As Reported by the Senate Insurance, Commerce and Labor Committee

128th General Assembly Regular Session 2009-2010

Sub. S. B. No. 204

Senator Wagoner 

Cosponsors: Senators Carey, Gibbs, Grendell, Husted, Jones, Morano, Niehaus, Patton, Schaffer, Widener, Schuring, Kearney 

---

A BILL

To amend sections 4517.01, 4517.52, 4517.54, 4517.55,

1

and 4517.59 and to enact sections 4517.541 and

2

4517.542 of the Revised Code relative to the

3

termination of franchises and prohibited acts

4

under the Motor Vehicle Dealers Law.

5

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4517.01, 4517.52, 4517.54, 4517.55,	6
and 4517.59 be amended and sections 4517.541 and 4517.542 of the	7
Revised Code be enacted to read as follows:	8

Sec. 4517.01.  As used in sections 4517.01 to 4517.65 of the	9
Revised Code:	10

(A) "Persons" includes individuals, firms, partnerships,	11
associations, joint stock companies, corporations, and any	12
combinations of individuals.	13

(B) "Motor vehicle" means motor vehicle as defined in section	14
4501.01 of the Revised Code and also includes "all-purpose	15
vehicle" and "off-highway motorcycle" as those terms are defined	16
in section 4519.01 of the Revised Code. "Motor vehicle" does not	17
include a snowmobile as defined in section 4519.01 of the Revised	18
Code or manufactured and mobile homes.	19

(C) "New motor vehicle" means a motor vehicle, the legal	20
title to which has never been transferred by a manufacturer,	21
remanufacturer, distributor, or dealer to an ultimate purchaser.	22

(D) "Ultimate purchaser" means, with respect to any new motor	23
vehicle, the first person, other than a dealer purchasing in the	24
capacity of a dealer, who in good faith purchases such new motor	25
vehicle for purposes other than resale.	26

(E) "Business" includes any activities engaged in by any	27
person for the object of gain, benefit, or advantage either direct	28
or indirect.	29

(F) "Engaging in business" means commencing, conducting, or	30
continuing in business, or liquidating a business when the	31
liquidator thereof holds self out to be conducting such business;	32
making a casual sale or otherwise making transfers in the ordinary	33
course of business when the transfers are made in connection with	34
the disposition of all or substantially all of the transferor's	35
assets is not engaging in business.	36

(G) "Retail sale" or "sale at retail" means the act or	37
attempted act of selling, bartering, exchanging, or otherwise	38
disposing of a motor vehicle to an ultimate purchaser for use as a	39
consumer.	40

(H) "Retail installment contract" includes any contract in	41
the form of a note, chattel mortgage, conditional sales contract,	42
lease, agreement, or other instrument payable in one or more	43
installments over a period of time and arising out of the retail	44
sale of a motor vehicle.	45

(I) "Farm machinery" means all machines and tools used in the	46
production, harvesting, and care of farm products.	47

(J) "Dealer" or "motor vehicle dealer" means any new motor	48
vehicle dealer, any motor vehicle leasing dealer, and any used	49
motor vehicle dealer.	50

(K) "New motor vehicle dealer" means any person engaged in	51
the business of selling at retail, displaying, offering for sale,	52
or dealing in new motor vehicles pursuant to a contract or	53
agreement entered into with the manufacturer, remanufacturer, or	54
distributor of the motor vehicles.	55

(L) "Used motor vehicle dealer" means any person engaged in	56
the business of selling, displaying, offering for sale, or dealing	57
in used motor vehicles, at retail or wholesale, but does not mean	58
any new motor vehicle dealer selling, displaying, offering for	59
sale, or dealing in used motor vehicles incidentally to engaging	60
in the business of selling, displaying, offering for sale, or	61
dealing in new motor vehicles, any person engaged in the business	62
of dismantling, salvaging, or rebuilding motor vehicles by means	63
of using used parts, or any public officer performing official	64
duties.	65

(M) "Motor vehicle leasing dealer" means any person engaged	66
in the business of regularly making available, offering to make	67
available, or arranging for another person to use a motor vehicle	68
pursuant to a bailment, lease, sublease, or other contractual	69
arrangement under which a charge is made for its use at a periodic	70
rate for a term of thirty days or more, and title to the motor	71
vehicle is in and remains in the motor vehicle leasing dealer who	72
originally leases it, irrespective of whether or not the motor	73
vehicle is the subject of a later sublease, and not in the user,	74
but does not mean a manufacturer or its affiliate leasing to its	75
employees or to dealers.	76

(N) "Salesperson" means any person employed by a dealer or	77
manufactured home broker to sell, display, and offer for sale, or	78
deal in motor vehicles for a commission, compensation, or other	79
valuable consideration, but does not mean any public officer	80
performing official duties.	81

(O) "Casual sale" means any transfer of a motor vehicle by a	82
person other than a new motor vehicle dealer, used motor vehicle	83
dealer, motor vehicle salvage dealer, as defined in division (A)	84
of section 4738.01 of the Revised Code, salesperson, motor vehicle	85
auction owner, manufacturer, or distributor acting in the capacity	86
of a dealer, salesperson, auction owner, manufacturer, or	87
distributor, to a person who purchases the motor vehicle for use	88
as a consumer.	89

(P) "Motor vehicle show" means a display of current models of	90
motor vehicles whereby the primary purpose is the exhibition of	91
competitive makes and models in order to provide the general	92
public the opportunity to review and inspect various makes and	93
models of motor vehicles at a single location.	94

(Q) "Motor vehicle auction owner" means any person who is	95
engaged wholly or in part in the business of auctioning motor	96
vehicles.	97

(R) "Manufacturer" means a person who manufactures,	98
assembles, or imports motor vehicles, including motor homes, but	99
does not mean a person who only assembles or installs a body,	100
special equipment unit, finishing trim, or accessories on a motor	101
vehicle chassis supplied by a manufacturer or distributor.	102

(S) "Tent-type fold-out camping trailer" means any vehicle	103
intended to be used, when stationary, as a temporary shelter with	104
living and sleeping facilities, and that is subject to the	105
following properties and limitations:	106

(1) A minimum of twenty-five per cent of the fold-out portion	107
of the top and sidewalls combined must be constructed of canvas,	108
vinyl, or other fabric, and form an integral part of the shelter.	109

(2) When folded, the unit must not exceed:

110

(a) Fifteen feet in length, exclusive of bumper and tongue;

111

(b) Sixty inches in height from the point of contact with the	112
ground;	113

(c) Eight feet in width;

114

(d) One ton gross weight at time of sale.

