
vehicle dealers, initial fee of Three Hundred D ollars ($300.00) per
franchise sold at each location licensed, with an annual renewal fee
of One Hundred Dollars ($100.00) per franchise sold at each location
licensed per year; and
5. For each powersports vehicle dealer, initial fee of Three
Hundred Dollars ($300.00) per manufacturer represented by the dealer
at each location licensed, with an annual renewal fee of One Hundred
Dollars ($100.00) per manufacturer represented by the dealer at each
location licensed per year.
D. The licenses issued to each n ew 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 ch ange of location on the
license without charge unless the change of address triggers a
relocation of a new motor vehicle dealer or new powersports vehicle
dealer pursuant to the provisions of Section 578.1 of this title.
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The licenses of each new vehic le dealer shall be posted in a
conspicuous place in the dealer ’s place or places of business.
Every motor vehicle factory representative or distributor
representative shall physically possess the license when engaged in
business and shall display such upon req uest. The name of the
employer of such factory representative or distributor
representative shall be stated on the license.
E. The new powersports dealer license shall only allow the sale
of the specific types of powersports vehicles authorized by th e
manufacturer and agreed to by the powersports dealer.
SECTION 3. AMENDATORY Sect ion 1, Chapter 29, O.S.L. 2023
(47 O.S. Supp. 2024, Section 564.3), is amended to read as follows:
Section 564.3. A. As used in this section:
1. “Access fee” means a requirement to pay money for access to
protected dealer data that is in addition to an amount specified in
a written and executed contract for goods and services ;
2. “Authorized integrator ” means a person who a dealer has a
contractual relationship with or the dealer otherwise gives express
written authorization to have access to protected dealer data stored
on a dealer data system or to write protected dealer data to the
dealer data system for the purpose of performing a specific function
for the dealer;
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3. “Dealer data system” means software, hardware, or firmware
that a dealer leases or rents from a dealer management system
provider for the purpose of storing protected dealer data;
4. “Dealer management system provider ” means a person who, for
compensation, maintains and provides access to a dealer data system
in which a dealer stores pr otected dealer data;
5. “Protected dealer data ” means:
a. consumer data that a dealer generated or that the
consumer provided to the dealer that is not otherwise
publicly available and the consumer has not otherwise
provided consent or acknowledgment to share the
information, and
b. any other dealer data in connection with the dealer ’s
daily business operations in which a dealer has rights
in a dealer data system; and
6. Authorized integrator and dealer management system provider
do not include:
a. a manufacturer, distributor, importer, factory or any
entity that is a subsidiary or affiliate of, or acts
on behalf of, a manufacturer, distributor, or impor ter
factory, or
b. a governmental body or other person that is acting in
accordance with federal, state, or local law, or a
valid court order.
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B. A dealer management system provider may:
1. Condition access and ability of a dealer or authorized
integrator to receive, share, copy, use, write, or transmit
protected dealer data from or to a dealer data system on the
dealer’s or authorized integrator ’s compliance with commercially
reasonable data security standards;
2. Require an authorized integrator to hav e express written
authorization from a dealer before allowing the authorized
integrator to gain access to, receive, share, copy, use, or transmit
protected dealer data; and
3. Deny access to a dealer data system to a dealer if the
dealer fails to pay an amount due to the dealer management system
provider under a lease, contract, or other agreement concernin g the
dealer’s access to or use of the dealer data system.
C. Except as provided in subsection B of this section, a dealer
management system provider s hall not take any action that would
limit or prohibit the ability of a dealer or an authorized
integrator to receive, protect, store, copy, share, or use protected
dealer data using means that include, but are not limited to:
1. Imposing an access fee on a dealer or authorized integrator;
and
2. Restricting a dealer or an authorized integrator from
sharing protected dealer data or writing data or having access to a
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dealer data system. Prohibited restrictions pursuant to this
paragraph include, but are no t limited to:
a. limits on the scope or nature of protected dealer data
to which a dealer or authorized integrator has access
or may share or write to a dealer data system, and
b. a requirement for a dealer or authorized integrator to
provide sensitive or confidential business information
or information that a dealer or authorized integrator
uses for competitive purposes in return for access to
protected dealer data or an authorization to share or
write protected dealer data to a dealer data system.
D. Except as otherwise provided in this section, any term or
condition of a contract with a dealer management system provider
that conflicts with the requirements set forth in subsection C of
this section is void and unenforceable to the extent of the
conflict.
E. An authorized integrator shall:
1. Obtain express written authorization from a dealer before
gaining access to, receiving, sharing, copying, using, writing, or
transmitting protected dealer data;
2. Comply with security standards in gaining access to ,
receiving, sharing, copying, using, writing, or transmitting
protected dealer data; and
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3. Allow a dealer to withdraw, revoke, or amend any express
written authorization the dealer provides under paragraph 1 of this
subsection:
a. at the sole discretion of the dealer, if the dealer
gives a thirty-day prior notice to an authorized
integrator, or
b. immediately, for good cause.
