MISSISSIPPI LEGISLATURE
2006 Regular Session
To: Ways and Means
By: Representative Ward
AN ACT TO ESTABLISH RELEVANT MARKET AREAS FOR NEW MOTOR VEHICLE DEALERS; TO DEFINE CERTAIN TERMS; TO PROVIDE THE PROCEDURES FOR ESTABLISHING OR RELOCATING NEW MOTOR VEHICLE DEALERS; TO PROVIDE NOTICE REQUIREMENTS; TO ADDRESS LINE-MAKE DISCONTINUATION; TO AMEND SECTION 63-17-55, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF MOTOR VEHICLE; TO AMEND SECTION 63-17-57, MISSISSIPPI CODE OF 1972, TO REVISE CERTAIN APPOINTMENTS TO THE MOTOR VEHICLE COMMISSION; TO AMEND SECTION 63-17-73, MISSISSIPPI CODE OF 1972, TO DEFINE DUE CAUSE; TO REVISE OFFENSES; TO AMEND SECTION 63-17-95, MISSISSIPPI CODE OF 1972, TO ALLOW REIMBURSEMENT OF EXPENSES AND ATTORNEY'S FEES IN HEARINGS BEFORE THE COMMISSION; TO AMEND SECTION 63-17-109, MISSISSIPPI CODE OF 1972, TO REVISE PROVISIONS REGARDING THE RIGHT OF FIRST REFUSAL; TO AMEND SECTION 63-17-119, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT ANY REQUIREMENT THAT A DEALER WAIVE ITS RIGHT TO TRIAL IS VOID; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) For purposes of this section, "relevant market area" means:
(a) For a proposed new motor vehicle dealer or a new motor vehicle dealer who plans to relocate his or her place of business in a county having a population which is greater than sixty thousand (60,000), the area within a radius of ten (10) miles of the intended site of the proposed or relocated dealer. The ten-mile distance shall be determined by measuring the distance between the nearest surveyed boundary of the existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business; or
(b) For a proposed new motor vehicle dealer or a new motor vehicle dealer who plans to relocate his or her place of business in a county having a population which is sixty thousand (60,000) or less, the area within radius of fifteen (15) miles of the intended site of the proposed or relocated dealer, or the county line, whichever is closer to the intended site. The fifteen-mile distance shall be determined by measuring the distance between the nearest surveyed boundary line of the existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business.
(2) As used in this section, "relocate" and "relocation" shall not include the relocation of a new motor vehicle dealer within two (2) miles of its established place of business.
(3) Before a franchisor enters into a franchise establishing or relocating a new motor vehicle dealer within a relevant market area where the same line-make is represented or establishes a parts and service outlet utilizing the same trade names and trademarks of the franchise, the franchisor shall give written notice to each new motor vehicle dealer of the same line-make in the relevant market area of its intent to establish an additional dealer, the parts and service outlet, or to relocate an existing dealer within that relevant market area.
(4) Within sixty (60) days after receiving the notice provided for in subsection (3) of this section, or within sixty (60) days after the end of any appeal or alternative dispute resolution procedure provided by the franchisor, a new motor vehicle dealer may file a verified complaint before the Mississippi Motor Vehicle Commission pursuant to Section 63-17-91 to determine whether good cause exists for the establishing or relocating of a proposed new motor vehicle dealer. The Mississippi Motor Vehicle Commission shall render a decision on the verified complaint within sixty (60) days of its filing. If the Mississippi Motor Vehicle Commission fails to render its decision within said time period, either party may file an appeal pursuant to Section 63-17-99, and the court will conduct a hearing and take evidence, both oral and documentary, in the place of the Mississippi Motor Vehicle Commission and shall render a decision utilizing the factors set forth in subsection (7).
(5) This section shall not apply to:
(a) The reopening or replacement in a relevant market area of a closed dealership that has been closed within the preceding two (2) years, if the established place of business of the reopened or replacement dealer is within two (2) miles of the established place of business of the closed dealership.
