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Sponsors: Reps. Clemmons and Witherspoon
Document Path: l:\council\bills\swb\5036cm07.doc
Companion/Similar bill(s): 505
Introduced in the House on January 9, 2007
Introduced in the Senate on May 8, 2007
Last Amended on May 1, 2008
Passed by the General Assembly on May 7, 2008
Governor's Action: May 14, 2008, Vetoed
Legislative veto action(s): Veto sustained
Summary: Motorcycle manufacturers, distributors, dealers, and wholesalers
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 12/13/2006 House Prefiled 12/13/2006 House Referred to Committee on Labor, Commerce and Industry 1/9/2007 House Introduced and read first time HJ-51 1/9/2007 House Referred to Committee on Labor, Commerce and Industry HJ-53 5/2/2007 House Committee report: Favorable with amendment Labor, Commerce and Industry HJ-3 5/3/2007 House Amended HJ-146 5/3/2007 House Read second time HJ-152 5/3/2007 House Unanimous consent for third reading on next legislative day HJ-152 5/4/2007 House Read third time and sent to Senate HJ-1 5/8/2007 Senate Introduced and read first time SJ-5 5/8/2007 Senate Referred to Committee on Transportation SJ-5 5/1/2008 Senate Polled out of committee Transportation SJ-17 5/1/2008 Senate Committee report: Favorable Transportation SJ-17 5/1/2008 Senate Amended SJ-19 5/1/2008 Senate Read second time SJ-19 5/1/2008 Senate Unanimous consent for third reading on next legislative day SJ-19 5/2/2008 Senate Read third time and returned to House with amendments SJ-1 5/2/2008 Scrivener's error corrected 5/7/2008 House Concurred in Senate amendment and enrolled HJ-23 5/8/2008 Ratified R 244 5/14/2008 Vetoed by Governor 5/21/2008 House Veto Sustained Yeas-63 Nays-48 HJ-75 5/21/2008 House Motion noted- Rep. JR Smith moved to reconsider the vote whereby the Governor's veto was sustained HJ-216 5/22/2008 House Reconsider vote whereby veto sustained HJ-76 5/22/2008 House Veto sustained Yeas-40 Nays-60 HJ-78
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VERSIONS OF THIS BILL
NOTE: THIS COPY IS A TEMPORARY VERSION. THIS DOCUMENT WILL REMAIN IN THIS VERSION UNTIL PUBLISHED IN THE ADVANCE SHEETS TO THE ACTS AND JOINT RESOLUTIONS. WHEN THIS DOCUMENT IS PUBLISHED IN THE ADVANCE SHEET, THIS NOTE WILL BE REMOVED.
AN ACT TO AMEND SECTION 56-16-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PROCEDURE A MANUFACTURER WHO SEEKS TO ENTER INTO A FRANCHISE ESTABLISHING AN ADDITIONAL NEW MOTORCYCLE DEALERSHIP OR RELOCATING AN EXISTING NEW MOTORCYCLE DEALERSHIP IN A RELEVANT MARKET AREA WHERE THIS LINE-MAKE IS REPRESENTED MUST FOLLOW, SO AS TO DELETE THE TERM "NEW MOTORCYCLE" AND REPLACE IT WITH THE TERM "MOTORCYCLE", TO MAKE A TECHNICAL CHANGE, TO INCREASE THE SIZE OF THE RELEVANT MARKET AREA, TO REVISE THE PERIOD IN WHICH A CIVIL ACTION MAY COMMENCE UNDER THIS PROVISION AND THE METHOD OF NOTICE THAT MUST BE USED, AND TO REVISE THE CONDITIONS UPON WHICH A COURT SHALL ENJOIN OR PROHIBIT THE ESTABLISHMENT OF CERTAIN NEW OR RELOCATED DEALERSHIPS; BY ADDING SECTION 56-16-220 SO AS TO PROVIDE THAT THE STATE OF SOUTH CAROLINA IS THE VENUE FOR AN ACTION BROUGHT PURSUANT TO CHAPTER 16 OF TITLE 56, AND TO PROVIDE THAT A PROVISION OF A FRANCHISE OR OTHER AGREEMENT WITH CONTRARY PROVISIONS IS VOID AND UNENFORCEABLE; AND BY ADDING SECTION 56-16-230 SO AS TO PROVIDE STATUTE OF LIMITATIONS FOR ACTIONS ARISING OUT OF A PROVISION CONTAINED IN CHAPTER 16 OF TITLE 56.