115

(T) "Distributor" means any person authorized by a motor	116
vehicle manufacturer to distribute new motor vehicles to licensed	117
new motor vehicle dealers, but does not mean a person who only	118
assembles or installs a body, special equipment unit, finishing	119
trim, or accessories on a motor vehicle chassis supplied by a	120
manufacturer or distributor.	121

(U) "Flea market" means a market place, other than a dealer's	122
location licensed under this chapter, where a space or location is	123
provided for a fee or compensation to a seller to exhibit and	124
offer for sale or trade, motor vehicles to the general public.	125

(V) "Franchise" means any written agreement, contract, or	126
understanding between any motor vehicle manufacturer or	127
remanufacturer engaged in commerce and any motor vehicle dealer	128
that purports to fix the legal rights and liabilities of the	129
parties to such agreement, contract, or understanding.	130

(W) "Franchisee" means a person who receives new motor	131
vehicles from the franchisor under a franchise agreement and who	132
offers, sells, and provides service for such new motor vehicles to	133
the general public.	134

(X) "Franchisor" means a new motor vehicle manufacturer,	135
remanufacturer, or distributor who supplies new motor vehicles	136
under a franchise agreement to a franchisee.	137

(Y) "Dealer organization" means a state or local trade	138
association the membership of which is comprised predominantly of	139
new motor vehicle dealers.	140

(Z) "Factory representative" means a representative employed	141
by a manufacturer, remanufacturer, or by a factory branch	142
primarily for the purpose of promoting the sale of its motor	143
vehicles, parts, or accessories to dealers or for supervising or	144
contacting its dealers or prospective dealers.	145

(AA) "Administrative or executive management" means those	146
individuals who are not subject to federal wage and hour laws.	147

(BB) "Good faith" means honesty in the conduct or transaction	148
concerned and the observance of reasonable commercial standards of	149
fair dealing in the trade as is defined in division (S) of section	150
1301.01 of the Revised Code, including, but not limited to, the	151
duty to act in a fair and equitable manner so as to guarantee	152
freedom from coercion, intimidation, or threats of coercion or	153
intimidation; provided however, that recommendation, endorsement,	154
exposition, persuasion, urging, or argument shall not be	155
considered to constitute a lack of good faith.	156

(CC) "Coerce" means to compel or attempt to compel by failing	157
to act in good faith or by threat of economic harm, breach of	158
contract, or other adverse consequences. Coerce does not mean to	159
argue, urge, recommend, or persuade.	160

(DD) "Relevant market area" means any area within a radius of	161
ten miles from the site of a potential new dealership, except that	162
for manufactured home or recreational vehicle dealerships the	163
radius shall be twenty-five miles. The ten-mile radius shall be	164
measured from the dealer's established place of business that is	165
used exclusively for the purpose of selling, displaying, offering	166
for sale, or dealing in motor vehicles.	167

(EE) "Wholesale" or "at wholesale" means the act or attempted	168
act of selling, bartering, exchanging, or otherwise disposing of a	169
motor vehicle to a transferee for the purpose of resale and not	170
for ultimate consumption by that transferee.	171

(FF) "Motor vehicle wholesaler" means any person licensed as	172
a dealer under the laws of another state and engaged in the	173
business of selling, displaying, or offering for sale used motor	174
vehicles, at wholesale, but does not mean any motor vehicle dealer	175
as defined in this section.	176

(GG)(1) "Remanufacturer" means a person who assembles or	177
installs passenger seating, walls, a roof elevation, or a body	178
extension on a conversion van with the motor vehicle chassis	179
supplied by a manufacturer or distributor, a person who modifies a	180
truck chassis supplied by a manufacturer or distributor for use as	181
a public safety or public service vehicle, a person who modifies a	182
motor vehicle chassis supplied by a manufacturer or distributor	183
for use as a limousine or hearse, or a person who modifies an	184
incomplete motor vehicle cab and chassis supplied by a new motor	185
vehicle dealer or distributor for use as a tow truck, but does not	186
mean either of the following:	187

(a) A person who assembles or installs passenger seating, a	188
roof elevation, or a body extension on a recreational vehicle as	189
defined in division (Q) and referred to in division (B) of section	190
4501.01 of the Revised Code;	191

(b) A person who assembles or installs special equipment or	192
accessories for handicapped persons, as defined in section 4503.44	193
of the Revised Code, upon a motor vehicle chassis supplied by a	194
manufacturer or distributor.	195

(2) For the purposes of division (GG)(1) of this section,	196
"public safety vehicle or public service vehicle" means a fire	197
truck, ambulance, school bus, street sweeper, garbage packing	198
truck, or cement mixer, or a mobile self-contained facility	199
vehicle.	200

(3) For the purposes of division (GG)(1) of this section,	201
"limousine" means a motor vehicle, designed only for the purpose	202
of carrying nine or fewer passengers, that a person modifies by	203
cutting the original chassis, lengthening the wheelbase by forty	204
inches or more, and reinforcing the chassis in such a way that all	205
modifications comply with all applicable federal motor vehicle	206
safety standards. No person shall qualify as or be deemed to be a	207
remanufacturer who produces limousines unless the person has a	208
written agreement with the manufacturer of the chassis the person	209
utilizes to produce the limousines to complete properly the	210
remanufacture of the chassis into limousines.	211

(4) For the purposes of division (GG)(1) of this section,	212
"hearse" means a motor vehicle, designed only for the purpose of	213
transporting a single casket, that is equipped with a compartment	214
designed specifically to carry a single casket that a person	215
modifies by cutting the original chassis, lengthening the	216
wheelbase by ten inches or more, and reinforcing the chassis in	217
such a way that all modifications comply with all applicable	218
federal motor vehicle safety standards. No person shall qualify as	219
or be deemed to be a remanufacturer who produces hearses unless	220
the person has a written agreement with the manufacturer of the	221
chassis the person utilizes to produce the hearses to complete	222
properly the remanufacture of the chassis into hearses.	223

