Act of Dec. 22, 1983,P.L. 306, No. 84 Cl. 63

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Agreement." A contract or franchise or any other written instrument which describes the contractual relationship between a manufacturer, distributor or dealer and at least one other person.

"Area of responsibility." The geographic area designated in the franchise agreement or related document where a new vehicle dealer is responsible for effectively selling, servicing and otherwise representing the products of the manufacturer. (Def. added July 7, 2011, P.L.285, No.65)

"Board." The State Board of Vehicle Manufacturers, Dealers and Salespersons.

"Branch lot." An office and lot maintained in addition to the main office and lot of a licensed vehicle dealer used for the display or sale of vehicles.

"Broker."

(1) Any person who, for any direct or indirect commission, compensation or other consideration, arranges or offers to arrange a transaction involving the sale of a new or used vehicle or establishes or offers to establish a plan or program involving the sale of a new or used vehicle and who is not:

(i) a licensed dealer or a licensed employee of a new or used vehicle dealer;

(ii) a licensed representative or a licensed employee of a manufacturer, factory branch or factory representative of new vehicles;

(iii) a licensed representative or a licensed employee of a distributor, distributor representative or distributor branch of new vehicles;

(iv) at any point in the transaction the owner of the vehicle involved in the transaction; or

(v) a licensed wholesale vehicle auction or public or retail vehicle auction.

(2) For purposes of this definition, "direct or indirect commission, compensation or other consideration" shall not include any interest, finance charges and fees directly associated with loans originated by financial institutions.

"Bushing." The practice of increasing the selling price of a vehicle above that originally quoted the purchaser or decreasing the allowance for trade-in of a used vehicle after the purchaser has signed a purchase order or contract which is subject to subsequent acceptance by the seller. If a used vehicle is being used as the trade-in and it is not to be delivered to the dealer until delivery of the new vehicle, the used vehicle may be reappraised at the time of delivery of the new vehicle if the dealer can establish that the vehicle has suffered damage or serious mechanical deterioration since the date of original valuation. The reappraisal value may determine the allowance made for the used vehicle.

"Buying, selling or exchanging." Includes listing, offering, auctioning, advertising, representing or soliciting, offering or attempting to solicit or negotiate on behalf of another a sale, purchase or exchange or any similar or related activity.

"Common ownership." Exists when a person is an owner of two or more licensed dealerships, regardless of:

(1) the location of each dealership;

(2) the person's percentage of ownership at each dealership; or

(3) the corporate structure of each dealership.

(Def. added Dec. 17, 2015, P.L.450, No.78)

"Dealer." A person required to be licensed under this act who is engaged in the business of buying, selling or exchanging new or used vehicles or an interest in new or used vehicles, regardless of whether the vehicles are owned by that person. The term includes persons engaged in consignment sales for a seller, but does not include a person issued an identification number by the Department of Transportation, unless the board has also issued a dealer license to the person. Vehicle dealers shall be classified as one or more of the following:

(1) A new vehicle dealer, who is a person engaged in the business of buying, selling or exchanging new and used vehicles, trailers or semitrailers for commission, compensation or other consideration, who holds a franchise with a manufacturer or distributor, giving the dealer selling rights for that particular line-make of new vehicles, trailers or semitrailers, or who is a distributor of new vehicles, trailers or semitrailers who holds a franchise with a manufacturer or distributor of vehicles, trailers and semitrailers.

(2) A used vehicle dealer, who is a person engaged in the business of buying, selling or exchanging used vehicles, trailers or semitrailers for commission, compensation or other consideration. The term includes fleet owners who engage directly in the retail sale of its fleet vehicles.

(3) A new manufactured housing dealer, who is a person engaged in the business of selling new manufactured housing and buying, selling or exchanging used manufactured housing or mobile homes for commission, compensation or other consideration and who holds a franchise with a manufacturer or distributor giving the dealer selling rights for a particular line-make of new manufactured housing.

(4) A used manufactured housing or mobile home dealer, who is a person engaged in the business of buying, selling or exchanging used manufactured housing or mobile homes for commission, compensation or other consideration.

(5) A new recreational vehicle dealer, who is a person engaged in the business of buying, selling or exchanging new and used recreational vehicles for commission, compensation or other consideration and who holds a franchise with a manufacturer or distributor giving the dealer selling rights for a particular line of new recreational vehicles.

(6) A used recreational vehicle dealer, who is a person engaged in the business of buying, selling or exchanging used recreational vehicles for commission, compensation or other consideration.

(7) A mobility vehicle dealer.

(Def. amended Dec. 22, 2011, P.L.557, No.120)

"Department." The Department of State acting through the Commissioner of Professional and Occupational Affairs.

"Distributor." A person, resident or nonresident, who sells, distributes or services a manufacturer's products to or for dealers or maintains distributor representatives.

"Distributor branch." An established place of business operated, controlled or maintained by a distributor for the purpose of selling, distributing or servicing a manufacturer's products to or for dealers.

"Distributor representative." A representative employed by a distributor or distributor branch for the purpose of selling, distributing or servicing a manufacturer's products to or for dealers.

"Do-not-drive order." A notification provided to the owner of an affected vehicle by a manufacturer or by the National Highway Traffic Safety Administration unconditionally instructing the owner to stop driving the vehicle until the noncompliance or defect remedy is performed. (Def. added June 28, 2018, P.L.420, No.59)

"Dual" or "dualing." A new vehicle dealership having two or more line-makes of new vehicles located in the same dealership facilities. (Def. added Sept. 3, 2009, P.L.378, No.41)

"Due regard to the equities." Treatment in enforcing an agreement that is fair and equitable to a dealer or distributor and that is not discriminatory compared to similarly situated dealers or distributors.

"Engaging in the business." Any activity which requires licensure under this act.

"Established place of business." A permanent, enclosed building as more specifically defined by regulation which is accessible and open at reasonable times and at which the business may be lawfully conducted in accordance with the terms of applicable building codes, zoning and other land-use regulatory ordinances.

"Factory branch." An established place of business operated, controlled or maintained, in whole or in part, by a manufacturer for the purpose of selling or servicing a manufacturer's products to or for distributors or dealers or for directing or supervising, in whole or part, its representatives.

"Factory representative." A representative employed by a manufacturer or by a factory branch for the purpose of making or promoting the sale of its vehicles or for supervising or contacting its dealers or prospective dealers.

"Fifth wheel trailer." A vehicle mounted on wheels designed to provide temporary living quarters for recreational, camping or travel use which is a size and weight which does not require a special highway movement permit and is designed to be towed by a motorized vehicle that contains a towing mechanism mounted above or forward of the tow vehicle's rear axle. (Def. added Oct. 24, 2018, P.L.816, No.134)

"Fleet owner." Any person who owns 15 or more vehicles.

"Folding camping trailer." A vehicle mounted on wheels and constructed with collapsible side walls that fold for towing by another vehicle and unfold at the campsite to provide temporary living quarters for recreational, camping or travel use. (Def. added Oct. 24, 2018, P.L.816, No.134)

"Franchise." The written agreement between any new vehicle manufacturer or distributor and any new vehicle dealer which purports to fix the legal rights and liabilities of the parties to such agreement, and pursuant to which the dealer purchases, resells, services, separately services and performs warranty repairs on the franchise product or leases or rents the dealership premises. (Def. amended October 18, 2000, P.L.577, No.75)

"Just cause." A material breach by a vehicle dealer or distributor, due to matters within the dealer's or distributor's control, of a reasonable and necessary provision of an agreement if the breach is not cured within a reasonable time after written notice of the breach has been received from the manufacturer or distributor.

"Line-make." Groups of vehicles that are offered for sale, lease or distribution under a common name, trademark, service mark or brand name of the manufacturer or distributor of those same vehicles. (Def. added Sept. 3, 2009, P.L.378, No.41)

"Manufactured housing." A structure manufactured after 1975, transportable in one or more sections, which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities and includes the plumbing, heating, air conditioning and electrical systems contained therein. The term shall include any structure which meets all the requirements of this definition with respect to which the manufacturer voluntarily files a certification required by the United States Department of Housing and Urban Development.

"Manufacturer." Any person, resident or nonresident, who manufactures or assembles vehicles or who manufactures or installs on previously assembled chassis special bodies or equipment which when installed form an integral part of a vehicle and which constitute a major manufacturing alteration.

"Material damage." Damage sustained or incurred by a vehicle, whether repaired or replaced, which results in a vehicle being altered or reconditioned and the alteration or reconditioning is of a nature that a reasonable person would consider important in determining whether to make a retail purchase of a particular vehicle for a particular price. Replacement of tires, glass, bumpers and in-dash audio equipment, and only for recreational vehicles any appliances, furniture or fixtures, shall not be considered altering or reconditioning the vehicle if those components are replaced by identical manufacturer's original equipment.

"Mobile home." A structure manufactured before 1976, designed and used exclusively for living quarters or commercial purposes, but only incidentally operated on a highway.

"Mobility vehicle." A vehicle that:

(1) Is designed and equipped to transport a person with a disability.

(2) Contains a lowered floor or frame or a raised roof and door.

(3) Contains one of the following:

(i) an electronic or mechanical wheelchair, scooter or platform lift that enables a person to enter or exit the vehicle while occupying a wheelchair or scooter;

(ii) an electronic or mechanical wheelchair ramp; or

(iii) a system to secure a wheelchair or scooter to allow for a person to be safely transported while occupying the wheelchair or scooter that is installed as an integral part or permanent attachment to the vehicle chassis.

(Def. added Dec. 22, 2011, P.L.557, No.120)

"Mobility vehicle dealer." A person engaged in the business of buying, selling or exchanging mobility vehicles for commission, compensation or other consideration. (Def. added Dec. 22, 2011, P.L.557, No.120)

"Motor home." A motorized vehicle designed to provide temporary living quarters for recreational, camping or travel use containing at least four of the following permanently installed independent life support systems:

(1) A cooking facility with an on-board fuel source.

(2) A potable water supply system that includes at least a sink, a faucet and a water tank with an exterior service supply connection.

(3) A toilet with exterior evacuation.

(4) A gas or electric refrigerator.

(5) A heating or air conditioning system with an on-board power or fuel source separate from the vehicle engine.

(6) An electric power system separate from the vehicle.

(Def. amended Oct. 24, 2018, P.L.816, No.134)

"Motorcycle." A vehicle having a seat or saddle for the use of the rider and designed to travel on not more than three wheels in contact with the ground or an "all-terrain vehicle" or "ATV" as defined in 75 Pa.C.S. § 7702 (relating to definitions).

"Net acquisition cost." The cost to a dealer plus any charges by the manufacturer or distributor for the distribution, delivery and taxes, less all allowances paid or credited to the dealer by the manufacturer or distributor.

"New vehicle." A vehicle, regardless of mileage, which has never been registered or titled in this Commonwealth or any other state or jurisdiction and on which a tax imposed under Article II of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, has not been paid prior to its sale.

"Off-premise sale," "vehicle show" or "exhibition." A sale, show or exhibition of one or more vehicle dealers, distributors, manufacturers or manufacturers' representatives who display, sell or attempt to sell vehicles, mobile homes, manufactured housing or trailers, but not recreational vehicles, for a fixed and limited period of time held in the relevant market area of the participating dealers or distributors. (Def. amended Oct. 8, 2008, P.L.1086, No.90)

"Park model RV." A vehicle that:

(1) Is designed and marketed as temporary living quarters for recreational camping, travel or seasonal use.

(2) Is not permanently affixed to real property for use as a permanent dwelling.

(3) Is built on a single chassis mounted on wheels with a gross trailer area not exceeding 400 square feet in the set-up mode.

(4) Is certified by the manufacturer as complying with the ANSI A119.5 Park Model Recreational Vehicle Standard.

(Def. added Oct. 24, 2018, P.L.816, No.134)

"Person." Any individual, corporation, partnership, association or other entity foreign or domestic.

"Public or retail vehicle auction." Any person required to be licensed under this act who for commission, compensation or other consideration is engaging in the business of providing retail vehicle auction services at an established place of business in which the auction acts as an agent as to vehicles which are sold to buyers, including individual retail buyers and the general public.

"Recreational vehicle." A vehicle which is either self-propelled or towed by a consumer-owned tow vehicle and designed to provide temporary living quarters for recreational, camping or travel use that complies with all applicable Federal vehicle regulations and is certified by the manufacturer as complying with NFPA 1192 Standard on Recreational Vehicles or ANSI A119.5 Park Model Recreational Vehicle Standard and includes the following types:

(1) Motor home.

(2) Travel trailer.

(3) Fifth wheel travel trailer.

(4) Folding camping trailer.

(5) Truck camper.

(6) Park model RV.

(Def. amended Oct. 24, 2018, P.L.816, No.134)

"Recreational vehicle park trailer." (Def. deleted by amendment Oct. 24, 2018, P.L.816, No.134)

"Recreational vehicle show," "recreational vehicle off-premise sale," "recreational vehicle exhibition" or "recreational vehicle rally." A sale, show, exhibition or rally, held by one or more recreational vehicle dealers, distributors, manufacturers or manufacturers' representatives who display, sell or attempt to sell recreational vehicles for a fixed and limited period of time, which shall not exceed ten days in a calendar month, 20 days in three consecutive calendar months and 60 days in a calendar year. Set-up and tear-down days and days when the events are not open shall be excluded from the calculation of the applicable time period. (Def. amended Oct. 14, 2014, P.L.2507, No.146)

"Recreational vehicle warrantor." An individual, firm, corporation or business entity, including a manufacturer or supplier that provides a written warranty to a consumer in connection with a new recreational vehicle or a part, accessory or component of a new recreational vehicle. The term does not include service contracts, mechanical or other insurance or extended warranties sold for separate consideration by a dealer or other person not controlled by a manufacturer. (Def. added Oct. 24, 2018, P.L.816, No.134)

"Relevant market area." The area within a radius of 20 miles around an existing dealer or the area of responsibility defined in the franchise, whichever is greater; except:

(1) where a manufacturer is seeking to establish an additional new vehicle dealer, the relevant market area shall be in all instances the area within a radius of ten miles around the proposed site of the additional new vehicle dealer, except for cities of the first and second class which will be the area within a five-mile radius, around the proposed site of the additional new vehicle dealer; and

(2) where a manufacturer is seeking to relocate an existing dealer, the relevant market area is the area within a radius of 20 miles around the proposed site of the relocating dealer or the area of responsibility defined in the franchise of the relocating dealer, whichever is greater.

This definition shall not apply to manufactured housing or recreational vehicle dealers or their manufacturer agreements.

"Retail sale" or "sale at retail." The act or attempted act of selling, bartering, exchanging or otherwise disposing of a vehicle to an ultimate purchaser.

"Salesperson." Any person who, for a commission, compensation or other consideration, is employed by a dealer to buy, sell or exchange one or more new or used vehicles.

"Significantly modify facilities." An alteration that has a major impact on the architectural features, characteristics, appearance or integrity of a structure or lot. The term does not include routine maintenance, such as interior painting, reasonably necessary to maintain a dealership facility in attractive condition. (Def. added June 28, 2018, P.L.420, No.59)

"Site-control agreement" or "exclusive use agreement." An agreement that, regardless of its name, title, form or the parties entering into it, has the effect of:

(1) controlling the use and development of the premises of a dealer's franchise or facility;

(2) requiring a dealer to establish or maintain an exclusive dealership facility on the premises of the dealer's franchise or facility;

(3) restricting the power or authority of the dealer or the lessor if the dealer leases the dealership premises to transfer, sell, lease, develop, redevelop or change the use of the dealership premises, whether by sublease, lease, collateral pledge of lease, right of first refusal to purchase or lease, option to purchase or lease or any similar arrangement; or

(4) establishing a valuation process or formula for the dealership premises that does not allow for the dealership premises to be transferred, sold or leased by the dealer at the highest and best use valuation for the dealership premises.

(Def. added Oct. 27, 2010, P.L.958, No.100)

"Stop-sale order." A notification issued by a manufacturer to its new vehicle dealers stating that certain used vehicles in inventory shall not be sold or leased, at retail or wholesale, due to a Federal safety recall for a defect or a noncompliance or a Federal or California emissions recall. (Def. added June 28, 2018, P.L.420, No.59)

"Trailer" or "semitrailer." A vehicle, other than a recreational vehicle, with a gross vehicle weight over 3,000 pounds which is designed to be towed by a vehicle.

"Travel trailer." A vehicle mounted on wheels and towed by a consumer's motorized vehicle designed to provide temporary living quarters for recreational, camping or travel use of a size and weight as to not require a special highway movement permit when towed by a motorized vehicle. (Def. added Oct. 24, 2018, P.L.816, No.134)

"Truck camper." A vehicle designed to be placed in the bed of a pickup truck to provide temporary living quarters for recreational, camping or travel use. (Def. added Oct. 24, 2018, P.L.816, No.134)

"Used vehicle." A vehicle on which title has been transferred from the person who first acquired it from the manufacturer or dealer in this Commonwealth or any other state or jurisdiction and on which a tax imposed under Article II of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, was paid prior to its sale.

"Vehicle." Every device which is or may be moved or drawn upon a highway, except devices which are infrequently operated or moved upon a highway but are designed primarily for use in construction or agriculture or road maintenance, devices moved by human or animal power, devices used exclusively upon rails or tracks, motorized pedalcycles and mobility vehicles. (Def. amended Dec. 22, 2011, P.L.557, No.120)

"Wholesale vehicle auction." Any person required to be licensed under this act who for commission, compensation or other consideration is engaging in the business of providing wholesale vehicle auction services at an established place of business. The auction need not have custody or control of the subject vehicle but shall have the authority of the buyer or seller to negotiate or conduct a transaction on behalf of the buyer or seller.

(2 amended Apr. 19, 1996, P.L.104, No.27)

(102 renumbered from 2 Oct. 24, 2018, P.L.816, No.134)

19830084u301h

CHAPTER 3

VEHICLES

(Ch. hdg. added Oct. 24, 2018, P.L.816, No.134)

19830084u301s

Section 301. State Board of Vehicle Manufacturers, Dealers and Salespersons.

(a) Board.--The State Board of Vehicle Manufacturers, Dealers and Salespersons shall consist of 17 members, one of whom shall be the Commissioner of Professional and Occupational Affairs, or his designee, one of whom shall be the Secretary of the Department of Transportation, or his designee, one of whom shall be the Director of Consumer Protection in the Office of Attorney General, or his designee, and the remaining 14 of whom shall be appointed by the Governor as follows:

(1) Three members shall be new vehicle dealers who have been actively engaged as such for a period of five years immediately preceding their appointment.

(2) Three members shall be used vehicle dealers who have been actively engaged as such for a period of five years immediately preceding their appointment. One used vehicle dealer member beginning with the first vacancy for a used vehicle dealer after the effective date of this amendment shall also be an owner, partner or officer of a corporation or business which is licensed as a vehicle auction and which has been actively engaged as such for a period of five years immediately preceding the appointment.

(3) One shall be a manufactured housing or mobile home dealer who has been actively engaged as such for a period of five years immediately preceding appointment.

(4) One shall be a salesperson who has been actively engaged in the sale of new or used vehicles for a period of five years immediately preceding appointment. The member shall not be a dealer or an officer of a corporation or a member of a partnership engaged in the business of a dealer at the time of appointment.

(5) One shall be a recreational vehicle dealer who has been actively engaged as such for a period of five years immediately preceding appointment.

(6) One shall be a motorcycle dealer who has been actively engaged as such for a period of five years immediately preceding appointment.

(6.1) One member shall be a mobility vehicle dealer who has been actively engaged as such for a period of five years immediately preceding appointment.

(7) Three shall be members of the general public having no connection with the vehicle business.

((a) amended Dec. 22, 2011, P.L.557, No.120)

(b) Terms of members.--The terms of the members of the board shall be four years for members appointed after the effective date of this amendment from the respective date of their appointment, provided that a member may continue for a period not to exceed six months beyond the expiration of his term if a successor has yet to be duly appointed and qualified according to law. The maximum number of consecutive terms a member shall serve shall be two consecutive four-year terms. In the event that any member shall die, resign or be removed from office, his successor shall be appointed and hold office for the unexpired term.

(c) Quorum.--A majority of the members of the board who have been appointed and confirmed shall constitute a quorum. Motions, questions and decisions of the board shall require the affirmative vote of a majority of a quorum for adoption. The board shall select, from among their number, a chairman and a secretary.

