MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Transportation

By: Representative Simpson

AN ACT TO AMEND THE PROVISIONS OF THE MISSISSIPPI MOTOR VEHICLE COMMISSION LAW; TO CREATE NEW SECTION 63-17-109, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT IN THE EVENT OF THE PROPOSED SALE OR TRANSFER OF A MOTOR VEHICLE DEALERSHIP AND THE FRANCHISE AGREEMENT FOR SUCH DEALERSHIP CONTAINS A RIGHT OF FIRST REFUSAL FOR THE MANUFACTURER OR DISTRIBUTOR, THE MANUFACTURER OR DISTRIBUTOR MUST MEET CERTAIN REQUIREMENTS IN ORDER TO EXERCISE SUCH RIGHT OF FIRST REFUSAL; TO PROVIDE THAT SUCH REQUIREMENTS SHALL NOT APPLY IN CERTAIN CIRCUMSTANCES; TO PROVIDE THAT IF THE MANUFACTURER OR DISTRIBUTOR EXERCISES ITS RIGHT OF FIRST REFUSAL, THE MANUFACTURER OR DISTRIBUTOR SHALL PAY THE REASONABLE EXPENSES INCURRED BY THE PROPOSED OWNER PRIOR TO THE EXERCISE OF THE RIGHT OF FIRST REFUSAL IN NEGOTIATING AND IMPLEMENTING THE CONTRACT FOR THE PROPOSED SALE OF THE DEALERSHIP; TO PROVIDE THAT THE MOTOR VEHICLE DEALER SHALL NOT HAVE ANY LIABILITY TO ANY PERSON AS A RESULT OF A MANUFACTURE OR DISTRIBUTOR EXERCISING ITS RIGHT OF FIRST REFUSAL; TO CREATE NEW SECTION 63-17-111, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT, NOTWITHSTANDING THE TERMS OF A FRANCHISE AGREEMENT, THE OWNER OF A MOTOR VEHICLE DEALERSHIP MAY APPOINT A SUCCESSOR BY A WRITTEN AGREEMENT TO SUCCEED IN THE OWNERSHIP OF THE DEALERSHIP UPON THE DEATH OR INCAPACITY OF THE OWNER; TO PROVIDE THAT A MANUFACTURER OR DEALER SHALL HONOR THE SUCCESSION UNLESS GOOD CAUSE EXISTS TO REFUSE TO HONOR THE SUCCESSION; TO PROVIDE A PROCEDURE TO REFUSE TO HONOR THE SUCCESSION; TO CREATE NEW SECTION 67-17-113, MISSISSIPPI CODE OF 1972, TO PROHIBIT THE MODIFICATION OF A FRANCHISE AGREEMENT WITHOUT 60 DAYS NOTICE; TO AUTHORIZE A DEALER TO FILE A COMPLAINT WITH THE MOTOR VEHICLE COMMISSION WITHIN THE NOTICE PERIOD; TO AUTHORIZE THE COMMISSION TO DETERMINE WHETHER THERE IS GOOD CAUSE FOR SUCH MODIFICATION; TO CREATE NEW SECTION 63-17-115, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A MANUFACTURER OR DISTRIBUTOR OF MOTOR VEHICLES THAT DIRECTLY OR INDIRECTLY OWNS OR OPERATES A NEW MOTOR VEHICLE DEALERSHIP SHALL NOT DISCRIMINATE AGAINST ANY OTHER MOTOR VEHICLE DEALER IN THE SAME LINE OR MAKE IN ANY MATTER GOVERNED BY THE FRANCHISE AGREEMENT; TO CREATE NEW SECTION 63-17-117, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT ANY WARRANTY OR SALES INCENTIVE AUDITS OF A MOTOR VEHICLE RECORDS MUST BE CONDUCTED WITHIN A CERTAIN AMOUNT OF TIME AFTER THE PAYMENT OF THE DISPUTED CLAIM; TO PROVIDE THAT NO CLAIM WHICH HAS BEEN APPROVED AND PAID MAY BE CHARGED BACK TO THE MOTOR VEHICLE DEALER UNLESS IT CAN BE SHOWN BY CLEAR AND CONVINCING EVIDENCE THAT THE CLAIMS WERE FALSE OR FRAUDULENT, THE REPAIRS WERE NOT PROPERLY MADE OR WERE UNNECESSARY, OR THE DEALER FAILED TO SUBSTANTIATE THE CLAIM; TO CREATE NEW SECTION 63-17-119, MISSISSIPPI CODE OF 1972, TO GIVE MOTOR VEHICLE DEALERS A CAUSE OF ACTION AGAINST A MANUFACTURER OR DEALER BECAUSE OF LOSSES DUE TO A VIOLATION BY THE MANUFACTURER OR DEALER OF THE MISSISSIPPI MOTOR VEHICLE COMMISSION LAW; TO CREATE NEW SECTION 63-17-121, MISSISSIPPI CODE OF 1972, TO PROHIBIT MANUFACTURERS OR DISTRIBUTORS FROM SELLING NEW MOTOR VEHICLES EXCEPT THROUGH A DEALER HOLDING A FRANCHISE FOR THE LINE OR MAKE OF SUCH NEW MOTOR VEHICLE; TO CREATE NEW SECTION 63-17-123, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE VENUE FOR ANY PROCEEDING ARISING FROM THE FRANCHISE AGREEMENT SHALL BE THE STATE OF MISSISSIPPI; TO CREATE NEW SECTION 63-17-125, MISSISSIPPI CODE OF 1972, TO LIMIT THE AMOUNT OF TIME THAT A MANUFACTURER MAY OWN AN INTEREST IN A FRANCHISED MOTOR VEHICLE DEALER; TO PROVIDE CERTAIN EXCEPTIONS TO SUCH LIMITATIONS; TO AMEND SECTION 63-17-55, MISSISSIPPI CODE OF 1972, TO DEFINE CERTAIN TERMS; TO AMEND SECTION 63-17-73, MISSISSIPPI CODE OF 1972, TO PROHIBIT MANUFACTURERS OR DISTRIBUTORS FROM REQUIRING OR CONDITIONING THE RENEWAL OR EXTENSION OF A FRANCHISE THAT THE DEALER RENOVATE HIS BUILDING OR CONSTRUCT A NEW ONE UNLESS CERTAIN CONDITIONS ARE MET; TO PROHIBIT MANUFACTURER OR DISTRIBUTOR FROM PROHIBITING A DEALER FROM ACQUIRING ANOTHER LINE OF MOTOR VEHICLES IF THE DEALER REMAINS IN SUBSTANTIAL COMPLIANCE WITH THE REASONABLE FACILITIES REQUIREMENTS OF THE MANUFACTURER OR DISTRIBUTOR; TO PROHIBIT THE MANUFACTURER OR DISTRIBUTOR FROM REFUSING TO SELL TO ALL DEALERS IN A LINE OR MAKE EVERY MOTOR VEHICLE SOLD OR OFFERED FOR SALE UNDER THE FRANCHISE AGREEMENT; TO PROVIDE THAT A MANUFACTURER OR DEALER SHALL NOT REQUIRE A DEALER TO ADHERE TO PERFORMANCE STANDARDS THAT ARE NOT APPLIED UNIFORMLY TO SIMILARLY SITUATED MOTOR VEHICLE DEALERS; TO AMEND SECTION 63-17-75, MISSISSIPPI CODE OF 1972, TO REQUIRE THAT NEW APPLICATIONS FOR LICENSES AS A MOTOR VEHICLE DEALER SHALL BE ACCOMPANIED BY A SURETY BOND; TO AMEND SECTION 63-17-51, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following shall be codified as Section 63-17-109, Mississippi Code of 1972:

63-17-109. (1) In the event of a proposed sale or transfer of a dealership and the franchise agreement for such dealership contains a right of first refusal in favor of the manufacturer or distributor, notwithstanding the terms of the franchise agreement, the manufacturer or distributor shall be permitted to exercise a right of first refusal to acquire the dealership only if all of the following requirements are met:

(a) The manufacturer or distributor sends by certified mail, return receipt requested, or any other reliable means of communication, notice of its intent to exercise its right of first refusal within sixty (60) days of receipt of the completed proposal for the proposed sale or transfer.

(b) The exercise of the right of first refusal will result in the motor vehicle dealer receiving consideration, terms and conditions that are either the same as or greater than that for which such dealer has contracted for in connection with the proposed transaction.

(2) The provisions of subsection (1) of this section shall not apply to a transaction involving one (1) of the following:

(a) A designated family member or members, including the spouse, child or grandchild, spouse of a child or grandchild, brother, sister or parent of the dealer-operator, or one or more motor vehicle dealer owners;

(b) A manager employed by the motor vehicle dealer in the dealership during the previous five (5) years that is otherwise qualified as a dealer-operator;

(c) A partnership or corporation controlled by any of the family members of the dealer-operator;

(d) A trust arrangement established or to be established for the purpose of allowing the new motor vehicle dealer to continue to qualify as such pursuant to the manufacturer's or distributor's standards, or provides for the succession of the franchise agreement to designated family members or qualified management in the event of the death or incapacity of the dealer-operator or its principal owner or owners.

(3) (a) The manufacturer or distributor shall pay the reasonable expenses, including attorney's fees which do not exceed the usual, customary, and reasonable fees charged for similar work done for other clients, incurred by the proposed owner prior to the exercise of the right of first refusal in negotiating and implementing the contract for the proposed sale of the dealership. Such expenses and attorney's fees shall be paid to the proposed new owner at the time of the closing of the sale at which the manufacturer or distributor exercises its right of first refusal.