(5) For the purposes of division (GG)(1) of this section,	224
"mobile self-contained facility vehicle" means a mobile classroom	225
vehicle, mobile laboratory vehicle, bookmobile, bloodmobile,	226
testing laboratory, and mobile display vehicle, each of which is	227
designed for purposes other than for passenger transportation and	228
other than the transportation or displacement of cargo, freight,	229
materials, or merchandise. A vehicle is remanufactured into a	230
mobile self-contained facility vehicle in part by the addition of	231
insulation to the body shell, and installation of all of the	232
following: a generator, electrical wiring, plumbing, holding	233
tanks, doors, windows, cabinets, shelving, and heating,	234
ventilating, and air conditioning systems.	235

(6) For the purposes of division (GG)(1) of this section,	236
"tow truck" means both of the following:	237

(a) An incomplete cab and chassis that are purchased by a	238
remanufacturer from a new motor vehicle dealer or distributor of	239
the cab and chassis and on which the remanufacturer then installs	240
in a permanent manner a wrecker body it purchases from a	241
manufacturer or distributor of wrecker bodies, installs an	242
emergency flashing light pylon and emergency lights upon the mast	243
of the wrecker body or rooftop, and installs such other related	244
accessories and equipment, including push bumpers, front grille	245
guards with pads and other custom-ordered items such as painting,	246
special lettering, and safety striping so as to create a complete	247
motor vehicle capable of lifting and towing another motor vehicle.	248

(b) An incomplete cab and chassis that are purchased by a	249
remanufacturer from a new motor vehicle dealer or distributor of	250
the cab and chassis and on which the remanufacturer then installs	251
in a permanent manner a car carrier body it purchases from a	252
manufacturer or distributor of car carrier bodies, installs an	253
emergency flashing light pylon and emergency lights upon the	254
rooftop, and installs such other related accessories and	255
equipment, including push bumpers, front grille guards with pads	256
and other custom-ordered items such as painting, special	257
lettering, and safety striping.	258

As used in division (GG)(6)(b) of this section, "car carrier	259
body" means a mechanical or hydraulic apparatus capable of lifting	260
and holding a motor vehicle on a flat level surface so that one or	261
more motor vehicles can be transported, once the car carrier is	262
permanently installed upon an incomplete cab and chassis.	263

(HH) "Operating as a new motor vehicle dealership" means	264
engaging in activities such as displaying, offering for sale, and	265
selling new motor vehicles at retail, operating a service facility	266
to perform repairs and maintenance on motor vehicles, offering for	267
sale and selling motor vehicle parts at retail, and conducting all	268
other acts that are usual and customary to the operation of a new	269
motor vehicle dealership. For the purposes of this chapter only,	270
possession of either a valid new motor vehicle dealer franchise	271
agreement or a new motor vehicle dealers license, or both of these	272
items, is not evidence that a person is operating as a new motor	273
vehicle dealership.	274

(II) "Outdoor power equipment" means garden and small utility	275
tractors, walk-behind and riding mowers, chainsaws, and tillers.	276

(JJ) "Remote service facility" means premises that are	277
separate from a licensed new motor vehicle dealer's sales facility	278
by not more than one mile and that are used by the dealer to	279
perform repairs, warranty work, recall work, and maintenance on	280
motor vehicles pursuant to a franchise agreement entered into with	281
a manufacturer of motor vehicles. A remote service facility shall	282
be deemed to be part of the franchise agreement and is subject to	283
all the rights, duties, obligations, and requirements of Chapter	284
4517. of the Revised Code that relate to the performance of motor	285
vehicle repairs, warranty work, recall work, and maintenance work	286
by new motor vehicle dealers.	287

(KK) "Recreational vehicle" has the same meaning as in	288
section 4501.01 of the Revised Code.	289

Sec. 4517.52.  (A) Each franchisor shall fulfill warranty and	290
recall obligations of repairing and servicing motor vehicles,	291
including all parts and components manufactured for installation	292
in any motor vehicle.	293

(B) Each franchisor shall compensate each of its franchisees	294
for labor and parts used to fulfill warranty and recall	295
obligations of repair and servicing at rates not less than the	296
rates charged by the franchisee to its retail customers for like	297
service and parts for nonwarranty work.	298

(C) Division (A) of this section shall not apply to	299
franchisors or franchisees who deal in recreational vehicles.	300

Sec. 4517.54.  (A) Notwithstanding the terms, provisions, or	301
conditions of an existing franchise, no franchisor shall	302
terminate, cancel, or fail to continue or renew a franchise except	303
for good cause. This section governs any action or intent to	304
terminate, cancel, discontinue, or not renew a franchise whether	305
the franchise was entered into prior to or after the effective	306
date of this amendment.	307

(B) EachExcept as otherwise provided in section 4517.541 of	308
the Revised Code, each franchisor proposing to terminate, cancel,	309
discontinue, or not renew a franchise shall send written notice by	310
certified mail of the proposed action to the franchisee at such	311
time as may be necessary to ensure that the notice is received no	312
later than ninety days before the effective date of the proposed	313
action, or no later than fifteen days before the effective date of	314
the proposed action when the proposed action is based upon any of	315
the following:	316

(1) Insolvency of the franchisee, or filing of any petition	317
by or against the franchisee under any bankruptcy or receivership	318
law;	319

(2) Any unlawful business practice after written warning	320
thereof;	321

(3) The franchisee has ceased business operations.