F. 1. This section does not prevent a dealer, a dealer
management system provider, or an authorized integrator from
discharging the obligations of a dealer, dealer management system
provider, or of an authorized integrator under federal, state, or
local law to secure and prevent unauthorized access to protected
dealer data, or from limiting the scope of the obligations, in
accordance with federal, state, or local law.
2. A dealer management system provider is not liable for any
action that a dealer takes directly with respect to securing or
preventing unauthorized access to protected dealer data, or for
actions that an authorized i ntegrator takes in appropriately
following the written instructions of the dealer for securing or
preventing unauthorized access to protected dealer data, to the
extent that the actions prevent the dealer management system
provider from meeting a legal obligation to secure or prevent
unauthorized access to protected dealer data.
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3. A dealer is not liable fo r any action that an authorized
integrator takes directly with respect to securing or preventing
unauthorized access to protected dealer data, or for ac tions that
the authorized integrator takes in appropriately following the
written instructions of the dealer for securing or preventing
unauthorized access to protected dealer data, to the extent that the
actions prevent the dealer from meeting a legal obligation to secure
or prevent unauthorized access to protected dealer data.
4. An authorized integrator is not liable for any action that a
dealer takes directly with respect to securing or preventing
unauthorized access to protected dealer data, or for ac tions that
the dealer takes in appropriately following the written instructions
of the authorized integrator for securing or preventing unauthorized
access to protected dealer data, to the extent that the actions
prevent the authorized integrator from meeting a legal obligation to
secure or prevent unauthorized access to protected dealer data.
5. A manufacturer, distributor, importer, factory or any entity
that is a subsidiary or affiliate of, or acts on behalf of, a
manufacturer, distributor, or importer factory is not liable for any
action that a dealer, dealer management system provider, authorized
integrator, or other third party, except for a third party who the
manufacturer has provided the data to as provided for in paragraph 7
of this subsection, takes directly with respect to securing or
preventing unauthorized access to protected dealer data or for
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actions that an authorized integrator, dealer management system
provider, or other third party takes in appropriately following the
written instructions of the dealer for securing or preventing
unauthorized access to protected dealer data.
6. Notwithstanding any other agreement, an authorized
integrator shall indemnify and hold the new motor vehicle dealer
harmless from any third -party claims asserte d against or damages
incurred by the new motor vehicle dealer to the extent caused by
access to, use of, or disclosure of consumer data in violation of
this section.
7. Notwithstanding any other agreement, a manufacturer,
distributor, importer, factory or any entity that is a subsidiary or
affiliate of, or acts on behalf of, a manufacturer, distributor, or
importer factory shall indemnify the dealer for any third -party
claims asserted against or damages incurred by the dealer to the
extent the claims or da mages are caused by the access to and
unlawful disclosure of protected dealer data resulting from a breach
caused by the manufacturer or distributor or a third party to which
the manufacturer or distributor has provided the protected dealer
data in violation of this section, the written consent granted by
the dealer, or other applicable state or federal law.
G. A factory or any entity that acts on behalf of a factory
shall not prohibit an authorized integrator that has satisfied, or
is compliant with, comm ercially reasonable data security standards
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and that the dealer has identified as one of its authorized
integrators from integrating into the dealer’s dealer data system or
place an unreasonable restriction on integration by an authorized
integrator or other t hird party that the dealer wishes to be an
authorized integrator. For the purposes of this subsection,
“unreasonable restriction ” includes:
1. Imposing an access fee on a dealer or authorized integrator;
however, a franchisor or third party may charg e a franchise or
authorized integrator for actual costs associated with modifications
to a franchisor’s electronic systems to enable a secure interface
with the authorized integrator ’s system and software;
2. An unreasonable limitation or condition on the sco pe or
nature of the data that is shared with an authorized integrator;
3. An unreasonable limitation on the ability of the authorized
integrator to write data to a dealer data system;
4. An unreasonable limitation or condition on an authorized
integrator that accesses or shares protected dealer data or that
writes data to a dealer data system; and
5. Requiring unreasonable access to an authorized integrator ’s
sensitive, competitive, or other confidential business information
as a condition for accessing protected dealer data or sharing
protected dealer data with an authorized integrator.