(d) Reimbursement of expenses.--Each member of the board, excepting the Commissioner of Professional and Occupational Affairs or his designee, the Director of the Bureau of Consumer Protection in the Office of Attorney General or his designee, and the Secretary of the Department of Transportation or his designee, shall be paid reasonable traveling, hotel and other necessary expenses and per diem compensation at the rate of $60 for each day of actual service while on board business.

(e) Attendance.--A member who fails to attend three consecutive meetings shall forfeit his seat unless the Commissioner of Professional and Occupational Affairs, upon written request from the member, finds that the member should be excused from a meeting because of illness or the death of an immediate family member.

(3 amended Apr. 19, 1996, P.L.104, No.27)

(301 renumbered from 3 Oct. 24, 2018, P.L.816, No.134)

19830084u302s

Section 302. Powers and duties of board.

(a) Powers and duties.--The board shall have the power and its duty shall be to:

(1) Provide for and regulate the licensing of salespersons, dealers, vehicle auctions, manufacturers, factory branches, distributors, distributor branches and factory or distributor representatives as defined in section 102.

(2) Review and pass upon the qualifications of applicants for licensure and to issue, except as otherwise provided herein, a license to engage in the said businesses to any applicant who is approved by the board and who meets the requirements of this chapter and regulations promulgated in accordance with this chapter.

(3) Investigate on its own initiative, upon complaint of the Department of Transportation, Department of Community and Economic Development, Department of Revenue or the Office of the Attorney General, any law enforcement officer or upon the verified complaint in writing of any person, any allegations of the wrongful act or acts of any licensee or person required to be licensed under this chapter. Duly authorized agents of the Bureau of Professional and Occupational Affairs shall be authorized to issue administrative citations for violations of this act in accordance with section 5 of the act of July 2, 1993 (P.L.345, No.48), entitled "An act empowering the General Counsel or his designee to issue subpoenas for certain licensing board activities; providing for hearing examiners in the Bureau of Professional and Occupational Affairs; providing additional powers to the Commissioner of Professional and Occupational Affairs; and further providing for civil penalties and license suspension."

(4) Administer and enforce this act and to impose appropriate administrative discipline upon licensees found to be in violation of this act.

(5) Bring criminal prosecutions for unauthorized, unlicensed or unlawful practice and bring an action to enjoin such practices. Duly authorized agents of the bureau shall be authorized to issue citations in accordance with section 5(a) of the act of July 2, 1993 (P.L.345, No.48), entitled "An act empowering the General Counsel or his designee to issue subpoenas for certain licensing board activities; providing for hearing examiners in the Bureau of Professional and Occupational Affairs; providing additional powers to the Commissioner of Professional and Occupational Affairs; and further providing for civil penalties and license suspension," for violations of this act.

(6) Require each licensee to register biennially with the board.

(7) Keep a record showing the names and addresses of all licensees licensed under this chapter.

(8) Keep minutes and records of all its transactions and proceedings especially with relation to the issuance, denial, registration, formal reprimand, suspension and revocation of licenses. In all actions or proceedings in any court, a transcript of any board record or any part thereof, which is certified to be a true copy by the board, shall be entitled to admission in evidence.

(9) Adopt, promulgate and enforce such rules and regulations consistent with this act as are deemed necessary and proper to effectuate the provisions of this act.

(10) Submit annually, to the Consumer Protection and Professional Licensure Committee of the Senate and the Professional Licensure Committee of the House of Representatives, a description of the types of complaints received, status of the cases, board action which has been taken and length of time from the initial complaint to final board resolution.

(11) Submit annually to the department an estimate of the financial requirements of the board for its administrative, investigative, legal and miscellaneous expenses.

(12) Submit annually to the House and Senate Appropriations Committees, 15 days after the Governor has submitted his budget to the General Assembly, a copy of the budget request for the upcoming fiscal year which the board previously submitted to the department.

(b) Summary proceedings.--All law enforcement officers in this Commonwealth may institute summary criminal proceedings in accordance with the Pennsylvania Rules of Criminal Procedure for violations of this act. Any person who violates this act shall be subject to criminal prosecution as provided in section 328.

(302 renumbered from 4 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u303s

Section 303. License to engage in business.

(a) License required.--

(1) To promote the public safety and welfare, it shall be unlawful for any person to engage in the business as a salesperson, dealer, branch lot, wholesale vehicle auction, public or retail vehicle auction, manufacturer, factory branch, distributor, distributor branch, factory representative or distributor representative within this Commonwealth unless the person has secured a license as required under this chapter.

(2) A person, including, but not limited to, salespersons, shall not engage in the business for his own benefit or profit unless he is licensed in accordance with this chapter.

(3) A person shall not act as, offer to act as or hold himself out to be a broker in the advertising, buying or selling of any new or used vehicle.

(b) Mobile home parks.--

(1) It shall be unlawful for any person, for a commission, compensation or other consideration, to sell or act as salesperson, broker or sales agent in connection with the sale of one or more mobile homes located in a mobile home park, as provided for in section 11 of the act of November 24, 1976 (P.L.1176, No.261), known as the Mobile Home Park Rights Act, unless such person shall be licensed under this chapter, except as provided for in paragraph (2).

(2) Any real estate salesperson or broker licensed under the act of February 19, 1980 (P.L.15, No.9), known as the Real Estate Licensing and Registration Act, may list for sale any preowned mobile home as defined by the Mobile Home Park Rights Act, whether or not the mobile home is located in a mobile home park, without being licensed under the provisions of this chapter. No mobile home park rule shall prevent the placement of a "for sale" sign on the home and on the property on which the home is located. Nothing in this paragraph shall authorize the listing for sale of preowned mobile homes at a sales lot by a licensed real estate salesperson or broker unless the salesperson or broker is also licensed under this chapter and has obtained a sales tax license from the Department of Revenue.

(c) Salespersons to be employed.--It shall be unlawful for any salesperson who has not been issued a salesperson's license number by the board to engage in any activity related to the buying, selling or exchanging of a vehicle for a commission, compensation or other consideration. Any sale must be conducted pursuant to and as part of the normal business activities of the dealer by a person who is a licensed salesperson of the dealer, unless that person is the dealer. The salesperson shall be presently employed by the currently licensed vehicle dealer for whom the salesperson is buying, selling or exchanging.

(1) Any salesperson licensed under this chapter shall be licensed to sell only for one dealer at a time and his license shall indicate the name of that dealer.

(2) A licensed salesperson who is employed by a dealer who holds a dealer license in more than one category or at more than one facility may sell for each such dealer or at each such facility, provided there is common ownership.

(d) Display of license.--Each person to whom a license is issued shall keep the license conspicuously displayed in his principal office or place of business and shall, when required, exhibit such license to any member or authorized representative of the board.

(e) Facility requirements for dealers.--

(1) Dealers engaged in the business of buying, selling or exchanging new and used vehicles, trailers or semitrailers shall maintain an established place of business with a salesroom devoted principally to the vehicle business, and new vehicle dealers shall hold a franchise in writing with a manufacturer or distributor authorizing a new vehicle dealer to sell a particular line-make of vehicles from the address of the licensed facility.

(i) A vehicle auction shall not be required to meet the facility requirements under this subsection.

(ii) A branch lot shall be a separately licensed location which meets the facility requirements under this section and by the regulations as a main lot, unless used solely for the storage of vehicles.

(2) Dealers engaged in the business of buying, selling or exchanging used vehicles, trailers or semitrailers shall maintain an established place of business with a salesroom devoted principally to the vehicle business which is a building or portion of a building where books and records are kept.

(3) Dealers engaged in the business of buying, selling or exchanging new manufactured housing and used mobile homes or manufactured housing shall maintain a minimum usable display area of 5,000 square feet devoted principally to the mobile home or manufactured housing business, maintain an established place of business and hold a contract in writing with a buyer, seller or manufacturer giving such person buying or selling rights for new manufactured housing of that particular line from the address of the licensed facility.

(i) Dealers engaged in the business of buying, selling or exchanging new manufactured housing, in lieu of maintaining the minimum usable display area requirements of this section, shall be authorized to display, sell, list or offer for sale new manufactured housing if the new manufactured housing is located on-site in a mobile home park or new manufactured housing is on real property owned or rented by a person who through a written agreement with the dealer authorizes the dealer to locate the new manufactured housing on the real property and the dealer is authorized to display, sell, list or offer the new manufactured housing at the real property location. Such dealers must maintain an established place of business and hold a contract in writing with a buyer, seller or manufacturer giving such person buying or selling rights for such new manufactured housing.

(ii) A display, sale, listing or offer for sale from a site or location as permitted by subparagraph (i) shall not require the issuance of a branch lot license.

(4) Dealers engaged in the business of buying, selling or exchanging used mobile homes or manufactured housing shall maintain a place of business and a building, or a portion of a building, where books and records are kept and which is devoted principally to the mobile home or manufactured housing business. There shall be no minimum square footage display area requirement for a used mobile home or manufactured housing dealer.

(i) Dealers engaged in the business of buying, selling or exchanging new manufactured housing or used mobile homes or manufactured housing in addition to maintaining the business facility requirements of this section shall be authorized to display, sell, list or offer for sale used manufactured housing or mobile homes if the used manufactured housing or mobile homes are located on-site in a mobile home park or used manufactured housing or mobile homes are located on real property owned or rented by the person who owns the used manufactured housing or mobile home and the dealer possesses a written agreement with the person authorizing the dealer to sell, list or offer the used manufactured housing or mobile home on behalf of the person from the real property location.

(ii) A display, sale, listing or offer for sale from a site or location as permitted by subparagraph (i) shall not require the issuance of a branch lot license.

(5) Dealers engaged in the business of buying, selling or exchanging new or used recreational vehicles shall maintain an established place of business with a minimum usable display area of 5,000 square feet devoted principally to the recreational vehicle business and hold a franchise in writing with a buyer, seller or manufacturer giving such person buying or selling rights for new recreational vehicles of that particular line from the address of the licensed facility.

(f) Wholesale vehicle auction activities.--

(1) Wholesale vehicle auctions in wholesale vehicle auction sales transactions shall permit only the following persons to sell vehicles at the auction: vehicle dealers licensed under this chapter or by any other state or jurisdiction, manufacturers, leasing companies, rental companies, financial institutions, insurance companies, charitable nonprofit organizations; persons who sell vehicles owned by their business which are utilized to accomplish their main business purpose and who do not engage in any vehicle buying, sales or repair business; and fleet owners.

(2) Only vehicle dealers licensed under this chapter or by any other state or jurisdiction shall be permitted to purchase vehicles at wholesale vehicle auctions. In addition to dealers licensed under this chapter or by any other state or jurisdiction, a vehicle business, except for repair and towing, transporter, service, financier or collector/repossessor businesses, registered with the Department of Transportation and issued a Department of Transportation identification number or licensed or registered by any other state or jurisdiction for a similar activity without being licensed under this chapter shall be authorized at wholesale vehicle auctions only to buy, sell or exchange vehicles of the type for which the business is authorized to engage by the Department of Transportation or any other state or jurisdiction, provided that upon buying such vehicle, application for an appropriate certificate of title or certificate of salvage is made for the vehicle.

(3) A dealer licensed under this chapter without possessing a wholesale vehicle auction or public or retail vehicle auction license shall be permitted to sell vehicles on consignment.

(4) A vehicle auction shall only permit a person who is currently employed and licensed as a salesperson for a dealer who holds a license issued under this chapter or by any other state or jurisdiction to buy, sell or exchange vehicles at an auction on behalf of a dealer. This paragraph shall not apply to a salesperson who is buying, selling or exchanging vehicles at:

(i) wholesale vehicle auctions which are either fleet sales or manufacturer's sales; or

(ii) sales of vehicles for salvage, where the salesperson shall be permitted to buy, sell or exchange vehicles for no more than five dealers during the sale.

(5) Any person who has had his license under this chapter or authority to engage as a dealer or salesperson in any other state or jurisdiction suspended or revoked shall not be authorized, while the license or authority is suspended or revoked, to be physically present at a wholesale vehicle auction during the auctioning of vehicles.

(g) Public or retail vehicle auction activities.--

(1) Public or retail vehicle auctions shall not be limited as to who may commission them to sell vehicles or who may buy vehicles at public or retail auctions, provided that any buyer or seller is not engaging in the business as a dealer without a license or as any other person who would be required to be licensed under this chapter. Any person who has had his license under this chapter or authority to engage as a dealer or salesperson in any other state or jurisdiction suspended or revoked shall not be authorized, while the license or authority is suspended or revoked, to be physically present at a public or retail vehicle auction during the auctioning of vehicles. Public or retail vehicle auctions shall not be required to take title to the vehicles they offer for sale or have their auctioneers licensed as salespersons under this chapter. Public or retail vehicle auctions shall inquire of the seller of the vehicle and, if applicable, disclose to potential purchasers material information obtained from the seller regarding the vehicle being offered for sale as is required of all sellers under applicable Federal and Pennsylvania laws.

(2) Public or retail vehicle auctions shall ensure all purchasers at the vehicle auction:

(i) show proof of identification at the time of transfer of ownership;

(ii) sign the identified name to the transfer of ownership documents;

(iii) pay any applicable tax imposed under Article II of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, unless otherwise exempted by law; and

(iv) submit transfer of ownership documents to the Department of Transportation as required under 75 Pa.C.S. (relating to vehicles).

(g.1) Mobility vehicle dealers.--

(1) A licensed dealer classified as a mobility vehicle dealer may do all of the following:

(i) Display, inventory, advertise, solicit, demonstrate, sell, offer for sale or deliver new and used mobility vehicles.

(ii) Arrange, negotiate and assist a customer regarding the purchase of a mobility vehicle.

(iii) Sell and install equipment and accessories in and provide services for mobility vehicles, in order to meet the needs of persons with disabilities as drivers or passengers.

(iv) Provide maintenance and repair services for mobility vehicles.

(v) Acquire a new vehicle with a lowered floor or frame or a raised roof and door in order to fit or equip the vehicle for retail sale as a new mobility vehicle.

(2) A licensed dealer that is classified only as a mobility vehicle dealer may not offer for sale or sell vehicles which are not mobility vehicles.

(h) Notification of unlicensed persons.--Vehicle auctions shall post a listing supplied by the board containing the names of all licensees who are currently revoked or suspended and persons who were penalized for unlicensed activity within the past year.

(303 renumbered from 5 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u303v

Compiler's Note: The short title of the act of November 24, 1976 (P.L.1176, No.261), previously known as the Mobile Home Park Rights Act, referred to in subsection (b)(1) and (2), was amended by Act 80 of 2018 and is now known as the Manufactured Home Community Rights Act.

19830084u304s

Section 304. Biennial renewal.

Each license holder shall be required to renew his license biennially; as a condition precedent to biennial renewal, the license holder shall pay a biennial renewal fee and, in the case of a salesperson or manufacturer's or distributor's representative, he must be presently employed with a dealer, manufacturer or distributor which has a current license. The license holder shall comply with all requirements as set forth through regulation by the board.

(6 amended Apr. 19, 1996, P.L.104, No.27)

(304 renumbered from 6 Oct. 24, 2018, P.L.816, No.134)

19830084u305s

Section 305. Enforcement.

Notwithstanding the enforcement powers granted to law enforcement officers to institute summary criminal proceedings pursuant to section 302(b), the enforcement of the laws and rules and regulations governing practice under this act is primarily vested in the board with the following additional powers and duties to:

(1) Inspect all license holders.

(2) Authorize investigations of alleged violations.

(3) Review and inspect all business records, documents and files relating to practice under this act.

(4) Subpoena witnesses.

(5) Take depositions of witnesses in the manner provided for in civil actions in courts of record.

(6) Bring criminal prosecutions for unauthorized, unlicensed and unlawful practice in accordance with the terms and provisions of the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act.

(7) Obtain injunctions from a court of competent jurisdiction against persons acting in violation of this act.

(305 renumbered from 7 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u306s

Section 306. Protest hearing decision within 120 days unless waived by the parties.

(a) Franchise protest hearings to be decided within 120 days unless waived by the parties.--Any franchise establishment, relocation, termination or failure to renew hearing based on a protest by a dealer or distributor of any action by a manufacturer or distributor alleged to be in violation of a provision of this chapter must be conducted and the final determination made within 120 days after the protest is filed. Unless waived by the parties, failure to do so will be deemed the equivalent of a determination that the manufacturer or distributor acted with just cause and, in the case of a protest of a proposed establishment or relocation of a dealer under section 326, that just cause does not exist for refusing to permit the proposed additional or relocated new vehicle dealer unless such delay is caused by acts of the manufacturer, distributor or the additional or relocating dealer. Any parties to such a hearing shall have a right of review of the decision in a court of competent jurisdiction pursuant to 2 Pa.C.S. § 701 (relating to scope of subchapter). If the board determined that just cause does not exist for refusing to permit the proposed additional or relocated new vehicle dealer and the manufacturer or distributor thereafter enters into a franchise establishing that new vehicle dealer, the manufacturer or distributor shall not be liable for damages based upon such establishment even if a court reverses the determination of the board.

(b) Procedure.--The procedure at the hearing shall be governed by 1 Pa. Code Pt. II (relating to general rules of administrative practice and procedure) with the following exceptions:

(1) In the event that the protest involves a termination or failure to renew the franchise of a new vehicle dealer, the dealer shall be permitted to review a manufacturer's or distributor's files related to that dealer upon written request.

(2) The board may order on its own initiative, or pursuant to a party's request, that part of the evidence for hearing be submitted to it in the form of depositions.

(c) Reconsideration.--In the event a decision of the board is remanded by a court of competent jurisdiction for further action by the board, the board shall consider the action and issue a final determination, not later than 120 days following receipt of the record from such court, unless the 120-day time period for the board to issue a final determination is waived or extended by the parties.

(d) Dealer protest of automobile, motorcycle or truck manufacturer act or omission.--

(1) Except for protests authorized under section 312 or 326 and notwithstanding any other remedy available under this chapter, any new vehicle dealer who believes that an automobile, motorcycle or truck manufacturer or distributor with whom the new vehicle dealer holds a franchise agreement has violated or is violating any provision of this chapter may file a protest with the board setting forth the factual and legal basis for such violation.

(2) The board shall issue a final determination within 120 days after the protest is filed, unless the 120-day time period for the board to issue a final determination is waived or extended by the parties.

(3) It shall be the burden of the automobile, motorcycle or truck manufacturer to prove it has not violated any provision of this chapter as set forth in the protest filed by the new vehicle dealer.

(4) The protested action shall not become effective until the final determination is issued by the board and shall not be effective thereafter if the board has determined that there is just cause for not permitting the protested action.

(5) The board shall be empowered to direct or require the automobile, motorcycle or truck manufacturer or distributor to perform such acts as necessary in order for the manufacturer or distributor to comply with the provisions of this chapter.

(e) Applicability.--The protest provisions of this section apply to Chapter 5 activities and actions between recreational vehicle dealers, manufacturers, distributors and suppliers.

(306 renumbered from 8 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u307s

Section 307. Reimbursement for all parts and service required by the manufacturer or distributor; reimbursement audits.

(a) Manufacturers or distributors to notify dealers of their obligations.--

(1) Each new vehicle manufacturer or distributor shall specify in writing to each of its new vehicle dealers licensed in this Commonwealth the dealer's obligations for predelivery preparation and warranty service on its products, shall compensate the new vehicle dealer for service required of the dealer by the manufacturer or distributor and shall provide the dealer with a schedule of compensation to be paid the dealer for parts, work and service, and the time allowance for the performance of such work and service.

(2) Compensation for parts, including major assemblies used in warranty service, shall be at the dealer's retail rate. The following shall apply:

(i) The dealer's retail rate for parts shall be established by the dealer's submitting to the manufacturer or distributor a declaration of the average percentage markup which shall be the lesser of the following orders which cover repairs made no more than 180 days before the submission:

(A) One hundred sequential nonwarranty customer-paid service repair orders which contain parts that are used in warranty-like service or repair.

(B) Ninety consecutive days of nonwarranty customer-paid service repair orders which contain parts that are used in warranty-like service or repair.

(ii) The declaration under subparagraph (i) shall be presumed to be reasonable, except that a manufacturer or distributor may, not later than 60 days after submission, rebut the presumption by substantiating that the declaration is unreasonable or materially inaccurate.

(iii) The retail rate shall go into effect 60 days following the declaration under subparagraph (i), unless the franchisor audits the submitted repair orders and a rebuttal under subparagraph (ii) occurs.