322

Each notice shall set forth the specific grounds for the	323
proposed termination, cancellation, or refusal to continue or	324
renew.	325

(C) Prior to the effective date of the proposed action, a	326
franchisee receiving written notice from a franchisor proposing to	327
terminate, cancel, discontinue, or not renew a franchise may file	328
a protest with the board against the franchisor's proposed action.	329
When such a protest has been filed, the board shall inform the	330
franchisor that a timely protest has been filed and that a hearing	331
is required pursuant to section 4517.57 of the Revised Code.	332

(D) A franchisor shall not terminate, cancel, discontinue, or	333
fail to renew a franchise before the holding of a hearing on any	334
protest filed under this section, or after the hearing, if the	335
board determines that good cause does not exist to terminate,	336
cancel, discontinue, or not renew the franchise.	337

Sec. 4517.541.  (A) Each franchisor proposing to terminate,	338
cancel, discontinue, or not renew a franchise based upon any of	339
the following shall send written notice by certified mail of the	340
proposed action to the franchisee at such time as may be necessary	341
to ensure that the notice is received not later than twelve months	342
before the effective date of the proposed action, unless	343
prohibited by law or regulation:	344

(1) As a result of any change in ownership, operation, or	345
control of all or any part of the business of the manufacturer,	346
factory branch, distributor, or distributor branch, whether by	347
sale or transfer of assets, corporate stock or other equity	348
interest, or by assignment, merger, consolidation, combination,	349
joint venture, redemption, operation of law, or otherwise;	350

(2) The termination, suspension, or cessation of a part or	351
all of the business operations of the manufacturer, factory	352
branch, distributor, or distributor branch;	353

(3) Discontinuance of the sale of a line-make, series, brand	354
or class of vehicles or a change in distribution system by the	355
manufacturer, whether through a change in distributors or the	356
manufacturer's decision to cease conducting business through a	357
distributor altogether.	358

(B) Each notice described in division (A) of this section	359
shall set forth the specific grounds for the proposed termination,	360
cancellation, or refusal to continue or renew a franchise.	361

(C) This section shall not apply to franchisors or	362
franchisees who deal in recreational vehicles.	363

Sec. 4517.542. (A) Except as provided in division (A)(6)(c)	364
of this section, upon the termination, cancellation,	365
discontinuance, or nonrenewal of any franchise by the franchisor	366
pursuant to this section, the manufacturer shall pay fair and	367
reasonable compensation to the new motor vehicle dealer for at	368
least the following:	369

(1)(a) The franchisee's net acquisition cost for any new,	370
undamaged, unaltered, and unsold vehicle in the franchisee's	371
inventory of the current model year or the model year preceding	372
the current model year, purchased from the franchisor or another	373
franchisee of the same line-make in the ordinary course of	374
business prior to receipt of a notice of termination,	375
cancellation, discontinuance, or nonrenewal, provided the vehicle	376
has less than five hundred miles registered on the odometer,	377
including mileage incurred in delivery from the franchisor or in	378
transporting the vehicle between new motor vehicle dealers for	379
sale;	380

(b) Notwithstanding division (A)(1)(a) of this section, a	381
vehicle damaged prior to delivery to the franchisee by the	382
manufacturer or its agent shall be eligible for repurchase in	383
accordance with this section;	384

(c) The franchisor shall pay the fair and reasonable	385
compensation for the items described in division (A)(1) of this	386
section, including the franchisee's costs of handling, packing,	387
loading, and transporting an item for return to the franchisor,	388
within thirty days after the effective date of the termination,	389
cancellation, discontinuance, or nonrenewal so long as the	390
franchisee can provide evidence of good and clear title upon	391
return of the items to the franchisor. If there is a lien on the	392
property, the franchisor may make payment jointly to the	393
franchisee and any party having a security interest or ownership	394
interest in the property.	395

(2) The franchisee's net acquisition cost of each new,	396
unused, undamaged, and unsold part or accessory purchased from the	397
manufacturer or a source recommended or approved by the franchisor	398
if the part or accessory is in the current parts catalog. In the	399
case of sheet metal, a comparable substitute for the original	400
package may be used. If the part or accessory was purchased by the	401
franchisee from an outgoing authorized franchisee, the franchisor	402
shall purchase the part or accessory at the depreciated value	403
price or the price in the current parts catalog, whichever is	404
less.	405

(3) The franchisee's net acquisition cost of each undamaged	406
sign if the sign bears a common name, trade name, or trademark of	407
the manufacturer, the manufacturer required the new motor vehicle	408
dealer to acquire the sign, and the sign was acquired by the new	409
motor vehicle dealer from the manufacturer or a source approved by	410
the manufacturer. A manufacturer shall purchase from the new motor	411
vehicle dealer at fair market price poles or other hardware used	412
to erect a sign if the manufacturer required the sign to be free	413
standing and not include a trademark or trade name other than that	414
of the manufacturer. For purposes of division (A)(3) of this	415
section, fair market price is equal to the new motor vehicle	416
dealer's original cost, reduced by one-tenth of the original cost	417
for each year of ownership.	418

(4) The franchisee's net acquisition cost of all equipment,	419
special tools, automotive service equipment, and other items	420
bearing the manufacturer's trademark that were required by the	421
manufacturer or distributor, and purchased from the manufacturer	422
or a source recommended or approved by the manufacturer. The net	423
acquisition cost shall be reduced over a period of five years at a	424
rate of twenty per cent per year.	425

(5) The franchisor shall pay the fair and reasonable	426
compensation for the items described in divisions (A)(2), (3), and	427
(4) of this section, including the cost of handling, packing,	428
loading, and transporting an item for return to the franchisor,	429
within sixty days after the effective date of termination,	430
cancellation, discontinuance, or nonrenewal, so long as the	431
franchisee is able to provide evidence of good and clear title	432
upon return of the items to the franchisor. The franchisor may	433
make payment jointly to the franchisee and any party having a	434
security interest or ownership interest in the property.	435

(6)(a) Subject to division (A)(6)(b) of this section, fair	436
market value of the franchise that is at least equivalent to the	437
fair market value of the franchise on the day before the	438
manufacturer announces the action that results in termination,	439
cancellation, discontinuance, or nonrenewal.	440

(b) If the termination, cancellation, discontinuance, or	441
nonrenewal is due to a manufacturer's change in distributors, the	442
manufacturer may avoid paying fair market value to the new motor	443
vehicle dealer if the new distributor or the manufacturer offers	444
the new motor vehicle dealer a franchise agreement with terms	445
substantially similar to terms offered to other same line-make new	446
motor vehicle dealers.	447

