1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 593 By: Thompson (Roger)
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6 AS INTRODUCED
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7 An Act relating to motor vehicle dealers and
7 manufacturers; amending 47 O.S. 2021, Section 565, as
8 amended by Section 3, Chapter 192, O.S.L. 2022 (47
8 O.S. Supp. 2022, Section 565), which relates to
9 application, denial, revocation, or suspension of
9 licenses and penalties; prohibiting denial or
10 chargeback of certain claim for failure of purchasers
10 to comply with title and registration laws;
11 clarifying statutory language; and providing an
11 effective date.
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14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15 SECTION 1. AMENDATORY 47 O.S. 2021, Section 565, as
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16 amended by Section 3, Chapter 192, O.S.L. 2022 (47 O.S. Supp. 2022,
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17 Section 565), is amended to read as follows:
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18 Section 565. A. The Oklahoma Motor Vehicle Commission may deny
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19 an application for a license, or revoke or suspend a license or
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20 impose a fine not to exceed Ten Thousand Dollars ($10,000.00)
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21 against a manufacturer or distributor or a fine not to exceed One
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22 Thousand Dollars ($1,000.00) against a dealer per occurrence that
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23 any provision of Sections 561 through 567, 572, 578.1, 579, and
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24 579.1 of this title is violated or for any of the following reasons:
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 1 1. On satisfactory proof of unfitness of the applicant in any
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2 application for any license under the provisions of Section 561 et
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3 seq. of this title;
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4 2. For any material misstatement made by an applicant in any
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5 application for any license under the provisions of Section 561 et
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6 seq. of this title;
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7 3. For any failure to comply with any provision of Section 561
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8 et seq. of this title or any rule promulgated by the Commission
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9 under authority vested in it by Section 561 et seq. of this title;
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10 4. A change of condition after license is granted resulting in
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11 failure to maintain the qualifications for license;
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12 5. Being a new motor vehicle dealer who:
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13 a. has required a purchaser of a new motor vehicle, as a
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14 condition of sale and delivery thereof, to also
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15 purchase special features, appliances, accessories, or
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16 equipment not desired or requested by the purchaser
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17 and installed by the dealer,
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18 b. uses any false or misleading advertising in connection
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19 with business as a new motor vehicle dealer,
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20 c. has committed any unlawful act which resulted in the
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21 revocation of any similar license in another state,
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22 d. has failed or refused to perform any written agreement
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23 with any retail buyer involving the sale of a motor
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24 vehicle,
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 1 e. has been convicted of a felony crime that
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2 substantially relates to the occupation of a motor
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3 vehicle dealer and poses a reasonable threat to public
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4 safety,
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5 f. has committed a fraudulent act in selling, purchasing,
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6 or otherwise dealing in new motor vehicles or has
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7 misrepresented the terms and conditions of a sale,
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8 purchase, or contract for sale or purchase of a new
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9 motor vehicle or any interest therein including an
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10 option to purchase such vehicle,
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11 g. has failed to meet or maintain the conditions and
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12 requirements necessary to qualify for the issuance of
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13 a license, or
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14 h. completes any sale or transaction of an extended
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15 service contract, extended maintenance plan, or
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16 similar product using contract forms that do not
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17 conspicuously disclose the identity of the service
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18 contract provider;
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19 6. Being a new motor vehicle salesperson who is not employed as
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20 such by a licensed new motor vehicle dealer;
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21 7. Being a new motor vehicle dealer who:
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22 a. does not have an established place of business,
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23 b. does not provide for a suitable repair shop separate
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24 from the display room with ample space to repair or
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 1 recondition one or more vehicles at the same time, and
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2 which is equipped with such parts, tools, and
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3 equipment as may be requisite for the servicing of
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4 motor vehicles in such a manner as to make them comply
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5 with the safety laws of this state and to properly
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6 fulfill the dealer’s or manufacturer’s warranty
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7 obligation,
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8 c. does not hold a franchise in effect with a
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9 manufacturer or distributor of new or unused motor
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10 vehicles for the sale of the same and is not
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11 authorized by the manufacturer or distributor to
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12 render predelivery preparation of such vehicles sold
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13 to purchasers and to perform any authorized post-sale
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14 work pursuant to the manufacturer’s or distributor’s
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15 warranty,
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16 d. employs a person without obtaining a certificate of
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17 registration for the person, or utilizes the services
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18 of used motor vehicle lots or dealers or other
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19 unlicensed persons in connection with the sale of new
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20 motor vehicles,
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21 e. does not properly service a new motor vehicle before
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22 delivery of same to the original purchaser thereof, or
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23 f. fails to order and stock a reasonable number of new
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24 motor vehicles necessary to meet customer demand for
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 1 each of the new motor vehicles included in the new
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2 motor vehicle dealer’s franchise agreement, unless the
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3 new motor vehicles are not readily available from the
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4 manufacturer or distributor due to limited production;
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5 8. Being a factory that has:
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6 a. either induced or attempted to induce by means of
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7 coercion or intimidation, any new motor vehicle
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8 dealer:
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9 (1) to accept delivery of any motor vehicle or
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10 vehicles, parts, or accessories therefor, or any
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11 other commodities including advertising material
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12 which shall not have been ordered by the new
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13 motor vehicle dealer,
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14 (2) to order or accept delivery of any motor vehicle
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15 with special features, appliances, accessories,
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16 or equipment not included in the list price of
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17 the motor vehicles as publicly advertised by the
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18 manufacturer thereof, or
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19 (3) to order or accept delivery of any parts,
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20 accessories, equipment, machinery, tools,
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21 appliances, or any commodity whatsoever, or
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22 b. induced under threat or discrimination by the
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23 withholding from delivery to a motor vehicle dealer
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24 certain models of motor vehicles, changing or amending
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 1 unilaterally the dealer’s allotment of motor vehicles,