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SECTION 4. AMENDATORY 47 O.S. 2021, Section 565, as last
amended by Section 7, Chapter 240, O.S.L. 2024 (47 O.S. Supp. 2024,
Section 565), is amended to read as follows:
Section 565. A. The Oklahoma New Motor Vehicle Commission may
deny an application for a license, revoke or suspend a license, or
impose a fine against any person or entity, not to exceed Ten
Thousand Dollars ($10,000.00) per occ urrence, that violates any
provision of Sections 561 through 567, 572, 578.1, 579, and 579.1 of
this title or for any of the following reasons:
1. On satisfactory proof of unfitness of the applicant in any
application for any license under the provisi ons 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 resulting in
failure to maintain the qualifications for license;
5. Being a new motor vehicle dealer or new powersports vehicle
dealer who:
a. has required a purchaser of a new motor vehicle or new
powersports vehicle, as a condition of sale and
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delivery thereof, to also purchase special features,
appliances, accessories, or equipme nt 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 connection
with business as a new motor vehicle dealer or new
powersports vehicle dealer,
c. has committed any unlawful act which resulted in the
revocation of any similar license in anot her 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, purchasi ng,
or otherwise dealing in new motor vehicles or new
powersports vehicles or has misrepresented the terms
and conditions of a sale, purchase or contract for
sale or purchase of a new motor vehicle or new
powersports vehicle or any interest therein including
an option to purchase such vehicle,
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g. has failed to meet or maintain the conditions and
requirements necessary to qualify for the issuance of
a license, or
h. completes any sale or transaction of an extended
service contract, extended maintenance plan, or
similar product using contract forms that do not
conspicuously disclose the identity of the service
contract provider;
6. Being a new motor vehicle salesperson who is not employed as
such by a licensed new motor vehicle dealer;
7. Being a new motor vehic le dealer or new powersports vehicle
dealer who:
a. does not have an established place of business,
b. does not provide for a suitable repair shop separate
from the display room with ample space to repair or
recondition one or more vehicles at the same time, and
which is staffed with properly trained and qualified
repair technicians and is equipped with such parts,
tools, and equipment as may be requisite for the
servicing of motor vehicles in such a manner as to
make them comply with the safety laws of thi s state
and to properly fulfill the dealer ’s or manufacturer’s
warranty obligation,
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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:
a. either induced or attempted to induce by means of
coercion or intimidation, any new motor vehicle dealer
or powersports vehicle dealer:
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(1) to accept delivery of any vehicl e 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 f eatures,
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 commodity whatsoever,
b. induced under threat or discrimination by the
withholding from delivery to a ne w motor vehicle
dealer or new powersports vehicle dealer certain
models of motor vehicles, changing or amending
unilaterally the new motor vehicle deale r’s allotment
of motor vehicles, and/or withholding and delaying
delivery of the vehicles out of the ordinary course of
business, in order to induce by such coercion any new
motor vehicle dealer or new powersports vehicle dealer
to participate or contr ibute to any local or national
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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 supportin g an advertising association
which is open to all new motor vehicle dealers or new
powersports vehicle deale rs on the same basis,
c. used a performance standard, sales objective, or
program for measuring dealer performance that may have
a material effect on a right of the dealer to vehicle
allocation; or payment under any incentive or
reimbursement program that is unfair, unreasonable,
inequitable, and not based on accurate information,
d. used a performance standard for measuring sales or
service performance of, or which results in penalizing
or withholding a benefit from, any new motor vehicle
dealer or new powersports vehicle dealer under the
terms of the franchise agreement which:
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(1) is unfair, unreasonable, arbitrary, or
inequitable, and
(2) does not consider the relevant and material local
and state or regional criteria, including
prevailing economic conditions affecting the
sales or service performance of a vehicle dealer
or and any relevant and material data and facts
presented by the dealer in writing w ithin thirty
(30) days of the written notice of the
manufacturer to the dealer of its intention to
cancel, terminate, or not renew the dealer ’s
franchise agreement, and
(3) does not consider the actual vehicle allocation
offered or otherwise made available to the dealer
by the manufacturer or distributor, as well as
the dealer’s inventory levels relevant to achieve
any minimum performance standards to which the
manufacturer or dist ributor holds the dealer
accountable,
e. failed or refused to sell, or offer for sale, new
motor vehicles to all of its authorized same line -make
franchised new motor vehicle dealer s or new
powersports vehicle dealers at the same price for a
comparably equipped motor vehicle, on the same terms,
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with no differential in functionally available
discount, allowance, credit, or bonus, except as
provided in subparagraph e of paragraph 9 of this
subsection,
f. failed to provide reasonable compensation to a new
motor vehicle dealer substantially equivalent to the
actual cost of providing a m anufacturer required
loaner or rental vehicle to any consumer who is having
a vehicle serviced at the de alership. For purposes of
this paragraph, actual cost is the average cost in the
new motor vehicle dealer ’s region for the rental of a
substantially similar make and model as the vehicle
being serviced, or
g. failed to make available to its new motor vehicle
dealers a fair and proportional share of all new
vehicles distributed t o 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
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enter into any agreement or to cancel any agreement;
has failed to act in good faith and in a fair,
equitable, and nondiscriminatory manner; has directly
or indirectly coerced, intimidated, threatened, or
restrained any new motor vehicle dealer; has acted
dishonestly; or has failed to act in accordance with
the reasonable standards of fair dealing,
b. has failed to compensate its dealers for the work and
services they are required to perform in connection
with the dealer’s delivery and preparation obligations
according to the agreements on file with the
