This year the Florida Legislature witnessed a huge turnover in the 160 citizen legislator seats with a 40% turnover in the Florida House and 48% turnover in the Florida Senate following the 2016 election cycle.
Thanks to you, CAR-PAC provided over $300,000 to those running for office in our state legislature and to the leadership that determines the course our bills will take through the process. In addition, dealers acted independently by funding many hundreds of thousands of dollars for their local candidates.
There were 3,052 bills and resolutions introduced during this 60 day Session and only 249 bills passed and were presented to the Governor! Two of the 249 bills passed this Session were our FADA/AutoNation recall bill and the Braman Management bill adding two franchise provisions.
In addition to passing bills, FADA worked to kill bills that would have mandated disclosures relative to the use of non-OEM parts and manufacturer’s warranties, requirements that dealers certify insurance coverage at the point of sale, and verify valid driver’s licenses before a sale.
Our most sincere thanks to Legislative Chairman Ted Serbousek, Past Chairman Jonathan Chariff, and our current FADA Chairman Tom O’Steen for their daily guidance and direction on our entire legislative agenda.
Our success depends not only on strong leaders, but the faithful support of our members who contributed to CAR-PAC. A list of those contributors can be seen here.
Lastly, our Mike Maher Dealer Day on the Hill brought our members into the Capitol and that personal touch is always a huge factor in our ability to accomplish our goals, photos of the Day can be seen here.
Franchise Legislation sponsored by Braman Management and endorsed by FADA (Effective 6/27/2017)
- HB 1175/SB 1678 – Relating to Motor Vehicle Manufacturers and Dealers
- Sponsored by: Representative Manny Diaz (R- Hialeah Gardens) & Senator Rene Garcia (R- Hialeah)
The Bill creates two new provisions of law (click here to see bill language):
Facility programs (sales and service facilities)
Dealers that undertake a facility action (modification, renovation, new facility, etc.), including new signage, that is in compliance with a manufacturer’s bonus or incentive program will be considered to comply with that program and any future program adopted by the manufacturer for 10 years after the date the facility action was completed. This means that a dealer will qualify for any increase in bonus or incentive monies under a new facility related bonus or incentive program offered by the manufacturer for a period of 10 years after construction.
This new law applies to any manufacturer program, standard or policy that offers a bonus, incentive, rebate or other benefit to a dealer
The new law applies when a dealer has completed any of the following facility actions that bring the dealer into compliance with a factory’s existing incentive or benefit program:
- New construction or remodeling, improvement, renovation, expansion, replacement, or other alteration
- Including installation of signs or other image elements
Any dealer who completes such a facility action that brings the dealer into compliance with an existing incentive or bonus program is deemed to be in full compliance with all subsequently adopted factory incentive or bonus programs relating to that facility for 10 years after completion. Such that, if a new program is implemented by the factory during the 10 year period, the dealer is entitled to collect the higher of the incentives or benefits paid under the program in place when the facility was completed or the incentives or benefits paid under the newer program, and the dealer need not make any new modifications or renovations to its facility in order to collect.
Sales Performance Metrics:
The new law prohibits a factory from imposing on a dealer a standard for sales or service performance which:
- is unfair, unreasonable, arbitrary or inequitable
- fails to consider relevant local and regional data and facts such as dealerships of comparable size in comparable markets
- if based on a survey fails to rely on statistically significant and valid random samples
Dealers subjected to a performance standard may request in writing how the standard was designed, calculated, established and uniformly applied.
Congratulations to David Liebowitz, General Counsel, Braman Automotive.
FADA/AutoNation sponsored legislation on Auto Recalls on Used Vehicles (Effective 7/1/2017)
- HB 775/SB 466 – Relating to Motor Vehicle Warranty Repairs and Recall Repairs
- Sponsored by: Representative Manny Diaz (R- Hialeah Gardens) & Senator Travis Hutson (R-Palm Coast)
The Bill creates two new provisions of law (click here to see bill language):
Reimbursement for Used Vehicles Subject to Open Recalls:
Federal law provides that a manufacturer must reimburse dealers for new vehicles that have open recalls that cannot be repaired.
Federal law prohibits the sale of a new vehicle with an open safety recall. Once you receive a new vehicle and a stop sale is issued by your manufacturer, the factory either has to repurchase the vehicle or reimburse you for the time you held back the vehicle from sale.
Your factory must reimburse you for labor and parts under our Florida warranty reimbursement law for installing the replacement part.
Your factory must also reimburse you at 1% per month of the manufacturer’s selling price (NADA says this means invoice price), for the time you held the vehicle from the date of the recall notice until they either repurchase the vehicle or you receive and install the new parts.