(c) The manufacturer is only required to pay fair market	448
value of the franchise if the termination, cancellation,	449
discontinuance, or nonrenewal of the franchise agreement is the	450
result of an action described in division (A) of section 4517.541	451
of the Revised Code.	452

(B) In the event the franchisor does not pay the franchisee	453
the amounts specified within the time required by this section for	454
an involuntary termination, the manufacturer shall pay or	455
reimburse the new motor vehicle dealer for any costs of storing,	456
insuring, and floor planning any of the property described in this	457
section from the effective date of termination, cancellation,	458
discontinuance, or nonrenewal until the date the franchisee is	459
paid and the property is transported, in addition to	460
transportation charges associated with the manufacturer's	461
repurchase obligations. The manufacturer shall not charge the new	462
motor vehicle dealer any handling, restocking, or other similar	463
costs or fees associated with items repurchased by the	464
manufacturer under division (A) of this section.	465

(C) Dealership facilities assistance shall be paid as	466
follows:	467

(1) If the new motor vehicle dealer is leasing the dealership	468
facilities from the manufacturer or a subsidiary of the	469
manufacturer, the manufacturer or subsidiary shall forgive any	470
future lease obligations.	471

(2) Subject to division (C)(4) of this section, if the new	472
motor vehicle dealer is leasing the dealership facilities from a	473
lessor other than the manufacturer, the manufacturer shall pay the	474
new motor vehicle dealer a sum equivalent to the rent for the	475
unexpired term of the lease or twelve months' rent, whichever is	476
less.	477

(3) Subject to division (C)(4) of this section, if the new	478
motor vehicle dealer owns the dealership facilities, the	479
manufacturer shall pay the new motor vehicle dealer a sum	480
equivalent to the reasonable rental value of the dealership	481
facilities for twelve months.	482

(4) In order to be entitled to facilities assistance from the	483
manufacturer as provided in divisions (C)(2) and (3) of this	484
section, the new motor vehicle dealer shall mitigate damages by	485
listing the dealership facilities for lease or sublease with a	486
licensed real estate agent or retail industry broker within thirty	487
days after the effective date of the termination, cancellation,	488
discontinuance, or nonrenewal of the franchise and thereafter by	489
reasonably cooperating with the real estate agent or retail	490
industry broker in the performance of the agent's or broker's	491
duties. If the new motor vehicle dealer is able to lease or	492
sublease the dealership facilities, the new motor vehicle dealer	493
shall pay the manufacturer the net revenue received from the	494
mitigation up to the total amount of facilities assistance that	495
the new motor vehicle dealer has received from the manufacturer	496
pursuant to division (C)(2) or (3) of this section.	497

(5) If the termination, cancellation, discontinuance, or	498
nonrenewal relates to fewer than all of the franchises operated by	499
the new motor vehicle dealer at a single location, the amount of	500
facilities assistance that the manufacturer is required to pay the	501
new motor vehicle dealer under division (F) of this section shall	502
be based on the percentage of total square footage attributed to	503
the line-make being terminated, canceled, discontinued, or not	504
renewed.	505

(6) The manufacturer shall pay the dealership facilities	506
assistance under division (C) of this section within sixty days	507
after the effective date of termination, cancellation,	508
discontinuance, or nonrenewal. The franchisor may make payment	509
jointly to the franchisee and any party having a security interest	510
or ownership interest in the property.	511

(7) The manufacturer is not required to pay dealership	512
facilities assistance if the termination, cancellation,	513
discontinuance, or nonrenewal of the franchise agreement is the	514
result of insolvency of the franchisee or the filing of any	515
petition by or against the franchisee under any bankruptcy or	516
receivership law, is the result of any unlawful business practice	517
after written warning thereof, is the result of the franchisee	518
ceasing business operations, or is the result of the voluntary act	519
of the new motor vehicle dealer.	520

(D) This section shall not apply to a termination,	521
cancellation, discontinuance, or nonrenewal of a franchise that	522
results from the sale of the assets or stock of the motor vehicle	523
dealership from a franchisee to a franchisee or prospective	524
franchisee.	525

(E) This section shall not apply to any noncoerced voluntary	526
termination. A franchisee that voluntarily terminates the	527
franchise agreement remains eligible for any termination	528
assistance provided for voluntary terminations in the franchisee's	529
franchise agreement with the franchisor.	530

(F) A franchise shall continue in full force and operation	531
notwithstanding a change, in whole or in part, of an established	532
plan of distribution or system of distribution of the motor	533
vehicles offered for sale under the franchise. The appointment of	534
a new manufacturer, factory branch, distributor, or distributor	535
branch for motor vehicles offered for sale under the franchise	536
agreement shall be considered to be a change of an established	537
plan of distribution or system of distribution.	538

(G) Disputes arising between a manufacturer or distributor	539
and a new motor vehicle dealer under this section shall be	540
resolved by submitting the dispute to the manufacturer's internal	541
dispute resolution process if one is available. If no such process	542
exists, the dispute shall be submitted to a court of competent	543
jurisdiction. Either party may appeal the decision of the	544
manufacturer's internal dispute resolution process to a court of	545
competent jurisdiction.	546

(H) Nothing in this section shall be construed as prohibiting	547
a manufacturer or distributor from changing, adding or deleting	548
models, specifications, model names, numbers or identifying marks,	549
or similar characteristics of the new vehicles it markets,	550
provided that the change, addition, or deletion does not result in	551
the termination or discontinuance of a line-make, series, brand,	552
or class of new vehicle.	553

(I) This section shall not apply to franchisors or	554
franchisees who deal in recreational vehicles.	555

(J) As used in this section:

556

(1) "Net acquisition cost" means the franchised dealer cost	557
for a new and unsold motor vehicle in a dealer's inventory plus	558
any charges by the manufacturer or distributor for destination,	559
distribution, or delivery, and taxes, less all allowances paid or	560
credited to the franchised dealer by the manufacturer or	561
distributor.	562

(2) "Line-make" means a collection of models, series, or	563
groups of motor vehicles manufactured by or for a particular	564
manufacturer, distributor, or importer that are offered for sale,	565
lease, or distribution pursuant to a common brand name or mark.	566
Multiple brand names or marks may constitute a single line-make,	567
but only when included in a common dealer agreement and when the	568
manufacturer, distributor, or importer offers such vehicles	569
bearing the multiple names or marks together, and not separately,	570
to its authorized dealers.	571

