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SB 604

Motor vehicles; definitions; merging multiple versions of statues; termination, cancellation, or nonrenewal of a franchise; repealer. Effective date.

2026 Regular Session Introduced by Mike Dobrinski and 1 co-sponsor

Consolidates Oklahoma motor vehicle franchise laws to streamline licensure, tighten data security standards, and formalize fair termination, compensation, and transition processes

Approved by Governor 05/20/2026
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WeVote Research Nonpartisan
Bill Summary · SB 604

Summary of SB 604 (2026) – Oklahoma

Note: The bill as presented is a floor substitute amending and consolidating provisions related to motor vehicle franchises, licensure, data security standards, and related dealer rights. It becomes effective November 1, 2026.

1) Purpose and Overall Intent

  • Streamlines and updates Oklahoma law governing motor vehicle franchises, dealers, and licensure.
  • Expands and clarifies licensure and regulatory requirements for entities involved in motor vehicle distribution and sale.
  • Introduces or clarifies data security standards applicable to motor vehicle dealers.
  • Reforms franchise termination, nonrenewal, and related compensation/transition processes to improve predictability and fairness for dealers and manufacturers.

2) Key Provisions and Changes

A. Definitions and Regulatory Consolidation (Section 1)

  • Amends 47 O.S. 2021, Section 562 to unify multiple statutory versions into one consolidated definitions section.
  • Redefines and clarifies terms including:
    • Motor vehicle, new motor vehicle dealer, motor vehicle salesperson, commission, manufacturer, distributor, factory branch, distributor branch, factory representative, distributor representative, and franchise.
    • Powersports vehicles and powersports vehicle dealers.
    • Retail implement dealers (farm equipment retailers) and related licensing exemptions.
    • Consumer data (nonpublic personal information) as collected by dealers and shared with manufacturers or third parties acting on behalf of manufacturers, notably not including data obtained from other sources.
    • Area of responsibility, off premises, sponsoring entity, product, service, lead, sell, and other franchise-related terms.
  • Clarifies the status and treatment of several entities (e.g., public officers, receivers, and certain employees) within the dealer/franchise framework.
  • Includes nuanced definitions for common entities (parties with shared ownership or control), with specific provisions to avoid misclassification of common entities that are related to distributors or manufacturers.

B. Repealer of Redundant/Conflicting Section (Section 2)

  • Repeals the repeater or outdated version of Section 562 to avoid confusion, given the consolidation in Section 1.

C. Franchise Termination, Nonrenewal, and Related Remedies (Section 3)

  • Rewrites and consolidates provisions governing termination, cancellation, or nonrenewal of dealer franchises.
  • Good cause and notice requirements:
    • Manufacturers must have good cause and provide notice consistent with the updated framework; good faith standards apply.
    • Performance criteria and remedial opportunities are recognized, including a minimum remedial period of six months for remediable failures.
  • Notice and protest process:
    • Manufacturers must provide formal notice to the dealer and to the Oklahoma New Motor Vehicle Commission.
    • Dealers may protest within 30 days and request a hearing; hearings occur within 180 days (extendable for another 180 days).
    • The Commission determines whether the termination/cancellation/nonrenewal is for good cause; the factory has the burden of proof.
    • During protests/hearings, the franchise remains in force, including transfer rights.
  • Decision and appeal:
    • If the Commission finds good cause, the manufacturer may proceed with the termination; if not, the termination is deemed wrongful.
    • Attorney fees may be awarded to the dealer if the termination action is found wrongful.

D. Seller Compensation and Transfer/Relocation Rights (Sections 3, 4, 5, 6)

  • Compensation for dealer inventory and other assets if termination/cancellation/nonrenewal occurs:
    • Dealers are entitled to compensation for new vehicle inventory, parts, equipment, furnishings, and special tools, with formulas based on net acquisition price and depreciation.
    • If the dealership facilities are owned by the dealer or related entities, timelines and valuation methods are specified; if leased, rent considerations and options for relocation or purchase are described.
  • Lease and facility transition:
    • Manufacturers must explore options to purchase, lease, or sublease dealership facilities, with timelines and conditions for the transition.
    • Images of the compensation framework include scenarios for owned vs. leased facilities and related property interests.
  • Valuation process:
    • In cases where parties cannot agree on value, the act provides an appraisal process:
    • Each side selects a state-certified appraiser; a potential third appraiser can be engaged if appraisals diverge by more than 10%.
    • Appraisers’ costs are shared; the value is determined by averaging as described.
    • The factory/dealer have up to 90 days to complete the transaction after value is determined.

E. Effective Date (Section 5)

  • The act becomes effective November 1, 2026, with transitional provisions aligning with the consolidated framework.

3) Who Is Affected

  • New motor vehicle dealers and powersports vehicle dealers operating under franchise agreements.
  • Manufacturers, distributors, factory branches, distributor branches, and their representatives.
  • The Oklahoma New Motor Vehicle Commission (regulatory oversight).
  • Retail implement dealers and entities involved in off-premises sales/display.
  • Consumers and data handlers, due to clarified data-sharing practices concerning consumer data and data security standards.

4) Procedural and Timeline Aspects

  • Protests and hearings:
    • Dealer protest window: 30 days after notice.
    • Initial hearing window: within 180 days of timely protest.
    • Possible extension: up to another 180 days, not unreasonably withheld.
  • Termination/renewal timelines:
    • Notice requirements and advance timelines (minimum notice periods) align with good-cause standards and remediation opportunities.
  • Appraisal process:
    • If value dispute arises, appraisers are chosen, processes followed, and costs shared; a 90-day period is specified to finalize a transaction after value is determined.
  • Effective date:
    • November 1, 2026.

5) Notable Details

  • Data security and consumer data handling are referenced as part of the amendments to licensure and franchise operations, with attention to commercially reasonable data security standards for dealers.
  • The bill consolidates several prior statutory versions to reduce ambiguity and streamline enforcement.

If you’d like, I can provide a side-by-side comparison with current Oklahoma law (pre-2026 amendments) or generate a plain-language FAQ for dealers and manufacturers based on these provisions.

Compiled from official sources — confirm details with the bill’s official record.

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