S*0630(Rat #0075, Act #0052 of 2009)  General Bill, By Land, Setzler, L. Martin, 
Ford, Nicholson, Lourie, Sheheen, Massey, Reese, Elliott, Peeler, Leatherman, 
Knotts, Hayes, Verdin, Leventis, Coleman, Matthews, Fair, Scott, Hutto, McGill, 
Williams, O'Dell, Campbell, Thomas, Rankin, Rose, Davis, Alexander, Shoopman, 
Anderson, S. Martin, Bright, Grooms, Jackson and Malloy

Similar(H 3888)
 AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION
 56-15-65 SO AS TO PROVIDE THAT IT IS UNLAWFUL FOR A MOTOR VEHICLE
 MANUFACTURER, DISTRIBUTOR, FACTORY REPRESENTATIVE, OR DISTRIBUTOR
 REPRESENTATIVE TO REQUIRE OR COERCE A MOTOR VEHICLE DEALER TO CHANGE THE
 LOCATION OF HIS DEALERSHIP OR MAKE SUBSTANTIAL ALTERATIONS TO THE DEALER'S
 PREMISES UNDER CERTAIN CIRCUMSTANCES; BY ADDING SECTION 56-15-75 SO AS TO
 PROVIDE THAT IT IS UNLAWFUL FOR A MOTOR VEHICLE MANUFACTURER, FACTORY BRANCH,
 DISTRIBUTOR BRANCH, FACTORY REPRESENTATIVE OR DISTRIBUTOR REPRESENTATIVE TO
 REQUIRE OR COERCE A MOTOR VEHICLE DEALER TO REFRAIN FROM PARTICIPATION IN THE
 MANAGEMENT OF, INVESTMENT IN, OR ACQUISITION OF ANOTHER MAKE OR LINE OF NEW
 MOTOR VEHICLES OR RELATED PRODUCTS UNDER CERTAIN CIRCUMSTANCES; AND TO AMEND
 SECTION 56-15-90, RELATING TO A MANUFACTURER'S, WHOLESALER'S, DISTRIBUTOR'S OR
 FRANCHISOR'S UNLAWFUL FAILURE TO RENEW, TERMINATE, OR RESTRICT THE TRANSFER OF
 A FRANCHISE, SO AS TO MAKE TECHNICAL CHANGES, AND TO PROVIDE THE FACTORS TO BE
 CONSIDERED IN CALCULATING THE FAIR AND REASONABLE COMPENSATION FOR THE VALUE
 OF A DEALERSHIP FRANCHISE. - ratified title

   03/26/09  Senate Introduced and read first time SJ-4
   03/26/09  Senate Referred to Committee on Transportation SJ-4
   04/15/09  Senate Committee report: Favorable with amendment
                     Transportation
   04/16/09         Scrivener's error corrected
   04/21/09  Senate Committee Amendment Adopted SJ-29
   04/21/09  Senate Read second time SJ-29
   04/22/09         Scrivener's error corrected
   04/22/09  Senate Amended SJ-18
   04/22/09  Senate Read third time and sent to House SJ-18
   04/23/09  House  Introduced and read first time HJ-229
   04/23/09  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-229
   04/30/09  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-5
   05/05/09         Scrivener's error corrected
   05/12/09  House  Amended HJ-33
   05/12/09  House  Read second time HJ-38
   05/13/09  House  Read third time and returned to Senate with
                     amendments HJ-6
   05/13/09  Senate Concurred in House amendment and enrolled SJ-73
   05/27/09         Ratified R 75
   06/03/09         Became law without Governor's signature
   06/11/09         Effective date 06/03/09
   06/12/09         Act No. 52

(A52, R75, S630)

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 56-15-65 SO AS TO PROVIDE THAT IT IS UNLAWFUL FOR A MOTOR VEHICLE MANUFACTURER, DISTRIBUTOR, FACTORY REPRESENTATIVE, OR DISTRIBUTOR REPRESENTATIVE TO REQUIRE OR COERCE A MOTOR VEHICLE DEALER TO CHANGE THE LOCATION OF HIS DEALERSHIP OR MAKE SUBSTANTIAL ALTERATIONS TO THE DEALER'S PREMISES UNDER CERTAIN CIRCUMSTANCES; BY ADDING SECTION 56-15-75 SO AS TO PROVIDE THAT IT IS UNLAWFUL FOR A MOTOR VEHICLE MANUFACTURER, FACTORY BRANCH, DISTRIBUTOR BRANCH, FACTORY REPRESENTATIVE, OR DISTRIBUTOR REPRESENTATIVE TO REQUIRE OR COERCE A MOTOR VEHICLE DEALER TO REFRAIN FROM PARTICIPATION IN THE MANAGEMENT OF, INVESTMENT IN, OR ACQUISITION OF ANOTHER MAKE OR LINE OF NEW MOTOR VEHICLES OR RELATED PRODUCTS UNDER CERTAIN CIRCUMSTANCES; AND TO AMEND SECTION 56-15-90, RELATING TO A MANUFACTURER'S, WHOLESALER'S, DISTRIBUTOR'S, OR FRANCHISOR'S UNLAWFUL FAILURE TO RENEW, TERMINATE, OR RESTRICT THE TRANSFER OF A FRANCHISE, SO AS TO MAKE TECHNICAL CHANGES, AND TO PROVIDE THE FACTORS TO BE CONSIDERED IN CALCULATING THE FAIR AND REASONABLE COMPENSATION FOR THE VALUE OF A DEALERSHIP FRANCHISE.

