South Carolina General Assembly
117th Session, 2007-2008

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H. 4525

STATUS INFORMATION

General Bill
Sponsors: Rep. Branham
Document Path: l:\council\bills\swb\5360cm08.doc

Introduced in the House on January 22, 2008
Currently residing in the House Committee on Labor, Commerce and Industry

Summary: Motor vehicle dealers

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
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   1/22/2008  House   Introduced and read first time HJ-6
   1/22/2008  House   Referred to Committee on Labor, Commerce and Industry 
                        HJ-6

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

1/22/2008

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND SECTION 56-15-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ACTS THAT ARE DEEMED TO BE UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS OR PRACTICES AMONG MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS, AND DEALERS, SO AS TO PROVIDE THAT TO USE OR CONSIDER THE PERFORMANCE OF CERTAIN FRANCHISED NEW MOTOR VEHICLE DEALERS RELATING TO THE SALE OF A MANUFACTURER'S NEW MOTOR VEHICLE OR THE ABILITY TO SATISFY ITS MINIMUM SALES OR MARKET SHARE QUOTAS OR RESPONSIBILITIES IS A VIOLATION OF THIS PROVISION WHEN THEY ARE USED TO DETERMINE A DEALER'S ELIGIBILITY TO PURCHASE CERTAIN MOTOR VEHICLES FROM THE MANUFACTURER, OR THE AVAILABILITY OR AMOUNT OF ANY DISCOUNT, CREDIT, REBATE OR SALES INCENTIVE THE DEALER IS ELIGIBLE TO RECEIVE FROM THE MANUFACTURER FOR THE PURCHASE OF A PROGRAM, CERTIFIED, OR OTHER USED MOTOR VEHICLE OFFERED FOR SALE BY THE MANUFACTURER, AND TO PROVIDE THAT IT IS A VIOLATION OF THIS PROVISION FOR A MOTOR VEHICLE MANUFACTURER, DISTRIBUTOR, OR DEALER TO DISCRIMINATE AGAINST CERTAIN MOTOR VEHICLE DEALERS, OR USE A FINANCIAL SERVICES COMPANY, OR LEASING COMPANY OWNED OR CONTROLLED BY A MANUFACTURER OR DISTRIBUTOR ENGAGED IN ILLEGAL ACTIVITY.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 56-15-40(3) of the 1976 Code is amended to read:

"(3)    It shall be deemed a violation of paragraph (a) of Section 56-15-30 for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent or other representative thereof:

(a)    To refuse to deliver in reasonable quantities and within a reasonable time after receipt of dealer's order, to any motor vehicle dealer having a franchise or contractual arrangement for the retail sale of new motor vehicles sold or distributed by such manufacturer, distributor branch or division, factory branch or division or wholesale branch or division, any such motor vehicles as are covered by such franchise or contract specifically publicly advertised by such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to be available for immediate delivery; provided, however, the failure to deliver any motor vehicle shall not be considered a violation of this chapter if such failure be due to an act of God, work stoppage or delay due to a strike or labor difficulty, shortage of materials, freight embargo or other cause over which the manufacturer, distributor, or wholesaler, or any agent thereof, shall have no control.

(b)    To coerce, or attempt to coerce, any motor vehicle dealer to enter into any agreement with such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent or other representative thereof, or to do any other act prejudicial to such dealer by threatening to cancel any franchise or any contractual agreement existing between such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, and such dealer; provided, however, that notice in good faith to any motor vehicle dealer of such dealer's violation of any terms or provisions of such franchise or contractual agreement shall not constitute a violation of this chapter.

(c)    To terminate or cancel the franchise or selling agreement of any such dealer without due cause. The nonrenewal of a franchise or selling agreement, without due cause, shall constitute an unfair termination or cancellation, regardless of the terms or provisions of such franchise or selling agreement. Such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent or other representatives thereof shall notify a motor vehicle dealer in writing of the termination or cancellation of the franchise or selling agreement of such dealer at least sixty days before the effective date thereof, stating the specific grounds for such termination or cancellation; and such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent or other representative thereof shall notify a motor vehicle dealer in writing at least sixty days before the contractual term of his franchise or selling agreement expires that the same will not be renewed, stating the specific grounds for such nonrenewal in those cases where there is no intention to renew, and in no event shall the contractual term of any such franchise or selling agreement expire, without the written consent of the motor vehicle dealer involved, prior to the expiration of at least sixty days following such written notice. During the sixty-day period, either party may in appropriate circumstances petition a court to modify such sixty-day stay or to extend it pending a final determination of such proceedings on the merits. The court shall have authority to grant preliminary and final injunctive relief.