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2 and/or withholding and delaying delivery of such
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3 vehicles out of the ordinary course of business, in
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4 order to induce by such coercion any such dealer to
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5 participate or contribute to any local or national
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6 advertising fund controlled directly or indirectly by
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7 the factory or for any other purposes such as contest,
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8 “give-aways” or other so-called sales promotional
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9 devices, and/or change of quotas in any sales contest;
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10 or has required motor vehicle dealers, as a condition
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11 to receiving their vehicle allotment, to order a
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12 certain percentage of the vehicles with optional
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13 equipment not specified by the new motor vehicle
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14 dealer; however, nothing in this section shall
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15 prohibit a factory from supporting an advertising
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16 association which is open to all dealers on the same
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17 basis;
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18 9. Being a factory that:
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19 a. has attempted to coerce or has coerced any new motor
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20 vehicle dealer to enter into any agreement or to
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21 cancel any agreement, or fails to act in good faith
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22 and in a fair, equitable and nondiscriminatory manner;
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23 or has directly or indirectly coerced, intimidated,
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24 threatened, or restrained any motor vehicle dealer; or
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 1 has acted dishonestly, or has failed to act in
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2 accordance with the reasonable standards of fair
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3 dealing,
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4 b. has failed to compensate its dealers for the work and
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5 services they are required to perform in connection
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6 with the dealer’s delivery and preparation obligations
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7 according to the agreements on file with the
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8 Commission which must be found by the Commission to be
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9 reasonable, or fail to adequately and fairly
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10 compensate its dealers for labor, parts, and other
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11 expenses incurred by such dealer to perform under and
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12 comply with manufacturer’s warranty agreements.
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13 Adequate and fair compensation for parts shall be
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14 established by the dealer submitting to the
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15 manufacturer or distributor one hundred sequential
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16 nonwarranty customer-paid service repair orders which
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17 contain warranty-like parts, or ninety (90)
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18 consecutive days of nonwarranty customer-paid service
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19 repair orders which contain warranty-like parts,
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20 whichever is less, covering repairs made no more than
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21 one hundred eighty (180) days before the submission
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22 and declaring the average percentage markup. Adequate
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23 and fair compensation for labor shall be established
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24 by the dealer submitting to the manufacturer or
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 1 distributor one hundred sequential customer-paid
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2 service repair orders which contain labor charges, or
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3 ninety (90) consecutive days of customer-paid service
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4 repair orders which contain labor charges, whichever
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5 is less. When submitting repair orders to calculate a
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6 labor rate, a dealer need not include repair orders
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7 for routine maintenance. A manufacturer or
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8 distributor may, not later than thirty (30) days after
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9 submission, rebut that declared rate in writing by
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10 reasonably substantiating that the rate is inaccurate
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11 or unreasonable in light of the practices of all other
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12 franchised motor vehicle dealers in an economically
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13 similar part of the state offering the same line-make
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14 vehicles. The retail rate shall go into effect thirty
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15 (30) days following the approval by the manufacturer,
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16 subject to audit of the submitted repair orders by the
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17 franchisor and a rebuttal of the declared rate as
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18 described above. If the declared rate is rebutted,
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19 the manufacturer or distributor shall propose an
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20 adjustment in writing of the average percentage markup
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21 based on that rebuttal not later than thirty (30) days
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22 after submission. If the dealer does not agree with
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23 the proposed average percentage markup, the dealer may
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24 file a protest with the Commission not later than
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 1 thirty (30) days after receipt of that proposal by the
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2 manufacturer or distributor. In the event a protest
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3 is filed, the manufacturer or distributor shall have
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4 the burden of proof to establish the new motor vehicle
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5 dealer’s submitted rate was inaccurate or unreasonable
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6 in light of the practices of all other franchised
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7 motor vehicle dealers in an economically similar part
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8 of the state. A manufacturer or distributor may not
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9 retaliate against any new motor vehicle dealer seeking
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10 to exercise its rights under this provision. A
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11 manufacturer or distributor may require a dealer to
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12 submit repair orders in accordance with this section
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13 in order to validate a dealer’s retail rate for parts
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14 or labor not more often than once every twelve (12)
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15 months. All claims made by dealers for compensation
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16 for delivery, preparation and warranty work shall be
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17 paid within thirty (30) days after approval and shall
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18 be approved or disapproved within thirty (30) days
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19 after receipt. When any claim is disapproved, the
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20 dealer shall be notified in writing of the grounds for
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21 disapproval. The dealer’s delivery, preparation and
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22 warranty obligations as filed with the Commission
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23 shall constitute the dealer’s sole responsibility for
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24 product liability as between the dealer and
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 1 manufacturer. A factory may reasonably and
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2 periodically audit a new motor vehicle dealer to
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3 determine the validity of paid claims for dealer
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4 compensation or any charge-backs chargebacks for
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5 warranty parts or service compensation. Except in
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6 cases of suspected fraud, audits of warranty payments
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7 shall only be for the one-year period immediately
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8 following the date of the payment. A manufacturer
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9 shall reserve the right to reasonable, periodic audits
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10 to determine the validity of paid claims for dealer
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11 compensation or any charge-backs chargebacks for
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12 consumer or dealer incentives. Except in cases of
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13 suspected fraud, audits of incentive payments shall
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14 only be for a one-year period immediately following
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15 the date of the payment. A factory shall not deny a
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16 claim or charge a new motor vehicle dealer back
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17 subsequent to the payment of the