COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 601
(By Senators Jenkins, Plymale, Kessler, Chafin, Unger, Oliverio,
Bailey, Minard, Green, Caruth, Stollings, Deem, Bowman, Hall,
Love, Yoder, Barnes, Helmick, Fanning, Foster, Hunter, Prezioso,
Edgell, McKenzie, Guills and White)
____________
[Originating in the Committee on the Judiciary;
reported February 21, 2007.]
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A BILL to amend and reenact §
17A
-6A-3 and §17A-6A-12
of the Code of
West Virginia, 1931, as amended
, all relating to the
establishment or relocation of additional motor vehicle
dealers within a relevant market area; redefining "relevant
market area"; creating exceptions for certain relocations and
transfers; exceptions for purposes of adding dealerships to an
area; and providing notice requirements to existing dealers.
Be it enacted by the Legislature of West Virginia:
That §
17A
-6A-3
and §
17A
-6A-12
of the Code of West Virginia,
1931, as amended, be amended and reenacted
, all to read as follows:
ARTICLE 6A. MOTOR VEHICLE DEALERS, DISTRIBUTORS, WHOLESALERS AND
MANUFACTURERS.
§17A-6A-3. Definitions.
For the purposes of this article, the words and phrases
defined in this section have the meanings ascribed to them, except
where the context clearly indicates a different meaning.
(1) "Dealer Agreement" means the franchise, agreement or
contract in writing between a manufacturer, distributor and a new
motor vehicle dealer which purports to establish the legal rights
and obligations of the parties to the agreement or contract with
regard to the purchase, lease or sale of new motor vehicles,
accessories, service and sale of parts for motor vehicles.
(2) "Designated family member" means the spouse, child,
grandchild, parent, brother or sister of a deceased new motor
vehicle dealer who is entitled to inherit the deceased dealer's
ownership interest in the new motor vehicle dealership under the
terms of the dealer's will, or who has otherwise been designated in
writing by a deceased dealer to succeed the deceased dealer in the
new motor vehicle dealership, or is entitled to inherit under the
laws of intestate succession of this state. With respect to an
incapacitated new motor vehicle dealer, the term means the person
appointed by a court as the legal representative of the new motor
vehicle dealer's property. The term also includes the appointed
and qualified personal representative and the testamentary trustee
of a deceased new motor vehicle dealer. However, the term means
only that designated successor nominated by the new motor vehicle
dealer in a written document filed by the dealer with the
manufacturer or distributor, if such a document is filed.
(3) "Distributor" means any person, resident or nonresident,
who, in whole or in part, offers for sale, sells or distributes any
new motor vehicle to a new motor vehicle dealer or who maintains a
factor representative, resident or nonresident, or who controls any
person, resident or nonresident, who, in whole or in part, offers
for sale, sells or distributes any new motor vehicle to a new motor
vehicle dealer.
(4) "Established place of business" means a permanent,
enclosed commercial building located within this state easily
accessible and open to the public at all reasonable times and at
which the business of a new motor vehicle dealer, including the
display and repair of motor vehicles, may be lawfully carried on in
accordance with the terms of all applicable building codes, zoning
and other land-use regulatory ordinances and as licensed by the
Division of Motor Vehicles.
(5) "Factory branch" means an office maintained by a
manufacturer or distributor for the purpose of selling or offering
for sale vehicles to a distributor, wholesaler or new motor vehicle
dealer, or for directing or supervising, in whole or in part,
factory or distributor representatives. The term includes any
sales promotion organization maintained by a manufacturer or
distributor which is engaged in promoting the sale of a particular
make of new motor vehicles in this state to new motor vehicle
dealers.
(6) "Factory representative" means an agent or employee of a
manufacturer, distributor or factory branch retained or employed for the purpose of making or promoting the sale of new motor
vehicles or for supervising or contracting with new motor vehicle
dealers or proposed motor vehicle dealers.
(7) "Good faith" means honesty in fact and the observation of
reasonable commercial standards of fair dealing in the trade.