(b) No payment of such expenses and attorney's fees shall be required if the person claiming reimbursement has not submitted or caused to be submitted an accounting of those expenses within thirty (30) days after the receipt of the manufacturer's or distributor's written request for such an accounting. A manufacturer or distributor may request such an accounting before exercising its right of first refusal.

(4) The motor vehicle dealer shall not have any liability to any person as a result of a manufacturer or distributor exercising its right of first refusal and the manufacturer or distributor shall assume the defense of the selling motor vehicle dealer for any claims by the proposed owner arising from the exercise of the right of first refusal.

SECTION 2. The following shall be codified as Section 63-17-111, Mississippi Code of 1972:

63-17-111. (1) Notwithstanding the terms of any franchise agreement, any dealer-operator may appoint by will, or other written instrument, a designated successor to succeed in the ownership of the dealer-operator in the dealership upon the death or incapacity of the dealer-operator.

(2) Unless good cause exists for the refusal to honor the succession on the part of the manufacturer or distributor, any designated successor of a deceased or incapacitated dealer-operator of a dealership may succeed to the ownership of the motor vehicle dealership under the existing franchise agreement if:

(a) The designated successor gives the manufacturer or distributor written notice of his or her intention to succeed to the ownership of the motor vehicle dealership within sixty (60) days after the dealer-operator's death or incapacity; and

(b) The designated successor agrees to be bound by all the terms and conditions of the franchise agreement.

(3) The manufacturer or distributor may request, and the designated successor shall provide promptly upon such request, personal and financial data reasonably necessary to determine whether the succession should be honored.

(4) (a) If the manufacturer or distributor believes that good cause exists for refusing to honor the succession of a deceased or incapacitated dealer, the manufacturer or distributor shall, not more than sixty (60) days following receipt of the notice of the designated successor's intent to succeed and receipt of such personal and financial data, serve upon the designated successor notice of its refusal to honor the proposed succession and of its intent to terminate the existing franchise with the dealer-operator not earlier than six (6) months from the date such notice of refusal is served.

(b) Such notice shall state the specific grounds for the refusal to honor the succession.

(c) If such notice is not timely served upon the designated successor, the franchise agreement shall continue in effect subject to termination only as otherwise provided by the Mississippi Motor Vehicle Commission Law.

(5) In determining whether good cause for the refusal to honor the succession exists, the manufacturer or distributor has the burden of proving that the designated successor is not of good moral character or does not otherwise meet the manufacturer's or distributor's reasonable standards for a dealer-operator.

(6) If a manufacturer or distributor refuses to honor the succession to the ownership interest of a deceased or incapacitated dealer-operator for good cause, the manufacturer or distributor shall allow the designated successor a reasonable period of time, which shall not be less than six (6) months, in which to consummate the sale of the dealership.

SECTION 3. The following shall be codified as Section 63-17-113, Mississippi Code of 1972:

63-17-113. (1) No person shall modify a franchise agreement during the term of such agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer's rights, obligations, investment or return on investment without giving sixty (60) days written notice of the proposed modification to the motor vehicle dealer, unless the modifications are required by law, court order, or the commission. Within the sixty-day notice period, the motor vehicle dealer may file a complaint with the commission for a determination whether there is good cause for permitting the proposed modification. The party seeking to modify or replace an agreement must demonstrate by a preponderance of the evidence that there is good cause for the modification or replacement. The commission shall schedule a hearing within sixty (60) days to decide the matter. Multiple complaints pertaining to the same proposed modifications shall be consolidated for hearing. The proposed modifications shall not take effect pending the determination of the matter.

(2) In making a determination of whether there is good cause for permitting a proposed modification, the commission may consider any relevant factors, including, but not limited to, the following:

(a) The reasons for the proposed modification.

(b) Whether the proposed modification is applied to or affects all motor vehicle dealers in an nondiscriminating manner.

(c) The degree to which the proposed modification will have a substantial and adverse effect upon the motor vehicle dealer's investment or return on investment.

(d) Whether the proposed modification is in the public interest.

(e) The degree to which the proposed modification is necessary to the orderly and profitable distribution of motor vehicles by the motor vehicle dealer.

(f) Whether the proposed modification is offset by other modifications beneficial to the motor vehicle dealer.

(3) The decision of the commission shall be in writing and shall contain findings of fact and a determination of whether there is good cause for permitting the proposed modification. The commission shall deliver copies of the decision to the parties personally or by certified mail, return receipt requested.

SECTION 4. The following shall be codified as Section 63-17-115, Mississippi Code of 1972:

63-17-115. A manufacturer or distributor of motor vehicles that directly or indirectly owns or operates a new motor vehicle dealership, in whole or in part, shall not discriminate against any other motor vehicle dealer in the same line or make in any matter governed by the franchise agreement, including, but not limited to:

(a) The sale, allocation, or availability of motor vehicles and other manufacturer or distributor products;

(b) Promotional or advertising allowances;

(c) Personnel training;

(d) The opportunity to perform warranty work; or

(e) The implementation of dealer programs or benefits.