If your factory fails to properly reimburse you for the work performed and/or the reimbursement for the time you held back the vehicle, you can bring an action in a US district Court to recover damages, court costs and reasonable attorney fees under 49 U.S. Code § 30116.
The federal statute follows:
STOP SALES ON NEW VEHICLES
Per NADA, one could argue about what “selling price” means and our association has defaulted to what the dealer is invoiced.
49 U.S. Code § 30116 – Defects and noncompliance found before sale to purchaser
(a) Actions Required of Manufacturers and Distributors.—
If, after a manufacturer or distributor sells a motor vehicle or motor vehicle equipment to a distributor or dealer and before the distributor or dealer sells the vehicle or equipment, it is decided that the vehicle or equipment contains a defect related to motor vehicle safety or does not comply with applicable motor vehicle safety standards prescribed under this chapter—
(1)the manufacturer or distributor immediately shall repurchase the vehicle or equipment at the price paid by the distributor or dealer, plus transportation charges and reasonable reimbursement of at least one percent a month of the price paid prorated from the date of notice of noncompliance or defect to the date of repurchase; or
(2) if a vehicle, the manufacturer or distributor immediately shall give to the distributor or dealer at the manufacturer’s or distributor’s own expense, the part or equipment needed to make the vehicle comply with the standards or correct the defect.
(b) Distributor or Dealer Installation
The distributor or dealer shall install the part or equipment referred to in subsection (a)(2) of this section. If the distributor or dealer installs the part or equipment with reasonable diligence after it is received, the manufacturer shall reimburse the distributor or dealer for the reasonable value of the installation and a reasonable reimbursement of at least one percent a month of the manufacturer’s or distributor’s selling price prorated from the date of notice of noncompliance or defect to the date the motor vehicle complies with applicable motor vehicle safety standards prescribed under this chapter or the defect is corrected.
(c) Establishing Amount Due and Civil Actions.—
The parties shall establish the value of installation and the amount of reimbursement under this section. If the parties do not agree, or if a manufacturer or distributor refuses to comply with subsection (a) or (b) of this section, the distributor or dealer purchasing the motor vehicle or motor vehicle equipment may bring a civil action. The action may be brought in a United States district court for the judicial district in which the manufacturer or distributor resides, is found, or has an agent, to recover damages, court costs, and a reasonable attorney’s fee. An action under this section must be brought not later than 3 years after the claim accrues.
This year FADA and AutoNation joined together to ensure that manufacturers cover the costs associated with used vehicle recalls. Special thanks to Coleman Edmunds at AutoNation for his drafting assistance and leadership and to his lobbying team, Kelly Mallette and Ron Book of Ron Book, PA.
The new law entitles dealers to collect reimbursement, for your line-make used vehicles only, that are under an open recall and parts are not available for at least 30 days.
You can collect for July, 2017 and subsequent months, as long as you had the vehicle in your inventory, an open recall exists and no parts have been available for at least 30 days.
The bill applies to used vehicles in your line-make that you take in from customer trades or in off-lease programs only. For instance, Ford dealers who have used Ford vehicles in their inventory or acquire Ford vehicles in customer trades or off-lease programs.
- 1.5% per month of average Black Book on recalls for which parts or repairs are not available, unless a national factory program pays more
- Payment begins on 31st day after recall notice or 31st day after vehicle enters inventory, whichever is later
In order to collect you will need to develop a submission which includes:
- Vehicle make, model, year, mileage, and VIN
- Date of the specific recall applicable to that used vehicle
- Date you acquired the vehicle – to determine the length of time for your reimbursement
- Date you sold this vehicle or the date you received the part or remedy from the manufacturer (unless that has not occurred as of the date of submission)
Manufacturers’ are required to make payments to you within 30 days of submission. A manufacturer may reimburse you under its national program as long as the compensation is equal to or greater than what this law prescribes.
This law applies to all recalls on your line-make used vehicles unless a manufacturer issues a written statement to dealers that vehicles are okay to sell prior to recall repair.
There is no federal law or state law that prevents you from selling used vehicles under open recalls. FADA recommends that you consult with your lawyer and consider using proper disclosures to your customers prior to the sale. FADA and Reynolds have produced two disclosure forms for dealers to use in connection with vehicles subject to an open recall, on for sales and one for service. Contact your Reynolds representative or Reynolds Regional Sales Director, Benoit Gadbois at (321) 297-8034 or email: Benoit_gadbois@reyrey.com for these disclosure forms. Please follow any specific directives from your manufacturers relative to their specific recall notices and your sales of said vehicles.