Sec. 4517.55.  (A) In determining whether good cause has been	572
established by the franchisor for terminating, cancelling, or	573
failing to continue or renew a franchise, the motor vehicle	574
dealers board shall take into consideration the existing	575
circumstances, including, but not limited to:	576

(1) The amount of retail sales transacted by the franchisee	577
during a five-year period immediately preceding such notice as	578
compared to the business available to the franchisee;	579

(2) The investment necessarily made and obligations incurred	580
by the franchisee to perform its part of the franchise;	581

(3) The permanency of the franchisee's investment;

582

(4) Whether it is injurious or beneficial to the public	583
interest for the franchise to be modified or replaced, or the	584
business of the franchisee disrupted;	585

(5) Whether the franchisee has adequate motor vehicle sales	586
and service facilities, equipment, vehicle parts, and qualified	587
service personnel to reasonably provide for the needs of the	588
consumers for the motor vehicles handled by the franchisee, and is	589
rendering adequate service to the public;	590

(6) Whether the franchisee fails to fulfill the warranty	591
obligations of the franchisor required to be performed by the	592
franchisee;	593

(7) The extent and materiality of the franchisee's failure to	594
comply with the terms of the franchise and the reasonableness and	595
fairness of the franchise terms;	596

(8) Whether the owners of the new motor vehicle dealer had	597
actual knowledge of the facts and circumstances upon which	598
termination, cancellation, discontinuance, or nonrenewal is based;	599

(9) Whether the proposed termination, cancellation,	600
discontinuance, or nonrenewal constitutes discriminatory	601
enforcement of the franchise agreement.	602

(B) Notwithstanding the terms, conditions, or provisions of	603
any franchise or waiver, the following do not constitute	604
sufficient good cause for terminating, cancelling, or failing to	605
continue or renew a franchise:	606

(1) Refusal by the franchisee to purchase or accept delivery	607
of any new motor vehicle, parts, accessories, or any other	608
commodity or service not ordered by the franchisee;	609

(2) The fact that the franchisee or the owner of any interest	610
therein, owns, has an investment in, participates in the	611
management of, or holds a license for the sale of the same or any	612
other line-make of new motor vehicle;	613

(3) The sale, transfer, or issuance of any equity or	614
debenture issue, or the transfer or issuance of any security or	615
shares of stock in a new motor vehicle dealer to any person,	616
whenever the sale, issuance, or transfer does not result in a	617
change in the controlling ownership of the dealership;	618

(4) A change by the franchisee in the administrative or	619
executive management of the dealership;	620

(5) Failure of the franchisee to achieve any unreasonable or	621
discriminatory performance criteria;	622

(6) A loss of trust by the franchisor absent circumstances or	623
facts that would be a material breach of the franchise agreement	624
and that material breach is known and ratified by the owners of	625
the new motor vehicle dealer;	626

(7) The failure of a franchisee to maintain a motor vehicle	627
floor plan line of credit, unless the franchisee fails to maintain	628
a floor plan line of credit for one hundred twenty days or longer;	629

(8) The export of new motor vehicles to a foreign country,	630
absent evidence that the new motor vehicle dealer knew or should	631
have known that the vehicle was purchased for export. There shall	632
be a rebuttable presumption that a new motor vehicle dealer did	633
not know, or should not have known, that a vehicle was purchased	634
for export if the vehicle is titled in the United States.	635

(C) Divisions (B)(6) to (8) of this section shall not apply	636
to franchisors or franchisees who deal in recreational vehicles.	637

Sec. 4517.59. (A) Notwithstanding the terms, provisions, or	638
conditions of any agreement, franchise, or waiver, no franchisor	639
shall:	640

(A)(1) In acting or purporting to act under the terms,	641
provisions, or conditions of a franchise or in terminating,	642
canceling, or failing to renew a franchise, fail to act in good	643
faith;	644

(B)(2) Prevent a franchisee from changing administrative or	645
executive management, provided such personnel satisfy reasonable	646
and objective standards formulated and objectively applied by the	647
franchisor;	648

(C)(3) Restrict the sale of any equity or debenture issue or	649
the transfer of any securities in a dealership, or in any way	650
prevent or attempt to prevent the transfer, sale, or issuance of	651
shares of stock or debentures to any person, if the basic	652
financial requirements of the franchisor have been equalled at the	653
time of the execution of the franchise agreement and continued in	654
effect, and if the sale, transfer, or issuance does not have the	655
effect of accomplishing a sale of a controlling interest in the	656
dealership;	657

(D)(4) Coerce or threaten any franchisee by refusing or	658
failing to renew or extend a lease of premises where the fee or	659
right of possession is in the absolute control of the franchisor	660
and the franchisee upon request or demand of the franchisor fails	661
to expand its facilities, increase sales personnel, purchase more	662
parts or accept programs for sales and operation of the	663
franchisee's business, when such demand is not reasonable, fair,	664
and equitable under all circumstances, or tends to depreciate the	665
franchisee's equity;	666

(E)(5) Sell, lease, or rent goods or motor vehicles, or	667
render any service normally performed and required of franchisees	668
under the franchise agreement with the franchisor, in unfair	669
competition with the franchisee, except that this division does	670
not apply to a sale, lease, or rental to, or service performed	671
for, an agency of federal, state, or local government;	672

(F)(6) Coerce, or attempt to coerce, any franchisee to accept	673
delivery of any motor vehicle, parts, accessories, or any other	674
commodities connected therewith which are not ordered by said	675
franchisee; nor withhold or delay delivery of motor vehicles out	676
of the ordinary course of business; nor discriminate against any	677
franchisee in the allocation or through the withholding from	678
delivery of certain models of motor vehicles ordered by a	679
franchisee out of the ordinary course of business; nor unfairly	680
change or amend unilaterally a franchisee's allotment of motor	681
vehicles or quota in a sales contest, sales expectancy, or sales	682
penetration without reasonable cause; nor coerce a franchisee by	683
any means to participate or contribute to any local or national	684
advertising fund; nor employ any coercive techniques for any other	685
purposes such as obtaining franchisee participation in contests,	686
"giveaways," or other sales devices;	687