SECTION 5. The following shall be codified as Section 63-17-117, Mississippi Code of 1972:

63-17-117. (1) Notwithstanding the terms of any franchise agreement, warranty and sales incentive audits of a motor vehicle dealer's records may be conducted by the manufacturer or distributor. Any audit for warranty parts or service compensation shall be performed within the twelve-month period immediately following the date of the payment of the disputed claim by the manufacturer or distributor. Any audit for sales incentives, service incentives, rebates or other forms of incentive compensation shall be performed within the eighteen-month period immediately following the date of the payment of the disputed claim by the manufacturer or distributor.

(2) No claim which has been approved and paid may be charged back to the motor vehicle dealer unless it can to shown by clear and convincing evidence that the claim was false or fraudulent, that the repairs were not properly made or were unnecessary to correct the defective conditions under generally accepted standards of workmanship, or that the motor vehicle dealer failed to reasonably substantiate the repair.

(3) A manufacturer or distributor shall not deny a claim based solely on a motor vehicle dealer's incidental failure to comply with a specific claim processing requirement that results in a clerical error or other administrative technicality.

(4) Limitations on warranty parts, service compensation, sales incentive audits, rebates or other forms of incentive compensation, chargebacks for warranty parts or service compensation, and service incentives and chargebacks for sales compensation only, shall not be effective in the case of intentionally false or fraudulent claims.

SECTION 6. The following shall be codified as Section 63-17-119, Mississippi Code of 1972:

63-17-119. Notwithstanding any provision of a franchise agreement to the contrary, if any motor vehicle dealer or dealer-operator incurs pecuniary loss due to a violation of the Mississippi Motor Vehicle Commission Law by a manufacturer or distributor, the motor vehicle dealer or dealer-operator may bring suit in a court of competent jurisdiction and recover damages, together with costs, including reasonable attorney's fees.

SECTION 7. The following shall be codified as Section 67-17-121, Mississippi Code of 1972:

63-17-121. No manufacturer or distributor shall offer to sell or sell, directly or indirectly, any new motor vehicle to a consumer in this state, except through a new motor vehicle dealer holding a franchise for the line or make covering such new motor vehicle. This section shall not apply to manufacturer or franchise sales of new motor vehicles to the federal government, charitable organizations, or employees of the manufacturer or distributor.

SECTION 8. The following shall be codified as Section 63-17-123, Mississippi Code of 1972:

63-17-123. Venue for any proceeding arising from the franchise agreement shall be in Mississippi and shall be consistent with Mississippi law. It is the public policy of this state that venue provided for in this section may not be modified by contract. Any provision contained in the franchise agreement that requires arbitration or litigation to be conducted outside the State of Mississippi shall be void and unenforceable.

SECTION 9. The following shall be codified as Section 63-17-125, Mississippi Code of 1972:

63-17-125. (1) In addition to the meaning given to the term "manufacturer" in Section 63-17-55, for purposes of this section such term includes:

(a) A factory representative; or

(b) A person or entity who is affiliated with a manufacturer or factory representative or who, directly or indirectly through an intermediary, is controlled by, or is under common control with, the manufacturer. For purposes of this paragraph, a person or entity is controlled by a manufacturer if the manufacturer has the authority directly or indirectly, by law or by agreement of the parties, to direct or influence the management and policies of the person or entity.

(2) Except as provided by this section, a manufacturer or distributor may not directly or indirectly:

(a) Own an interest in a dealer or dealership;

(b) Operate or control a dealer or dealership; or

(c) Act in the capacity of a dealer.

(3) A manufacturer or distributor may own an interest in a franchised dealer, or otherwise control a dealership, for a period not to exceed twelve (12) months from the date the manufacturer or distributor acquires the dealership if:

(a) The person from whom the manufacturer or distributor acquired the dealership was a franchised dealer, and

(b) The dealership is for sale by the manufacturer or distributor at a reasonable price and on reasonable terms and conditions.

(4) For the purpose of broadening the diversity of its dealer body and enhancing opportunities for qualified persons who are part of a group who have historically been underrepresented in its dealers, or who are qualified persons who lack the resources to purchase a dealership outright, but for no other purpose, a manufacturer or distributor may temporarily own an interest in a dealership, if the manufacturer's or distributor's participation in the dealership is in a bona fide relationship with the franchised dealer and the franchised dealer:

(a) Has made a significant investment in the dealership, subject to loss;

(b) Has an ownership interest in the dealership; and

(c) Operates the dealership under a plan to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions.

(5) On a showing by a manufacturer or distributor of good cause, the commission may extend the time limit set forth in subsection (3) of this section. An extension under this subsection shall not exceed twelve (12) months. An application for an extension after the first extension is granted is subject to protest by a dealer of the same line or make whose dealership is located in the same county as, or within fifteen (15) miles of, the dealership owned or controlled by the manufacturer or distributor.

