Text: HF02059 Text: HF02061 Text: HF02000 - HF02099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 322D.1, subsections 2, 5, 6, and 10, 1 2 Code Supplement 2003, are amended to read as follows: 1 3 2. "Attachment" means a machine or part of a machine 1 4 designed to be used on and in conjunction with a farm 1 5 implement, motorcycle, all-terrain vehicle, or snowmobileor 1 6 personal mobile vehicle. 1 7 2A. "Equipment" means a farm implement, personal mobile 1 8 vehicle, or a related part or attachment. 1 9 5. "Franchisee" means a person who receivesfarm1 10implements, motorcycles, all-terrain vehicles, snowmobiles, or1 11related parts or attachmentsequipment fromthea franchiser 1 12 under a franchise and who offers and sells thefarm1 13implements, motorcycles, all-terrain vehicles, snowmobiles, or1 14related parts or attachmentsequipment to the general public. 1 15 6. "Franchiser" means a person who manufactures, 1 16 wholesales, or distributesfarm implements, motorcycles, all-1 17terrain vehicles, snowmobiles, or related parts or1 18attachments,equipment and who enters into a franchise. 1 19 10. "Person" meansa sole proprietor, partnership,1 20corporation, or any other form of business organizationan 1 21 individual or business association as defined in section 1 22 202B.102. 1 23 10A. "Personal mobile vehicle" means an all-terrain 1 24 vehicle, motorcycle, personal watercraft, or snowmobile. 1 25 10B. "Personal watercraft" means the same as defined in 1 26 section 462A.2. 1 27 Sec. 2. Section 322D.1, subsection 4, paragraphs b and e, 1 28 Code Supplement 2003, are amended to read as follows: 1 29 b. The franchisee is granted the right to offer and sell 1 30farm implements, motorcycles, all-terrain vehicles,1 31snowmobiles, or related parts or attachmentsequipment 1 32 manufactured or distributed by the franchiser. 1 33 e. The operation of the franchisee's business is 1 34 substantially reliant on the franchiser for the continued 1 35 supply offarm implements, motorcycles, all-terrain vehicles,2 1snowmobiles, or related parts or attachmentsequipment. 2 2 Sec. 3. Section 322D.2, subsection 1, unnumbered paragraph 2 3 1, Code Supplement 2003, is amended to read as follows: 2 4 A franchisee who enters into a written franchise with a 2 5 franchiser to maintain a stock offarm implements,2 6motorcycles, all-terrain vehicles, snowmobiles, or related2 7parts or attachmentsequipment has the following rights to 2 8 payment, at the option of the franchisee, if the franchise is 2 9 terminated: 2 10 Sec. 4. Section 322D.2, subsection 1, paragraph a, Code 2 11 Supplement 2003, is amended to read as follows: 2 12 a. One hundred percent of the net cost of new, unused, 2 13 completefarm implements, motorcycles, all-terrain vehicles,2 14snowmobiles, or related attachments,equipment whichwerewas 2 15 purchased from the franchiser. In addition, the franchisee 2 16 shall have a right of payment for transportation charges on 2 17 thefarm implements, motorcycles, all-terrain vehicles, or2 18snowmobiles,equipment which have been paid by the franchisee. 2 19 Sec. 5. Section 322D.2, subsections 2 and 3, Code 2 20 Supplement 2003, are amended to read as follows: 2 21 2. Upon receipt of the payments due under subsection 1, 2 22 the franchiser is entitled to possession of and title to the 2 23farm implements, motorcycles, all-terrain vehicles,2 24snowmobiles, or related parts or attachmentsequipment. 2 25 3. The cost offarm implements, motorcycles, all-terrain2 26vehicles, snowmobiles, or related attachmentsequipment and 2 27 the price of repair parts shall be determined by reference to 2 28 the franchiser's price list or catalog in effect at the time 2 29 of the franchise termination. 2 30 Sec. 6. NEW SECTION. 322D.2A WARRANTIES – PERSONAL 2 31 MOBILE VEHICLES. 2 32 This section applies to a franchise of personal mobile 2 33 vehicles, or related parts or attachments. 2 34 1. The franchiser shall satisfy its warranty obligations 2 35 within a reasonable time. 3 1 2. If the franchisee performs labor or provides parts in 3 2 satisfaction of a warranty required to be honored by the 3 3 franchiser, all of the following shall apply: 3 4 a. The franchiser shall reimburse the franchisee for parts 3 5 supplied by the franchisee and for labor performed by the 3 6 franchisee under the warranty. 3 7 (1) The franchiser shall reimburse the franchisee for 3 8 parts at the published manufacturer's suggested retail price 3 9 at the time of retail sale. 3 10 (2) The franchiser shall reimburse the franchisee for 3 11 labor at the retail rate customarily charged by the franchisee 3 12 for performing the same labor not performed to honor a 3 13 warranty. The franchisee shall post the rates for performing 3 14 labor not performed to honor a warranty in a conspicuous place 3 15 on the franchisee's premises in a manner to reasonably notify 3 16 its customers. 3 17 b. A franchisee may make a claim to a franchiser to be 3 18 reimbursed for parts provided or labor performed in honoring 3 19 the franchiser's warranty obligation. The franchiser must 3 20 approve or disapprove the claim within thirty days from the 3 21 date that the franchiser receives the claim. 