Commission which must be found by the Com mission to be
reasonable, or has failed to adequately and fairly
compensate its dealers for labor, parts, and other
expenses incurred by the dealer to perform under and
comply with manufacturer’s warranty agreements and
recall repairs which shall include diagnostic work as
applicable and assistance requested by a consumer
whose vehicle was subjected to an over -the-air or
remote change, repair, or update to any part, system,
accessory, or function by the manufacturer and
performed by the dealer in order to s atisfy the
consumer. Time allowances for the diagnosis and
performance of repair work shall be reasonable and
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adequate for the work to be performed. Adequate and
fair compensation, which under this provision shall be
no less than the rates customarily charged for retail
consumer repairs as calculated herein, for parts and
labor for warranty and recall repairs shall, at the
option of the new motor vehicle dealer, be established
by the new motor vehicle dealer submitting to the
manufacturer or distributor o ne 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 purchase of
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those parts, subtracting one (1), and multiplying by
one hundred (100) to produce a percentage. The new
motor vehicle dealer or new powersports vehicle dealer
shall calculate its retail labor rate by dividing the
amount of the new vehi cle dealer’s total labor sales
from the qualified repair orders by the total labor
hours charged for tho se sales. When submitting repair
orders to establish a retail parts and labor rate, a
new motor vehicle dealer or new powersports vehicle
dealer need not include repairs for:
(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 promotiona l
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,
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(7) replacement of or work on tires including front -
end alignments and wheel or tire rotations,
(8) repairs of vehicles owned by the new mo tor
vehicle dealer or new powersports vehicle dealer
or employee thereof at t he time of the repair,
(9) vehicle reconditioning, or
(10) items that do not have individual part number s
including, but not limited to, nuts, bolts, and
fasteners.
A manufacturer or distributor may, not later than
forty-five (45) days after submission, re but 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 submitt ed by the
new motor vehicle dealer or new powersports vehicle
dealer pursuant to this section for a reta il 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
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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. A ll time
periods under this section shall be suspended until
the supplemental repair orders are provided. If the
manufacturer or distributor requests su pplemental
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 fr anchisee
and following the formula set forth herein to
establish the rate. The retail labor and parts rates
shall go into effect thirty (30) days follo wing 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
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adjustment in writing of the average percentage markup
or labor rate based on that rebuttal not later than
forty-five (45) days after submission. If the new
motor vehicle dealer or new powersports vehicle dealer
does not agree with the proposed average percentage
markup or labor rate, the new vehicle dealer may file
a protest with the Commission not later than thirty
(30) days after receipt of that pr oposal by the
manufacturer or distributor. In the event a protest
is filed, the manufacturer or distrib utor 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 pursu ant to the provisions
of this section. A manufacturer or distributor may
not retaliate against any new motor vehicle dealer or
new powersports vehicle dealer seeking to exercise its
rights under this section. A manufacturer or
distributor may require a d ealer to submit repair
orders in accordance with this section in order to
validate the reasonableness of a dealer’s retail rate
for parts or labor not more often than once every
twelve (12) months. A manufacturer or distributor may
not otherwise recover i ts costs from new vehicle
dealers within this state including a surcharge
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imposed on a new motor vehicle dealer solely intended
to recover the cost of reimbursing a dealer for par ts
and labor pursuant to this section; provided, a
manufacturer or distributo r shall not be prohibited
from increasing prices for vehicles or parts in the
normal course of business or from auditing and
charging back claims in accordance with this section.
All claims made by dealers for compensation for
delivery, preparation, warra nty, or recall repair work
shall be paid within thirty (30) days after approval
and shall be approved or disapproved within thirty
(30) days after receipt. When any claim is
disapproved, the dealer shall be notified in writing
of the grounds for disapprov al. The dealer’s
delivery, preparation, and warranty obligations as
filed with the Commission shall con stitute the
dealer’s sole responsibility for product liability as
between the dealer and manufacturer. A factory may
reasonably and periodically audit a new motor vehicle
dealer or new powersports vehicle dealer to determine
the validity of paid claims for dealer compensation or
any charge-backs for warranty parts or service
compensation. Except in cases of suspected fraud,
audits of warranty payments s hall only be for the one -
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year period immediately following the date of the
payment. A manufacturer shal l reserve the right to
reasonable, periodic audits to determine the validity
of paid claims for dealer compensation or any charge -
backs for consumer or dealer incentives. Except in
cases of suspected fraud, audits of incentive payments
shall only be for a one -year period immediately
following the date of the payment. A factory shall
not deny a claim or charge a new motor vehicle dealer
back subsequent to the payment of the claim unless the
factory can show that the claim was false or
fraudulent or that th e new motor vehicle dealer or new
powersports vehicle dealer failed to reasonably
substantiate the claim by the written reasonable
procedures of the fac tory. A factory shall not deny a
claim or implement a charge -back against a new vehicle
dealer after payment of a claim in the event a
purchaser of a new vehicle that is the subj ect 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 requi re the dealer to provide, within
thirty (30) days of notice of charge -back, withholding
of payment, or denial of claim, the documentation to
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demonstrate the vehicle sale, delivery, and customer
qualification for an incentive as reported, including
consumer name and address and written attestation
signed by the dealer operator or general manager
stating the consumer was not on the export control
list and the dealer did not know or have reason to
know the vehicle was being exported or resold.