(6) Notwithstanding any other provision of this section, a person who, on June 7, 1995, held both a motor home dealer's license and a motor home manufacturer's license issued under the Mississippi Motor Vehicle Commission Law may:

(a) Hold both a motor home dealer's license and a motor home manufacturer's license; and

(b) Operate as both a manufacturer and dealer of motor homes but of no other type of vehicle.

SECTION 10. Section 63-17-55, Mississippi Code of 1972, is amended as follows:

63-17-55. The following words, terms and phrases, when used in the Mississippi Motor Vehicle Commission Law, shall have the meanings respectively ascribed to them in this section, except where the context clearly indicates a different meaning:

(a) "Motor vehicle" means any motor-driven vehicle of the sort and kind required to have a Mississippi road or bridge privilege license, and shall include, but not be limited to, motorcycles.

(b) "Motor vehicle dealer" means any person, firm, partnership, copartnership, association, corporation, trust or legal entity, not excluded by subsection (c) of this section, who holds a bona fide contract or franchise in effect with a manufacturer, distributor or wholesaler of new motor vehicles, and a license under the provisions of the Mississippi Motor Vehicle Commission Law, and such duly franchised and licensed motor vehicle dealers shall be the sole and only persons, firms, partnerships, copartnerships, associations, corporations, trusts or legal entities entitled to sell and publicly or otherwise solicit and advertise for sale new motor vehicles as such.

(c) The term "motor vehicle dealer" does not include:

(i) Receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under judgment, decree or order of any court; or

(ii) Public officers while performing their duties as such officers; or

(iii) Employees of persons, corporations or associations enumerated in subsection (c)(i) of this section when engaged in the specific performance of their duties as such employees.

(d) "New motor vehicle" means a motor vehicle which has not been previously sold to any person except a distributor or wholesaler or motor vehicle dealer for resale.

(e) "Ultimate purchaser" means, with respect to any new motor vehicle, the first person, other than a motor vehicle dealer purchasing in his capacity as such dealer, who in good faith purchases such new motor vehicle for purposes other than for resale.

(f) "Retail sale" or "sale at retail" means the act or attempted act of selling, bartering, exchanging or otherwise disposing of a new motor vehicle to an ultimate purchaser for use as a consumer.

(g) "Motor vehicle salesman" means any person who is employed as a salesman by a motor vehicle dealer whose duties include the selling or offering for sale of new motor vehicles.

(h) "Commission" means the Mississippi Motor Vehicle Commission.

(i) "Manufacturer" means any person, firm, association, corporation or trust, resident or nonresident, who manufactures or assembles new motor vehicles.

(j) "Distributor" or "wholesaler" means any person, firm, association, corporation or trust, resident or nonresident, who in whole or in part sells or distributes new motor vehicles to motor vehicle dealers, or who maintains distributor representatives.

(k) "Factory branch" means a branch or division office maintained by a person, firm, association, corporation or trust who manufactures or assembles new motor vehicles for sale to distributors or wholesalers, to motor vehicle dealers, or for directing or supervising, in whole or in part, its representatives.

(l) "Distributor branch" means a branch or division office similarly maintained by a distributor or wholesaler for the same purposes a factory branch or division is maintained.

(m) "Factory representative" means a representative employed by a person, firm, association, corporation or trust who manufactures or assembles new motor vehicles, or by a factory branch, for the purpose of making or promoting the sale of his, its or their new motor vehicles, or for supervising or contacting his, its or their dealers or prospective dealers.

(n) "Distributor representative" means a representative similarly employed by a distributor, distributor branch, or wholesaler.

(o) "Person" means and includes, individually and collectively, individuals, firms, partnerships, copartnerships, associations, corporations and trusts, or any other forms of business enterprise, or any legal entity.

(p) "Good faith" means the duty of each party to any franchise, and all officers, employees or agents thereof, to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation or threats of coercion or intimidation from the other party. However, recommendation, endorsement, exposition, persuasion, urging or argument shall not be deemed to constitute a lack of good faith.

(q) "Coerce" means the failure to act in good faith in performing or complying with any terms or provisions of the franchise or agreement. However, recommendation, exposition, persuasion, urging or argument shall not be deemed to constitute a lack of good faith.

(r) "Special tools" are those which a dealer was required to purchase by the manufacturer or distributor for service on that manufacturer's product.

(s) "Motor vehicle lessor" means any person, not excluded by subsection (c) of this section, engaged in the motor vehicle leasing or rental business.