3 22 (1) If any part of the claim is approved, the franchiser 3 23 must reimburse the franchisee the amount of the approved claim 3 24 within the thirty-day period. 3 25 (2) If any part of the claim is disapproved, the 3 26 franchisee must receive a notice of the disapproval within 3 27 that thirty-day period. The notice must be in writing and 3 28 state each reason for the disapproval. If the franchisee is 3 29 the prevailing party in an action to recover the amount 3 30 disputed in a claim, the franchisee shall be awarded 3 31 reasonable attorney fees plus court costs, which shall be 3 32 taxed as part of the costs of the action. 3 33 3. An agreement executed between the franchiser and 3 34 franchisee is void if it does any of the following: 3 35 a. Provides for a rate of reimbursement that is less than 4 1 provided in this section. 4 2 b. Restricts or impairs the ability of a franchisee to 4 3 provide parts or perform labor necessary to honor a warranty 4 4 obligation according to generally accepted standards for the 4 5 business. 4 6 Sec. 7. Section 322D.3, subsections 7 and 9, Code 4 7 Supplement 2003, are amended to read as follows: 4 8 7. A farm implement, motorcycle, all-terrain vehicle, or4 9snowmobileor personal mobile vehicle which is not in new, 4 10 unused, undamaged, or complete condition. 4 11 9. A farm implement, motorcycle, all-terrain vehicle, or4 12snowmobileor personal mobile vehicle which was purchased 4 13 twenty-four months or more prior to the termination of the 4 14 franchise. 4 15 Sec. 8. Section 322D.9, subsection 1, Code 2003, is 4 16 amended to read as follows: 4 17 1. This chapter applies to a franchise for all-terrain 4 18 vehicles only if chapter 322F does not apply to a dealership 4 19 engaged in the retail sale of equipment designed to be 4 20 principally used for an agriculturaloperationspurpose under 4 21 chapter 322F. 4 22 Sec. 9. NEW SECTION. 322D.11 APPLICATION – PERSONAL 4 23 WATERCRAFT. 4 24 The rights under section 322D.2, subsection 1, apply to 4 25 personal watercraft franchise agreements in effect on July 1, 4 26 2004, which have no expiration date and are continuing 4 27 franchises, and to franchises executed or renewed on or after 4 28 July 1, 2004, but only to personal watercraft and related 4 29 parts or attachments purchased on or after July 1, 2004. 4 30 Sec. 10. NEW SECTION. 322D.12 APPLICATION – PERSONAL 4 31 MOBILE VEHICLES. 4 32 The rights under section 322D.2A shall apply to franchise 4 33 agreements for personal mobile vehicles as follows: 4 34 1. All franchises in effect on July 1, 2004, that have no 4 35 expiration date and are continuing franchises. 5 1 2. Franchises that have been executed or renewed on or 5 2 after July 1, 2004, but only for personal mobile vehicles and 5 3 related parts or attachments purchased on or after July 1, 5 4 2004. 5 5 Sec. 11. NEW SECTION. 322F.3A WARRANTIES – ALL-TERRAIN 5 6 VEHICLES. 5 7 This section applies to a dealership agreement which 5 8 provides that the dealer is granted the right to sell, 5 9 distribute, or service all-terrain vehicles as provided in 5 10 this chapter. 5 11 1. The supplier shall satisfy its warranty obligations 5 12 within a reasonable time. 5 13 2. If the dealer performs labor or provides parts in 5 14 satisfaction of a warranty required to be honored by the 5 15 supplier, all of the following shall apply: 5 16 a. The supplier shall reimburse the dealer for parts 5 17 supplied by the dealer and for labor performed by the dealer 5 18 under the warranty. 5 19 (1) The supplier shall reimburse the dealer for parts at 5 20 the published manufacturer's suggested retail price at the 5 21 time of retail sale. 5 22 (2) The supplier shall reimburse the dealer for labor at 5 23 the retail rate customarily charged by the dealer for 5 24 performing the same labor not performed to honor a warranty. 5 25 The dealer shall post the rates for performing labor not 5 26 performed to honor a warranty in a conspicuous place on the 5 27 dealer's premises in a manner to reasonably notify its 5 28 customers. 5 29 b. A dealer may make a claim to a supplier to be 5 30 reimbursed for parts provided or labor performed in honoring 5 31 the supplier's warranty obligation. The supplier must approve 5 32 or disapprove the claim within thirty days from the date that 5 33 the supplier receives the claim. 5 34 (1) If any part of the claim is approved, the supplier 5 35 must reimburse the dealer the amount of the approved claim 6 1 within the thirty-day period. 6 2 (2) If any part of the claim is disapproved, the dealer 6 3 must receive a notice of the disapproval within that thirty- 6 4 day period. The notice must be in writing and state each 6 5 reason for the disapproval. 6 6 3. An agreement executed between the supplier and dealer 6 7 is void if it does any of the following: 6 8 a. Provides for a rate of reimbursement that is less than 6 9 provided in this section. 6 10 b. Restricts or impairs the ability of a dealer to provide 6 11 parts or perform labor necessary to honor a warranty 6 12 obligation according to generally accepted standards for the 6 13 business. 