CHAPTER 151
(SB 84)
Motor vehicle dealerships, ownership regulated.
ENTITLED, An Act
regulate the ownership of motor vehicle dealerships.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section
1.
That chapter 32-6B be amended by adding thereto a NEW SECTION to read as
follows:
In this Act, the term, manufacturer, includes a representative or a person or entity who is
affiliated with a manufacturer or representative, or who, directly or indirectly through an
intermediary, is controlled by, or is under common control with, the manufacturer. For purposes
of this section, a person or entity is controlled by a manufacturer if the manufacturer has the
authority directly or indirectly, by law or by agreement of the parties, to direct or influence the
management and policies of the person or entity.
Section
2.
That chapter 32-6B be amended by adding thereto a NEW SECTION to read as
follows:
Except as otherwise provided by this Act, no manufacturer or franchisor may directly or
indirectly:
(1) Own an interest in a vehicle dealer or dealership;
(2) Operate or control a vehicle dealer or dealership; or
(3) Act in the capacity of a vehicle dealer.
Section
3.
A manufacturer or franchisor may own an interest in a franchised vehicle dealer, or
otherwise control a dealership, for a period not to exceed twelve months from the date the
manufacturer or franchisor acquires the dealership if:
(1) The person from whom the manufacturer or franchisor acquired the dealership was a
franchised dealer; and
(2) The dealership is for sale by the manufacturer or franchisor at a reasonable price and on
reasonable terms and conditions.
Section
4.
That chapter 32-6B be amended by adding thereto a NEW SECTION to read as
follows:
For the 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 dealership outright, but for
no other purpose, a manufacturer or franchisor may temporarily own an interest in a dealership if
the manufacturer's or franchisor's participation in the dealership is in a bona fide relationship with
a franchised vehicle dealer who:
(1) Has made a significant investment in the dealership, subject to loss;
(2) Has an ownership interest in the dealership; and
(3) Operates the dealership under a plan to acquire full ownership of the dealership within
a reasonable time and under reasonable terms and conditions.
Section
5.
That chapter 32-6B be amended by adding thereto a NEW SECTION to read as
follows:
On a showing by a manufacturer or franchisor of good cause, the department may extend the
time limit set forth in section 3 of this Act. No extension under this section may exceed twelve
months. An application for an extension after the first extension is granted is subject to protest by
a vehicle dealer of the same line-make whose dealership is located in the same county as, or within
fifteen miles of, the dealership owned or controlled by the manufacturer or franchisor. The
department may not grant more than two extensions.
Signed February 28, 2000.