Because many manufacturers prohibit what they call “selling warranty service” and some have prohibited advertising for recall repairs, the new law prohibits a factory from denying your claim, reducing the amount of compensation or processing a charge-back when:
- You conduct a warranty or recall repair during the course of a separate repair requested by the customer
- You notify your customer of the need for a recall repair after a recall notice is issued
Legislation regarding service agreement companies (Effective July 1, 2017)
- HB 339 / SB 794 – Relating to Motor Vehicle Service Agreement Companies
- Sponsored by Representative Frank White (R-Pensacola) / Senator Jeff Brandes (R-St. Petersburg)
This legislation was introduced by the Florida Vehicle Protection Products Association seemingly to allow other types of companies to enter the retail space selling vehicle service contracts. The legislation allows risk retention groups to enter with a $15 million surplus as their reserve requirement. It also adds to the list of those who can cancel a service agreement – lenders, finance companies and creditors.
LEGISLATIVE INITIATIVES THAT DID NOT PASS THIS SESSION
Auto Tech/Service Advisor Funding – Legislature approved FADA request for $200,000 – Governor Scott vetoed it!
HB 2235 – Relating to Creating Careers for Non-College Bound Floridians; Sponsor: Rep. Manny Diaz
FADA is constantly working to develop new auto techs for your stores. For over 20 years our AYES (Automotive Youth Education Services) program has led the nation in the training of automotive instructors in our 130 automotive programs that operate in high schools, career academies and technical colleges. Through a contract with the Department of Education we serve the needs of our own 25 AYES Certified Schools:
Atlantic Technical Center – Coconut Creek
Bowers/Whitley Career Center – Tampa
Charlotte Technical Center – Port Charlotte
Choice High School – Ft. Walton Beach
Frank H. Peterson Academies – Jacksonville
Ft. Myers Technical Institute – Ft. Myers
Ft. Pierce Central H. S. – Ft. Pierce
Kathleen H. S. – Lakeland
Lorenzo Walker Institute of Technology – Naples
Marchman Technical College
Miami Lakes Educational Center – Miami
Miami Northwestern H. S. – Miami
Mid Florida Tech – Orlando
Pinellas Technical College – Clearwater
Port St. Lucie H. S. – Port St. Lucie
Professional & Technical H. S. – Kissimmee
Robert Morgan Educational Center – Miami
Sarasota County Technical Institute – Sarasota
Sebastian River H. S.
Sheridan Technical College – Hollywood
Titusville High School – Titusville
Traviss Career Center – Lakeland
Vero Beach H. S.
FADA helps to launch new schools, works with instructors and faculty at all 25 schools, we help get the other 105 schools certified and we have created our own FADA certification program for students so that the programs are appropriately credentialed and the students’ knowledge base is properly tested.
This year our Director, Randy Houck, is trying to launch a new program to create future service advisors for your stores.
We approached the legislature and successfully pushed through a legislative budget appropriation of $200,000 to help us grow our programs for auto techs and launch this new endeavor in all 67 counties.
After passing the House and the Senate our appropriation was vetoed by Governor Scott.
We are extremely disappointed and plan to discuss this veto with his office as soon as possible. We provided his team with detailed information on the program and so we did not expect this result from our jobs Governor.
Florida leaves its historical trend of price reductions
- On April 28, 2016, in Castellanos v. Next Door Company, the Florida Supreme Court threw out the current attorney fee structure that had led to lower rates.
- On June 9, 2016, in Westphal v. City of St. Petersburg, the Florida Supreme Court threw out the two-year period for temporary total disability benefits.
Due to the Florida Supreme Court decisions that declared these portions of Florida’s workers’ comp system unconstitutional, the Office of Insurance Regulation approved a first year 14.5 percent rate increase, effective December 1, 2016 for new and renewal policies. The result is a $1.5 billion increase in workers’ compensation rates for Florida’s job creators.
Florida’s business community tried and failed to pass a legislative fix in the 2017 Legislative Session.
FADA joined the Florida Chamber with a resolution of support focusing on bringing stability to the system, reining in runaway costs that only benefit trial lawyers – not injured workers – and ensuring our employees are able to get the high quality care they need to get back to work as soon as possible.
FADA members should get busy right now talking to your local legislators and arranging meetings of fellow local business groups and your legislators during the summer and early fall. There will be another attempt at reforming the system but without a strong push from you nothing will happen next year either! This is the time and the issue to make your voice heard!
2017 LEGISLATIVE SESSION – FADA DEFENSE
We play offense and defense – FADA defeated these issues in the 2017 Session
Attempts to require dealers to:
- Electronically verify insurance coverage on all purchasers at point of sale
- Electronically verify the validity of the driver’s license before consummation
- Get a written disclosure when you hand a customer the warranty booklet and explain how warranties work vis-a-vis non-OEM aftermarket parts
- Be responsible under Florida’s Deceptive and Unfair Trade Practices Act for installing unsafe tires on any car
Special thanks to John Forehand and Alex Kurkin of Kurkin Forehand Brandes for providing special counsel and legislative drafting.
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