(iv) If the declared retail rate is rebutted, the manufacturer or distributor shall propose an adjustment of the markup based on the rebuttal no later than 60 days after submission.

(v) A manufacturer shall provide written support to the dealer for the rebuttal retail rate that is proposed. If the dealer does not agree with the proposed markup, the dealer may file a protest after receipt of the proposal by the manufacturer or distributor. If a protest is filed, the board shall inform the manufacturer or distributor that a protest has been filed and that a hearing will be held on the protest. In a hearing held under this subparagraph, the manufacturer or distributor shall have the burden of proving that:

(A) the retail rate declared by the dealer was unreasonable or materially inaccurate; and

(B) the manufacturer's or distributor's proposed adjustment of the markup is reasonable.

(3) Compensation for labor used in warranty service shall be at the dealer's retail rate. The following shall apply:

(i) The dealer's hourly retail rate for labor shall be established by submitting the following to the manufacturer or distributor:

(A) A declaration of the average labor rate calculated by dividing the amount of the dealer's total labor sales by the number of total labor hours that generated the sales.

(B) The lesser of the following orders which cover repairs made no more than 180 days before the submission:

(I) One hundred sequential nonwarranty customer-paid service repair orders.

(II) Ninety consecutive days of nonwarranty customer-paid service repair orders.

(ii) The declaration under subparagraph (i)(A) shall be presumed to be reasonable, except that a manufacturer or distributor may, no later than 60 days after submission, rebut the presumption by substantiating that the rate is unreasonable or materially inaccurate.

(iii) The average labor rate shall go into effect 60 days following the declaration under subparagraph (i)(A), unless the franchisor audits the submitted repair orders and a rebuttal under subparagraph (ii) occurs.

(iv) If the declared rate is rebutted, the manufacturer or distributor shall propose an adjustment of the labor rate based on the rebuttal not later than 60 days after submission.

(v) A manufacturer shall provide written support to the dealer for the rebuttal rate that is proposed. If the dealer does not agree with the proposed labor rate, the dealer may file a protest after receipt of the proposal by the manufacturer or distributor. If a protest is filed, the board shall inform the manufacturer or distributor that a protest has been filed and that a hearing will be held on the protest. In a hearing held under this subparagraph, the manufacturer or distributor shall have the burden of proving that:

(A) the retail rate declared by the dealer was unreasonable or materially inaccurate; and

(B) the manufacturer's or distributor's proposed adjustment of the retail rate is reasonable.

(4) This subsection shall not apply to manufacturers or distributors of manufactured housing. ((4) amended Oct. 24, 2018, P.L.816, No.134)

((a) amended Nov. 1, 2013, P.L.675, No.84)

(b) Schedule of compensation to include reasonable compensation.--((b) deleted by amendment Nov. 1, 2013, P.L.675, No.84)

(b.1) Exceptions.--When calculating the retail rate customarily charged by the dealer for parts and labor under this section, the following work shall not be included:

(1) Repairs for manufacturer or distributor special events, specials or promotional discounts for retail customer repairs.

(2) Parts sold at wholesale.

(3) Routine maintenance not covered under a retail customer warranty, such as fluids, filters and belts not provided in the course of repairs.

(4) Nuts, bolts, fasteners and similar items that do not have an individual part number.

(5) Tires.

(6) Vehicle reconditioning.

((b.1) added Nov. 1, 2013, P.L.675, No.84)

(b.2) Compensation.--If a manufacturer or distributor furnishes a part or component to a dealer, at no cost, to use in performing repairs under a recall, campaign service or warranty repair, the manufacturer or distributor shall compensate the dealer for the part or component in the same manner as warranty parts compensation under this section by compensating the dealer the average markup on the cost for the part or component as listed in the manufacturer's or distributor's price schedule, minus the cost for the part or component. ((b.2) added Nov. 1, 2013, P.L.675, No.84)

(b.3) Prohibitions and audit.--

(1) A manufacturer or distributor may not require a dealer to establish the retail rate customarily charged by the dealer for parts and labor by:

(i) An unduly burdensome or time-consuming method.

(ii) Requiring information that is unduly burdensome or time consuming to provide, including part-by-part or transaction-by-transaction calculations.

(2) A dealer may not declare an average percentage markup or average labor rate more than once in one calendar year.

(3) A manufacturer or distributor may perform annual audits to verify that a dealer's effective rates have not decreased. If a dealer's effective rates have decreased, a manufacturer or distributor may reduce the warranty reimbursement rate prospectively.

((b.3) added Nov. 1, 2013, P.L.675, No.84)

(b.4) Recovery.--

(1) (i) A manufacturer or distributor may not recover its costs from a dealer within this Commonwealth that does not apply to the manufacturer or distributor for retail rate reimbursement for parts and labor, including an increase in the wholesale price of a vehicle or surcharge imposed on a dealer intended to recover the cost of reimbursing a dealer for parts and labor under this section.

(ii) A manufacturer or distributor may increase the price for a vehicle or part in the normal course of business.

(2) A dealer may elect to revert to the nonretail rate reimbursement for parts and labor once in a calendar year to avoid a manufacturer or distributor surcharge.

((b.4) added Nov. 1, 2013, P.L.675, No.84)

(d) Indemnification required.--Notwithstanding the terms of any franchise agreement, it shall be a violation for any new vehicle manufacturer to fail to indemnify its franchised dealers against any judgment for damages or settlement approved in writing by the manufacturer, including, but not limited to, court costs and reasonable attorneys' fees of the new vehicle dealer, arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, express or implied warranty or rescission of the sale as defined in 13 Pa.C.S. § 2608 (relating to revocation of acceptance in whole or in part) to the extent that the judgment or settlement relates solely to the alleged defective or negligent manufacture, assembly or design of new vehicles, parts or accessories or other functions by the manufacturer or distributor beyond the control of the dealer.

(e) Warranty reimbursement and incentive or reimbursement program approval and audits.--

(1) Any warranty, recall, service contract or any other required service parts or labor reimbursement claim or incentive or reimbursement program claim filed by the dealer with the manufacturer or distributor in the manner and on forms the manufacturer or distributor reasonably prescribes which is not specifically disapproved in writing or by electronic transmission 30 days after receipt by the manufacturer or distributor is considered approved and payment to the dealer must follow within 30 days.

(1.1) Where the automobile, motorcycle or truck manufacturer or distributor disapproves any claim, the manufacturer or distributor shall describe in writing or by electronic transmission what reasonable corrective action the dealer must perform to receive payment for the claim, or the claim shall be deemed approved within 30 days of the original disapproval and payment to the dealer shall be made within 30 days of the deemed approval. The automobile, motorcycle or truck manufacturer or distributor shall not deny a claim or reduce the amount to be reimbursed if the dealer has reasonably substantiated the claim in accordance with reasonable written requirements of the manufacturer or distributor, provided that the dealer has been notified of the requirements prior to the time the claim arose and the requirements were in effect at the time the claim arose.

(2) The manufacturer or distributor shall be permitted to audit claims within a nine-month period from the date the claim was paid or credit issued by the manufacturer or distributor and to charge back any false or unsubstantiated claims. If there is evidence of fraud, this subsection does not limit the right of the manufacturer or distributor to audit for longer periods and charge back for any fraudulent claim, subject to the limitations period under 42 Pa.C.S. (relating to judiciary and judicial procedure). ((2) amended Nov. 1, 2013, P.L.675, No.84)

(3) (i) After the completion of any internal appeal process pursuant to the manufacturer's or distributor's policy manual, but no less than 30 days prior to a manufacturer or distributor charging back a new vehicle dealer for any claims which the manufacturer or distributor alleges are false or unsubstantiated, the manufacturer or distributor shall notify the new vehicle dealer in writing of all of the following:

(A) The amount of and basis for each claim the manufacturer or distributor seeks to charge back.

(B) The total amount to be charged back.

(ii) During the 30-day time period under subparagraph (i), a new vehicle dealer may file with the board a protest of the charge-backs as provided for under section 306. When such a protest is filed, the board shall inform the manufacturer or distributor that a timely protest has been filed and that the manufacturer or distributor shall not charge back the new vehicle dealer:

(A) until the board has held a hearing; or

(B) if the board has determined that there is good cause for not permitting the charge-back of such new vehicle dealer.

((ii) amended Oct. 24, 2018, P.L.816, No.134)

((3) added July 7, 2011, P.L.285, No.65)

(f) Applicability.--This section shall also apply to each medium-duty and heavy-duty truck component and engine manufacturer or distributor that provides integral parts of vehicles, provides major components by selling directly to dealers or who enters into a contract with a medium-duty and heavy-duty truck dealer which authorizes the dealer to perform warranty or other services on the products produced or distributed.

(g) Applicability.--This section shall not apply to recreational vehicle warrantors or dealers. ((g) added Oct. 24, 2018, P.L.816, No.134)

(9 amended Oct. 18, 2000, P.L.577, No.75)

(307 renumbered from 9 Oct. 24, 2018, P.L.816, No.134)

19830084u307.1s

Section 307.1. Vehicle recalls.

(a) General rule.--A manufacturer shall compensate its new vehicle dealers for all labor and parts required by the manufacturer to perform recall repairs. Compensation for recall repairs shall be in the same manner as warranty parts and labor compensation under section 307. If parts or a remedy are not reasonably available to perform a recall service or repair on a used vehicle held for sale by a new vehicle dealer of the same line-make within 30 days of the manufacturer issuing the initial notice of recall, and the manufacturer has issued a stop-sale order or a do-not-drive order on the vehicle, the manufacturer shall compensate the dealer at a prorated rate of at least 1.5% of the value of the vehicle per month, beginning on the date that is 30 days after the date on which the stop-sale or do-not-drive order was provided to the dealer, until the earlier of the date the recall or remedy parts are made available or the date the dealer sells, trades or otherwise disposes of the affected used vehicle. The following shall apply:

(1) The value of a used vehicle shall be the average trade-in value for used vehicles as indicated in an independent third-party guide for the year, make, model and mileage of the recalled vehicle at the time of the announcement of the stop-sale order or the do-not-drive order.

(2) This section shall only apply to used vehicles subject to safety or emissions recalls pursuant to and recalled in accordance with Federal law and regulations and where a stop-sale order or a do-not-drive order has been issued. Further, this section shall only apply to new vehicle dealers holding used vehicles for sale that are a line-make that the dealer is franchised to sell or on which the dealer is authorized to perform recall repairs:

(i) in inventory at the time the stop-sale or do-not-drive order was issued; or

(ii) which were taken into the used vehicle inventory of the dealer as a lease return vehicle or consumer trade-in incident to the purchase of a new vehicle from the dealer after the stop-sale or do-not-drive order was issued.

(3) Nothing in this section shall require a manufacturer to provide total compensation to a dealer which would exceed the total average trade-in value of the affected used motor vehicle as originally determined under paragraph (1).

(b) Violation.--It is a violation of this section for a manufacturer to reduce the amount of compensation otherwise owed to a new vehicle dealer because the new vehicle dealer has submitted a claim for reimbursement under this section or was otherwise compensated for a vehicle subject to a recall where a stop-sale order or a do-not-drive order has been issued. This subsection applies regardless of whether the reduction in the amount of compensation owed to a new vehicle dealer is through a chargeback, removal from an incentive program, reduction in amount owed under an incentive program or any other means.

(c) Procedure.--A reimbursement claim made by new vehicle dealers under this section for recall remedies or repairs, or for compensation where no part or repair is reasonably available and the used vehicle is subject to a stop-sale order or a do-not-drive order, shall be subject to the same limitations and requirements as a warranty reimbursement claim made under section 307. A claim shall be either approved or disapproved within 30 days after the claim is submitted to the manufacturer in the manner and on the forms the manufacturer reasonably prescribes. A claim shall be paid within 30 days of approval of the claim by the manufacturer. A claim not specifically disapproved in writing within 30 days after the manufacturer receives a submitted claim shall be deemed to be approved.

(d) Alternative compensation.--As an alternative to the compensation provided for under subsection (a):

(1) a manufacturer may compensate its new vehicle dealers under a national recall compensation program if the compensation under the program is equal to or greater than that provided under subsection (a); or

(2) the manufacturer and dealer otherwise agree to equal or greater compensation than that provided under subsection (a).

(e) Exclusive remedy.--Any compensation provided to a new vehicle dealer pursuant to this section is exclusive and may not be combined with any other Federal or State recall compensation remedy.

(f) Disclosure.--

(1) A new or used vehicle dealer shall disclose in writing to used vehicle retail purchasers at the time of sale the existence of any open, unremedied recalls. By providing to the used vehicle retail purchaser a report obtained from the publicly accessible Internet website safercar.gov, or a successor website, based on a vehicle identification number search, the dealer shall be deemed to have complied with the disclosure requirement under this subsection. For the purpose of this subsection, failure to provide disclosures to multiple vehicle retail purchasers at the time of sale in violation of this subsection constitutes a single offense with a maximum fine of $1,000 under section 328(a).

(2) Nothing in this subsection shall be construed to limit any civil actions or remedies available in statute or common law.

(307.1 renumbered from 9.1 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u308s

Section 308. Damage disclosure.

(a) Notice to dealer.--Each manufacturer or distributor of new vehicles sold or transferred to a new vehicle dealer shall notify the new vehicle dealer in writing prior to delivery of the vehicle of any material damage to the vehicle which is known to the manufacturer or distributor which was sustained or incurred by the vehicle at any time after the manufacturing process is complete but prior to delivery of the vehicle to the dealer. A dealer may reject the delivery of a nonconforming vehicle under the provisions of 13 Pa.C.S. (relating to commercial code).

(b) Notice to purchaser.--When selling a new vehicle, each new vehicle dealer shall notify the purchaser in writing at the time of sale of any material damage sustained or incurred by the vehicle at any time after the manufacturing process is complete which is disclosed by the manufacturer to the new vehicle dealer.

(c) Exemption.--This section shall not apply to manufacturers and dealers of manufactured housing or to manufacturers, distributors or dealers of motorcycles or recreational vehicles.

(d) Other statutes and decisions.--Nothing in this section shall be construed to diminish any obligation to provide notice to the purchaser of a new vehicle which obligation is imposed by any other provision of law or by any judicial decision, including, but not limited to, the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law.

(308 renumbered from 10 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u309s

Section 309. Mediation and arbitration.

(a) Mediation of disputes between licensees.--

(1) A dealer or distributor may not file a complaint, petition or protest or bring an action in a court of competent jurisdiction against a manufacturer or distributor based on an alleged violation of this chapter or in a protest action under this chapter regarding an establishment, relocation or termination of a franchise agreement unless the dealer or distributor serves a demand for mediation upon the manufacturer or distributor before or contemporaneous with the filing of the complaint, petition or protest or the bringing of an action. A demand for mediation shall be in writing and served upon the manufacturer or distributor by certified mail at an address designated for that manufacturer or distributor within records of the dealer or distributor. The demand for mediation shall contain a brief statement of the dispute and the relief sought by the dealer or distributor filing the demand.

(2) Within 20 days after the date a demand for mediation is served, the parties shall mutually select an independent mediator and meet with that mediator for the purpose of attempting to resolve the dispute. The meeting place shall be in this Commonwealth in a location selected by the mediator. The mediator may extend the date of the meeting for just cause shown by either party or upon stipulation of both parties.

(3) The service of a demand for mediation under paragraph (1) shall stay the time for the filing of any complaint, petition, protest or action under this chapter until representatives of both parties have met with a mutually selected mediator for the purpose of attempting to resolve the dispute. If a complaint, petition, protest or action is filed before the meeting, the board or court shall enter an order suspending the proceeding or action until the meeting has occurred and may, upon written stipulation of all parties to the proceeding or action that they wish to continue to mediate under this subsection, enter an order suspending the proceeding or action for as long a period as the board or court considers appropriate. A suspension order issued under this paragraph may be revoked upon motion of any party or upon motion of the board or the court.

(4) The board shall encourage dealers, manufacturers and distributors to establish, maintain and administer a panel of mediators who have the character, ability and training to serve as mediators and who have knowledge of the vehicle industry.

(5) Mandatory mediation under this section shall not be required of any of the following:

(i) A dealer seeking to dual two or more franchises or a dealer seeking a relocation involving a request to dual two or more franchises unless another dealer of the same line-make has a right to protest the proposed relocation under section 326.

(ii) Manufacturers, distributors or dealers of motorcycles.

(b) Arbitration of disputes between licensees.--After a dispute arises, the licensees may voluntarily agree to submit a dispute arising under this chapter pertaining to a complaint, petition, protest or action to binding or nonbinding arbitration. Any arbitration proceeding shall be voluntary, initiated by serving a written demand for arbitration on the other party, and shall be conducted under the provisions of 42 Pa.C.S. Ch. 73 Subch. A (relating to statutory arbitration) and administered by representatives of dealers, manufacturers or distributors.

(c) Immunity and presumption of good faith by mediators and arbitrators.--A mediator or arbitrator is immune from civil liability for any good faith act or omission within the scope of the mediator's or arbitrator's performance of his powers and duties under this section. Every act or omission of a mediator or arbitrator is presumed to be a good faith act or omission. This presumption may be overcome only by clear and convincing evidence.

(309 renumbered from 11 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u310s

Section 310. Unlawful acts by manufacturers or distributors.

(a) Unlawful coercive acts.--It shall be a violation for any manufacturer, factory branch, distributor, field representative, officer, agent or any representative whatsoever of such manufacturer, factory branch or distributor licensed under this chapter to require, attempt to require, coerce or attempt to coerce any new vehicle dealer in this Commonwealth to:

(1) Order or accept delivery of any new vehicle, part or accessory thereof, equipment or any other commodity not required by law which shall not have been voluntarily ordered by the new vehicle dealer, except that this paragraph is not intended to modify or supersede any terms or provisions of the franchise requiring new vehicle dealers to market a representative line of those vehicles which the manufacturer or distributor is publicly advertising.

(2) Order or accept delivery of any new vehicle with special features, accessories or equipment not included in the list price of such vehicles as publicly advertised by the manufacturer or distributor.

(3) Participate monetarily in an advertising campaign or contest or to purchase unnecessary or unreasonable quantities of any promotional materials, training materials, showroom or other display decorations or materials at the expense of the new vehicle dealer.

(4) Enter into any agreement with the manufacturer or to do any other act prejudicial to the new vehicle dealer by threatening to terminate or not renew a franchise or any contractual agreement existing between the dealer and the manufacturer or distributor, except that this paragraph is not intended to preclude the manufacturer or distributor from insisting on compliance with the reasonable terms or provisions of the franchise or other contractual agreement and notice in good faith to any new vehicle dealer of the new vehicle dealer's violation of such terms or provisions shall not constitute a violation of this chapter.

(5) Change the capital structure of the new vehicle dealer or the means by or through which the new vehicle dealer finances the operation of the dealership, provided that the new vehicle dealer at all times meets any reasonable capital standards determined by the manufacturer or distributor in accordance with uniformly applied criteria, and also provided that no change in the capital structure shall cause a change in the principal management or have the effect of a sale of the franchise without the consent of the manufacturer or distributor. The consent shall be granted or denied within 60 days of receipt of a written request from the new vehicle dealer.

(6) (i) Refrain from participation in the management816of, investment in or the acquisition of any other line of new vehicle or related products. This paragraph does not apply unless the new vehicle dealer maintains a reasonable line of credit for each make or line of new vehicle, the new vehicle dealer remains in compliance with the reasonable terms of the franchise agreement and any reasonable facilities requirements of the manufacturer or distributor, and no change is made in the principal management of the new vehicle dealer. The reasonable facilities requirements shall not include any requirement that a new vehicle dealer establish or maintain exclusive facilities, personnel or display space when such requirements or any of them would be unreasonable in light of economic conditions and would not otherwise be justified by reasonable business considerations.

(ii) (A) Nothing in this paragraph shall permit the dualing or relocation and addition of a line-make to the dealership facilities without the new vehicle dealer providing written certification to the manufacturer or distributor that the new vehicle dealer, with the addition of a line-make by the new vehicle dealer, will maintain a reasonable line of credit for each make or line of new vehicle and the new vehicle dealer will remain in compliance with the reasonable terms of the franchise agreement and any reasonable facilities requirements of the manufacturer or distributor, excluding any exclusive facility or nondualing requirements.

(B) The dealer shall provide the following816 information:

(I) the address of the proposed new location, if applicable;

(II) a brief description of the proposed facility; and

(III) the owner of the proposed new location.