The factory shall provide written notice to a dealer
of a proposed charge -back that is the result of an
audit along with the specific audit results and
proposed charge-back amount. A dealer that receives
notice of a proposed charge -back pursuant to a
factory’s audit has the right to file a protest with
the Commission within thirty (30) days aft er receipt
of the notice of the charge -back or audit results,
whichever is later. The factory is prohibited from
implementing the charge -back or debiting the dealer ’s
account until either the time frame for filing a
protest has passed or a final adjudication is rendered
by the Commission, whichever is later, unless the
dealer has agreed to the charge -back or charge-backs,
c. fails to compensate the new motor vehicle dealer for a
used motor vehicle:
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(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 vehi cle dealer is
franchised to sell or on which the new motor
vehicle dealer is authorized to perform recal l
repairs,
(2) that is subject to a stop -sale or do-not-drive
order issued by the factory or an authorized
governmental agency,
(3) that is held by the new motor vehicle dealer in
the dealer’s inventory at the time the stop -sale
or do-not-drive order is issued or that is taken
by the new motor vehicle dealer into the dealer ’s
inventory after the recall notice as a result of
a retail consumer trade -in or a lease return to
the dealer inventory in accordance with an
applicable lease contract,
(4) that cannot be repaired due to the
unavailability, within thirty (30) days after
issuance of the stop -sale or do-not-drive order,
of a remedy or parts necessary for the new motor
vehicle dealer to make the recall repair, and
(5) that is not at least in the prorated amount of
one percent (1.00%) of the value of the vehicle
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per month beginning on the date that is thirty
(30) days after the date on which the stop -sale
order was provided to the new motor vehicle
dealer until the earlier of either of the
following:
(a) the date the recall remedy or parts are made
available, or
(b) the date the new motor vehicle dealer sells,
trades, or otherwise disposes of the
affected used motor vehicle.
For the purposes of division (5) of this subparagraph,
the value of a used vehicle shall be the average Black
Book value for the year, make, and model of the
recalled vehicle. A factory may direct the manner and
method in which a new moto r vehicle dealer must
demonstrate the inventory status of an affected used
motor vehicle to determine el igibility under this
subparagraph; provided, that the manner and method may
not be unduly burdensome and may not require
information that is unduly burd ensome to provide. All
reimbursement claims made by new motor vehicle dealers
pursuant to this section for recall remedies or
repairs, or for compensation where no part or repair
is reasonably available and the vehicle is subject to
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a stop-sale or do-not-drive order, shall be subject to
the same limitations and requirements as a warranty
reimbursement claim made under subparagraph b of this
paragraph. In the alternative, a manufacturer may
compensate its franchised new motor vehicle dealers
under a national recall compensation program;
provided, the compensation under the program is equal
to or greater than that provided under division (5) of
this subparagraph, or as the manufactu rer and new
motor vehicle dealer otherwise agree. Nothing in this
section shall require a factory to provide total
compensation to a new motor vehicle dealer which would
exceed the total average Black Book value of the
affected used motor vehicle as originally determined
under division (5) of this subparagraph. Any remedy
provided to a new motor vehicle dealer under this
subparagraph is exclusive and may not be combined with
any other state or federal compensation remedy,
d. unreasonably fails or refuses to offer to its same
line-make franchised dealers a reasonable supply and
mix of all models manufactured for that line -make, or
unreasonably requires a dealer to pay any extra fee,
purchase unreasonable advertising displays or other
materials, or enter into a separate agreement which
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adversely alters the rights or obligations conta ined
within the dealer’s existing franchise agreement or
which waives any right of the new motor vehicle dealer
or new powersports vehicle dealer as protected by
Section 561 et seq. of this title, or remodel,
renovate, or recondition the dealer ’s existing
facilities as a prerequisite to receiving a model or
series of vehicles, except as may be necessary to s ell
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 fre ight
embargo, or other cause over which the manufacturer
has no control. However, this subparagraph shall not
apply to limited production model vehicle s, 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
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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 requiremen t which
is necessary to sell or service a vehicle that the
franchised new motor vehicle dealer or new powersports
vehicle dealer is authorized or licens ed 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 auto motive
industry. However, this subparagraph shall not apply
if the new motor vehicle dealer or new powersports
vehicle dealer voluntarily agrees to fac ility
construction or renovation in exchange for money,
credit, allowance, reimbursement, or additional
vehicle allocation to a dealer from the factory to
compensate the dealer fo r the cost of, or a portion of
the cost of, the facility construction or reno vation.
