§ 44-20-126 — Independent control of dealer - definitions

(1) Except as
otherwise provided in this section, no manufacturer shall own, operate, or control
any motor vehicle dealer or used motor vehicle dealer in Colorado.

(2) Notwithstanding subsection (1) of this section, the following activities are
not prohibited:

(a) (I) Except as provided in subsection (2)(a)(II) of this section, operation of a
dealer for a temporary period, not to exceed twelve months, during the transition
from one owner or operator to another independent owner or operator; except that
the executive director may extend the period, not to exceed twenty-four months,
upon showing by the manufacturer or distributor of the need to operate the
dealership for such time to achieve a transition from an owner or operator to
another independent third-party owner or operator;

(II) Operation of a dealer that sells recreational vehicles for not more than
eighteen months during the transition from one owner or operator to another
independent owner or operator;

(b) Ownership or control of a dealer while the dealer is being sold under a
bona fide contract or purchase option to the operator of the dealer;

(c) Participation in the ownership of the dealer solely for the purpose of
providing financing or a capital loan that will enable the dealer to become the
majority owner of the dealer in less than seven years;

(d) Operation of a motor vehicle dealer if the manufacturer has no other
dealers of the same line-make in this state; or

(e) and (f) Repealed.

(g) Ownership, operation, or control of one or more motor vehicle dealers if
the manufacturer manufactures only electric vehicles and has no franchised
dealers of the same line-make in this state.

(3) As used in this section:

(a) Control means to possess, directly, the power to direct or cause the
direction of the management or policies of a person, whether through the
ownership of voting securities, by contract, or otherwise; except that control does
not include the relationship between a manufacturer and a motor vehicle dealer
under a franchise agreement.

(b) Manufacturer means a motor vehicle manufacturer, distributor, or
manufacturer representative.

(c) Operate means to directly or indirectly manage a motor vehicle dealer.

(d) Own means to hold any beneficial ownership interest of one percent or
more of any class of equity interest in a dealer, whether as a shareholder, partner,
limited liability company member, or otherwise. To hold an ownership interest
means to have possession of, title to, or control of the ownership interest, either
directly or through a fiduciary or agent.

(4) This section shall not apply to manufacturers of vehicles with a
passenger capacity of thirty-two or more.

Legislative History

Source: L. 2018: Entire article added with relocations, (SB 18-030), ch. 7, p. 82, � 2, effective October 1. L. 2020: (2)(d) amended, (2)(e) and (2)(f) repealed, and (2)(g) added, (SB 20-167), ch. 71, p. 302, � 1, effective September 14.