6 14 Sec. 12. Section 322F.9, subsection 2, Code Supplement 6 15 2003, is amended by adding the following new paragraph: 6 16 NEW PARAGRAPH. d. For provisions in dealership agreements 6 17 governing warranties for all-terrain vehicles, section 322F.3A 6 18 applies to those provisions in effect that have no expiration 6 19 date and all other such provisions in dealership agreements 6 20 entered into or renewed on or after July 1, 2004. For any 6 21 such provision in a dealership agreement in effect on July 1, 6 22 2004, which by its own terms will terminate on a subsequent 6 23 date, the dealership agreement shall be governed by the law as 6 24 it existed prior to July 1, 2004. 6 25 EXPLANATION 6 26 This bill regulates franchise agreements between persons 6 27 merchandising certain equipment referred to as personal mobile 6 28 vehicles. It amends two related Code chapters: 322D and 6 29 322F. Historically, Code chapter 322D governed agricultural 6 30 equipment and motorcycle franchises. Generally, Code chapter 6 31 322D's regulation of agricultural equipment franchises was 6 32 supplanted by Code chapter 322F in 1990. The new Code chapter 6 33 covers franchise relationships based on agreements executed or 6 34 renewed on or after July 1, 1990, or agreements without any 6 35 expiration date. Code chapter 322D continues to govern 7 1 motorcycle dealerships and other agricultural franchise 7 2 agreements. While Code chapter 322F refers to the 7 3 merchandisers as dealerships and their agreements with 7 4 suppliers as dealership agreements, Code chapter 322D refers 7 5 to merchandisers as franchisees and their agreements with 7 6 franchisers as franchise agreements. Both Code chapters 7 7 regulate these business relationships by specifying rights and 7 8 obligations for both parties. They also place restrictions on 7 9 franchiser practices, provide for their liability, and make 7 10 remedies available to the franchisee. 7 11 In 2002, the general assembly enacted legislation which 7 12 provides that Code chapter 322D covers franchise agreements 7 13 for the merchandising of all-terrain vehicles. It also 7 14 provided that for franchisers of agricultural equipment 7 15 governed under new Code chapter 322F who also merchandised 7 16 all-terrain vehicles, the provisions of the new Code chapter 7 17 would apply to them. In 2003, the franchise law was amended 7 18 again. In part, Code chapter 322D's provisions were extended 7 19 to cover franchise agreements for the merchandising of 7 20 snowmobiles. 7 21 The bill amends both Code chapters 322D and 322F. It 7 22 amends the definitions in Code chapter 322D in order to 7 23 enhance the Code chapter's readability. For purposes of 7 24 reference, the bill refers to motorcycles, all-terrain 7 25 vehicles, snowmobiles, and personal watercraft as "personal 7 26 mobile vehicles". It refers to farm implements as well as 7 27 personal mobile vehicles and associated attachments as 7 28 "equipment". 7 29 Substantively, the bill requires that the provisions of 7 30 Code chapter 322D apply to cover personal watercraft (a vessel 7 31 less than 16 feet in length, propelled by a water jet pump or 7 32 similar machinery, and designed to be operated by a person 7 33 sitting, standing, or kneeling on the vessel), such as a "jet 7 34 ski". 7 35 In addition, the bill provides additional restrictions upon 8 1 franchise agreements involving personal mobile vehicles under 8 2 Code chapter 322D and all-terrain vehicles under Code chapter 8 3 322F. The new provisions concern warranties. Under the bill, 8 4 a franchiser must satisfy its warranty obligations within a 8 5 reasonable time. If a franchisee honors a warranty by 8 6 providing parts or performing labor, the franchiser must 8 7 reimburse the franchisee. The bill regulates the amount of 8 8 the reimbursement based on parts and labor ordinarily charged 8 9 absent a warranty. It also provides for the submission of 8 10 claims by the franchisee and the approval or disapproval of 8 11 those claims by the franchiser. The bill amends Code chapter 8 12 322D to provide that if the franchisee prevails in a legal 8 13 action based on a disapproved claim, the franchiser is 8 14 obligated to pay the franchisee reasonable attorney fees plus 8 15 court costs. A similar provision already exists under Code 8 16 chapter 322F. The bill also provides that any agreement which 8 17 provides terms contrary to those in the bill are void. 8 18 The bill provides special applicability provisions for 8 19 franchise agreements involving personal mobile vehicles under 8 20 Code chapter 322D and for all-terrain vehicles under Code 8 21 chapter 322F which are based on those provisions enacted in 8 22 prior years. Generally, the provisions of the bill do not 8 23 apply to a franchise agreement which is effective on July 1, 8 24 2004, and which is to expire. 8 25 LSB 5295YH 80 8 26 da/gg/14
Text: HF02059 Text: HF02061 Text: HF02000 - HF02099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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