Except as necessary to comply with a health or safety
law, or to comply with a technology or sa fety
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requirement which is necessary to sell or service a
motor vehicle or powersports vehicle that the
franchised dealer is authorized or licensed by th e
franchisor to sell or service, a new vehicle dealer
which completes a facility construction or renovation
pursuant to factory requirements shall not be required
to construct a new facility or renovate the existing
facility if the same area of the facilit y or premises
has been constructed or substantially altered within
the last ten (10) years and the const ruction or
alteration was approved by the manufacturer as a part
of a facility upgrade program, standard, or policy.
For purposes of this subparagraph, “substantially
altered” means to perform an alteration that
substantially impacts the architectural features,
characteristics, or integrity of a structure or lot.
The term shall not include routine maintenance
reasonably necessary to maintain a dealershi p in
attractive condition. If a facility upgrade program,
standard, or policy under which the dealer co mpleted a
facility construction or substantial alteration does
not contain a specific time period during which the
manufacturer or distributor shall pro vide payments or
benefits to a participating dealer, or the time frame
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specified under the program is reduced or canceled
prematurely in the unilateral discretion of the
manufacturer or distributor, the manufacturer or
distributor shall not deny the partic ipating dealer
any payment or benefit under the terms of the program,
standard, or policy as it existed when the dealer
began to perform under the program, standard, or
policy for the balance of the ten -year period,
regardless of whether the manufacturer ’s or
distributor’s program, standard, or policy has been
changed or canceled, unless the manufacturer and
dealer agree, in writing, to the change in payment or
benefit,
f. requires a new motor vehicle dealer or new powersports
vehicle dealer to establish an exclusive facility,
unless supported by reasonable business, market, and
economic considerations; provi ded, that this section
shall not restrict the terms of any agreement for such
exclusive facility voluntarily entered into and
supported by valuable cons ideration separate from the
new motor vehicle dealer ’s right to sell and service
motor vehicles for the franchisor,
g. requires a new motor vehicle dealer or new powersports
vehicle dealer to enter into a site -control agreement
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covering any or all of the n ew motor vehicle dealer ’s
facilities or premises; provided, that this section
shall not restrict the ter ms of any site-control
agreement voluntarily entered into and supported by
valuable consideration separate from the new motor
vehicle dealer’s right to sell and service motor
vehicles for the franchisor. Notwithstanding the
foregoing or the terms of any site -control agreement,
a site-control agreement automatically extinguishes if
all of the factory’s franchises that operated from the
location that are the subject of the site -control
agreement are terminated by the factory as part of the
discontinuance of a product line,
h. refuses to pay, or claims reimbursement from, a new
motor vehicle dealer or new powersports vehicle dealer
for sales, incentives, or other payments related to a
vehicle sold by the dealer because the purchaser of
the new vehicle exported or resold the vehicle in
violation of the policy of the factory unless the
factory can show that, at the time of the sale, the
new vehicle dealer knew or reasonably should have
known of the purchaser ’s intention to export or resell
the vehicle. There is a rebuttable presumption that
the new vehicle dealer did not know or could not have
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known that the vehicle would be exported if the
vehicle is titled an d registered in any state of the
United States, or
i. (1) notwithstanding the terms of a franchise
agreement or other agreement providing otherwise,
requires a new motor vehicle d ealer or new
powersports vehicle dealer to purchase or utilize
goods or services, or contract with any vendor,
identified, selected, or designated by the
factory for the:
(a) operation of the dealership, including
electronic services such as websites, data
management or storage systems, digital
retail platforms, software, or other digital
services or platforms, or
(b) construction, renovation, or improvement of
the new dealer’s facility from a vendor
chosen by the factory if goods or services
available from other sources a vendor that
the new motor vehicle dealer chooses are of
substantially similar quality and design and
comply with all applicable laws; provided,
however, that such g oods are not subject to
the factory’s intellectual property or
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trademark rights and the new vehicle dealer
has received the factory ’s approval, which
approval may not be unreasonably withheld.