Be it enacted by the General Assembly of the State of South Carolina:
Motorcycle dealership franchise
SECTION 1. Section 56-16-40 of the 1976 Code is amended to read:
"Section 56-16-40. If a manufacturer seeks to enter into a franchise establishing an additional motorcycle dealership or relocating an existing motorcycle dealership in a relevant market area where the line-make is represented, the manufacturer shall, in writing, first notify each motorcycle dealer in this line-make in the relevant market area of the intention to establish an additional dealership or to relocate an existing dealership in the market area. The relevant market area is a radius of fifteen miles around a location that sells motorcycles pursuant to the franchise. Within forty-five days of receiving the notice by certified mail or within forty-five days after the end of any appeal procedure provided by the manufacturer, the motorcycle dealership may commence a civil action in a court of competent jurisdiction challenging the establishing or relocating of the motorcycle dealership. Thereafter, the manufacturer shall not establish or relocate the proposed motorcycle dealership unless the court has determined that there is good cause for permitting the establishment or relocation of the motorcycle dealership.
The court shall enjoin or prohibit the establishment of the new or relocated dealership within a fifteen-mile radius of the existing dealership unless the manufacturer shows by a preponderance of the evidence that the existing dealership is not providing adequate representation of the line-make and that the new or relocated dealership is necessary to provide the public with reliable and convenient sales and service within that area. The burden of proof in establishing adequate representation is on the manufacturer. In determining whether good cause has been established for entering into or relocating an additional franchise for the same line-make, the court shall take into consideration the existing circumstances, including, but not limited to:
(1) the impact the establishment of the additional or relocated dealership will have on consumers, the public interest, and the existing dealership. However, financial impact may be considered only with respect to the existing dealership;
(2) the size and permanency of investment reasonably made and the reasonable obligations incurred by the existing dealership to perform its obligation pursuant to the dealership's franchise agreement;
(3) the reasonably expected market penetration of the line-make after consideration of all factors which may affect the penetration including, but not limited to, demographic factors such as age, income, education, product popularity, retail lease transactions, and other factors affecting sales to consumers;
(4) actions by the manufacturer in denying its existing dealership of the same line-make the opportunity for reasonable growth, market expansion, or relocation, including the availability of the line-make in keeping with reasonable expectations of the manufacturer in providing an adequate number of dealerships;
(5) attempts by the manufacturer to coerce the existing dealership into consenting to an additional or relocated dealership of the same line-make within a fifteen-mile radius of the existing dealership;
(6) distance, travel time, traffic patterns, and accessibility between the existing dealership of the same line-make and the location of the proposed new or relocated dealership;
(7) the likelihood of benefits to consumers from the establishment or relocation of the dealership, which benefits may not be obtained by other geographic or demographic changes, or other expected changes within a fifteen-mile radius of the existing dealership;
(8) whether the existing dealership is in substantial compliance with its franchise agreement;
(9) whether there is adequate interbrand and intrabrand competition with respect to the line-make, including the adequacy of sales and service facilities;
(10) whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and market conditions pertinent to dealerships competing within a fifteen-mile radius of the existing dealership, including anticipated changes; and
(11) the volume of service business transacted by the existing dealership.
The reopening in a relevant market area of a motorcycle dealership within two miles of a location at which a former dealership of the same line-make had been in operation within the previous two years is not considered the establishment of a motorcycle dealership.
The relocation of an existing dealer within its area of responsibility as defined in the franchise agreement is not subject to this section if the proposed relocation site is not within five miles of an existing dealer of the same line-make."
Venue and void agreements
SECTION 2. Chapter 16, Title 56 of the 1976 Code is amended by adding:
"Section 56-16-220. In an action brought pursuant to this chapter, venue is in the State of South Carolina. A provision of a franchise or other agreement with contrary provisions is void and unenforceable."
Statute of limitations
SECTION 3. Chapter 16, Title 56 of the 1976 Code is amended by adding:
"Section 56-16-230. An action rising out of a provision of this chapter must be commenced within four years after the cause of action accrues. However, if a person liable under this chapter conceals the cause of action from the knowledge of the person entitled to bring it, the period prior to the discovery of his cause of action by the person entitled to bring it must be excluded in determining the time limited for the commencement of the action. If a cause of action accrues during the pendency of a civil, criminal, or administrative proceeding against a person brought by the United States, or any of its agencies, under the antitrust laws, the Federal Trade Commission Act, or another federal act, or the laws of the State related to antitrust laws or to franchising, the action may be commenced within one year after the final disposition of the civil, criminal, or administrative proceeding."
SECTION 4. This act takes effect upon approval by the Governor.
Ratified the 8th day of May, 2008.
President of the Senate
Speaker of the House of Representatives
Approved the ____________ day of _____________________2008.
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