(C) Any objection by the manufacturer or distributor with regard to the dualing or relocation and dualing of two or more franchises shall be delivered to the dealer within 45 days of receipt of the written certification from the new vehicle dealer. Failure on the part of the manufacturer or distributor to timely respond to a dualing or relocation and dualing certification shall be deemed to be an approval of the new vehicle dealer's certification notice of dualing or relocation and dualing of two or more franchises. The manufacturer or distributor shall execute and deliver a franchise reflecting the relocated address of the dealership facilities to the new vehicle dealer within 30 days of the date of the deemed approval.

(iii) A dealer may file a complaint, petition or protest, or bring an action in a court of competent jurisdiction against a manufacturer or distributor, based on a denial of a request by a dealer to dual or relocate and dual two or more franchises without first going through mediation required under section 309. If a dualing or relocation and dualing denial protest is filed with the board, a hearing shall be held within 45 days of the protest's filing and a final determination issued by the board within 90 days of the protest filing. The burden of proof shall be on the manufacturer or distributor to show that the dualing or relocation and dualing is unreasonable. No automobile, motorcycle or truck manufacturer or distributor may limit or restrict the addition of a line-make to the dealership facilities if the new vehicle dealer maintains a reasonable line of credit for each make or line of new vehicle and the new vehicle dealer remains in compliance with the reasonable terms of the franchise agreement and any reasonable facilities requirements of an automobile, motorcycle or truck manufacturer or distributor. This paragraph shall also apply if the dealer seeks to dual two or more line-makes and no relocation will occur. This paragraph shall not impair the rights of another dealer of the same line-make to protest a proposed relocation under section 326.

(7) Prospectively assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability to be imposed by this chapter or to require any controversy between a new vehicle dealer and a manufacturer, distributor or representative to be referred to any person other than the duly constituted courts of the Commonwealth or the United States of America, if such referral would be binding upon the new vehicle dealer. A dealer and the manufacturer, distributor or representative, by themselves or through their respective counsel, are permitted to agree to execute a written agreement or to arbitrate in a binding or nonbinding manner after a controversy arises.

(8) Expand, construct or significantly modify facilities before a date that is ten years after the date of the construction of the facility or the alteration or remodeling at that location was completed and without assurances that the manufacturer or distributor will provide a reasonable supply of new vehicles within a reasonable time so as to justify such an expansion in light of the market and economic conditions. This paragraph shall not apply if the expansion, construction or significant modification is necessary to comply with a health or safety law or to comply with a technology requirement, which is necessary to sell or service a vehicle that the new vehicle dealer is licensed by the manufacturer to sell or service. This section shall apply to any successor dealer provided the dealer has been designated and approved by the manufacturer in the franchise agreement and the construction, alteration or remodeling substantially complied with the manufacturer's brand image standards or plans that the manufacturer provided at the time the construction, alteration or remodeling was completed. Nothing in this paragraph shall prohibit a manufacturer from:

(i) Continuing a facility improvement program that is in effect as of the effective date of this subparagraph with more than one new vehicle dealer in this Commonwealth or to renewing or modifying the facility improvement program.

(ii) Providing lump sum or regularly scheduled payments to assist a new vehicle dealer in making a facility improvement, including construction, alteration or remodeling or installing signage or an image element.

(iii) Providing reimbursement to a new vehicle dealer on reasonable, written terms for a portion of the new vehicle dealer's cost of making a facility improvement, including construction, alteration or remodeling, the purchase of goods, building materials or services or installing signage or an image element.

(8.1) Unreasonably expand, construct or significantly modify facilities in light of the market and economic conditions or require a separate facility for the sale or service of a line-make of a new vehicle if the market and economic conditions do not clearly justify the separate facility.

(8.2) (i) Purchase a good or service from a vendor selected, identified or designated by a manufacturer, factory branch, distributor, distributor branch or an affiliate of a manufacturer, factory branch, distributor, distributor branch by agreement, program, incentive provision or other method if expanding, constructing or significantly modifying a facility without allowing the dealer the option to obtain a good or service of substantially similar quality from a vendor chosen by the dealer and approved by the manufacturer, which approval may not be unreasonably withheld.

(ii) Nothing under this paragraph shall be construed to:

(A) Allow a dealer or vendor to eliminate or impair a manufacturer's intellectual property rights, including a manufacturer's intellectual property rights in a trademark.

(B) Permit a dealer to erect or maintain signs that do not conform to the intellectual property usage guidelines of the manufacturer.

(9) Agree as a condition to granting or renewing a franchise to waive, limit or disclaim a right that the dealer may have to protest the establishment or relocation of another vehicle dealer in the relevant market area as provided in section 326, unless such agreement is voluntary.

(10) (i) Sell, offer to sell or sell exclusively an extended service contract, extended maintenance plan or similar product, such as gap products, offered, endorsed or sponsored by the manufacturer or distributor by the following means:

(A) By an act or statement that the manufacturer or distributor will in any manner impact the dealer, whether it is express or implied or made directly or indirectly.

(B) By a contract, or an express or implied offer of contract, made to the dealer on the condition that the dealer shall sell, offer to sell or sell exclusively an extended service contract, extended maintenance plan or similar product offered, endorsed or sponsored by the manufacturer or distributor.

(C) By measuring the dealer's performance under the franchise based on the sale of extended service contracts, extended maintenance plans or similar products offered, endorsed or sponsored by the manufacturer or distributor.

(D) By requiring the dealer to actively promote the sale of extended service contracts, extended maintenance plans or similar products offered, endorsed or sponsored by the manufacturer or distributor.

(ii) Nothing in this paragraph shall prohibit a manufacturer or distributor from providing incentive programs to a new vehicle dealer who makes the voluntary decision to offer to sell, sell or sell exclusively an extended service contract, extended maintenance plan or similar product offered, endorsed or sponsored by the manufacturer or distributor.

(b) Violations.--It shall be a violation of this chapter for any manufacturer, factory branch, distributor, field representative, officer, agent or any representative whatsoever of such manufacturer, factory branch or distributor licensed under this chapter to:

(1) Delay, refuse or fail to deliver new vehicles or new vehicle parts or accessories in a reasonable time and in reasonable quantity relative to the new vehicle dealer's facilities and sales potential after acceptance of an order from a new vehicle dealer having a franchise for the retail sale of any new vehicle sold or distributed of an order from a new vehicle dealer having a franchise for the retail sale of any new vehicle sold or distributed by the manufacturer or distributor as are covered by such franchise, if such vehicle, parts or accessories are publicly advertised as being available for immediate delivery. There is no violation if the failure is caused by acts or causes beyond the control of the manufacturer or distributor.

(2) Unfairly discriminate among its new vehicle dealers with respect to warranty, recall, service contract or any other service required by the manufacturer or distributor with regard to labor or parts reimbursement.

(3) Unreasonably withhold consent to the sale, transfer or exchange of the franchise to a qualified buyer capable of being licensed as a new vehicle dealer in this Commonwealth who meets the manufacturer's or distributor's reasonable requirements for appointment as a dealer.

(4) Unreasonably withhold consent to the relocation of an existing new vehicle dealer. If the relocation involves dualing of two or more franchises, the requirements of subsection (a)(6)(ii) and (iii) shall apply and paragraph (5) shall not apply.

(5) Fail to respond in writing to a request for consent as specified in paragraphs (3) and (4) within 60 days of receipt of a written request on the forms, if any, generally utilized by the manufacturer or distributor for such purposes and containing the information required. The failure to respond within the time period set forth in this paragraph shall be deemed to be approval of the request, and the manufacturer or distributor shall execute and deliver a franchise to the applicant within 30 days of the expiration of this time period. A manufacturer or distributor shall acknowledge in writing to the applicant the receipt of the forms, and, if the manufacturer or distributor requires additional information to complete its review, the manufacturer or distributor shall notify the applicant within 15 days of the receipt of the forms. If the manufacturer or distributor fails to request additional information from the applicant within 15 days after receipt of the initial forms, the 60-day time period for approval shall be deemed to run from the initial receipt date. Otherwise, the 60-day time period for approval shall run from receipt of the supplemental requested information. In no event shall the total time period for approval exceed 75 days from the date of the receipt of the initial forms.

(6) Prevent or attempt to prevent by contract or otherwise, any new vehicle dealer from changing the executive management control of the new vehicle dealer unless the manufacturer or distributor, having the burden of proof, can show that such change of executive management will result in executive management or control by a person or persons who are not of good moral character or who do not meet reasonable, preexisting, and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards. Where the manufacturer or distributor rejects a proposed change in executive management control, the manufacturer or distributor shall give written notice of its reasons to the dealer within 60 days of notice to the manufacturer by the dealer of the proposed change; otherwise the change in the executive management of the new vehicle dealer shall be presumptively deemed approved.

(7) Offer in connection with a sale of a new vehicle or vehicles to the Federal Government, the Commonwealth or any political subdivision thereof, any discounts, refunds or any other type of inducement to any new vehicle dealer without making the same offer or offers available to all other of its new vehicle dealers within this Commonwealth. This paragraph shall not be construed to prevent the offering of incentive programs or other discounts if the discounts are equally available to all franchised vehicle dealers in this Commonwealth on a proportionally equal basis.

(8) Fail to indemnify its franchised dealers, notwithstanding the terms of any franchise agreement, against any judgment for damages or settlement approved in writing by the manufacturer or distributor, including, but not limited to, court costs and reasonable attorney fees of the new vehicle dealer, arising out of complaints, claims or lawsuits, including, but not limited to, strict liability, negligence, misrepresentation, express or implied warranty or rescission of the sale as defined in 13 Pa.C.S. § 2608 (relating to revocation of acceptance in whole or in part) to the extent that the judgment or settlement relates solely to the alleged defective or negligent functions by the manufacturer or distributor beyond the control of the dealer.

(9) Sell or exchange with a second or final stage manufacturer, retail consumer or end user except through a licensed new vehicle dealer. This paragraph shall not apply to manufacturer or distributor sales of new vehicles to the Federal Government, charitable organizations and employees of the manufacturer.

(10) Modify a franchise during the term of the franchise or upon its renewal if the modification substantially and adversely affects the new vehicle dealer's rights, obligations, investment or return on investment without giving 60 days' written notice of the proposed modification to the new vehicle dealer unless the modification is required by law, court order or the board. Within the 60-day notice period, the new vehicle dealer may file with the board and serve notice upon the manufacturer or distributor a protest requesting a determination of whether there is just cause for permitting the proposed modification. The board shall promptly schedule a hearing and decide the matter within 180 days from the date the protest is filed. Multiple protests pertaining to the same proposed modification shall be consolidated for hearing. The proposed modification shall not take effect pending the determination of the matter. In determining whether there is just cause for permitting a proposed modification, the board shall consider any relevant factors, including, but not limited to:

(i) The reasons for the proposed modification.

(ii) Whether the proposed modification is applied to or affects all new vehicle dealers in a nondiscriminatory manner.

(iii) Whether the proposed modification will have a substantial and adverse effect upon the new vehicle dealer's investment or return on investment.

(iv) Whether the proposed modification is in the public interest.

(v) Whether the proposed modification is necessary to the orderly and profitable distribution of products by the manufacturer or distributor.

(vi) Whether the proposed modification is offset by other modifications beneficial to the new vehicle dealer.

(11) Fail or refuse to offer to its new vehicle dealers all new model vehicles manufactured for that line-make franchise or require any of its new vehicle dealers to pay an unreasonable fee, unreasonably remodel or renovate the new vehicle dealer's existing facilities, unreasonably purchase or construct a new facility, unreasonably purchase parts, supplies, tools, equipment, operational services, other merchandise or unreasonably participate in training programs in order to receive any new model vehicles, parts or accessories. It shall not be a violation of this paragraph if the manufacturer or distributor fails to supply new vehicle dealers with model vehicles, parts or accessories due to circumstances beyond the control of the manufacturer or distributor, including, but not limited to, strike or labor difficulty, shortage of materials, freight embargo or temporary lack of capacity.

(12) Operate a system for the allocation of new vehicles which is not reasonable or fair to a new vehicle dealer. Upon the written request of any of its new vehicle dealers, a manufacturer or distributor shall disclose to the new vehicle dealer the method on which new vehicles are allocated among the new vehicle dealers of the same line-make. The manufacturer distributor has the burden of establishing the fairness of its allocation.

(13) Own, operate or control, either directly or indirectly, any vehicle warranty facility. Nothing in this subsection shall prohibit any manufacturer or distributor from owning, operating or controlling any warranty facility for warranty repairs on vehicles owned or operated by the manufacturer or distributor.

(14) Compel a dealer through a finance subsidiary of the manufacturer or distributor to agree to unreasonable operating requirements or to directly or indirectly terminate a new vehicle dealer through the actions of a finance subsidiary of the manufacturer or distributor. This paragraph shall not limit the right of a financing entity to engage in business practices in accordance with the trade of retail or wholesale vehicle financing.

(15) Use any subsidiary corporation, affiliated corporation or any other controlled corporation, partnership, association, entity or person to accomplish what would otherwise be illegal conduct under this chapter on the part of the manufacturer or distributor.

(16) Release to any third party any customer information which has been provided by the new vehicle dealer to the manufacturer or distributor if the customer objects in writing to releasing the information, unless the information is necessary for the manufacturer or distributor to meet its obligations to customers or new vehicle dealers under requirements imposed by Federal or State law.

(17) Require or coerce or attempt to require or coerce a new vehicle dealer to pay attorney fees of the manufacturer or distributor related to hearings and appeals brought under this chapter.

(18) Vary the price charged to any of its new vehicle dealers, which has the effect of causing a difference in the price of any similarly equipped new vehicle to its new vehicle dealers or to the ultimate purchaser. This paragraph shall not be construed to prevent the offering of incentive programs or other discounts if the incentive or discounts are available to all competing new vehicle dealers of the same line-make in this Commonwealth on a proportionately equal basis.

(19) Directly or indirectly condition any of the following actions on a dealer, prospective dealer or owner of an interest in a dealership franchise or facility to enter into a site-control agreement or exclusive use agreement:

(i) awarding of a franchise to a prospective dealer;

(ii) adding of a line-make or franchise to an existing dealer's franchise or facility;

(iii) renewing of an existing dealer's franchise;

(iv) approving of the relocation of an existing dealer's franchise or facility; or

(v) approving of the sale or transfer of a dealer's ownership of a franchise or facility.

Nothing in this paragraph prohibits a dealer, prospective dealer or owner of an interest in a dealership franchise or facility from voluntarily entering into such an agreement for other consideration. However, a provision contained in an agreement which is not voluntarily entered into by a dealer, prospective dealer or owner of an interest in a dealership franchise or facility on or after the effective date of this paragraph that is inconsistent with the provisions of this section shall be a violation of this chapter.

(1) Except as otherwise provided in this subsection, a manufacturer or distributor shall not:

(i) own or hold an interest, other than a passive, minority interest in a publicly traded dealer held for investment purposes, in a dealer licensed under this chapter which is engaging in the business of buying, selling or exchanging vehicles; or

(ii) operate or control a dealer licensed under this chapter which is engaging in the business of buying, selling or exchanging vehicles.

(2) A manufacturer or distributor may own or hold an interest in a dealer or otherwise operate or control a dealer for a period not to exceed 12 months from the date the manufacturer or distributor acquires an interest in the dealer if:

(i) The person from whom the manufacturer or distributor acquired the dealer was a franchised dealer.

(ii) The dealer is for sale by the manufacturer or distributor at a reasonable price and on reasonable terms and conditions.

(3) On a showing by a manufacturer or distributor of just cause, the board may extend the time limit set forth in paragraph (2). An extension under this paragraph may not exceed 12 months. Where an extension under this paragraph is sought, the manufacturer or distributor shall provide notice delivered 30 days before the extension request is filed with the board to all the same line-make dealers within a ten-mile radius of the manufacturer or distributor owned, operated or controlled dealer. An application for an extension is subject to protest by a dealer of the same line-make who is within the ten-mile radius of the manufacturer or distributor owned, operated or controlled dealer.

(4) For the primary purpose of broadening the diversity of its dealer body and enhancing opportunities for qualified persons who are part of a group who have historically been underrepresented in its dealer body or other qualified persons who lack the resources to purchase a dealer outright, a manufacturer or distributor may temporarily own an interest in a dealer if the manufacturer's or distributor's participation in the dealer is in a bona fide relationship with a franchised dealer who:

(i) At or prior to the time the prospective dealer takes an equity interest in the dealer, the prospective dealer is obligated to make a significant investment in the dealer, subject to loss.

(ii) Has an ownership interest in the dealer.

(iii) Operates the dealer under a written agreement to acquire full ownership of the dealer within a reasonable time and under reasonable terms and conditions.

(5) A manufacturer or distributor shall not unfairly discriminate or compete in terms of any sales, service or operational activities with a new vehicle dealer of the same line-make when a manufacturer or distributor operates a new vehicle dealer under this subsection.

(6) The following shall apply:

(i) A manufacturer or distributor may own, operate or control not more than five new vehicle dealerships trading solely in electric vehicles, as defined in 75 Pa.C.S. § 102 (relating to definitions), that are not sold as new vehicles by a licensed independent new vehicle dealer pursuant to an existing franchise with a manufacturer or distributor, if each of the following conditions are met:

(A) Each of the new vehicle dealerships selling the manufacturer's new motor vehicles in this Commonwealth trade exclusively in the manufacturer's line-make.

(B) Each of the new vehicle dealerships selling the manufacturer's motor vehicles in this Commonwealth are determined to be in compliance with this chapter.

(I) The manufacturer, distributor or a subsidiary, affiliate or controlled entity has not acquired, nor does it hold a controlling interest in another manufacturer or distributor, required to be licensed under this chapter.

(II) If a controlling interest is acquired, the manufacturer, distributor or a subsidiary, affiliate or controlled entity may not continue to operate or control a new vehicle dealership under this subsection for a period not more than 12 months from the date it acquired the controlling interest.

(D) Either of the following apply:

(I) A controlling interest in the original manufacturer, distributor or any subsidiary, affiliate or controlled entity was not transferred, sold or conveyed to another manufacturer, distributor, person or entity required to be licensed under this chapter.

(II) If a controlling interest is transferred, sold or conveyed to another manufacturer, distributor, person or entity required to be licensed under this chapter, the entity may not continue to operate or control a new vehicle dealership under this subsection for a period not more than 12 months from the date it acquired the controlling interest.

(E) The manufacturer shall have continuously offered electric vehicles for sale for a period of not less than 12 months prior to the effective date of this clause.

(ii) Nothing under this chapter shall prohibit a manufacturer operating or controlling a new vehicle dealership under this paragraph from owning, operating or controlling a warranty facility for warranty repairs on the manufacturer's line-make of vehicles.

(7) Nothing under this subsection shall prohibit the sale or lease of used vehicles obtained as a result of a trade or return of a vehicle during the purchase of a new vehicle under paragraph (6) at a manufacturer's licensed location.

(d) Applicability.--

(1) Subsections (b)(11) through (17) and (c) shall not apply to manufacturers, distributors or dealers of manufactured housing.

(1.1) This section shall not apply to manufacturers, distributors or dealers of recreational vehicles.

(2) Subsections (b)(13) and (15) and (c) shall not apply to the ownership or activities of a manufacturer in the operation of a licensed dealer or a licensed dealer that fulfills the following conditions:

(i) The manufacturer maintains an ownership interest in, operates or controls a licensed dealer whose primary business purpose is the rental of vehicles.

(ii) Vehicles sold by the licensed dealer primarily engaged in the business of rental vehicles are limited to those vehicles used for rental purposes or vehicles obtained in trade for such vehicles.

(iii) Any warranty repairs are limited to those repairs conducted on the vehicles used in the vehicle rental business or vehicles sold by the licensed dealer.

(310 renumbered from 12 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u311s

Section 311. Area of responsibility.

(a) General rule.--It shall be a violation of this chapter for any manufacturer or distributor, officer, agent or any representative of a manufacturer or distributor to unreasonably alter a new vehicle dealer's area of responsibility. The following shall apply:

(1) Advance notice from the manufacturer of an alteration of a dealer's area of responsibility shall be given at least 60 days before the effective date of the alteration. The notice shall include an explanation of the basis for the alteration.