(G)(7) Coerce, or attempt to coerce, a franchisee by	688
threatening to award an additional franchise or agreement to	689
another person for the sale of its same product in the same area	690
of influence for the purposes of compelling such franchisee to	691
yield to demands of the franchisor for increased sales of the	692
franchisor's products, parts, expansion of facilities and	693
improvement of operations inconsistent with good business	694
practices of the franchisee;	695

(H)(8) Fail or refuse to make equally available to its same	696
line-make franchisees all motor vehicles, motor vehicle parts, or	697
other products manufactured for that line-make at the same actual	698
price, or to utilize any device including, but not limited to,	699
sales promotion plans or programs that result in such lesser	700
actual price. Division (A)(8) of this section shall not apply to	701
sales to a franchisee for resale to any unit of government or	702
donation or use by a franchisee in a driver education program.	703
Division (A)(8) of this section shall not prohibit the offering of	704
incentive programs or other discounts so long as such incentives	705
or discounts are reasonably available to all franchisees in this	706
state on a proportionately equal basis and are based on the sale	707
of individual vehicles and not increased for meeting a performance	708
standard unless the standard is reasonable considering all	709
existing circumstances.	710

A franchisor has not made a motor vehicle, motor vehicle	711
part, or other product available to all line-make franchisees if	712
the franchisor does any of the following:	713

(a) Requires a franchisee to remodel, renovate, or	714
recondition the new motor vehicle dealer's existing dealership	715
facilities as a prerequisite to receiving the model, part, or	716
product, unless reasonably necessary to accommodate the adequate	717
sale and service of a vehicle based on the technology of that	718
vehicle. As used in division (A)(8) of this section, "remodel,	719
renovate, and recondition" includes the requirement that a	720
franchisee purchase or lease unreasonably expensive advertising or	721
promotional displays or other similar materials.	722

(b) Requires a franchisee to pay an additional fee to receive	723
any model, part, or product within a franchisor's line-make;	724

(c) Requires a franchisee to accept additional inventory to	725
receive any model, part, or product within a franchisor's	726
line-make.	727

(9) Fail to either return a part to the franchisee, at the	728
franchisor's expense, or reimburse the franchisee for the	729
franchisee's cost of the part where a franchisor does not approve	730
a franchisee's claim for a defective part;	731

(I)(10) Fail to approve or disapprove any warranty or recall	732
claim submitted by a franchisee within forty-five days after	733
receipt from the franchisee. If a claim is not approved, the	734
franchisor shall immediately so notify in writing the franchisee	735
who submitted the claim and shall include in the notice the	736
specific grounds upon which the disapproval is based.	737

(J)(11) Fail to pay a franchisee within thirty days after	738
approval by the franchisor of any claim by a franchisee for labor	739
and parts made under sectionsdivision (B) of section 4517.52 and	740
section 4517.53 of the Revised Code. Any failure of a franchisor	741
to act on or pay a claim within the time limits specified by this	742
section that results from causes beyond the franchisor's	743
reasonable control does not constitute a violation of this	744
section.	745

(K)(12) Disclaim an otherwise valid warranty or recall claim	746
because the franchisee fails to submit or resubmit the claim	747
within a period of less than six months from the date on which the	748
service was rendered or parts supplied;	749

(L)(13) Unless otherwise authorized or required by the	750
"National Traffic and Motor Vehicle Safety Act," 49 U.S.C. 30101,	751
et seq. or any regulation adopted thereunder, the "Transportation	752
Recall, Enhancement, Accountability, and Documentation Act," 49	753
U.S.C. 30123, et seq. or any regulation adopted thereunder, or any	754
other federal law or regulation, provide reimbursement to any	755
individual or entity that is not a franchisee for labor and parts	756
used to fulfill warranty and recall work, unless the work is	757
required for emergency service, or is performed by a service	758
center owned by the manufacturer on employee- or company-owned	759
vehicles only, or the work is warranty service by employees of a	760
fleet operator on its own vehicles. Nothing in division (A)(13) of	761
this section shall prohibit a manufacturer from reimbursing a	762
franchisee of another line-make of the same manufacturer for labor	763
and parts used to fulfill warranty and recall work.	764

(14) Refuse to disclose to any new motor vehicle dealer who	765
handles the same line-make, the manner and mode of distribution of	766
that line-make within the same county, or if a line-make is	767
allocated among new motor vehicle dealers, refuse to disclose to	768
any new motor vehicle dealer that handles the same line-make the	769
system of allocation, including, but not limited to, a complete	770
breakdown by model, color, equipment, other items or terms, and a	771
concise listing of dealerships with an explanation of the	772
derivation of the allocation system including its mathematical	773
formula in a clear and comprehensible form;	774

(M)(15) Engage in any predatory practice or discriminate	775
against any new motor vehicle dealer including discriminating	776
against a franchisee, as compared to a same line-make franchisee,	777
with regard to motor vehicle allocation, motor vehicle sales	778
expectations, motor vehicle market penetration, motor vehicle	779
planning volume requirements, customer service satisfaction	780
requirements, dealership facility requirements, or dealer	781
capitalization requirements;	782

(N)(16) Prohibit a franchisee from acquiring a line-make of	783
new motor vehicles solely because it owns or operates a franchise	784
of the same line-make in a contiguous market;	785

(17) Use any financial services company or leasing company	786
owned in whole or part or controlled by the manufacturer or	787
distributor to accomplish what would otherwise be illegal conduct	788
on the part of the manufacturer or distributor pursuant to this	789
section. This section does not limit the right of the financial	790
services or leasing company to otherwise engage in regular	791
financial services or leasing business practices.	792

(18) Initiate a charge back without an audit or perform an	793
audit to confirm a warranty repair, sales incentive, or rebate	794
more than twelve months after the date of submission by the	795
franchisee, provided that these limitations shall not be effective	796
in the case of a fraudulent claim. Division (A)(18) of this	797
section does not preclude a charge back for any fraudulent claim	798
that was previously paid.	799