(t) "Specialty vehicle" means a motor vehicle manufactured by a second stage manufacturer by purchasing motor vehicle components, e.g. frame and drive train, and completing the manufacturer of finished motor vehicles for the purpose of resale with the primary manufacturer warranty unimpaired, to a limited commercial market rather than the consuming public. Specialty vehicles include garbage trucks, ambulances, fire trucks, buses, limousines, hearses and other similar limited purpose vehicles as the commission may by regulation provide.

(u) "Auto auction" means (i) any person who provides a place of business or facilities for the wholesale exchange of motor vehicles by and between duly licensed motor vehicle dealers, (ii) any motor vehicle dealer licensed to sell used motor vehicles selling motor vehicles using an auction format but not on consignment, or (iii) any person who provides the facilities for or is in the business of selling in an auction format motor vehicles.

(v) "Motor home" means a motor vehicle that is designed and constructed primarily to provide temporary living quarters for recreational, camping or travel use.

(w) "Dealer-operator" means the individual designated in the franchise agreement as the operator of the motor vehicle dealership.

(x) "Franchise" or "franchise agreement" means a written contract or agreement between a motor vehicle dealer and a manufacturer or its distributor or factory branch by which the motor vehicle is authorized to engage in the business of selling or leasing the specific makes, models or classifications of new motor vehicles marketed or leased by the manufacturer and designated in the agreement or any addendum to such agreement.

SECTION 11. Section 63-17-73, Mississippi Code of 1972, is amended as follows:

63-17-73. (1) It is unlawful and a misdemeanor:

(a) For any person, firm, association, corporation or trust to engage in business as, or serve in the capacity of, or act as a motor vehicle dealer, motor vehicle salesman, manufacturer, distributor, wholesaler, factory branch or division, distributor branch or division, wholesaler branch or division, factory representative or distributor representative, as such, in this state without first obtaining a license therefor as provided in the Mississippi Motor Vehicle Commission Law, regardless of whether or not said person, firm, association, corporation or trust maintains or has a place or places of business in this state. Any person, firm, association, corporation or trust engaging, acting, or serving in more than one of said capacities or having more than one place where such business is carried on or conducted shall be required to obtain and hold a current license for each capacity and place of business.

(b) For a motor vehicle dealer or a motor vehicle salesman:

1. To require a purchaser of a new motor vehicle, as a condition of sale and delivery thereof, to also purchase special features, appliances, equipment, parts or accessories not desired or requested by the purchaser. However, this prohibition shall not apply as to special features, appliances, equipment, parts or accessories which are already installed on the car when received by the dealer.

2. To represent and sell as a new motor vehicle any motor vehicle which has been used and operated for demonstration purposes or which is otherwise a used motor vehicle.

3. To resort to or use any false or misleading advertisement in connection with his business as such motor vehicle dealer or motor vehicle salesman.

(c) For a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesaler branch or division, or officer, agent or other representative thereof, to coerce, or attempt to coerce, any motor vehicle dealer:

1. To order or accept delivery of any motor vehicle or vehicles, appliances, equipment, parts or accessories therefor, or any other commodity or commodities which shall not have been voluntarily ordered by said motor vehicle dealer.

2. To order or accept delivery of any motor vehicle with special features, appliances, accessories or equipment not included in the list price of said motor vehicles as publicly advertised by the manufacturer thereof.

3. To order for any person any parts, accessories, equipment, machinery, tools, appliances, or any commodity whatsoever.

4. To contribute or pay money or anything of value into any cooperative or other advertising program or fund.

(d) For a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesaler branch or division, or officer, agent or other representative thereof:

1. To refuse to deliver in reasonable quantities and within a reasonable time after receipt of dealer's order to any duly licensed motor vehicle dealer having a franchise or contractual arrangement for the retail sale of new motor vehicles sold or distributed by such manufacturer, distributor, wholesaler, 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. However, the failure to deliver any motor vehicle shall not be considered a violation of this subsection if such failure be due to acts of God, work stoppages or delays due to strikes or labor difficulties, freight embargoes or other causes over which the manufacturer, distributor, or wholesaler, or any agent thereof, shall have no control.

2. 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 wholesaler branch or division, or officer, agent or other representative thereof, or to do any other act prejudicial to said 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 wholesaler branch or division, and said dealer. However, good faith notice to any motor vehicle dealer of said dealer's violation of any terms or provisions of such franchise or contractual agreement shall not constitute a violation of this subsection.

3. 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 wholesaler branch or division, or officer, agent or other representative thereof shall notify a motor vehicle dealer in writing, and forward a copy of such notice to the commission, of the termination or cancellation of the franchise or selling agreement of such dealer at least sixty (60) days before the effective date thereof, stating the specific grounds for such termination or cancellation. Such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesaler branch or division, or officer, agent or other representative thereof shall notify a motor vehicle dealer in writing, and forward a copy of such notice to the commission, at least sixty (60) 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 the same. 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 (60) days following such written notice. Any motor vehicle dealer who receives written notice that his franchise or selling agreement is being terminated or cancelled or who receives written notice that his franchise or selling agreement will not be renewed, may, within such sixty-day notice period, file with the commission a verified complaint for its determination as to whether such termination or cancellation or nonrenewal is unfair within the purview of the Mississippi Motor Vehicle Commission Law, and any such franchise or selling agreement shall continue in effect until final determination of the issues raised in such complaint notwithstanding anything to the contrary contained in said law or in such franchise or selling agreement.