(2) At any time before the effective date of such alteration of a dealer's area of responsibility, and after the completion of any internal appeal process pursuant to the manufacturer's or distributor's policy manual, the dealer may file a protest as provided for under section 306. In the event a protest is filed, no such alteration of a dealer's area of responsibility shall become effective until final determination by the board.

(3) If a dealer protests under paragraph (2), the burden of proof shall be on the manufacturer to show that the dealer's area of responsibility is reasonable and justifiable in light of the market conditions.

(4) If a new vehicle dealer's area of responsibility is altered, the manufacturer shall allow 18 months for the dealer to penetrate the market and to become sales effective prior to taking negative legal action claiming a breach or nonperformance of the dealer's sales performance responsibilities against the dealer.

(b) Exception.--This section shall not apply to recreational vehicle manufacturers, distributors or dealers.

(311 renumbered from 12.1 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u312s

Section 312. Termination of franchises.

(a) Terminations.--It shall be a violation of this chapter for any manufacturer or distributor, officer, agent or any representative whatsoever to unfairly, without due regard to the equities of said dealer and without just cause, terminate or fail to renew the franchise of any vehicle dealer; or being a manufacturer, to unfairly, without due regard to the equities of a distributor and without just cause, terminate or fail to renew the franchise of any distributor. The manufacturer or distributor shall not meet its burden of proof to terminate or fail to renew the franchise if the acts of the manufacturer or distributor, in whole or in significant part, caused the dealer or distributor to be unable to comply substantially with the reasonable and material requirements of the franchise.

(b) Mutual agreement of termination filing.--All existing dealers' franchises shall continue in full force and operation under a newly appointed distributor on the termination of an existing distributor unless a mutual agreement of termination is filed with the board between the newly appointed distributor and such dealer.

(c) Notification of termination.--Not less than 60 days advance notice of such termination or failure to renew shall be given the dealer or distributor prior to the effective date thereof unless the nature or character of the reason for termination or failure to renew is such that the giving of such notice would not be in the public interest. A copy of the notice shall also be provided to the board.

(1) The 60-day notice period required by this subsection may be reduced to not less than 15 consecutive business days if the ground for termination or failure to renew is:

(i) insolvency of the dealer or filing of any petition by or against the dealer under any bankruptcy or receivership law;

(ii) failure of the dealer to conduct customary sales and service operations during business hours for seven consecutive business days, except in circumstances beyond the direct control of the dealer;

(iii) conviction of the dealer, or any owner thereof, of any felony which is punishable by imprisonment;

(iv) suspension or revocation of any license which the new vehicle dealer is required to have to operate a dealership; or

(v) based on a determination that there was a fraudulent misrepresentation by the dealer to the manufacturer or distributor which is material to the franchise.

(2) The 60-day notice period under this subsection is not required if the new vehicle dealer or distributor waives it voluntarily in writing.

(d) Appeals.--At any time before the effective date of such termination or failure to renew, the dealer or distributor may appeal to the board for a hearing on the merits, and following due notice to all parties concerned, such hearing shall be promptly held. No such termination or failure to renew shall become effective until final determination of the issue by the board.

(e) Burden of proof and just cause terminations on appeal.--In the event of a dealer or distributor appeal of the termination or failure to renew of its franchise, the burden of proof shall be on the manufacturer or distributor to show that such termination or failure to renew was for just cause. Any termination or failure to renew which is subject to section 313 shall not be subject to this subsection.

(f) Exception.--This section shall not apply to recreational vehicle manufacturers, distributors or dealers.

(312 renumbered from 13 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u313s

Section 313. Industry reorganization.

(a) Violation.--

(1) It shall be a violation of this chapter for a manufacturer or distributor directly or indirectly or through any officer, agent or employee to terminate or fail to renew a franchise of a new vehicle dealer in connection with:

(i) any change in ownership or control of all or any part of the manufacturer's or distributor's business whether by sale or transfer of assets, corporate stock or other equity interest; assignment; merger; consolidation; combination; joint venture; redemption; operation of law; or otherwise; or

(ii) the termination, suspension or cessation of all or any part of the manufacturer's or distributor's business operations except for a termination of a part of the manufacturer's or distributor's business operations throughout the United States that is not otherwise part of any change in ownership or control of the manufacturer's or distributor's business.

(2) Paragraph (1) shall not apply if:

(i) a manufacturer or distributor offers a dealer a replacement franchise with reasonable terms or conditions; or

(ii) the manufacturer or distributor, within 90 days of the effective date of the termination or failure to renew, compensates the dealer in an amount at least equivalent to the higher of the fair market value of the franchise or portion of the franchise terminated or failed to be renewed on the date the manufacturer or distributor announces the act that results in the termination or nonrenewal of the franchise or the date on which the notice of termination or nonrenewal of the franchise is issued.

(3) If the manufacturer or distributor either or both:

(i) authorizes the dealer to continue servicing and supplying parts, including warranty service and parts, for any goods or services marketed by the dealer pursuant to the franchise for a period of not less than five years from the effective date of the termination or failure to renew and continues to reimburse the dealer for warranty parts and service at the same prices and terms as franchised dealers for the manufacturer or distributor;

(ii) continues to supply the dealer with replacement parts for any goods or services marketed by the dealer pursuant to the franchise for a period of not less than five years from the effective date of the termination or failure to renew at the same prices and terms as franchised dealers for the manufacturer or distributor;

and if a dealer chooses to continue either or both such parts and service operation under subparagraph (i) or (ii), the fair market value compensation of the franchise shall be reduced to reflect the value of continuing either or both such parts and service operation.

(b) Acts affecting franchise.--For purposes of subsection (a), the termination or discontinuation of a series, line, brand or class of new vehicle marketed by a manufacturer or distributor as a distinct series, line, brand or class shall be deemed to be the termination or nonrenewal of a franchise even if said series, line, brand or class of new vehicle is part of a franchise including other series, lines, brands or classes of new vehicle, provided that nothing in this subsection shall be construed as prohibiting a manufacturer or distributor from changing, adding or deleting models, specifications, model names, numbers or identifying marks or similar characteristics of the new vehicles it markets, provided that such change, addition or deletion does not result in the termination or discontinuance of a distinct series, line, brand or class of new vehicle.

(c) Disputes.--Any dispute arising between a manufacturer or distributor and a dealer under this section involving the determination of the fair market valuation of a franchise shall be determined by a court of competent jurisdiction and not by the board.

(d) Exemption.--This section shall not apply to motorcycle or recreational vehicle manufacturers, distributors or dealers.

(313 renumbered from 14 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u314s

Section 314. Succession to franchise ownership.

(a) Succession of ownership interest.--Notwithstanding the terms of any franchise, any owner of a new vehicle dealership may appoint, by will or any other written instrument, a designated family member, the spouse, child or grandchild, spouse of a child or grandchild, brother, sister or parent of the dealer owner, or qualified manager, who has been employed at the dealership for at least two years, to succeed to the ownership interest of such owner in the new vehicle dealership.

(b) Consent to succession on part of manufacturer or distributor.--Notwithstanding the terms of any franchise, unless there exists just cause to withhold consent to succession on the part of the manufacturer or distributor, any designated family member or qualified manager of the franchise location in question of a retiring, deceased or incapacitated owner of a new vehicle dealership may succeed to the ownership interest of such owner under the existing franchise, provided:

(1) The designated family member or qualified manager furnishes written notice to the manufacturer or distributor of his or her intention to succeed to the ownership of the new vehicle dealership within 60 days after the owner's retirement, death or incapacity.

(2) The designated family member or qualified manager agrees to be bound by all then existing terms and conditions of the franchise.

(c) Submission of personal and financial information.--The manufacturer or distributor may request, and the designated family member or qualified manager shall promptly provide, such personal and financial information as is reasonably necessary to determine whether the succession will be honored.

(d) Withholding consent to succession.--If a manufacturer or distributor believes that just cause exists to withhold consent to the succession to the ownership of a new vehicle dealership by a designated family member or qualified manager of a retiring, deceased or incapacitated owner of a new vehicle dealership under the existing franchise, the manufacturer or distributor must serve written notice on the designated family member or qualified manager and on the board of its refusal to honor the succession and intent to discontinue the existing franchise with the new vehicle dealer. Such notice shall be served no later than 60 days after the manufacturer's or distributor's receipt of:

(1) notice of the designated family member's or qualified manager's intent to succeed to the ownership of the new vehicle dealer; or

(2) any personal or financial information requested by the manufacturer or distributor.

(e) Notice requirements.--The notice in subsection (d) shall state the specific grounds to withhold consent to honor the succession and the manufacturer's or distributor's intent to discontinue the franchise with the new vehicle dealer no sooner than 60 days after the date the notice is served. The reasons given for the disapproval or any explanation of those reasons by the manufacturer or distributor shall not subject the manufacturer or distributor to any civil liabilities unless the reasons given or explanations made are malicious and published with the sole intent to cause harm to the dealer or successor. If the notice of refusal and discontinuance is not timely and properly served, the franchise shall continue in effect, subject to termination only as otherwise provided under this chapter.

(f) Protest requirements upon withholding of consent.--Within 30 days after receipt of such notice or within 30 days after the end of any appeal procedure provided by the manufacturer or distributor, whichever is greater, the designated family member or qualified manager may file with the board to protest the withholding the consent to honor the succession. When a protest is filed, the board shall promptly notify the manufacturer or distributor that a timely protest has been filed and that such manufacturer or distributor shall not terminate or discontinue the existing franchise until the board has held a hearing and issued a written decision within 120 days of the filing of the protest nor thereafter, unless the board determines that there is just cause for not permitting the succession.

(g) Conflicts.--This chapter shall not preclude the owner of a new vehicle dealership from designating any person as his or her successor by written instrument filed with the manufacturer or distributor. In the event of any conflict between such a written instrument which has not been revoked by written notice from the owner to the manufacturer or distributor, and this section, the written instrument shall govern.

(h) Restriction.--This section shall not apply if the successor will not agree to comply with an existing agreement pertaining to transfer of ownership made between the manufacturer or distributor and the dealer transferor or with a new agreement containing substantially the same terms.

(i) Exception.--This section shall not apply to recreational vehicle manufacturers, distributors or dealers.

(314 renumbered from 15 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u315s

Section 315. Manufacturer right of first refusal.

(a) General rule.--A manufacturer or distributor shall be permitted to enact a right of first refusal to acquire the new vehicle dealer's assets or ownership in the event of a proposed change of all or substantially all ownership or transfer of all or substantially all dealership assets if all of the following requirements are met:

(1) To exercise its right of first refusal, the manufacturer or distributor must notify the dealer in writing within the 60-day or 75-day time limitations established under section 310(b)(5).

(2) The exercise of the right of first refusal will result in the dealer and dealer's owners receiving the same or greater consideration as they have contracted to receive in connection with the proposed change of all or substantially all ownership or transfer of all or substantially all dealership assets. In that regard, the following shall apply:

(i) The manufacturer or distributor shall have the right to and shall assume the dealer's lease for, or acquire the real property on which the franchise is conducted, on the same terms as those on which the real property or lease was to be sold or transferred to the proposed new owner in connection with the sale of the franchise, unless otherwise agreed to by the dealer and manufacturer or distributor. The manufacturer or distributor shall have the right to assign the lease or to convey the real property.

(ii) The manufacturer or distributor shall assume all of the duties, obligations and liabilities contained in the agreements that were to be assumed by the proposed new owner and with respect to which the manufacturer or distributor exercised the right of first refusal, including the duty to honor all time deadlines in the underlying agreements, provided that the manufacturer or distributor has knowledge of such obligations at the time of the exercise of the right of first refusal. Failure by an assignee of the manufacturer or distributor to discharge such obligations shall be deemed a failure by the manufacturer or distributor under this subsection.

(3) The proposed change of all or substantially all ownership or transfer of all or substantially all dealership assets does not involve the transfer of assets or the transfer or issuance of stock by the dealer or one or more dealer owners to a designated family member or members, the spouse, child or grandchild, spouse of a child or grandchild, brother, sister or parent of the dealer owner, of one or more dealer owners or to a qualified manager or to a partnership or corporation controlled by such persons.

(4) The manufacturer or distributor agrees to pay the reasonable expenses, including reasonable attorney fees which do not exceed the usual, customary and reasonable fees charged for similar work done for other clients, incurred by the proposed new owner and transferee prior to the manufacturer's or distributor's exercise of its right of first refusal in negotiating and implementing the contract for the proposed change of all or substantially all ownership or transfer of all or substantially all dealership assets. Notwithstanding the foregoing, no payment of such expenses and attorney fees shall be required if the dealer has not submitted or caused to be submitted an accounting of those expenses within 20 days of the dealer's receipt of the manufacturer's or distributor's written request for such an accounting. Such an accounting may be requested by a manufacturer or distributor before exercising its right of first refusal.

(b) Exception.--This section shall not apply to recreational vehicle manufacturers, distributors or dealers.

(315 renumbered from 16 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u316s

Section 316. Manufacturer or distributor repurchase of inventory and equipment.

(a) Return of property for repurchase.--A new vehicle dealer shall return property, including, but not limited to, vehicle inventory, parts, equipment, tools and signs, as permitted under this section or as set forth in the franchise agreement, to the manufacturer or distributor within 90 days of the effective date of any termination or nonrenewal of a franchise or upon a termination or cessation of a part of a manufacturer's or distributor's business operations throughout the United States which is not part of any change in ownership, operation or control of all or any part of the manufacturer's or distributor's business under section 313. The manufacturer or distributor shall supply the new vehicle dealer with instructions on the method by which the new vehicle dealer must return the property to the manufacturer or distributor. Within 60 days of tender of the property to the manufacturer or distributor, the manufacturer or distributor, including medium and heavy-duty truck component and engine manufacturers or distributors who provide integral parts of vehicles or provide major components by selling directly to dealers, shall repurchase from the new vehicle dealer and remit payment to the new vehicle dealer in accordance with their respective interest in:

(1) Any new, undamaged and unsold vehicle inventory, whether acquired from the manufacturer or distributor or from another dealer of the same line-make in the ordinary course of business within 18 months of the termination date, provided the vehicle has less than 750 miles registered on the odometer, not including mileage incurred in delivery from the manufacturer or in transporting the vehicle between dealers for sale, at the dealer's net acquisition cost, plus any cost to the dealer for returning the vehicle inventory to the manufacturer or distributor. A dealer shall be entitled to the payment under this paragraph for new and undamaged motor vehicles having a gross vehicle weight rating of at least 10,001 pounds of current and two prior model years as determined on a model-by-model basis within the line-make.

(2) All new, unused, undamaged parts listed in the current price catalog acquired from a manufacturer or distributor or a source approved or recommended by the manufacturer or distributor at the dealer price listed in the current parts catalog, less applicable allowances, plus 5% of the catalog price of the part for the cost of packing and returning the parts to the manufacturer or distributor. Reconditioned or core parts shall be valued at their core value, the price listed in the current parts catalog or the amount paid for expedited return of core parts, whichever is higher.

(3) Any special tools or equipment offered for sale during the three years preceding termination or nonrenewal and each trademark or trade name bearing signs which was recommended or required by the manufacturer or distributor at fair market value at the time the notice of termination or nonrenewal is given.

In the event the inventory is subject to a security interest, the manufacturer may make payment jointly to the dealer and the holder of the security interest.

(b) Failure to pay sums due.--A manufacturer or distributor who fails to pay those sums due the dealer within the prescribed time or at such time as the dealer proffers good title prior to the prescribed time for payment is liable to the new vehicle dealer for:

(1) the greater of dealer net acquisition cost, fair market value or current price of inventory;

(2) interest on the amount due, calculated at the rate applicable to a judgment of court; and

(3) reasonable attorney fees and costs.

(c) Limited applicability.--This section shall not apply to manufacturers, distributors or dealers of recreational vehicles or manufactured housing, nor shall it apply to motorcycle manufacturers, distributors or dealers except when the unilateral termination or failure to renew is by the manufacturer or distributor.

(316 renumbered from 17 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u317s

Section 317. Reimbursement of rental costs for dealer facility.

(a) Reimbursement of rental costs.--In the event of a termination or nonrenewal under this chapter, except for termination or nonrenewal under section 313, the manufacturer or distributor shall, at the request and option of the new vehicle dealer, also pay to the new vehicle dealer:

(1) a sum equivalent to rent for the unexpired term of the lease or one year, whichever is less, or such longer term as provided in the franchise, if the new vehicle dealer is leasing the new vehicle dealership facilities from a lessor other than the manufacturer or distributor; or

(2) a sum equivalent to the reasonable rental value of the new vehicle dealership facilities for one year or until the facilities are leased or sold, whichever is less, if the new vehicle dealer owns the new vehicle dealership facilities.

(b) Extent of requirement.--The rental payment required under subsection (a) is only required to the extent that the facilities were used for activities under the franchise and only to the extent the facilities were not leased for unrelated purposes. If payment under subsection (a) is made, the manufacturer or distributor is entitled to possession and use of the new vehicle dealership facilities for the period rent is paid.

(c) Exemption.--This section shall not apply to motorcycle or recreational vehicle manufacturers, distributors or dealers.

(317 renumbered from 18 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u318s

Section 318. Grounds for disciplinary proceedings.

In addition to any criminal or civil penalties otherwise provided in this act, the board shall have the power to formally reprimand, suspend or revoke any license or refuse to issue or renew any license of an applicant or licensee or a person required to be licensed under this act, if after due notice of and hearing, the person charged is found in violation of or fails to carry out the acts and procedures set forth in this act or is found guilty of committing or attempting to commit any of the acts set forth in section 322 or any of the following acts:

(1) Having had a license revoked or suspended by the Commonwealth or another state based on grounds similar to those which in this Commonwealth allow disciplinary proceedings, in which case the record of such revocation or suspension shall be conclusive evidence.

(2) Make any substantial misrepresentation of material facts.

(3) Make any false promise of a character likely to influence, persuade or induce the sale of a vehicle.

(4) Being a vehicle dealer or salesperson, having within five years prior to the application for or issuance of a license or while his current license is in force pleaded guilty, entered a plea of nolo contendere or been found guilty in a court of competent jurisdiction in this or any other state or Federal jurisdiction of forgery, embezzlement, obtaining money under false pretenses, extortion, conspiracy to defraud, bribery, odometer tampering or any other crime involving moral turpitude.

(5) Having failed or refused to account for moneys or other valuables belonging to others which have come into his possession arising out of the sale of vehicles.

(6) Having engaged in false, deceptive or misleading advertising of vehicles.

(7) Having committed any act or engaged in conduct in connection with the sale of vehicles which clearly demonstrates unprofessional conduct or incompetency to operate as a licensee under this act.

(8) Having made a material misstatement in application for licensure.

(9) Having set up, promoted or aided in promotion of a plan by which vehicles are sold to a person for consideration and upon the further consideration that the purchaser agrees to secure one or more persons to participate in the plan by respectively making a similar purchase and in turn agreeing to secure one or more persons likewise to join in said plan, each purchaser being given the right to secure money, credits, goods or something of value, depending upon the number of persons joining in the plan.

(10) Having engaged in the buying, selling, exchanging, trading or otherwise dealing in vehicles on Sunday in violation of 18 Pa.C.S. § 7365 (relating to trading in motor vehicles and trailers).

(i) Manufactured housing is permitted to be sold on Sundays by licensed manufactured housing dealers without being subject to prosecution under this paragraph.

(ii) Licensed motorcycle dealers are permitted to buy, sell, exchange, trade or otherwise deal in motorcycles on Sunday without being subject to prosecution under this paragraph.

(11) Being a dealer or broker who advertises or otherwise holds out to the public that he is selling new vehicles for which he does not hold a franchise agreement in writing with a manufacturer or distributor giving the dealer authority to sell the particular line-make of new vehicles.

(12) Being a dealer or broker who sells new vehicles for which he does not hold a franchise agreement in writing with a manufacturer or distributor giving the dealer authority to sell the particular line-make of new vehicles.

(13) Failing to take immediate remedial action when the dealer knows that someone in his direct employ or someone who renders vehicle-related services to the dealer for consideration, has unlawfully tampered with the odometer of a vehicle in his care, custody or control or which has been sold or exchanged by the dealer. For the purpose of this paragraph, remedial action shall be defined as at least reporting the incident in writing to the Pennsylvania State Police or the board.

(14) Engaging in the business for which such licensee is licensed without at all times maintaining an established place of business as required.

(15) Employing any person as a salesperson who has not been licensed as required.