(b) The entering into of a renewal, replacement, or succeeding franchise agreement with an existing motor vehicle dealer whose operations will continue at the dealer's then current location; or
(c) The relocation of an existing or replacement dealer to a location within the existing or replacement dealer's own relevant market area, provided, however, that the proposed new location is not within a six-mile radius of any other same line-make motor vehicle dealer.
(6) Only a dealer into whose relevant market area the proposed new franchise or relocated dealer will be located shall have standing to object to the additional franchise agreement or relocation or to take any other action under this chapter with respect to the proposed appointment or relocation. Such dealer may not protest the relocation of an existing dealer or the establishment of a replacement dealer, however, if the proposed location is further away from the dealer than the relocating or replacement dealer's current or former location.
(7) In determining whether good cause exists for establishing or relocating an additional new motor vehicle dealer for the same line-make, the Mississippi Motor Vehicle Commission shall take into consideration the existing circumstances including, but not limited to, the following:
(a) Permanency of the investment;
(b) Effect on the retail motor vehicle business and the consuming public in the relevant market area;
(c) Whether it is injurious or beneficial to the public welfare;
(d) Whether the new motor vehicle dealers of the same line-make in that relevant market area are providing adequate competition and convenient consumer care for the motor vehicles of that line-make in the market area, including the adequacy of motor vehicle sales and qualified service personnel;
(e) Whether the establishment or relocation of the new motor vehicle dealer in the relevant market area would promote competition;
(f) Growth or decline of the population and the number of new motor vehicle registrations in the relevant market area;
(g) Effect on the relocating dealer, the establishment of a new dealer, or the establishment of a parts and service outlet and the franchisor of a denial of the dealer's relocation into the relevant market area; and
(h) Effect on the objecting dealer of the relocation or establishment of a new proposed franchise location.
SECTION 2. (1) For purposes of Section 63-17-73, the termination, cancellation or discontinuation of a motor vehicle line-make will be considered to be the cancellation or failure to renew the franchise of a motor vehicle dealer or distributor of that line-make even if that line-make is part of an agreement that includes other line-makes but a manufacturer, importer or distributor may change, add or delete models, specifications, model names, numbers of identifying marks or similar characteristics of motor vehicles that it markets.
(2) The cancellation or nonrenewal of a franchise shall not be a violation of Section 63-17-73 if all of the following requirements are met:
(a) The motor vehicle dealer or distributor is given notice at least twelve (12) months before the effective date of the cancellation or nonrenewal.
(b) The manufacturer, importer or distributor contemporaneously cancels or fails to renew every franchise for the same line-make granted to any dealer or distributor in the United States, the manufacturer, importer or distributor, contemporaneously cancels or fails to renew every franchise for the same line-make granted to any dealer or distributor in this state.
(c) If the franchise is a motor vehicle dealer, the dealer receives the termination benefits set forth in paragraph (d).
(d) The manufacturer, importer or distributor does the following:
(i) Offers or causes to be offered to the motor vehicle dealer or distributor a replacement franchise with reasonable terms and conditions; or
(ii) Compensates the dealer or distributor for the actual pecuniary loss caused by the franchise cancellation or nonrenewal but not less than three (3) times the annual fair rental value of the dealership property and improvements. In determining the actual pecuniary loss, the value of any continued service or parts business available to the dealer or distributor for the line-make covered by the franchise shall be considered. If the dealer or distributor and the manufacturer, importer or distributor cannot agree on the amount of compensation to be paid under this section, either may file a declaratory judgment action in a court of competent jurisdiction.
(iii) Complies in all respects with the provisions of Section 63-17-141.
SECTION 3. 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. "Motor vehicle" shall also mean an engine, transmission, or rear axle manufactured for installation in a vehicle having as its primary purpose the transport of person or persons or property on a public highway and having a gross vehicle weight rating of more than sixteen thousand (16,000) pounds, whether or not attached to a vehicle chassis.