(8) "Manufacturer" means any person who manufactures or
assembles new motor vehicles; or any distributor, factory branch or
factory representative.
(9) "Motor vehicle" means that term as defined in section one,
article one of this chapter, including motorcycle and recreational
vehicle as defined in subsections (c) and (nn), respectively, of
said section, but not including a tractor or farm equipment.
(10) "New motor vehicle" means a motor vehicle which is in the
possession of the manufacturer, distributor or wholesaler, or has
been sold only to a new motor vehicle dealer and on which the
original title has not been issued from the new motor vehicle
dealer.
(11) "New motor vehicle dealer" means a person who holds a
dealer agreement granted by a manufacturer or distributor for the
sale of its motor vehicles, who is engaged in the business of
purchasing, selling, leasing, exchanging or dealing in new motor
vehicles, service of said vehicles, warranty work and sale of parts
who has an established place of business in this state and is
licensed by the Division of Motor Vehicles.
(12) "Person" means a natural person, partnership,
corporation, association, trust, estate or other legal entity.
(13) "Proposed new motor vehicle dealer" means a person who
has an application pending for a new dealer agreement with a
manufacturer or distributor. Proposed motor vehicle dealer does
not include a person whose dealer agreement is being renewed or
continued.
(14) "Relevant market area" means the area located within a
fifteen twenty air-mile radius around an existing same line-make
new motor vehicle dealership.
§17A-6A-12. Establishment and relocation or Establishment of
Additional Dealers.
(1) As used in this section, "relocate" and "relocation" do
not include the relocation of a new motor vehicle dealer within two
four miles of its established place of business or an existing new
motor vehicle dealer sells or transfers the dealership to a new
owner and the successor new motor vehicle dealership owner
relocates to a location within four miles of the seller's last open
new motor vehicle dealership location. The relocation of a new
motor vehicle dealer to a site within the area of sales
responsibility assigned to that dealer by the manufacturing branch
or distributor may not be within six air miles of another dealer of
the same line-make.
(2)Before a manufacturer or distributor enters into a dealer
agreement establishing or relocating a new motor vehicle dealer
within a relevant market area where the same line-make is
represented, the manufacturer or distributor shall give written
notice to each new motor vehicle dealer of the same line-make in the relevant market area of its intention to establish an
additional dealer or to relocate an existing dealer within that
relevant market area.
(3) Within sixty days after receiving the notice provided for
in subsection (2) of this section, or within sixty days after the
end of any appeal procedure provided by the manufacturer or
distributor, a new motor vehicle dealer of the same line-make
within the affected relative market area may bring a declaratory
judgment action in the circuit court for the county in which the
new motor vehicle dealer is located to determine whether good cause
exists for the establishing or relocating of the a proposed new
motor vehicle dealer. Once an action has been filed, the
manufacturer or distributor may not establish or relocate the
proposed new motor vehicle dealer until the circuit court has
rendered a decision on the matter. An action brought pursuant to
this section shall be given precedence over all other civil matters
on the court's docket. The manufacturer has the burden of proving
that good cause exists for establishing or relocating a proposed
new motor vehicle dealer.
(4) This section does not apply to the reopening in a relevant
market area of a new motor vehicle dealer that has been closed or
sold within the preceding two years if the established place of
business of the new motor vehicle dealer is within two four miles
of the established place of business of the closed or sold new
motor vehicle dealer.
(5) In determining whether good cause exists for establishing
or relocating an additional new motor vehicle dealer for the same
line-make, the court shall take into consideration the existing
circumstances, including, but not limited to, the following:
(a) Permanency and amount of the investment, including any
obligations incurred by the dealer in making the investment;
(b) Effect on the retail new 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 the 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 would promote competition;
(f) Growth or decline of the population and the number of new
motor vehicle registrations in the relevant market area; and
(g) The effect on the relocating dealer of a denial of its
relocation into the relevant market area.
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(NOTE: The purpose of this bill is to amend the provisions
governing the establishment of motor vehicle dealers within a
relevant market area.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)