(19) Refuse to pay a franchisee for sales incentives, service	800
incentives, rebates, or other forms of incentive compensation	801
within thirty days after their approval by the manufacturer. The	802
franchisor shall either approve or disapprove each claim by the	803
franchisor within thirty days after receipt of the claim in a	804
proper form generally used by the franchisor. Any claims not	805
specifically disapproved in writing within thirty days after	806
receipt shall be considered to be approved.	807

(20) Reduce the amount to be paid to the new motor vehicle	808
dealer or charge a new motor vehicle dealer back subsequent to the	809
payment of the claim unless either of the following applies:	810

(a) The manufacturer shows that the claim lacks material	811
documentation or is false, fraudulent, or a misrepresentation. A	812
franchisor may not deny a claim based solely on a new motor	813
vehicle dealer's incidental failure to comply with a specific	814
claim processing requirement, such as a clerical error, that does	815
not put into question the legitimacy of the claim.	816

(b) The new motor vehicle dealer knew or should have known a	817
new motor vehicle was sold for export to a foreign country. There	818
shall exist a rebuttable presumption that a new motor vehicle	819
dealer did not know, or should not have known, that a vehicle was	820
sold for export to a foreign country if the motor vehicle is	821
titled in the United States.	822

No refusal to pay sales incentives, service incentives,	823
rebates, or other forms of incentive compensation, no reduction in	824
the amount to be paid to the new motor vehicle dealer, and no	825
charge back subsequent to the payment of a claim may be made until	826
the new motor vehicle dealer has had notice and an opportunity to	827
participate in all franchisor internal appeal processes as well as	828
all available legal processes. If a charge back is the subject of	829
adjudication, internal appeal, mediation, or arbitration, no	830
charge back shall be made until, in the case of an adjudication or	831
legal action, a final appealable order has been issued.	832

At the time submitted, the claim shall act as an immediate	833
automatic credit against future billings. Any ambiguity or	834
inconsistency in submission guidelines shall be construed against	835
the drafter. Any failure by a new motor vehicle dealer to exercise	836
its rights to reimbursement under this section does not create a	837
waiver of these rights. Any unreasonable denial, delay, or	838
restriction of a valid reimbursement claim shall subject the	839
manufacturer to interest in accordance with division (A) of	840
section 1343.03 of the Revised Code until paid.	841

(21) Prevent, attempt to prevent, prohibit, coerce, or	842
attempt to coerce, any new motor vehicle dealer from charging any	843
consumer any fee allowed to be charged by the dealer under Ohio	844
law;	845

(22) Require, coerce, or attempt to coerce any new motor	846
vehicle dealer in this state to change the capital structure of	847
the new motor vehicle dealer or the means by or through which the	848
new motor vehicle dealer finances the operation of the dealership	849
provided that:	850

(a) The new motor vehicle dealer at all times shall meet any	851
reasonable capital standards determined by the manufacturer in	852
accordance with uniformly applied criteria.	853

(b) No change in the capital structure shall cause a change	854
in the principal management or have the effect of a sale of the	855
franchise without the consent of the manufacturer or distributor,	856
and further provided that the manufacturer or distributor shall	857
not unreasonably withhold consent.	858

(23) Require, coerce, or attempt to coerce any new motor	859
vehicle dealer in this state to change location of the dealership,	860
or to make any substantial alterations to the dealership premises	861
or facilities, when to do so would be unreasonable, or without	862
written estimation of a sufficient supply of new motor vehicles so	863
as to justify the location change or alterations, in light of the	864
current market and economic conditions;	865

(24) Establish any performance standard or program for	866
measuring franchisee performance that may have a material impact	867
on a franchisee that is not fair, reasonable, and equitable, or	868
apply any such standard or program to a franchisee in a manner	869
that is not fair, reasonable, and equitable;	870

(25) Unreasonably require a franchisee to establish or	871
maintain exclusive sales facilities, sales display space,	872
personnel, service, parts, or administrative facilities for a	873
line-make, unless such exclusivity is reasonable and otherwise	874
justified by reasonable business considerations. In making that	875
determination, the franchisor shall take into consideration the	876
franchisee's satisfaction of facility requirements as required by	877
the franchise agreement. The franchisor shall have the burden of	878
proving that reasonable business considerations justify	879
exclusivity.	880

(26) Require or request a franchisee to waive any	881
requirements of this section.	882

(B) No franchisor shall discriminate among the franchisor's	883
dealers in any program that provides assistance to the	884
franchisor's dealers, including internet listings, sales leads,	885
warranty policy adjustments, marketing programs, and dealer	886
recognition programs. The franchisor shall not require a	887
franchisee to provide its customer lists or service files to the	888
franchisor, unless necessary for the sale and delivery of a new	889
motor vehicle to a consumer, to validate and pay consumer or	890
dealer incentives, or for the submission to the franchisor for any	891
services supplied by the franchisee for any claim for warranty	892
parts or repairs. Nothing in this division shall limit the	893
franchisor's ability to require or use customer information to	894
satisfy any safety or recall notice obligation.	895

(C) No franchise agreement shall require the franchisee to	896
pay the attorney's fees of a franchisor, waive any remedy or	897
defense available to the franchisee, require a motor vehicle	898
dealer to submit to arbitration or mediation to resolve a	899
controversy before the controversy arises, or waive any other	900
provisions of this chapter. Nothing in this division shall	901
preclude the parties from entering into a voluntary agreement to	902
arbitrate or mediate a controversy after it arises unless	903
otherwise precluded by law. Such an agreement shall require that	904
the dispute be heard in this state and that the arbitrator or	905
mediator apply the law of this state in resolving the controversy.	906
Either party may appeal a decision of an arbitrator in the court	907
of common pleas of Franklin county on the grounds that the	908
arbitrator failed to apply the law of this state.	909

(D) This section applies to any franchise whether entered	910
into prior to or after the effective date of this amendment.	911
Divisions (A)(8), (13), (16) to (25), (B), and (C) of this section	912
shall not apply to franchisors or franchisees who deal in	913
recreational vehicles.	914

Section 2.  That existing sections 4517.01, 4517.52, 4517.54,	915
4517.55, and 4517.59 of the Revised Code are hereby repealed.	916