(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;
(ii) Public officers while performing their duties as such officers;
(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; or
(iv) A motor vehicle manufacturer operating a project as defined in Section 57-75-5(f)(iv)1; and the provisions of the Mississippi Motor Vehicle Commission Law shall not apply to:
1. a. Any lease by such a motor vehicle manufacturer of three (3) or fewer motor vehicles at any one time and related vehicle maintenance, of any line of vehicle produced by the manufacturer or its subsidiaries, to any one (1) employee of the motor vehicle manufacturer on a direct basis; or
b. Any sale or other disposition of such motor vehicles by the motor vehicle manufacturer at the end of a lease through direct sales to employees of the manufacturer or through an open auction or auction limited to dealers of the manufacturer's vehicle line or its subsidiaries' vehicle lines; or
2. Any sale or other disposition by such a motor vehicle manufacturer of motor vehicles for which the manufacturer obtained distinguishing number tags under Section 27-19-309(8).
(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 dealer 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 4. Section 63-17-57, Mississippi Code of 1972, is amended as follows:
63-17-57. There is hereby created the Mississippi Motor Vehicle Commission to be composed of eight (8) members, one (1) of whom shall be appointed by the Attorney General from the state at large for a term of four (4) years and one (1) of whom shall be appointed by the Secretary of State from the state at large for a term of four (4) years, and six (6) licensees who shall be appointed by the Governor, one (1) from the state at large and one (1) from each of the five (5) congressional districts of this state for terms of the following duration: the term of the member from the state at large shall expire at the time the incumbent Governor's term expires, the term of the member appointed from the First Congressional District shall expire on June 30, 1973, the term of the member appointed from the Second Congressional District shall expire on June 30, 1974, the term of the member appointed from the Third Congressional District shall expire on June 30, 1976, the term of the member from the Fourth Congressional District shall expire on June 30, 1977, and the term of the member appointed from the Fifth Congressional District shall expire on June 30, 1978. Each member shall serve until his successor is appointed and qualified. At the expiration of the term of the member initially appointed by the Attorney General each successor member shall be appointed for a term of four (4) years by the incumbent Attorney General, and at the expiration of the term of the member appointed by the Secretary of State each successor member shall be appointed for a term of four (4) years by the incumbent Secretary. At the expiration of a term for which each of the initial appointments of the Governor is made, each successor member shall be appointed for a term of seven (7) years except that the term of the member appointed from the state at large shall be coterminous with that of the Governor making the appointment. The members of the commission as constituted on July 1, 2006, who are appointed by the Governor and whose terms have not expired shall serve the balance of their terms, after which time the gubernatorial appointments shall be made as follows: The Governor shall appoint one (1) member of the commission from each of the four (4) congressional districts and two (2) from the state at large.
The member appointed from the state at large by the Governor shall serve as chairman of the commission and one (1) of the other members appointed by the Governor shall be designated by him to serve as vice chairman. In the absence of the chairman at any meeting of the commission the vice chairman shall preside and perform the duties of the chairman.
In the event of a vacancy created by the death, resignation or removal of any member of the commission the vacancy shall be filled by appointment of the Governor, Attorney General or the Secretary of State, as the case may be, for the unexpired portion of the term. All appointments hereunder shall be made with the advice and consent of the Senate.
SECTION 5. 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 (1) of said capacities or having more than one (1) 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. "Due cause" shall be defined as a breach by the dealer of a material provision of the franchise agreement which breach has not been substantially cured within a reasonable time after the dealer has been given written notice of the breach. The burden of proving that due cause exists shall be upon the party attempting to terminate, cancel or not renew the 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 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.
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 Mississippi Motor Vehicle 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 which consent shall not be unreasonably withheld.
10. To condition unreasonably 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. The manufacturer shall notify the motor vehicle dealer in writing of its intent to impose such a 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 shall demonstrate 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 part of any such condition the manufacturer shall offer the motor vehicle dealer a reasonable initial supply and model 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.
11. 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 maintains a reasonable line of credit for each dealership and the motor vehicle dealer remains in substantial compliance with reasonable facilities' requirements of the manufacturer or distributor. The reasonable facilities' requirements may 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 do not justify exclusive facilities is on the dealer.