Nothing in this subparagraph may be
construed to allow a new motor vehicle
dealer or new powersports vehicle dealer to
impair or eliminate a factory’s intellectual
property, trademark rights, or trade dress
usage guidelines. Nothing in this section
prohibits the enforcement of a voluntary
agreement between the facto ry and the new
vehicle dealer where separate and valuable
consideration has been offered and accepted
It is a violation of this division for a factory, or
any entity that operates on behalf of a factory, to
coerce a new motor vehicle dealer to purchase or
utilize certain goods or services by the withholding
of monetary incentives paid on a per vehicle basis and
vehicle allocation that the new motor vehicl e dealer
is otherwise eligible to receive, and
(2) for the purposes of this subparagraph, “goods and
services” do not include:
(a) moveable displays, brochures, or promotional
materials containing material subject to the
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intellectual property rights of a f actory or
parts to be used in repairs under warranty
obligations of a factory, or
(b) special tools or training required by the
factory to perform warranty or recall
related repairs;
10. Being a factory that:
a. establishes a system of motor vehicle alloc ation 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
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 system of ne w motor
vehicle or new powersports vehicle distribution. A
new motor vehicle dealer or new powersports vehicle
dealer franchise agreement shall continue in full
force and operation notwithstanding a change, in whole
or in part, of an established plan or system of
distribution of the motor vehicles or new powersports
vehicles offered or previously offered for sale under
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the franchise agreement. The appointment of a new
importer or distributor for motor vehicles or new
powersports vehicle offered for sale u nder the
franchise agreement shall be deemed to be a change of
an established plan or system of distribution. 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 powersports 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 previously so ld through another
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 t he new plan or
system of distribution unless the manufacturer or
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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 franchise for the line-make that includes
the new motor vehicle or new powersports vehi cle. 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
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 throu gh participating dealers subject to
the limitations provided in paragraph 2 of Section 562 of this
title;
12. a. Being a factory which directly or indirectly:
(1) owns any ownership interest or has any financial
interest in a new motor vehicle dealer or ne w
powersports vehicle dealer or any person who
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sells products or services pursuant to the terms
of the franchise agreement,
(2) operates or controls a new motor vehicle dealer
or new powersports vehicle dealer, or
(3) acts in the capacity of a new motor ve hicle
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
dealer development candidate can reasonably
expect to acquire full ownership of a new vehicle
dealer within a reasonable period o f 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
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from one independent dealer to another
independent dealer if the dealership is for sale
at a reasonable price and on reason able 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 w hich was in operation
prior to January 1, 2000.
(4) This paragraph does not p rohibit a factory from
owning, directly or indirectly, a minority
interest in an entity that owns, opera tes, 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
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trade exclusively in the line-make of that
manufacturer,
(b) all of the franchise agreements of the
manufacturer confer rights on the dealer of
the line-make to develop and operate, within
a defined geographic territory or area, as
many dealership facilities as the dealer and
manufacturer shall agree are appropriate,
(c) at the time the manufactu rer 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
the same line-make is not less than se venty
(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 motor vehicle
dealers or new powersports vehicle dealers
licensed by the Oklahoma New Mo tor Vehicle
Commission to do business within the state,
and
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(e) prior to January 1, 2000, the factory shall
have furnished or made available to
prospective new vehicle dealers an offering
circular in accordance with the Trade
Regulation Rule on Franchising of the
Federal Trade Commission, and any guidelines
and exemptions issued thereunder, which
disclose the possibility that the factory
may from time to time seek to own or
acquire, directly or indirectly, ownership
interests in retail dealerships;
13. Being a factory which directly or indirectly makes
available for public disclosure any proprietary information provided
to the factory by a new motor vehicle dealer or new powersport s
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 informat ion includes, but is not
limited to, information:
a. derived from monthly financial statements provided to
the factory, and
b. regarding any aspect of t he profitability of a
particular new motor vehicle dealer or new powersports
vehicle dealer;
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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 fac tory to disregard the preference of a
consumer in providing or directing a lead;
15. Being a factory wh ich used the consumer list of a new motor
vehicle dealer or new powersports 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 propose d new location satisfies
or meets the written reasonable guidelines of the
factory. Reasonable guidelines do not include
exclusivity or site control unless agreed to as set
forth in subparagraphs f and g of paragraph 9 of this
subsection,
b. the proposed new location is within the area of
responsibility of the new motor vehicle de aler 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 relocation request to
approve or deny the request. The failure to approve
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or deny the request within the sixty -day time frame
shall constitute approval of the request;
17. Being a factory whic h prohibits a new motor vehicle dealer
or new powersports vehicle dealer from adding additional line -makes
to its existing facility, if, after adding th e additional line-
makes, the facility satisfies the written reasonable capitalization
standards and facility guidelines of each factory. Reasonable
facility guidelines do not inc lude a requirement to maintain
exclusivity or site control unless agreed to b y 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 vehicles which the dealer had ordered for retail
consumers and notified the factory pr ior 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