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

5. 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 charged 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. The provisions of this subsection 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 the same price. This subsection shall not be construed to prevent the offering of volume discounts if such discounts are equally available to all franchised dealers in this state.

The provisions of this subsection shall not apply to sales to a motor vehicle dealer of any motor vehicle ultimately sold, donated or used by said dealer in a driver education program, or to sales to a motor vehicle dealer for resale to any unit of government, federal, state or local.

6. To offer to sell or to sell any new motor vehicle to any person, except a wholesaler or distributor, at a lower actual price therefor than the actual price offered and charged to a motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device which results in such lesser actual price.

7. To offer to sell or to sell parts and/or accessories to any new motor vehicle dealer for use in his own business for the purpose of repairing or replacing the same or 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 and/or accessories for use in his own business. However, it is recognized that certain motor vehicle dealers operate and serve as wholesalers of parts and accessories to retail outlets, and nothing herein contained shall be construed to prevent a manufacturer, distributor or wholesaler, or any agent thereof, from selling to a motor vehicle dealer who operates and serves as a wholesaler of parts and accessories, such parts and accessories as may be ordered by such motor vehicle dealer for re-sale 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.

8. 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 capital standards agreed to between the dealership and the manufacturer, distributor or wholesaler, provided such standards are deemed reasonable by the commission.

9. 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. However, no dealer, officer, partner or stockholder shall have the right to sell, transfer or assign the franchise or any right thereunder without the consent of the manufacturer, distributor or wholesaler.

(e) For a manufacturer or distributor:

1. To condition the renewal or extension of a franchise on a motor vehicle dealer's substantial renovation of the dealer's place of business or on the construction, purchase, acquisition, or rental of a new place of business by the motor vehicle dealer, unless the motor vehicle dealer is notified in writing of the intent to impose such condition within a reasonable time prior to the effective date of the proposed renewal or extension, but in no case less than one hundred eighty (180) days prior to the renewal or extension and the manufacturer or distributor demonstrates to the commission the need for such demand in view of the need to service the public and the economic conditions existing in the motor vehicle industry at the time such action would be required of the motor vehicle dealer. As a part of any such condition the manufacturer or distributor shall supply the motor vehicle dealer with an adequate initial supply and mode mix of motor vehicles to meet the sales levels necessary to support the increased overhead incurred by the motor vehicle dealer by reason of such renovation, construction, purchase or rental of a new place of business.

2. To require, coerce, or attempt to coerce a motor vehicle dealer to refrain from participation in the management of, investment in or the acquisition of any other line of motor vehicles or related products, as long as the motor vehicle dealer remains in substantial compliance with reasonable facilities requirements of the manufacturer or distributor. The reasonable facilities requirement of the manufacturer or distributor shall not include any requirement that a motor vehicle dealer establish or maintain exclusive facilities, personnel or display space when the requirements are unreasonable considering current economic conditions and not otherwise justified by reasonable business considerations. The burden of proving by a preponderance of the evidence that the current economic conditions and reasonable business considerations justify exclusive facilities is on the manufacturer or distributor.

3. To fail or refuse to sell or offer to sell to all motor vehicle dealers in a line or make every motor vehicle sold or offered for sale under the franchise agreement to any motor vehicle dealer of the same line or make, or to unreasonably require a motor vehicle dealer to pay an extra fee, purchase unreasonable advertising displays or any other material, or to unreasonably require the dealer to remodel, renovate or recondition its existing facilities as a prerequisite to receiving a certain model or series of vehicles. However, the failure to deliver any such motor vehicle shall not be considered a violation of this section if the failure is not arbitrary and is due to a lack of manufacturing capacity or to a strike or labor difficulty, a shortage of materials, a freight embargo or other cause over which the manufacturer or distributor has no control.

4. To coerce, or attempt to coerce, a motor vehicle dealer to adhere to performance standards that are not applied uniformly to other similarly situated motor vehicle dealers. Performance standards may be imposed if they are fair, reasonable, equitable and based upon accurate information. If performance standards are based upon a survey, the manufacturer or distributor shall establish the objectivity of the survey process and provide this information to any motor vehicle dealer of the same line or make covered by the survey request. Each response to a survey used by a manufacturer in preparing an evaluation or performance rating of a motor vehicle dealer shall be made available to that motor vehicle dealer, or it cannot be used by the manufacturer or distributor. However, if a customer requests that the manufacturer or distributor not disclose the customer's identity to the dealer, the manufacturer may withhold the customer's identity in providing the survey response to the motor vehicle dealer, and the manufacturer or distributor may use the response.