12. 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 materials, or to unreasonably require the dealer-operator 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 of which the manufacturer or distributor has no control. This provision shall not apply to manufacturers of recreational vehicles.
13. To attempt to coerce, or coerce, a motor vehicle dealer to adhere to performance standards that are not applied uniformly to other similarly situated motor vehicle dealers. Any performance standards shall be fair, reasonable, equitable and based upon accurate information. If dealership performance standards are based on 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. Upon request of the dealer, a manufacturer or distributor shall disclose in writing to the dealer a description of how a performance standard or program is designed and all relevant information pertaining to that dealer used in the application of the performance standard or program to that dealer.
14. To increase prices of new motor vehicles which the new motor vehicle dealer had ordered for the ultimate purchasers prior to the dealer's receipt of written official price increase notification. A sales contract signed by the ultimate purchaser shall constitute evidence of each such order; provided that the vehicle is in fact delivered to that purchaser.
(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 6. Section 63-17-95, Mississippi Code of 1972, is amended as follows:
63-17-95. (1) All parties whose rights may be affected at any hearing before the commission shall have the right to appear personally and by counsel, to cross-examine witnesses appearing against them, and to produce evidence and witnesses in their own behalf. The commission shall make and keep a record of each such hearing and shall provide a transcript thereof to any interested party upon his request and at his expense. Testimony taken at all such hearings shall be taken either stenographically or by machine.
(2) Witnesses who testify at any hearing before the commission shall testify under oath. The form of the oath or affirmation shall be in the form or to the effect following: "You do solemnly swear (or affirm) that the evidence you shall give as a witness at this hearing shall be the truth, the whole truth, and nothing but the truth; so help you God."
(3) Any member of the commission may administer oaths or affirmations to witnesses testifying before the commission.
(4) The commission shall prescribe its rules of order or procedure in hearings or other proceedings before it. However, such rules of order or procedure shall not be in conflict or contrary to the provisions of law governing hearings before the commission, and appeals therefrom.
(5) All decisions of the commission with respect to the hearings shall be incorporated into orders of the commission and spread upon its minutes.
(6) The commission may apply to the chancery court of the county or to the chancery court of the judicial district of the county, or to any chancellor of any such court in vacation, to which its order is appealable under the provisions of Section 63-17-99 for the enforcement of such order by injunction.
(7) Any licensee who prevails on a complaint filed before the commission alleging the failure of another licensee or a manufacturer or distributor to comply with any provision of the Mississippi Motor Vehicle Commission Law or with any rule or regulation promulgated by the commission under its authority vested in it by said law shall be entitled to be reimbursed if reasonable expenses and attorney's fees incurred in the proceedings on the complaint and any appeal with said amounts to be set by the final authority hearing the complaint.
SECTION 7. Section 63-17-109, Mississippi Code of 1972, is amended as follows:
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 contract 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 manufacturer's or distributor's right of first refusal 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 attorneys’ 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 attorneys' 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 attorneys' 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) If the selling dealer discloses the manufacturer's right of first refusal to the proposed owner in writing, 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.
(5) If the manufacturer or distributor does not exercise its right of first refusal within the time period set forth in subsection (1)(a), the manufacturer or distributor shall act upon the proposed sale of the franchise promptly and in good faith but in no event more than ninety (90) days after receipt of the completed application and related documents reasonably requested by the manufacturer or distributor.
SECTION 8. Section 63-17-119, Mississippi Code of 1972, is amended as follows:
63-17-119. (1) 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 attorneys’ fees.
(2) 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.
(3) Notwithstanding any provision in a franchise agreement to the contrary, any requirement that a dealer waive its right to a trial by jury is void and unenforceable.
SECTION 9. Sections 1 and 1 of this act shall be codified in Chapter 17 of Title 63, Mississippi Code of 1972.
SECTION 10. This act shall take effect and be in force from and after July 1, 2006.