submission to the fa ctory shall constitute evidence of each such
order, provided that the vehicle is in fact delivered to 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 caus ed by any of the following shall not
be subject to the provisions of this paragraph:
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a. the addition to a motor vehicle or powersports vehicle
of required or optional equipment pu rsuant 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 inc reased
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 m otor vehicle or powersports vehicle dealer
without consent of the dealer, whi ch consent shall not be
unreasonably withheld;
20. Being a factory that denies any new motor vehicle de aler or
new powersports vehicle dealer the right of free association with
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 contract, extended maintenance plan,
or similar product, such as gap products offered, endorsed, or
sponsored by the factory by the following means:
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a. by an act or statement from the factor y 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;
22. Being a factory that require s or coerces a new motor
vehicle dealer in this state to purchase or lease an y electric
vehicle charging stations at the new motor vehicle dealer ’s expense
unless the franchise agre ement, including any related addendums,
with the new motor vehicle dealer identifies electric vehicle models
among the vehicles available for sale under the dealer’s franchised
line-make, or the new motor vehicle dealer has notified the
manufacturer or distributor of the new motor vehicle dealer ’s
intention to begin selling and s ervicing electric vehicles
manufactured or distributed by that factory. If t he new motor
vehicle dealer’s franchise identifies electric vehicle models or the
dealer is actually off ering for sale to the public or providing
warranty service on electric vehicles manufactured or distributed by
that factory, the new motor vehicle deale r may not be required to
purchase or lease, at the new motor vehicle dealer ’s expense:
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a. more than the number and type of electric vehicle
charging stations based upon the reason able estimate
by the new motor vehicle dealer of the sales and
service volume, or
b. to make electric vehicle charging stations located at
the new motor vehicle dealership available for use by
the general public. Nothing in this paragraph shall
prohibit a factory from offering financial assistance
through a lump-sum payment to new motor vehicle
dealers that purchase or install electric charging
stations; and
23. Being a factory that withdraws all or a material part of
its stated electric vehicle distribut ion plan and fails or refuses,
at the written request of the new motor vehicl e dealer, to accept
the return or otherwise fully reimburse a new motor vehicle dealer
for the cost of parts, tools, equipment, chargers, and other
returnable items required as a part of that distribution plan,
program, policy, or other initiative related to the sale or service
of electric motor vehicles; provided, that:
a. the dealer demonstrates that the volume of electric
motor vehicles sales or service is no longer adequate
to allow the dealer to realize a positive return on
the investment over the usef ul life of the parts,
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tools, equipment, chargers, or other returnable items,
and
b. the dealer submits i ts request to the manufacturer or
distributor in writing and within twenty -four (24)
months of the dealer ’s receipt of the part s, tools,
equipment, chargers, or other returnable items .
B. Notwithstanding the terms of any franchise agreement, in the
event of a proposed sale or transfer of a dealership, the
manufacturer or distrib utor shall be permitted to exercise a right
of first refusal to acquire the a ssets or ownership interest of the
dealer 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, on ly if all the following
requirements are met:
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 rece ive in connection with
the proposed change of ownership or transfer;
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3. The proposed sale or transfer of the dealership does not
involve the transfer or sale to a member or membe rs 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, including
attorney fees which do not exceed the usual, customary, and
reasonable fees charged for similar work done for other clients
incurred by the proposed new owner and transferee prior to the
exercise by the factory of its right of first refusal in negotiating
and implementing the contract for the proposed sale or transfer of
the dealership or dealership assets. Notwithstanding the forego ing,
no payment of expenses and attorney fees shall be required if the
proposed new dealer or transferee has not submitted or caused to be
submitted an accounting of those expenses within thirty (30) days of
receipt of the written request of the factory fo r such an
accounting. The accounting may be requested by a factory before
exercising its right of first refusal.
C. Nothing in this section shall prohibit, limit, restrict, or
impose conditions on:
1. Business activities, including without limitation th e
dealings with motor vehicle manufacturers and the representatives
and affiliates of motor vehicle manu facturers, of any person that is
primarily engaged in the business of short -term, not to exceed
twelve (12) months, rental of motor vehicles and industr ial and
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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 vehicles or
powersports vehicles that have been previously used
exclusively and regularly by that person in the
conduct of business and used motor vehicles 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 powerspor ts vehicles are limited to those
vehicles that the person owns, previously owned, or
takes in trade, and
c. motor vehicle or powersports vehicle financing
provided by that person to retail consumers for motor
vehicles or powersports vehicles is limited to used
vehicles sold by that person in the conduct of
business; or
2. The direct or indirect ownership, a ffiliation, or control of
a person described in paragraph 1 of this subsection.
D. As used in this section:
1. “Substantially relates ” means the nature of criminal conduct
for which the person was convicted has a direct bearing on the
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fitness or ability to perform one or more of the duties or
responsibilities necessarily relate d to the occupation; and
2. “Poses a reasonable threat ” means the nature of criminal
conduct for which the person was convicted involved an act or threat
of harm against another an d 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 manufa cturer or
distributor from requiring a dealer to be in compliance with the
franchise agreement and authorized to sell a make and model based on
applicable reasonable standards and requirements that include but
are not limited to any facility, technology, o r 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 5. This act shall become effect ive November 1, 2025.
60-1-1702 CN 3/6/2025 12:14:31 PM