(d)    To resort to or use any false or misleading advertisement in connection with his business as such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent or other representative thereof.

(e)    To offer to sell or to sell any new motor vehicle to any motor vehicle dealer at a lower actual price therefor than the actual price offered to any other motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price; provided, however, the provisions of this paragraph shall not apply to sales to a motor vehicle dealer for resale to any unit of the United States Government, the State or any of its political subdivisions; and provided, further, the provisions of this paragraph shall not apply to sales to a motor vehicle dealer of any motor vehicle ultimately sold, donated or used by such dealer in a driver education program; and provided, further, that the provisions of this paragraph shall not apply so long as a manufacturer, distributor, or wholesaler, or any agent thereof, offers to sell or sells new motor vehicles to all motor vehicle dealers at an equal price. This provision shall not apply to sales by manufacturer, distributor, or wholesaler to the United States Government or any agency thereof.

(f)    To wilfully discriminate, either directly or indirectly, in price between different purchasers of a commodity of like grade or quality where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly or to injure or destroy the business of a competitor.

(g)    To offer to sell or to sell parts or accessories to any new motor vehicle dealer for use in his own business for the purpose of repairing or replacing the same on a comparable part or accessory, at a lower actual price therefor than the actual price charged to any other new motor vehicle dealer for similar parts or accessories for use in his own business; provided, however, in those cases where motor vehicle dealers operate and serve as wholesalers of parts and accessories to retail outlets or other dealers, whether or not such dealer is regularly designated as a wholesaler, nothing herein contained shall be construed to prevent a manufacturer, distributor, or wholesaler, or any agent thereof, from selling to such motor vehicle dealer who operates and services as a wholesaler of parts and accessories, such parts and accessories as may be ordered by such motor vehicle dealer for resale to retail outlets, at a lower actual price than the actual price charged a motor vehicle dealer who does not operate or serve as a wholesaler of parts and accessories.

(h)    To prevent or attempt to prevent by contract or otherwise, any motor vehicle dealer from changing the capital structure of his dealership or the means by or through which he finances the operation of his dealership, provided the dealer at all times meets any reasonable capital standards agreed to between the dealership and the manufacturer, distributor or wholesaler, and provided such change by the dealer does not result in a change in the executive management of the dealership.

(i)        To prevent or attempt to prevent by contract or otherwise, any motor vehicle dealer or any officer, partner or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person or persons or party or parties; provided, however, that no dealer, officer, partner or stockholder shall have the right to sell, transfer or assign the franchise or power of management or control thereunder without the consent of the manufacturer, distributor or wholesaler except that such consent shall not be unreasonably withheld.

(j)        To obtain money, goods, services, anything of value, or any other benefit from any other person with whom the motor vehicle dealer does business, on account of or in relation to the transactions between the dealer and such other person, unless such benefit is promptly accounted for and transmitted to the motor vehicle dealer.

(k)    To require a motor vehicle dealer to assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by this chapter.

(l)        Notwithstanding the terms, provisions, or conditions of any agreement or franchise, to use or consider the performance of any of its franchised new motor vehicle dealers located in this State relating to the sale of the manufacturer's new motor vehicles or ability to satisfy any minimum sales or market share quota or responsibility relating to the sale of the manufacturer's new motor vehicles in determining the:

( i)    dealer's eligibility to purchase program, certified, or other used motor vehicles from the manufacturer;

(ii)    volume, type, or model of program, certified, or other used motor vehicles the dealer is eligible to purchase from the manufacturer;

(iii)    price or prices of any program, certified, or other used motor vehicles that the dealer is eligible to purchase from the manufacturer; or

(iv)    availability or amount of any discount, credit, rebate, or sales incentive the dealer shall be eligible to receive from the manufacturer for the purchase of any program, certified, or other used motor vehicles offered for sale by the manufacturer.

(m)    Notwithstanding the terms of any contract, franchise, novation, or agreement, to:

( i)    discriminate against any similarly situated franchised new motor vehicle dealers in this State;

(ii)    unfairly discriminate against franchised new motor vehicle dealers located in this State who have dual facilities at which the vehicles distributed by the manufacturer, factory branch, distributor, or distributor branch are sold or serviced with one or more other line makes of vehicles;

(iii)    unfairly discriminate against one of its franchised new motor vehicle dealers in this State with respect to any aspect of the franchise agreement; or

(iv)    use any financial services company or leasing company owned or controlled by the manufacturer or distributor to accomplish what would otherwise be illegal conduct on the part of the manufacturer or distributor pursuant to this section. This section shall not limit the right of the financial services or leasing company to engage in business practices in accordance with the trade."

SECTION    2.    This act takes effect upon approval by the Governor.

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