(16) Having had his vehicle business registration plates (dealer identification number) suspended or revoked by the Department of Transportation pursuant to 75 Pa.C.S. § 1374(a) (relating to suspension or revocation of vehicle business registration plates). A certified copy of the decision and order of the Department of Transportation will constitute conclusive evidence.

(17) Being a new car dealer whose franchise agreement with a manufacturer or distributor, which gives the subject dealer selling rights for that line-make, has been finally terminated, but who continues to sell new vehicles. A recreational vehicle or manufactured housing dealer, whose franchise was terminated or failed to be renewed by either the manufacturer or the dealer, who owned new vehicles prior to the termination or nonrenewal and sold them subsequent to the termination or nonrenewal is exempt from prosecution under this paragraph. Such dealers shall be authorized to sell as new all new vehicles that remain on their lot after a franchise is terminated or failed to be renewed.

(18) Willfully failing to display a license.

(19) Failing to obey any order of the board entered pursuant to the act.

(20) Permitting or allowing another individual or organization not licensed by the board to use that individual's license for the purpose of operating in this Commonwealth in a capacity for which the individual or organization should have held a license.

(21) Willfully having made any false statement as to a material matter in any oath or affidavit which is required by this act.

(22) Failing to collect a tax or fee due the Commonwealth upon a sale of a vehicle as defined in 75 Pa.C.S. § 102 (relating to definitions).

(23) Collecting a tax or fee and failing to issue a true copy of the tax report to the purchaser as required by law.

(24) Issuing a false or fraudulent tax report or copy thereof.

(25) Failing to pay over taxes or fees collected for the Commonwealth at the time and in the manner required by law.

(26) Violating any provision of this act.

(27) Being an unlicensed salesperson, dealer, vehicle auction, branch lot, manufacturer or any other person or business where a license is required under this act.

(28) Any violation of the regulations promulgated by the board.

(29) Being a wholesale vehicle auction who permits dealers who are not currently licensed in this Commonwealth or any other state or jurisdiction or a vehicle business registered with the Department of Transportation and issued a Department of Transportation identification number or licensed or registered by any other state or jurisdiction for a similar activity who during the time their licenses or registrations are suspended or revoked by the Commonwealth or any other state to sell, represent or purchase vehicles at an auction.

(29.1) Being a wholesale vehicle auction who permits a vehicle business as described under paragraph (29), which is restricted to certain vehicle buys, sales or exchanges as set forth in section 303(f)(2), to buy, sell or exchange vehicles of a type which the vehicle business is not authorized to engage in.

(30) Being a dealer which permits salespersons who are not currently licensed in this Commonwealth or any other state or who during the time their licenses are suspended or revoked by the Commonwealth or any other state to sell, represent or purchase vehicles at an auction.

(31) Being a public or retail vehicle auction who knowingly and willfully permits any buyer or seller to buy or sell vehicles which results in engaging in the business as dealer without a license or permitting any other person to engage in any activity which would require licensure under this act.

(32) Being a dealer which willfully permits an individual or salesperson to buy, sell or exchange a vehicle for his own benefit or profit under the dealer's license.

(33) Being a dealer which willfully permits any person who is not a licensed salesperson or owner of the dealership to use the dealer's dealer identification number issued by the Department of Transportation, vehicle dealer's license number or dealer's vehicle registration plates for the purpose of buying, selling or exchanging vehicles.

(34) Being a dealer which conducts its business under any name other than the name in which it is registered or at any other location than that authorized by its license.

(35) Being a dealer, agent of a dealer or a salesperson who buys, sells or exchanges vehicles with a person who is required to be licensed under this act if the dealer, agent or salesperson knew or should have known that the person is not licensed.

(36) Accepting an order of purchase or a contract from a buyer, which offer of purchase or contract is subject to subsequent acceptance by the seller, if such arrangement results in the practice of bushing.

(37) Failing to produce business records when an authorized agent of the board reasonably requests the licensee to produce business records.

(38) Being a person whose license under this act or authority to engage as a dealer or salesperson in any other state or jurisdiction was suspended or revoked and, while the license or authority was suspended or revoked, was physically present at a wholesale vehicle auction or public or retail vehicle auction during the auctioning of vehicles. A vehicle auction shall not be subject to prosecution for a violation of a person being physically present under this paragraph.

(39) Being an out-of-State recreational vehicle dealer who, while buying, selling, titling, registering, financing or exchanging recreational vehicles in this Commonwealth, violates a Pennsylvania law or regulation or a law or regulation of the state or jurisdiction of licensure or the state or jurisdiction of domicile regarding the buying, selling, titling, registering, financing or exchanging of recreational vehicles.

(40) Being an out-of-State recreational vehicle dealer who fails to demonstrate, upon direction of or investigation by the board or its agents, that the out-of-State recreational vehicle dealer satisfies the provisions of section 332.1(c) regarding participation in this Commonwealth in a recreational vehicle show, recreational vehicle off-premise sale, recreational vehicle exhibition or recreational vehicle rally.

(318 renumbered from 19 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u319s

Section 319. Administrative liability of employer, copartnership, association or corporation.

In the event of the revocation of the license issued to any member of a partnership or to any officer of an association or corporation, the license issued to a partnership, association or corporation shall be revoked by the board unless, within a time fixed by the board, in the case of a partnership, the connection of the member whose license has been revoked shall be severed and his interest in the partnership and his share in its activities brought to an end, or in the case of an association or corporation, the offending officer shall be discharged and shall have no further participation in its activities.

(20 renumbered from 11 and former 20 renumbered 29 and amended Apr. 19, 1996, P.L.104, No.27)

(319 renumbered from 20 Oct. 24, 2018, P.L.816, No.134)

19830084u320s

Section 320. Reinstatement.

(a) Suspension.--Upon application in writing and after a hearing pursuant to notice, the board may reissue or modify the suspension of any license which has been suspended.

(b) Revocation.--Unless ordered to do so by a court, the board shall not reinstate the license of a person that has been revoked and such person shall be required to apply for a license after a period of five years in accordance with section 321 if he desires to resume operating as a licensee at any time after such revocation.

(320 renumbered from 21 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u321s

Section 321. Application for license.

(a) Dealer's or vehicle auction's license.--Application for license as a dealer or vehicle auction shall be made in writing to the board, signed by the applicant, setting forth the following:

(1) Name of applicant and location of principal place of business to which the license will be issued.

(2) Name or style under which business is to be conducted and, if a corporation, the state of incorporation.

(3) Name and address of each owner or partner and, if a corporation, the names of principal officers and directors.

(4) Locations in which the business is to be conducted if the dealer has more than one place of business.

(5) If new vehicles are to be sold, the line-make or line-makes to be handled.

(6) A statement of the previous history, record and association of the applicant and of each owner, partner, officer and director, which statement shall be sufficient to establish to the satisfaction of the board the reputation in business of the applicant.

(7) A statement showing whether the applicant has previously applied for a license and the result of such application and whether the applicant has ever been the holder of either a dealer, vehicle auction or salesperson license which was revoked or suspended.

(8) If the applicant is a corporation or partnership, a statement showing whether any of the partners, employees, officers or directors have been refused a dealer's, vehicle auction's or salesperson's license or have been the holder of such a license which was revoked or suspended.

(9) A statement by the applicant that he has met all facility requirements as noted herein and as required by regulation, except as provided in subsection (a.1).

((a) amended June 28, 2018, P.L.420, No.59)

(a.1) Temporary permit for new vehicle dealers.--Upon receipt of a complete and accurate new vehicle dealer application or new vehicle dealer change of address application, the board shall issue a new vehicle dealer license immediately. If the new vehicle dealer does not have the franchise approval letter, the telephone business line information, the certificate of occupancy or the lease or deed for the property available when the application has been submitted, the new vehicle dealer shall receive a temporary permit that expires at the end of 45 days from the date of closing. The new vehicle dealer shall submit the franchise approval letter, the telephone business line information, the certificate of occupancy and the lease or deed for the property prior to the expiration of the temporary permit. Upon receipt of the franchise approval letter, the telephone business line information, the certificate of occupancy and the lease or deed for the property, the board shall issue a new vehicle dealer license immediately. ((a.1) added June 28, 2018, P.L.420, No.59)

(b) Salesperson's license.--Application for license as a salesperson shall be made in writing to the board, signed by the applicant, setting forth the following:

(1) The applicant's name and address.

(2) The period of time, if any, during which he has been engaged in the occupation of salesperson.

(3) The name and address of his last employer.

(4) The name and address of the dealer then employing him or into whose employ he is about to enter. If the applicant is to be licensed for a dealer who is licensed in more than one category or at more than one location and the applicant desires to sell for each of the dealer's licensed entities, the name and address of the primary location and of each other entity shall be supplied.

(5) The recommendation of his employer or prospective employer certifying that the applicant is honest, trustworthy and of good repute and recommending that a license be granted. In the case of an applicant who is himself a dealer, an officer of a corporation which is a dealer or a member of a partnership which is a dealer, the foregoing recommendation shall be made by another dealer, bank or sales finance company which has personal knowledge concerning the reputation and fitness of the applicant.

(6) A statement showing whether the applicant has previously applied for a license and the result of such application and whether the applicant has ever been the holder of a salesperson's license which was revoked or suspended or the subject of disciplinary action by this board or that of any other jurisdiction.

(7) The application shall be made upon a form prepared by the board containing such other reasonable information as the board shall require.

(c) Application for license other than as a dealer, vehicle auction or salesperson.--Application for license other than as a dealer, vehicle auction or salesperson shall be made in writing to the board accompanied by the required fee. The board may require, in such application or otherwise, information relating to the applicant's background and his financial standing, all of which may be considered by the board in determining the fitness of said applicant to engage in the business for which he desires to be licensed.

(d) Manufacturer's or distributor's license.--Application for license as a manufacturer or distributor shall be made in writing to the board, signed by the applicant, setting forth or attaching the following:

(1) Name of applicant and location of principal place of business for the license which is the subject of the application and the location of any other place of business within this Commonwealth.

(2) Name or style under which business is to be conducted and, if a corporation, the state of incorporation.

(3) The line-make or line-makes of new vehicles which are to be manufactured or distributed.

(4) A statement showing whether the applicant has previously applied for a license and the result of such application.

(e) Change of ownership.--A dealer or vehicle auction shall supply the board with information regarding any change in named owners. The information shall include a statement of the previous history, record and reputation in the business of the new owner. Where the same business name and address is to be retained, any change in owners shall only require the licensee to inform the board of the change in owners but shall not require the licensee to submit to the entire license application process as set forth by this act or corresponding regulations.

(22 renumbered from 13 and amended and former 22 renumbered 31 April 19, 1996, P.L.104, No.27)

(321 renumbered from 22 Oct. 24, 2018, P.L.816, No.134)

19830084u322s

Section 322. Refusal of license.

The board may refuse to issue a license if the applicant has committed any of the acts set forth as grounds for the suspension or revocation of a license or the board finds that the applicant continued to engage in an activity in violation of this act during the suspension or revocation period. The board may also refuse to issue a license when it determines:

(1) That the applicant was previously the holder of a license issued under this act, which license was revoked for cause or which license was suspended for cause and the terms of the suspension have not been fulfilled.

(2) That the applicant was previously a limited or general partner, stockholder, director or officer of a partnership or corporation whose license issued under the authority of this act was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled.

(3) If the applicant is a partnership or corporation, that one or more of the limited or general partners, stockholders, directors or officers of the partnership or corporation was previously the holder of a license issued under the authority of this act which was revoked for cause or was suspended for cause and the terms of the suspension have not been fulfilled, or that by reason of the facts and circumstances touching the organization, control and management of the partnership or corporation business, the policy of such business will be directed, controlled or managed by individuals who, by reason of their conviction of violations of the provisions of this act, would be ineligible for a license and that by licensing such corporation or partnership, the purposes of this act would likely be defeated.

(4) That the applicant is a vehicle dealer, vehicle auction or salesperson who, having within five years prior to the application for or issuance of a license or while a current license is in force, pleaded guilty, entered a plea of nolo contendere or has been found guilty in a court of competent jurisdiction in Federal or in this or any other state jurisdiction of forgery, embezzlement, obtaining money under false pretenses, extortion, conspiracy to defraud, bribery, odometer tampering or any other crime involving moral turpitude.

(23 renumbered from 14 and amended and former 23 repealed Apr. 19, 1996 P.L.104, No.27)

(322 renumbered from 23 Oct. 24, 2018, P.L.816, No.134)

19830084u323s

Section 323. Change of salesperson's license to indicate new employer.

Whenever a licensed salesperson desires to change his employment from one licensed dealer to another, he shall notify the board in writing using the appropriate form, which is completed in its entirety and is accurate, no later than ten days after the date of change, pay the required fee and return the current license if not previously returned. The board shall issue a new license upon receipt of a complete and accurate salesperson's transfer application. In the interim at such time as the change in affiliation of the salesperson occurs, he shall maintain a copy of the notification sent to the board as his temporary license pending receipt of his new current license. This temporary transfer license shall expire at the end of 45 days from the date on the transfer application. It shall be the duty of the applicant to notify the board if a new license or other pertinent communication is not received from the board within 30 days of the submission of the transfer application. The new license shall be issued for the remainder of the period covered by the previous license. The fee for the issuance of such changed license shall be determined by regulation.

(24 renumbered from 15 and amended and former 24 renumbered 34 and amended Apr. 19, 1996, P.L.104, No.27)

(323 renumbered from 24 Oct. 24, 2018, P.L.816, No.134)

19830084u324s

Section 324. Termination of employment or business.

(a) Salesperson's license to be surrendered after termination of employment.--Within ten days after termination of employment, the dealer shall surrender that salesperson's license to the board. If the license is not in the dealer's possession, then it will be the responsibility of the salesperson to return the license to the board.

(b) Dealer's, branch lot or vehicle auction license to be surrendered after termination of business.--Within ten days after termination of business activities, the dealer, branch lot or vehicle auction shall surrender to the board all of its licenses and its salespersons' licenses issued by the board.

(25 renumbered from 16 and amended and former 25 deleted by amendment Apr. 19, 1996, P.L.104, No.27)

(324 renumbered from 25 Oct. 24, 2018, P.L.816, No.134)

19830084u325s

Section 325. Exemption from licensure and registration.

This act shall not be construed to require licensure and registration in the following cases:

(1) Public officers in the conduct of sales of vehicles in the performance of their official duties.

(2) Sales finance companies and banks licensed under the provisions of the act of June 28, 1947 (P.L.1110, No.476), known as the Motor Vehicle Sales Finance Act, in the conduct of sales of vehicles which have been repossessed by them.

(3) The sale, exchange or purchase by a person in one calendar year of fewer than five vehicles, except manufactured housing or mobile homes, on which sales tax has been paid at the purchase of the vehicle by that person. Where such a vehicle is authorized under Article II of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, to be transferred from the person who paid the sales tax to another without being subject to sales tax, such as, but not limited to, wife and husband transfers or disbursements from an estate to a beneficiary, the recipient of the vehicle shall be permitted to sell such vehicle without paying sales tax prior to his sale of the vehicle.

(4) The sale, exchange or purchase of fewer than five manufactured housing or mobile homes by a person in one calendar year.

(26 renumbered from 17 and amended and former 26 renumbered 35 Apr. 19, 1996, P.L.104, No.27)

(325 renumbered from 26 Oct. 24, 2018, P.L.816, No.134)

19830084u326s

Section 326. Limitations on establishing or relocating dealers.

(a) Additional or relocation of new vehicle dealers.--

(1) In the event that a manufacturer seeks to enter into a franchise establishing an additional new vehicle dealer or relocating an existing new vehicle dealer within or into a relevant market area where the same line-make is then represented, the manufacturer shall in writing first notify the board and each new vehicle dealer in such line-make in the relevant market area of the intention to establish an additional dealer or to relocate an existing dealer within or into that market area. Within 20 days after the end of any appeal procedure provided by the manufacturer, any such new vehicle dealer may file with the board a protest to the establishing or relocating of the new vehicle dealer. When such a protest is filed, the board shall inform the manufacturer that a timely protest has been filed, and that the manufacturer shall not establish the proposed new vehicle dealer or relocate the new vehicle dealer until the board has held a hearing, nor thereafter, if the board has determined that there is just cause for not permitting the addition or relocation of such new vehicle dealer.

(2) The notice required by this subsection shall include the following information:

(i) The location of the proposed additional or relocating new vehicle dealer.

(ii) An explanation of the appeal procedure provided by the manufacturer or distributor, if any, to the establishment of the proposed additional new vehicle dealer or relocation of the new vehicle dealer.

(iii) An explanation of the existing new vehicle dealer's rights to file a protest with the board to the establishment of the proposed new vehicle dealer or the relocation of the new vehicle dealer.

(3) Under this subsection, relocating an existing new vehicle dealer shall include any instance where an existing dealer sells or otherwise transfers all or substantially all of its business to a new owner and the new owner, who has been approved by the manufacturer or distributor to enter into a franchise agreement, seeks to relocate the ongoing, operating dealership franchise from its current licensed address to a site within the relevant market area of the existing dealer which is not within five miles of another licensed new vehicle dealer for the same line-make of vehicle as set forth in subsection (b)(1).

(4) (i) Where an automobile, motorcycle or truck manufacturer or distributor seeks to enter into an agreement or franchise establishing an additional vehicle warranty service facility or seeks to relocate an existing vehicle warranty service facility within or into a radius of five miles surrounding where an existing new vehicle dealer vehicle warranty service facility of the same line-make is then represented, except in cases involving a franchised new medium or heavy-duty truck dealer, in which case the affected radius shall be the relevant market area or the area of responsibility as defined in the dealer's franchise, whichever is greater, the automobile, motorcycle or truck manufacturer shall in writing first notify the board and each affected new vehicle dealer vehicle warranty service facility of such line-make of the intention to establish an additional vehicle warranty service facility or to relocate an existing vehicle warranty service facility within or into the affected market areas.

(ii) The notice required by subparagraph (i) shall include the following information:

(A) The location of the proposed additional or relocating vehicle warranty service facility.

(B) An explanation of the appeal procedure provided by the automobile, motorcycle or truck manufacturer or distributor, if any, to the establishment of the proposed additional vehicle warranty service facility or relocation of the vehicle warranty service facility.

(C) An explanation of the existing new vehicle dealer's or vehicle warranty service facility's rights to file a protest with the board to the establishment of the proposed vehicle warranty service facility or the relocation of the vehicle warranty service facility.

(iii) Within 20 days after the end of any appeal procedure provided by the automobile, motorcycle or truck manufacturer, any such new vehicle warranty dealer vehicle service facility may file with the board a protest to the establishment or relocation of the vehicle warranty service facility.

(iv) When such a protest is filed, the board shall inform the automobile, motorcycle or truck manufacturer that a timely protest has been filed and that the automobile, motorcycle or truck manufacturer shall not establish the proposed vehicle warranty service facility or relocate the vehicle warranty service facility until the board has held a hearing nor thereafter if the board has determined that there is just cause for not permitting the addition or relocation of such vehicle warranty service facility.

(v) In determining whether just cause exists to allow for the establishment or relocation of a vehicle warranty service facility, the board shall consider the same type of circumstances as established in subsection (c).

(b) Nonapplicability of section.--This section does not apply:

(1) To the relocation of an existing dealer within that dealer's relevant market area, provided that the relocation not be at a site within five miles of a licensed new vehicle dealer for the same line-make of vehicles.

(2) If the proposed new vehicle dealer is to be established at or within two miles of a location at which a former licensed new vehicle dealer for the same line-make of new vehicle had ceased operating within the previous two years. For purposes of this section, a former vehicle dealer shall have ceased operations on the date on which the franchise or agreement shall have been finally terminated.

(3) To the relocation of an existing dealer to a site that is further away from the nearest dealer of the same line-make.

(4) To manufactured housing or recreational vehicle dealers.

(c) Board to consider existing circumstances.--In determining whether just cause has been established for not entering into or relocating an additional new vehicle dealer for the same line-make, the board shall take into consideration the existing circumstances, including, but not limited to:

(1) Permanency of the investment of both the existing and proposed new vehicle dealers.

(2) Growth or decline in population and new vehicle registrations in the relevant market area.

(3) Effect on the consuming public in the relevant market area.

(4) Whether it is injurious or beneficial to the public welfare for an additional new vehicle dealer to be established.

