THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY ERICKSON, ALLOWAY, LOGAN, TOMLINSON, ORIE, RAFFERTY, D. WHITE, KASUNIC, EARLL, WAUGH, FONTANA, M. WHITE, BROWNE, FOLMER, MELLOW, WOZNIAK, O'PAKE, BAKER, MENSCH, DINNIMAN, GREENLEAF, BOSCOLA, STACK, STOUT, YAW, COSTA, SCARNATI, GORDNER, CORMAN, WARD, BRUBAKER AND HUGHES, APRIL 27, 2010

AS AMENDED ON SECOND CONSIDERATION, JUNE 21, 2010   

AN ACT

Amending the act of December 22, 1983 (P.L.306, No.84), entitled

"An act providing for the State Board of Vehicle

Manufacturers, Dealers and Salespersons; and providing

penalties," further providing for definitions and for

unlawful acts by manufacturers or distributors.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2 of the act of December 22, 1983

(P.L.306, No.84), known as the Board of Vehicles Act, is amended

by adding a definition to read:

Section 2.  Definitions.

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:

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"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.

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Section 2.  Section 12(b) of the act is amended by adding a

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paragraph 12(a) and (b) of the act are amended by adding

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paragraphs to read: 

Section 12.  Unlawful acts by manufacturers or distributors.

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(a)  Unlawful coercive acts.--It shall be a violation for any

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manufacturer, factory branch, distributor, field representative,

officer, agent or any representative whatsoever of such

manufacturer, factory branch or distributor licensed under this

act to require, attempt to require, coerce or attempt to coerce

any new vehicle dealer in this Commonwealth to:

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(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 act for any

manufacturer, factory branch, distributor, field representative,

officer, agent or any representative whatsoever of such

manufacturer, factory branch or distributor licensed under this

act to:

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(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 act.

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Section 3.  This act shall take effect in 60 days.