(2) Concerning any sale of a motor vehicle or vehicles to the State of Mississippi, or to the several counties or municipalities thereof, or to any other political subdivision thereof, no manufacturer, distributor or wholesaler shall offer any discounts, refunds, or any other similar type inducements to any dealer without making the same offer or offers to all other of its dealers within the state. If such inducements above-mentioned are made, the manufacturer, distributor or wholesaler shall give simultaneous notice thereof to all of its dealers within the state.

(3) It is unlawful to be a broker. For the purpose of this subsection, "broker" means a person who, for a fee, commission or other valuable consideration, arranges or offers to arrange a transaction involving the sale, for purposes other than resale, of a new motor vehicle, and who is not:

(a) A new motor vehicle dealer or agent or employee of such a dealer; or

(b) A distributor or an agent or employee of such a distributor.

However, an individual shall not be deemed to be a broker if he or she is the owner of the new or used motor vehicle which is the object of the brokering transaction.

SECTION 12. Section 63-17-75, Mississippi Code of 1972, is amended as follows:

63-17-75. (1) Within ninety (90) days after July 1, 1970, all persons who on July 1, 1970, are engaged in a business or occupation for which a license is required under the Mississippi Motor Vehicle Commission Law, shall make application on forms prescribed by the commission for their respective licenses. All such persons shall be permitted, without a license, to continue to engage in the business or occupation for which a license is applied for until the license is either granted or, in case it is denied, until the applicant has exhausted or has had an opportunity to exhaust all of his remedies under Section 63-17-99. No person not engaged in a business or occupation requiring such a license on July 1, 1970, shall be permitted to engage in such business or occupation until he shall have first obtained a license to engage in such business or occupation.

Applications for * * * licenses shall be verified by the oath or affirmation of the applicants and shall be on forms prescribed by the commission and furnished to * * * applicants. * * * Applications shall contain such 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 licenses applied for. The commission shall require that there be set forth in each * * * application information relating to the applicant's financial standing, the 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 is applied for, and whether the applicant is able to properly conduct the business for which a license or licenses is applied for, and such other pertinent information consistent with the safeguarding of the public interest and public welfare. Applications for a license as a motor vehicle dealer shall, in addition to the foregoing, * * * be accompanied by the filing with the commission of a bona fide contract or franchise then in effect between the applicant and a manufacturer, distributor or wholesaler of the new motor vehicle or vehicles proposed to be dealt in, unless such contract or franchise has already been filed with the commission in connection with a previous application made by such applicant, in which event the applicant shall, in lieu of again filing the contract or franchise, identify the contract or franchise by appropriate reference and file all revisions and additions, if any, which have been made to the contract or franchise. The applicant must furnish satisfactory evidence that he or it maintains adequate space in the building or structure wherein his or its established business is conducted for the display of new motor vehicles, or he or it will have such facilities within a reasonable time after receiving a license, and that he or it has or will have adequate facilities in said building or structure for the repair and servicing of motor vehicles and the storage of new parts and accessories for motor vehicles. However, the failure to furnish the evidence called for in the preceding sentence shall not constitute sufficient cause for denying a license to any motor vehicle dealer who on July 1, 1970, was an enfranchised new motor vehicle dealer in this state of a manufacturer, distributor or wholesaler of new motor vehicles and who continued to be such a dealer from such date until application was made for a license as a motor vehicle dealer.

(2) New applications for licenses as motor vehicle dealers shall be accompanied by a surety bond issued by a bonding company or insurance company authorized to do business in this state, in the principal sum of Twenty-five Thousand Dollars ($25,000.00) for each location; provided, however, that an applicant for licenses at multiple locations may provide a surety bond in the principal sum of One Hundred Thousand Dollars ($100,000.00) to cover all licensed locations in lieu of a separate bond for each location. The bond shall be in a form satisfactory to the commission.

The bond shall be conditioned upon compliance with the provisions of the Mississippi Motor Vehicle Commission Law. The bond shall also be an indemnity for any loss sustained by any person by reason of the acts of the person bonded when those acts constitute grounds for the suspension or revocation of such person's motor vehicle dealer license. The bond shall be executed in the name of the State of Mississippi for the benefit of any aggrieved party. The aggregate liability of the surety for any claimants, regardless of the number of years the bond is in effect, shall not exceed the principal amount of the bond. The proceeds of the bond shall be paid upon receipt by the commission of a final judgment from a Mississippi court of competent jurisdiction against the principal and in favor of an aggrieved party.

SECTION 13. Section 63-17-51, Mississippi Code of 1972, is amended as follows:

63-17-51. Sections 63-17-51 through 63-17-125 shall be known and may be cited as the "Mississippi Motor Vehicle Commission Law."

SECTION 14. This act shall take effect and be in force from and after July 1, 2000.