(5) Whether the new vehicle dealers of the same line-make in that relevant market area are providing adequate competition and convenient customer care for the vehicles of the line-make in the market area which shall include the adequacy of vehicle sales and service facilities, equipment, supply of vehicle parts and qualified service personnel.

(6) Whether the establishment of an additional new vehicle dealer would increase competition and whether such increased competition would be in the public interest.

(7) The effect the denial of relocation will have on a relocating dealer.

(326 renumbered from 27 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u327s

Section 327. Licensing cost.

(a) Licensing cost.--Subject to the limitations established under subsection (c), a licensed dealer who has a contract with the Department of Transportation pursuant to 75 Pa.C.S. § 7501 (relating to authorization of messenger and agent services) may charge the purchaser of a vehicle a licensing cost permissible under 75 Pa.C.S. Ch. 19 (relating to fees) and the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law, and regulations promulgated thereunder, to include any of the following:

(1) The actual cost incurred by the dealer for fees associated with titling and registering the vehicle, including messenger fees, notary fees and electronic transaction fees.

(2) A documentary preparation charge for:

(i) Preparation and completion of documents required to register and license the vehicle under 75 Pa.C.S. (relating to vehicles).

(ii) Collection and submission of taxes payable by the purchaser.

(iii) Preparation of any other information associated with titling and registration of a vehicle.

(iv) Complying with Federal and State laws and regulations relating to the privacy and safeguarding of customer information requirements, providing financial services to the customer and preparation and retrieval of documents.

(b) Out-of-State title.--The provisions of subsection (a) shall apply whether or not the purchaser intends to title and register the vehicle outside this Commonwealth.

(1) A dealer which provides electronic transaction services for documents under subsection (a)(2) may impose a maximum charge of $100 for calendar year 2008 and a maximum charge of $120 for calendar year 2009.

(2) A dealer which does not provide electronic transaction services for document preparation under subsection (a)(2) may impose a maximum charge of $80 for calendar year 2008 and a maximum charge of $100 for calendar year 2009.

(d) Adjustment.--Beginning in January 2010, and annually thereafter, the licensing cost for documentary preparation shall be adjusted in accordance with the Federal Consumer Price Index for All Urban Consumers (CPI-U) for all items as published by the United States Department of Labor, Bureau of Labor Statistics, for the previous 12-month period on a cumulative basis. Any adjustment which is less than 50¢ shall be rounded down to the next lowest dollar amount and any adjustment which is 50¢ or greater shall be rounded up to the next highest dollar amount.

(e) Fees.--Licensing costs under this section shall not be considered fees for purposes of section 330 or 331.

(327 renumbered from 27.1 and amended Oct. 24, 2018, P.L.816, No.134)

19830084u328s

Section 328. Penalties.

(a) Criminal penalties for violation of this act.--Whoever shall give any false or forged evidence of any kind to the board or to any member in order to obtain a license, or shall refuse upon request to furnish business records, documents and files relating to practice under this act, or shall otherwise violate the provisions of this act shall be guilty of a summary offense and, upon conviction, shall be ordered to pay a fine of $1,000. A licensee shall be subject to criminal prosecution under this subsection for violation of any provision of this act.

(b) Criminal penalties for unlicensed activity.--Whoever engages in the business of vehicle dealer, manufacturer, factory branch, distributor, distributor branch, auction or broker or engages in the occupation of vehicle salesperson or factory or distributor representative without being licensed and registered as required or exempted from licensure as provided, or shall present or attempt to use as his own the license of another, shall be guilty of a summary offense and, upon conviction, shall be sentenced to pay a fine of $1,000 or any higher amount equal to double the pecuniary gain derived from the offense. For the purpose of this act the sale of each vehicle in violation of this act constitutes a separate offense.

(c) Additional remedy.--In addition to any other civil remedy or criminal penalty provided for in this act, the board by a vote of the majority of the authorized membership of the board as provided by law, or by a vote of the majority of the duly qualified and confirmed membership, may levy a civil penalty of up to $1,000 on any current licensee who violates any provision of this act or on any person who engages in an activity required to be licensed by this act. The board shall levy this penalty only after affording the accused party the opportunity for a hearing as provided in 2 Pa.C.S. (relating to administrative law and procedure).

(28 amended Oct. 18, 2000, P.L.577, No.75)

(328 renumbered from 28 Oct. 24, 2018, P.L.816, No.134)

19830084u329s

Section 329. Civil actions for violations.

Notwithstanding the terms, provisions or conditions of any agreement or franchise or other terms or provisions of any novation, waiver or other written instrument, any person who is or may be injured by a violation of a provision of this act of any party to a franchise who is so injured in his business or property by a violation of a provision of this act relating to that franchise, or any person so injured because he refuses to accede to a proposal for an arrangement which, if consummated, would be in violation of this act, may bring an action for damages and equitable relief, including injunctive relief, in any court of competent jurisdiction.

(29 renumbered from 20 and amended Apr. 19, 1996, P.L.104, No.27)

(329 renumbered from 29 Oct. 24, 2018, P.L.816, No.134)

19830084u330s

Section 330. Fees.

(a) General rule.--All fees required under the provisions of this act shall be fixed by the board by regulation and shall be subject to review in accordance with the act of June 25, 1982 (P.L.633, No.181), known as the Regulatory Review Act. If the revenues generated by fees, fines and civil penalties imposed in accordance with the provisions of this act are not sufficient to match expenditures over a two-year period, the board shall increase those fees by regulation, subject to review in accordance with the Regulatory Review Act, such that the projected revenues will meet or exceed projected expenditures.

(b) Increases by bureau.--If the Bureau of Professional and Occupational Affairs determines that the fees established by the board are inadequate to meet the minimum enforcement efforts required, then the bureau, after consultation with the board, shall increase the fees by regulation, subject to review in accordance with the Regulatory Review Act, such that adequate revenues are raised to meet the required enforcement effort.

(c) Existing fees.--All fees fixed pursuant to section 211 of the act of July 1, 1978 (P.L.700, No.124), known as the Bureau of Professional and Occupational Affairs Fee Act, shall continue in full force and effect until changed by the board pursuant to subsection (a).

(30 renumbered from 21 Apr. 19, 1996, P.L.104, No.27)

(330 renumbered from 30 Oct. 24, 2018, P.L.816, No.134)

19830084u331s

Section 331. Disposition of fees and fines.

All civil fines and fees and all criminal fines shall be paid into the Special Augmentation Fund established by section 301 of the act of July 1, 1978 (P.L.700, No.124), known as the Bureau of Professional and Occupational Affairs Fee Act.

(31 renumbered from 22 Apr. 19, 1996, P.L.104, No.27)

(331 renumbered from 31 Oct. 24, 2018, P.L.816, No.134)

19830084u332s

Section 332. Vehicle shows, off-premise sales and exhibitions.

(a) Participation.--Any licensed dealer, distributor or manufacturer may participate in public vehicle shows, off-premise sales and exhibitions, provided that a dealer shall participate only in shows, off-premise sales and exhibitions held within the dealer's relevant market area. A dealer shall be permitted to conduct a vehicle show or exhibition at its established place of business.

(b) Application of section.--The provisions of this section relating to "relevant market area" shall not apply to vehicle shows held as part of, and in conjunction with, the following:

(1) An event operated to benefit a charitable organization or group of organizations approved under section 501(c)(3) of the Internal Revenue Code of 1954 (68A Stat. 3, 26 U.S.C. § 501(c)(3)).

(2) A community or agricultural fair which receives funds from the Pennsylvania Fair Fund.

(3) An event pertaining to shows of recreational vehicles, manufactured housing or mobile homes.

(c) Out-of-State new vehicle dealers.--A new vehicle dealer, except a recreational vehicle dealer, licensed in another state or jurisdiction may participate with permission of its licensed manufacturer in industrywide public vehicle shows and exhibitions in which a total of 50 or more new vehicle dealers participate as exhibitors. Furthermore, the limitations relating to relevant market area contained in subsection (a) shall not be applicable to industrywide public vehicle shows and exhibitions in which, when open to the public, a total of 50 or more new vehicle dealers participate as exhibitors.

(d) Out-of-State recreational vehicle dealers.--((d) repealed Oct. 8, 2008, P.L.1086, No.90)

(e) Emergency vehicles.--Licensed manufacturers of firefighting or emergency service vehicles shall be authorized to buy, sell or exchange such vehicles to governmental agencies or emergency service providers at vehicle shows, off-premise sales and exhibitions without possessing a dealer's license.

(f) Applicability.--This section shall not apply to recreational vehicle dealers. ((f) added Oct. 8, 2008, P.L.1086, No.90)

(32 renumbered from 23.1 and amended Apr. 19, 1996, P.L.104, No.27)

(332 renumbered from 32 Oct. 24, 2018, P.L.816, No.134)

19830084u332.1s

Section 332.1. Recreational vehicle shows, recreational vehicle off-premise sales, recreational vehicle exhibitions and recreational vehicle rallies.

(a) Participation.--A recreational vehicle dealer, salesperson, distributor, manufacturer or manufacturer's representative licensed under this act may participate in a recreational vehicle show, recreational vehicle off-premise sale, recreational vehicle exhibition or recreational vehicle rally. A recreational vehicle dealer shall be permitted to conduct a recreational vehicle show, recreational vehicle exhibition or recreational vehicle rally at its established place of business.

(b) Bond required.--Any person acting as a recreational vehicle dealer in this Commonwealth shall have posted a bond payable to the Commonwealth in the amount of $30,000 to ensure compliance with all Commonwealth laws and regulations. The bond shall be executed by a surety company authorized to transact business in this Commonwealth. The bond shall be security for any claim filed by an agency of the Commonwealth, for moneys due, including unpaid taxes, fees, licenses, payment of a criminal penalty or fine after conviction or payment of a civil penalty or monetary amount after the entry of judgment. The bond shall remain valid until canceled in writing by the issuer. This provision shall not limit the authority of any government agency or private individual to institute civil, criminal or disciplinary action against a person for a violation of a Commonwealth law or regulation. A recreational vehicle dealer who has a current bond in the amount of at least $30,000 on file with the Department of Transportation shall not be required to post a bond under this subsection.

(c) Out-of-State recreational vehicle dealers.--An out-of-State recreational vehicle dealer licensed in another state or jurisdiction or domiciled in another state or jurisdiction that does not require licensure shall register with the board on a form prescribed by the board before participating in this Commonwealth in a recreational vehicle show, recreational vehicle off-premise sale, recreational vehicle exhibition or recreational vehicle rally. The following apply:

(1) Registration shall include all of the following:

(i) Notification of the out-of-State recreational vehicle dealer's intent to participate in this Commonwealth in a recreational vehicle show, recreational vehicle off-premise sale, recreational vehicle exhibition or recreational vehicle rally.

(ii) Agreement to comply with all Federal and State laws and regulations relating to the buying, selling, exchanging, titling, registration or financing of recreational vehicles.

(iii) Agreement by the out-of-State recreational vehicle dealer to submit to the jurisdiction of the Commonwealth for purposes of disciplinary action of imposition of a civil or criminal penalty or assessment under subsection (b) resulting from a violation under subparagraph (ii).

(iv) Evidence of the posting of a bond under subsection (b).

(v) Payment of a participation fee.

(vi) A list of all individuals engaged as sales people for the out-of-State recreational vehicle dealer while operating in this Commonwealth.

(2) If the board has taken action within the last five years to sanction an out-of-State recreational vehicle dealer, the board may:

(i) refuse to accept the registration and participation fee of the out-of-State recreational vehicle dealer permanently or for a fixed period; and

(ii) order that the out-of-State recreational vehicle dealer be denied access to all recreational vehicle shows, recreational vehicle off-premise sales, recreational vehicle exhibitions and recreational vehicle rallies in this Commonwealth.

(3) An out-of-State recreational vehicle dealer licensed in another state or jurisdiction or domiciled in a state or jurisdiction that does not require licensure may participate in this Commonwealth in a recreational vehicle show, recreational vehicle off-premise sale, recreational vehicle exhibition or recreational vehicle rally under the circumstances set forth either in subparagraph (i) or (ii):

(i) When the show, sale, exhibition or rally has less than a total of 50 recreational vehicle dealers participating with permission of the dealer's licensed manufacturer and meets all of the following requirements:

(A) A minimum of ten recreational vehicle dealers at the show are licensed in this Commonwealth.

(B) More than 50% of the participating recreational vehicle dealers are licensed in this Commonwealth.

(C) The state in which the out-of-State recreational vehicle dealer is licensed is contiguous to this Commonwealth and permits recreational vehicle dealers licensed in this Commonwealth to participate in recreational vehicle shows in that state under conditions substantially equivalent to the conditions imposed upon dealers from that state to participate in recreational vehicle shows in this Commonwealth.

(ii) When the recreational vehicle show, sale, exhibition or rally opens to the public, it has a total of at least 50 recreational vehicle dealers from this Commonwealth and from another state participating with permission of the dealer's licensed manufacturer and meets all of the following requirements:

(A) The show, sale, exhibition or rally is trade oriented and predominantly funded by recreational vehicle manufacturers.

(B) All of the participating dealers who are not licensed in this Commonwealth are from a state contiguous to this Commonwealth which permits recreational vehicle dealers licensed in this Commonwealth to participate in recreational vehicle shows in that state under conditions substantially equivalent to the conditions imposed upon dealers from that state to participate in recreational vehicle shows in this Commonwealth.

(4) The board shall report a violation of Pennsylvania law or regulation to the state or jurisdiction in which the out-of-State recreational vehicle dealer is licensed or domiciled.

(5) Forms for out-of-State recreational vehicle dealers shall be published in the Pennsylvania Bulletin and shall be maintained on the board's Internet website.

(6) The board may accept registration information and payment electronically.

(7) An out-of-State recreational vehicle dealer may not participate in a recreational vehicle show, recreational vehicle off-premise sale, recreational vehicle exhibition or recreational vehicle rally in this Commonwealth, unless the out-of-State recreational vehicle dealer satisfies at least four of the listed activities at its facility in the contiguous state in which it is licensed or domiciled that does not require licensure:

(i) Accepting delivery of new recreational vehicles from the recreational vehicle dealer's manufacturer for which the recreational vehicle dealer possesses an agreement with the manufacturer to sell its new recreational vehicles.

(ii) Maintaining inventory and offering recreational vehicles for sale to the public.

(iii) Consummating and finalizing recreational vehicle sales.

(iv) Servicing or repairing recreational vehicles.

(v) Delivering recreational vehicles to purchasers with recreational vehicle titling, registrations issued and taxes collected and paid to the dealer's appropriate home state agencies.

((c) amended Oct. 14, 2014, P.L.2507, No.146)

(32.1 added Oct. 8, 2018, P.L.1086, No.90)

(332.1 renumbered from 32.1 Oct. 24, 2018, P.L.816, No.134)

19830084u333s

Section 333. Off-premise sales, shows, exhibitions or rallies on Sundays.

(1) The following shall be permitted to be open on Sundays:

(i) Off-premise vehicle sales, shows and exhibitions.

(ii) Recreational vehicle shows, recreational vehicle off-premise sales, recreational vehicle exhibitions and recreational vehicle rallies.

(2) Except as provided in paragraphs (3) and (4), normal vehicle business practices shall be allowed at off-premise sales, vehicle shows or exhibitions on Sunday except that no final sales contract may be consummated on a Sunday.

(3) Normal vehicle business practices shall be allowed at recreational vehicle shows, recreational vehicle off-premise sales, recreational vehicle exhibitions and recreational vehicle rallies. Recreational vehicle dealers are permitted to consummate final sales contracts on Sundays.

(4) Manufactured housing dealers are permitted to consummate final sales contracts on Sundays.

(33 amended Oct. 8, 2008, P.L.1086, No.90)

(333 renumbered from 33 Oct. 24, 2018, P.L.816, No.134)

19830084u501h

CHAPTER 5

RECREATIONAL VEHICLES

(Ch. 5 added Oct. 24, 2018, P.L.816, No.134)

Compiler's Note: Section 24 of Act 134 of 2018 provided that the addition of Chapter 5 shall apply to recreational vehicle manufacturer/dealer agreements entered into or renewed on or after the effective date of Act 134.

19830084u501s

Section 501. Legislative intent.

It is the intent of the General Assembly to protect the public health, safety and welfare of the residents of this Commonwealth by regulating the relationship between recreational vehicle dealers, manufacturers and suppliers, maintaining competition and providing consumer protection and fair trade.

(501 added Oct. 24, 2018, P.L.816, No.134)

19830084u502s

Section 502. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Area of sales responsibility." The geographical area, agreed to by the dealer and the manufacturer in the manufacturer/dealer agreement, within which the dealer has the exclusive right to display and sell the manufacturer's new recreational vehicles of a particular line-make to the retail public.

"Dealer." A person, firm, corporation or business entity licensed or required to be licensed under Chapter 3.

"Distributor." A person, firm, corporation or business entity that purchases new recreational vehicles for resale to dealers.

"Factory campaign." An effort on the part of a warrantor to contact a recreational vehicle owner or dealer in order to address a part or equipment issue.

"Family member." A spouse, child, grandchild, parent, sibling, niece or nephew or the spouse of a child, grandchild, sibling, niece or nephew.

"Line-make." A specific series of recreational vehicles that:

(1) Are identified by a common series trade name or trademark.

(2) Are targeted to a particular market segment, as determined by the recreational vehicle's decor, features, equipment, size, weight and price range.

(3) Have lengths and interior floor plans that distinguish the recreational vehicles from other recreational vehicles with substantially the same decor, equipment, features, price and weight.

(4) Belong to a single, distinct classification of recreational vehicle product type having a substantial degree of commonality in the construction of the chassis, frame and body.

(5) Have a manufacturer/dealer agreement that authorizes a dealer to sell.

"Manufacturer." A person, firm, corporation or business entity that engages in the manufacturing of recreational vehicles.

"Manufacturer/dealer agreement." A written agreement or contract entered into between a manufacturer and a dealer that fixes the rights and responsibilities of the parties and under which the dealer sells new recreational vehicles.

"Proprietary part." A part manufactured by or for and sold exclusively by a manufacturer.

"Supplier." A person, firm, corporation or business entity that engages in the manufacturing of recreational vehicle parts, accessories or components.

"Transient customer." A customer who is temporarily traveling through a dealer's area of sales responsibility.

"Warrantor." A person, firm, corporation or business entity, including a manufacturer or supplier that provides a written warranty to a consumer in connection with a new recreational vehicle or a part, accessory or component of a new recreational vehicle. The term does not include service contracts, mechanical or other insurance or extended warranties sold for separate consideration by a dealer or other person not controlled by a manufacturer.

(502 added Oct. 24, 2018, P.L.816, No.134)

19830084u503s

Section 503. Written agreements and designated territories.

(a) General rule.--A manufacturer or distributor may not sell a recreational vehicle in this Commonwealth to or through a dealer without having first entered into a manufacturer/dealer agreement with a dealer which has been signed by both parties.

(b) Area of sales responsibility.--The manufacturer shall designate the area of sales responsibility exclusively assigned to a dealer in the manufacturer/dealer agreement and may not change the area or contract with another dealer for sale of the same line-make in the designated area for the duration of the agreement.

(c) Review.--The area of sales responsibility may be reviewed or changed with the consent of both parties not less than 12 months after the execution of the manufacturer/dealer agreement.

(d) New vehicles.--A recreational vehicle dealer may not sell a new recreational vehicle in this Commonwealth without having first entered into a manufacturer/dealer agreement with a manufacturer or distributor which has been signed by both parties.

(503 added Oct. 24, 2018, P.L.816, No.134)

19830084u504s

Section 504. Termination, cancellation, nonrenewal and alteration of dealership by manufacturer.

(a) General rule.--A manufacturer or distributor, directly or through an authorized officer, agent or employee, may terminate, cancel or fail to renew a manufacturer/dealer agreement with just cause. Section 506 shall not apply to this section.

(b) Burden of proof.--The manufacturer or distributor has the burden of showing just cause for terminating, canceling or failing to renew a manufacturer/dealer agreement with a dealer. For purposes of determining whether there is just cause for the proposed action, any of the following factors may be considered:

(1) The extent of the affected dealer's penetration in the area of sales responsibility compared to other similarly situated dealers and market conditions.

(2) The nature and extent of the dealer's investment in the dealer's business.

(3) The adequacy of the dealer's service facilities, equipment, parts, supplies and personnel.

(4) The effect of the proposed action on the community.

(5) The extent and quality of the dealer's service under recreational vehicle warranties.