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

Motor vehicle dealerships

SECTION    1.    Article 1, Chapter 15, Title 56 of the 1976 Code is amended by adding:

"Section 56-15-65.    It is unlawful for any manufacturer, distributor, factory representative, or distributor representative to require, coerce, or attempt to coerce any motor vehicle dealer to change the location of the motor vehicle dealership or to make any substantial alterations to the dealer's premises or facilities unless:

(1)    the manufacturer demonstrates that such change or alteration is reasonable in light of the current market and economic conditions; and

(2)    the motor vehicle dealer has been provided written assurance from the manufacturer or distributor of a sufficient supply of motor vehicles to justify such change or alteration."

Motor vehicle dealers

SECTION    2.    Article 1, Chapter 15, Title 56 of the 1976 Code is amended by adding:

"Section 56-15-75.    It is unlawful for any manufacturer, distributor, factory branch, distributor branch, factory representative, or distributor representative to require, coerce, or attempt to coerce any motor vehicle dealer to refrain from participation in the management of, investment in, or acquisition of any other make or line of new motor vehicles or related products if:

(1)    the requirements are unreasonable considering current economic conditions and are not otherwise justified by reasonable business considerations;

(2)    the motor vehicle dealer has maintained a reasonable line of credit for each make or line of a new motor vehicle; and

(3)    the motor vehicle dealer remains in compliance with reasonable capital standards and reasonable facilities requirements specified by the manufacturer.

Reasonable facilities requirements shall not include any requirement that a motor vehicle dealer establish or maintain exclusive facilities, personnel, or display space, unless the manufacturer or distributor establishes by a preponderance of the evidence that such requirements are justified by current economic conditions or reasonable business considerations."

Motor vehicle dealers

SECTION    3.    Section 56-15-90 of the 1976 Code is amended to read:

"Section 56-15-90.    (A)    Anything to the contrary notwithstanding, it shall be unlawful for the manufacturer, wholesaler, distributor, or franchisor, without due cause, to fail to renew on terms then equally available to all its motor vehicle dealers of the same line-make, to terminate a franchise or to unreasonably restrict the transfer of a franchise unless the franchisee shall receive fair and reasonable compensation for the value of the business and compensation for its dealership facilities or location as provided in subsection (C).

(B)    In determining the fair and reasonable compensation for a business, pursuant to subsection (A) or (D), the value of the business shall include, but not be limited to:

(1)    the dealer cost for all new untitled, undamaged, and unaltered motor vehicles in the dealer's inventory purchased from the manufacturer or from another same line-make dealer in the ordinary course of business within eighteen months of termination;

(2)    the dealer cost for all new, unused, and undamaged parts listed in the current price catalog and still in the original, resalable merchandising package and in unbroken lots, purchased from the manufacturer or distributor;

(3)    the fair market value of signage bearing a trademark or trade name of the manufacturer or line-make purchased from and required by the manufacturer or distributor;

(4)    the fair market value of special tools and automotive service equipment owned by the dealer that were designated as special tools or equipment required by and purchased from the manufacturer or distributor, if the tools and equipment are in useable and good condition, normal wear and tear excepted; and

(5)    the reasonable cost of return shipping and handling charges incurred as a result of returning such items.

Provided the new motor vehicle dealer has clear title to the inventory and other items and is in a position to convey that title to the manufacturer, the payments required under this section shall be paid by the manufacturer, wholesaler, distributor, or franchisor within ninety days of the effective date of the termination, nonrenewal, or cancellation of a franchise. If the inventory or other items are subject to a security interest, the manufacturer, wholesaler, distributor, or franchisor may make payment jointly to the dealer and the holder of the security interest.

(C)    Within ninety days of the termination, cancellation, or nonrenewal of a franchise by a manufacturer, wholesaler, distributor, or franchisor, due to a dealer's poor sales and service performance, or due to the discontinuation of a line-make, the party shall pay the franchisee an amount equal to:

(1)    the franchisee's reasonable cost to rent or lease its dealership facility or location for one year or the unexpired term of the lease or rental period, whichever is less; or

(2)    the reasonable rental value of the facilities or location for one year if the franchisee owns the facility or location.

If more than one franchise is being terminated, canceled, or not renewed, the reimbursement shall be prorated equally among the different manufacturers, wholesalers, distributors, and franchisors. If the facility is used for the operations of more than one franchise and only one is being terminated, the reasonable rent shall be paid based upon the prorated portion of new vehicle sales for the previous year attributable to the line-make being terminated, canceled, or nonrenewed for the prior one-year period.

(D)    In the event a franchisee terminates the franchise agreement with the manufacturer, wholesaler, distributor, or franchisor, it is unlawful for the manufacturer, wholesaler, distributor, or franchisor to not abide by the provisions included in subsection (B) in determining fair and reasonable compensation to the dealer. However, the requirements of subsection (B) do not apply to a termination, cancellation, or nonrenewal due to the sale of the assets or stock of a motor vehicle franchisee.

(E)    In the case of a franchise for motor homes as defined in Section 56-15-10(q), subsections (B), (C), and (D) do not apply."

Time effective

SECTION    4.    This act takes effect upon approval by the Governor.

Ratified the 27th day of May, 2009.

Became law without the signature of the Governor -- 6/3/09.