(6) The dealer's failure to follow agreed-upon procedures or standards related to the overall operation of the dealership.

(7) The dealer's performance under the terms of its manufacturer/dealer agreement.

(c) Written notice required.--Except as otherwise provided in this section, a manufacturer or distributor shall provide a dealer with at least 90 days' prior written notice of termination, cancellation or nonrenewal of the manufacturer/dealer agreement in the event the dealer is being terminated for just cause. The following shall apply:

(1) The notice shall state all reasons for the proposed termination, cancellation or nonrenewal and shall state that, within 30 days following receipt of the notice, the dealer shall provide to the manufacturer or distributor written notice of intent to cure all claimed deficiencies. The dealer shall have 90 days following receipt of the original notice to rectify the deficiencies.

(2) If the deficiencies are rectified within 90 days, the manufacturer's or distributor's notice shall be voided. If the dealer fails to provide the notice of intent to cure the deficiencies in the prescribed time period or fails to cure the deficiencies in the time period provided, the termination, cancellation or nonrenewal shall take effect 30 days after the dealer's receipt of the original notice. If the dealer has new and untitled inventory on hand, it may be sold under section 506.

(d) Time period of notice.--The notice period may be reduced to 30 days if the manufacturer's or distributor's grounds for termination, cancellation or nonrenewal are due to any of the following just-cause factors:

(1) A dealer or one of its owners has been convicted of or has entered a plea of nolo contendere to a felony.

(2) The abandonment or closing of the business operations of the dealer for 10 consecutive business days unless the closing is due to an act of God, strike, labor difficulty or other cause over which the dealer has no control.

(3) A significant misrepresentation by the dealer materially affecting the business relationship.

(4) A suspension or revocation of the dealer's license or refusal to renew the dealer's license by the department.

(5) A material violation of this chapter which is not resolved within 30 days after the written notice by the manufacturer.

(e) Nonapplicability of notice.--The notice provisions of subsection (c) do not apply if the reason for termination, cancellation or nonrenewal is the dealer's insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy.

(504 added Oct. 24, 2018, P.L.816, No.134)

19830084u505s

Section 505. Termination, cancellation, nonrenewal and alteration of dealership by dealer.

(a) General rule.--A dealer may terminate or cancel its manufacturer/dealer agreement with a manufacturer or distributor with or without just cause by giving 30 days' written notice.

(1) If the termination or cancellation is for just cause, the notice shall state all reasons for the proposed termination or cancellation and shall state that if, within 30 days following receipt of the notice, the manufacturer or distributor provides to the dealer a written notice of intent to cure all claimed deficiencies, the manufacturer or distributor will then have 90 days following receipt of the original notice to rectify the deficiencies.

(2) If the deficiencies are rectified within 90 days, the dealer's notice shall be voided. If the manufacturer or distributor fails to provide the notice of intent to cure the deficiencies or fails to cure the deficiencies in the time period prescribed in the original notice, the termination or cancellation shall take effect as provided in the original notice.

(b) Just cause shown.--If the dealer terminates, cancels or fails to renew the manufacturer/dealer agreement without just cause, the provisions of section 506 shall not apply. If the dealer terminates, cancels or fails to renew the manufacturer/dealer agreement with just cause, the provisions of section 506 shall apply. The dealer has the burden of showing just cause for the proposed termination, cancellation or nonrenewal action by a dealer due to any of the following just-cause factors:

(1) A manufacturer being convicted of or entering a plea of nolo contendere to a felony.

(2) The business operations of the manufacturer have been abandoned or closed for 10 consecutive business days, unless the closing is due to an act of God, strike, labor difficulty or other cause over which the manufacturer has no control.

(3) A significant misrepresentation by the manufacturer materially affecting the business relationship.

(4) A material violation of this chapter which is not cured within 30 days after written notice by the dealer.

(5) A declaration by the manufacturer of bankruptcy, insolvency or the occurrence of an assignment for the benefit of creditors or bankruptcy.

(505 added Oct. 24, 2018, P.L.816, No.134)

19830084u506s

Section 506. Repurchase of inventory.

(a) General rule.--If the manufacturer/dealer agreement is terminated, canceled or not renewed by the dealer for just cause as described in section 505(b) and the manufacturer fails to provide notice or cure the claimed deficiencies as provided in section 505(a), the manufacturer shall, at the dealer's option and within 45 days after termination, cancellation or nonrenewal, repurchase:

(1) All new, untitled recreational vehicles that were acquired from the manufacturer or distributor within 12 months before the effective date of the notice of termination, cancellation or nonrenewal that have not been used, except for demonstration purposes, and that have not been altered or damaged, at 100% of the net invoice cost, including transportation, less applicable rebates and discounts to the dealer.

(2) In the event any of the vehicles repurchased under this section are damaged but do not trigger a consumer disclosure requirement, the amount due the dealer shall be reduced by the cost to repair the vehicle. Damage prior to delivery to the dealer that is disclosed at the time of delivery will not disqualify repurchase under this subsection.

(3) All undamaged accessories and proprietary parts sold to the dealer for resale within the 12 months prior to termination, cancellation or nonrenewal, if accompanied by the original invoice, at 105% of the original net price paid to the manufacturer or distributor to compensate the dealer for handling, packing and shipping the parts.

(4) Properly functioning diagnostic equipment, special tools, current signage or other equipment and machinery which was purchased by the dealer upon the manufacturer's or distributor's request within five years prior to the termination, cancellation or nonrenewal and which can no longer be used in the normal course of the dealer's ongoing business at 100% of the dealer's net cost plus freight.

(b) Sale of remaining inventory after termination.--

(1) A dealer is not prohibited from selling the remaining in-stock inventory of a particular line-make after a manufacturer/dealer agreement has been terminated or not renewed under section 504.

(2) If recreational vehicles of a line-make subject to the terminated agreement are not repurchased or required to be repurchased by the manufacturer or distributor, the dealer may continue to sell the recreational vehicles that are subject to the terminated manufacturer/dealer agreement and are currently in stock until those recreational vehicles are no longer in the dealer's inventory.

(506 added Oct. 24, 2018, P.L.816, No.134)

19830084u507s

Section 507. Transfer of dealership and family succession.

(a) General rule.--

(1) If a dealer desires to make a change in ownership by the sale of the business assets, stock transfer or otherwise, the dealer shall give the manufacturer or distributor written notice at least 30 business days before the closing, including all supporting documentation as may be reasonably required by the manufacturer or distributor to determine if an objection to the sale may be made. In the absence of a breach by the selling dealer of its manufacturer/dealer agreement or this chapter, the manufacturer or distributor shall not object to the proposed change in ownership unless the prospective transferee:

(i) has previously been terminated by the manufacturer for breach of its dealer agreement;

(ii) has been convicted of a felony or a crime of fraud, deceit or moral turpitude;

(iii) lacks a license required by law;

(iv) does not have an active line of credit sufficient to purchase a manufacturer's product; or

(v) has undergone in the last 10 years bankruptcy, insolvency, a general assignment for the benefit of creditors or the appointment of a receiver, trustee or conservator to take possession of the transferee's business or property.

(2) If the manufacturer or distributor objects to a proposed change of ownership, the manufacturer or distributor shall give written notice of its reasons to the dealer within 10 business days after receipt of the dealer's notification and complete documentation. The manufacturer or distributor has the burden of proof with regard to its objection. If the manufacturer or distributor does not give timely notice of its objection, the change or sale shall be deemed approved.

(3) It is unlawful for a manufacturer or distributor to fail to provide a dealer an opportunity to designate, in writing, a family member as a successor to the dealership. It is unlawful to prevent or refuse to honor the succession to a dealership by a family member of the dealer unless the manufacturer or distributor has provided to the dealer written notice of its objections within 10 days after receipt of the dealer's modification of the dealer's succession plan. In the absence of a breach of the dealer agreement, the manufacturer may object to the succession for the following reasons only:

(i) conviction of the successor of a felony or a crime of fraud, deceit or moral turpitude;

(ii) bankruptcy or insolvency of the successor during the past 10 years;

(iii) prior termination by the manufacturer of the successor for breach of a dealer agreement;

(iv) the successor does not have an active line of credit sufficient to purchase the manufacturer's product; or

(v) the successor lacks a license required by law.

(b) Burden of proof.--The manufacturer or distributor has the burden of proof regarding the manufacturer's or distributor's objection. A family member may not succeed to a dealership if the succession involves, without the manufacturer's or distributor's consent, a relocation of the business or an alteration of the terms and conditions of the manufacturer/dealer agreement.

(507 added Oct. 24, 2018, P.L.816, No.134)

19830084u508s

Section 508. Warranty obligations.

(a) General rule.--Each warrantor shall:

(1) Specify in writing to each of its dealer obligations, if any, for preparation, delivery and warranty service on its products.

(2) Compensate the dealer for warranty service required of the dealer by the warrantor.

(3) Provide to the dealer the schedule of compensation to be paid and the time allowances for the performance of work and service. The schedule of compensation must include reasonable compensation for diagnostic work as well as warranty labor.

(b) Time allowances and compensation.--Time allowances for the diagnosis and performance of warranty labor must be reasonable for the work to be performed. In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration shall be the actual wage rates being paid by the dealer and the actual retail labor rate being charged by the dealers in the community in which the dealer is doing business. The compensation of a dealer for warranty labor may not be less than the posted labor rates actually charged by the dealer for similar nonwarranty labor as long as the rates are reasonable.

(c) Reimbursement.--The warrantor shall reimburse the dealer for warranty parts at actual wholesale cost plus a minimum 30% handling charge and the cost, if any, of freight to return warranty parts to the warrantor.

(d) Audits.--Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis, and dealer claims for warranty compensation may not be denied except for cause, such as performance of nonwarranty repairs, material noncompliance with the warrantor's published policies and procedures, lack of material documentation, fraud or misrepresentation.

(e) Warranty claims.--The dealer shall submit warranty claims within 45 days after completing work.

(f) Warrantor notification.--If a dealer receives a written or verbal complaint from a consumer relative to a warranty repair, the dealer must notify the warrantor about the complaint in writing within 10 days of receiving the complaint if the dealer cannot satisfy the consumer's complaint.

(g) Disapproval of warranty claims.--The warrantor shall disapprove warranty claims in writing within 45 days after the date of submission by the dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within 45 days shall be construed to be approved and must be paid within 60 days of submission.

(h) Violation.--It is a violation of this chapter for a warrantor to:

(1) Fail to perform any of its warranty obligations with respect to its warranted products.

(2) Fail to include, in written notices of factory campaigns to recreational vehicle owners and dealers, the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the campaign work. The warrantor may ship parts to the dealer to effect the campaign work, and, if the parts are in excess of the dealer's requirements, the dealer may return unused parts to the warrantor for credit after completion of the campaign.

(3) Fail to compensate its dealers for authorized repairs effected by the dealer on merchandise damaged in manufacture or transit to the dealer, if the carrier is designated by the warrantor, factory branch, distributor or distributor branch.

(4) Fail to compensate its dealers in accordance with the schedule of compensation provided to the dealer under this section if repairs are performed in a timely and competent manner.

(5) Intentionally misrepresent in any way to purchasers of recreational vehicles that warranties with respect to the manufacture, performance or design of the vehicle are made by the dealer as warrantor or cowarrantor.

(6) Require the dealer to make warranties to customers in any manner related to the manufacture of the recreational vehicle.

(i) Violations.--It is a violation of this chapter for a dealer to:

(1) Fail to perform predelivery inspection functions, as specified by the warrantor, in a competent and timely manner.

(2) Fail to perform warranty service work authorized by the warrantor in a competent and reasonably timely manner on a transient customer's recreational vehicle of a line-make sold or serviced by that dealer.

(3) Fail to accurately document the time spent completing each repair, the total number of repair attempts conducted on a single unit and the number of repair attempts for the same repair conducted on a single vehicle.

(4) Fail to notify the warrantor within 10 days of a second repair attempt which impairs the use, value or safety of the vehicle.

(5) Fail to maintain written records, including a consumer's signature, regarding the amount of time a unit is stored for the consumer's convenience during a repair.

(6) Make fraudulent warranty claims or misrepresent the terms of a warranty.

(508 added Oct. 24, 2018, P.L.816, No.134)

19830084u509s

Section 509. Indemnification.

(a) General rule.--Notwithstanding the terms of a manufacturer/dealer agreement, it is a violation of this chapter for:

(1) A warrantor to fail to indemnify and hold harmless its new recreational vehicle dealer against losses or damages to the extent that the losses or damages are caused by the negligence or willful misconduct of the warrantor.

(2) A new recreational vehicle dealer to be denied indemnification for failing to discover, disclose or remedy a defect in the design or manufacturing of a new recreational vehicle or new recreational trailer.

(3) A new recreational vehicle dealer to fail to indemnify and hold harmless its warrantor against losses or damages to the extent that the losses or damages are caused by the negligence or willful misconduct of the new recreational vehicle dealer.

(b) Denial of indemnification.--A new recreational vehicle dealer may be denied indemnification if the new recreational vehicle dealer fails to remedy a known and announced defect in accordance with the written instructions of a warrantor for whom the new recreational vehicle dealer is obligated to perform warranty service.

(1) A new recreational vehicle dealer shall provide to a warrantor a copy of any pending lawsuit in which allegations are made that are covered by the provisions of this section within 10 days after receiving the suit. This subsection shall continue to apply even after the new recreational vehicle is titled.

(2) A warrantor shall provide to a new recreational vehicle dealer a copy of any pending law suit or similar proceeding in which allegations are made that come within the provisions of this subsection within 10 days after receiving the suit. This paragraph shall continue to apply even after the new recreational vehicle is titled.

(509 added Oct. 24, 2018, P.L.816, No.134)

19830084u510s

Section 510. Inspection and rejection by dealer.

(a) General rule.--Whenever a new recreational vehicle is damaged prior to transit to the dealer or is damaged in transit to the dealer when the carrier or means of transportation has been selected by the manufacturer or distributor, the dealer shall notify the manufacturer or distributor of the damage within the time frame specified in the manufacturer/dealer agreement and:

(1) request from the manufacturer or distributor authorization to replace the components, parts and accessories damaged or otherwise correct the damage; or

(2) reject the vehicle within the time frame set forth in subsection (d).

(b) Refusal or failure to repair.--If the manufacturer or distributor refuses or fails to authorize repair of the damage within 10 days after receipt of notification or if the dealer rejects the recreational vehicle because of damage, ownership of the new recreational vehicle shall revert to the manufacturer or distributor.

(c) Obligations.--The dealer shall exercise due care in custody of the damaged recreational vehicle, but the dealer shall have no other obligations, financial or otherwise, with respect to that recreational vehicle.

(d) Time frame.--The time frame for inspection and rejection by the dealer must be part of the manufacturer/dealer agreement and may not be less than two business days after the physical delivery of the recreational vehicle.

(e) Unreasonable mileage.--A recreational vehicle that has, at the time of delivery to the dealer, an unreasonable amount of miles on its odometer, as determined by the dealer, may be subject to rejection by the dealer and reversion of the vehicle to the manufacturer or distributor. In no instance shall a dealer deem an amount less than the distance between the dealer and the manufacturer's factory or a distributor's point of distribution, plus 100 miles, as unreasonable.

(f) Notice to dealer.--Each manufacturer or distributor of new recreational vehicles sold or transferred to a new recreational vehicle dealer shall notify the new recreational vehicle dealer in writing prior to delivery of the recreational vehicle of any material damage to the recreational vehicle which is known to the manufacturer or distributor which was sustained or incurred by the vehicle at any time after the manufacturing process is complete but prior to delivery of the recreational vehicle to the dealer. A dealer may reject the delivery of a nonconforming recreational vehicle under the provisions of 13 Pa.C.S. (relating to commercial code), and the following shall apply:

(1) When selling a new recreational vehicle, each new recreational vehicle dealer shall notify the purchaser in writing at the time of sale of any material damage sustained or incurred by the recreational vehicle at any time after the manufacturing process is complete which is disclosed by the manufacturer to the new recreational vehicle dealer.

(2) Nothing in this section shall be construed to diminish any obligation to provide notice to the purchaser of a new recreational vehicle which obligation is imposed by any other provision of law or by any judicial decision, including, but not limited to, the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law.

(510 added Oct. 24, 2018, P.L.816, No.134)

19830084u511s

Section 511. Coercion of dealer prohibited.

(a) General rule.--A manufacturer or distributor may not coerce or attempt to coerce a dealer to:

(1) purchase a product that the dealer did not order;

(2) enter into an agreement with the manufacturer or distributor; or

(3) enter into an agreement that requires the dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under this chapter.

(b) Definition.--As used in this section, the term "coerce" includes, but is not limited to, threatening to terminate, cancel or not renew a manufacturer/dealer agreement without just cause or threatening to withhold product lines the dealer is entitled to purchase under the manufacturer/dealer agreement or delay product delivery as an inducement to amending the manufacturer/dealer agreement.

(511 added Oct. 24, 2018, P.L.816, No.134)

19830084u512s

Section 512. Applicability.

To the extent the provisions of this chapter are inconsistent with any other provisions of this act as applied to a recreational vehicle dealer, manufacturer, distributor or supplier, this chapter controls. Unless inconsistent with the provisions in this chapter or expressly excluded, the provisions of this act apply to recreational vehicle dealers, manufacturers, distributors and suppliers.

(512 added Oct. 24, 2018, P.L.816, No.134)

19830084u513s

Section 513. Severability.

The provisions of this chapter are severable. If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application.

(513 added Oct. 24, 2018, P.L.816, No.134)

19830084u701h

CHAPTER 7

MISCELLANEOUS PROVISIONS

(Ch. hdg. added Oct. 24, 2018, P.L.816, No.134)

19830084u701s

Section 701. Savings provision.

This act shall not be deemed to repeal, suspend, modify or revoke any of the provisions of 75 Pa.C.S. (relating to vehicles) or of the act of June 28, 1947 (P.L.1110, No.476), known as the Motor Vehicle Sales Finance Act.

(34 renumbered from 24 and amended Apr. 19, 1996, P.L.104, No.27)

(701 renumbered from 34 Oct. 24, 2018, P.L.816, No.134)

19830084u702s

Section 702. Repeals.

(a) Specific repeal.--The act of September 9, 1965 (P.L.499, No.254), known as the Motor Vehicle Manufacturer's, Dealer's and Salesmen's License Act, is repealed.

(b) General repeal.--All acts and parts of acts are repealed insofar as they are inconsistent with this act.

(35 renumbered from 26 Apr. 19, 1996, P.L.104, No.27)

(702 renumbered from 35 Oct. 24, 2018, P.L.816, No.134)

19830084u703s

Section 703. Expiration of terms of board members.

Persons who are members of the State Board of Motor Vehicle Manufacturers, Dealers and Salespersons on the effective date of this act shall serve on the board created under this act until their current three-year terms expire or until their successors are duly appointed and qualified, but no longer than six months after the expiration of their terms.

(36 renumbered from 27 and amended Apr. 19, 1996, P.L.104, No.27)

(703 renumbered from 36 Oct. 24, 2018, P.L.816, No.134)

19830084u704s

Section 704. Existing rules and regulations.

Each rule and regulation of the board not inconsistent with this act shall remain in effect after such date until repealed or amended by the board.

(37 renumbered from 28 and amended Apr. 19, 1996, P.L.104, No.27)

(704 renumbered from 37 Oct. 24, 2018, P.L.816, No.134)

19830084uax

APPENDIX

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Supplementary Provisions of Amendatory Statutes

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1996, APRIL 19, P.L.104, NO.27

Preamble

It is hereby declared to be the public policy of this Commonwealth to provide for fair and impartial regulation of those persons engaged in manufacturing, distributing or selling of vehicles. The provisions of this act which are applicable to such activities shall be administered in such a manner as will continue to promote fair dealing and honesty in the vehicle industry and among those engaged therein without unfair or unreasonable discrimination or undue preference or advantage. It is further declared to be the policy of this Commonwealth to protect the public interest in the purchase and trade of vehicles so as to insure protection against irresponsible vendors and dishonest or fraudulent sales practices and to assist, provide and secure a stable, efficient, enforceable and verifiable method for the distribution of vehicles to consumers in this Commonwealth.

Compiler's Note: Act 27 of 1996 amended, added or repealed sections 2, 3, 4, 5, 6, 7, 8, 9, 9.1, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 23.1, 23.2, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 and 37 of Act 84.

BOARD OF VEHICLES ACT