House File 587 - Introduced HOUSE FILE 587 BY COMMITTEE ON TRANSPORTATION (SUCCESSOR TO HSB 176) A BILL FOR An Act relating to the regulation of agreements between 1 manufacturers or distributors, and dealers relating to the 2 sale of recreational vehicles and including applicability 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2019HV (6) 86 av/nh

H.F. 587 DIVISION I 1 RECREATIONAL VEHICLE SALES 2 Section 1. NEW SECTION . 322E.1 Definitions. 3 When used in this chapter, unless the context otherwise 4 requires: 5 1. “Area of sales responsibility” means the geographical 6 area, agreed to by a dealer and a manufacturer or distributor 7 in a manufacturer and dealer agreement, within which area 8 the dealer has the exclusive right to display and sell the 9 manufacturer’s or distributor’s new recreational vehicles of a 10 particular line-make to a consumer. 11 2. “Consumer” means a person who is offered or purchases a 12 new recreational vehicle in a retail transaction. 13 3. “Dealer” means any person, firm, corporation, or business 14 entity licensed or required to be licensed as a motor vehicle 15 dealer pursuant to chapter 322 or as a travel trailer dealer 16 pursuant to chapter 322C. 17 4. “Distributor” means any person, firm, corporation, or 18 business entity that purchases new recreational vehicles for 19 resale to a dealer. 20 5. “Factory campaign” means an effort on the part of a 21 warrantor to contact a recreational vehicle owner or dealer in 22 order to address a part or equipment issue. 23 6. “Family member” means a person who is the spouse, child, 24 grandchild, parent, sibling, niece, or nephew of a recreational 25 vehicle owner or the spouse of such a person. 26 7. “Fifth-wheel trailer” means the same as fifth-wheel 27 travel trailer defined in section 321.1. 28 8. “Folding camping trailer” means a vehicle mounted on 29 wheels and constructed with collapsible partial side walls 30 that fold for towing by another vehicle and unfold to provide 31 temporary living quarters for recreational, camping, or travel 32 use. 33 9. “Line-make” means a specific series of recreational 34 vehicles that include all of the following: 35 -1- LSB 2019HV (6) 86 av/nh 1/ 27

H.F. 587 a. Are identified by a common series trade name or 1 trademark. 2 b. Are targeted to a particular market segment, as 3 determined by the recreational vehicle’s decor, features, 4 equipment, size, weight, and price range. 5 c. Have lengths and interior floor plans that distinguish 6 the recreational vehicle from other recreational vehicles 7 with substantially the same decor, features, equipment, size, 8 weight, and price range. 9 d. Belong to a single, distinct classification of 10 recreational vehicle product type having a substantial degree 11 of commonality in the construction of the chassis, frame, and 12 body, and in price range. 13 e. Are authorized for sale by a dealer pursuant to a 14 manufacturer and dealer agreement. 15 10. “Manufacturer” means any person, firm, corporation, 16 or business entity that engages in the manufacturing of 17 recreational vehicles. 18 11. “Manufacturer and dealer agreement” means a written 19 agreement or contract entered into between a manufacturer 20 or distributor and a dealer that fixes the rights and 21 responsibilities of the parties and pursuant to which the 22 dealer sells new recreational vehicles. 23 12. “Motor home” means the same as defined in section 321.1. 24 13. “Park model recreational vehicle” means a vehicle that 25 is all of the following: 26 a. Designed and marketed primarily as temporary living 27 quarters for recreational, camping, travel, or seasonal use. 28 b. Built on a single chassis mounted on wheels. 29 c. Has a gross trailer area not exceeding four hundred 30 square feet in the set-up mode, and if less than three hundred 31 twenty square feet in the set-up mode would require a special 32 movement permit for highway transit. 33 d. Certified by the manufacturer as complying with the 34 American national standards institute A119.5 park model 35 -2- LSB 2019HV (6) 86 av/nh 2/ 27

H.F. 587 recreational vehicle standard. 1 14. “Proprietary part” means any part manufactured by or for 2 and sold exclusively by a manufacturer. 3 15. “Recreational vehicle” means a vehicle which is either 4 self-propelled or towed by a consumer-owned vehicle, primarily 5 designed to provide temporary living quarters for recreational, 6 camping, or travel use that complies with all applicable 7 federal vehicle regulations. “Recreational vehicle” includes a 8 “motor home” and a “travel trailer” . 9 16. “Supplier” means any person, firm, corporation, or 10 business entity that engages in the manufacture of recreational 11 vehicle parts, accessories, or components. 12 17. “Transient consumer” means a consumer who is temporarily 13 traveling through a dealer’s area of sales responsibility. 14 18. “Travel trailer” means the same as defined in section 15 321.1. “Travel trailer” includes a fifth-wheel trailer, folding 16 camping trailer, and a park model recreational vehicle, but 17 does not include a vehicle that is so designed as to permit it 18 to be towed exclusively by a motorcycle. 19 19. “Warrantor” means any person, firm, corporation, or 20 business entity, including any manufacturer or supplier, that 21 provides a written warranty to a consumer in connection with 22 a new recreational vehicle or a part, accessory, or component 23 of a new recreational vehicle. “Warrantor” does not include 24 a dealer, supplier, or other person, firm, corporation, or 25 business entity not controlled by a manufacturer that provides 26 a service contract, mechanical or other insurance, or extended 27 warranties sold for separate consideration to a consumer. 28 Sec. 2. NEW SECTION . 322E.2 Manufacturer and dealer 29 agreements —— area of sales responsibility. 30 1. A manufacturer or distributor shall not sell a new 31 recreational vehicle in this state to or through a dealer 32 without first entering into a written manufacturer and dealer 33 agreement with the dealer that has been signed by both parties. 34 A dealer shall not sell a new recreational vehicle in this 35 -3- LSB 2019HV (6) 86 av/nh 3/ 27

H.F. 587 state without first entering into a written manufacturer and 1 dealer agreement with a manufacturer or distributor that has 2 been signed by both parties. 3 2. A manufacturer and dealer agreement shall designate the 4 area of sales responsibility exclusively assigned to a dealer 5 by the manufacturer or distributor and the manufacturer or 6 distributor shall not change that area or contract with another 7 dealer for sale of the same line-make in the designated area 8 for the duration of the agreement. 9 3. The area of sales responsibility designated in a 10 manufacturer and dealer agreement shall not be reviewed 11 or changed until at least one year after execution of the 12 agreement without the consent of both parties to the agreement. 13 Sec. 3. NEW SECTION . 322E.3 Manufacturer and dealer 14 agreements —— termination, cancellation, nonrenewal, and 15 alteration. 16 1. Termination by manufacturer or distributor. 17 a. A manufacturer or distributor, directly or through any 18 authorized officer, agent, or employee, may terminate, cancel, 19 or fail to renew a manufacturer and dealer agreement with good 20 cause. 21 b. If the manufacturer or distributor terminates, cancels, 22 or fails to renew a manufacturer and dealer agreement with 23 good cause, the manufacturer or distributor is not required to 24 comply with the provisions of section 322E.4. 25 c. The manufacturer or distributor has the burden of showing 26 good cause for terminating, canceling, or failing to renew a 27 manufacturer and dealer agreement. For purposes of determining 28 whether good cause exists for such termination, cancellation, 29 or nonrenewal of the agreement, any of the following factors 30 may be considered: 31 (1) The extent of the affected dealer’s penetration in the 32 area of sales responsibility. 33 (2) The nature and extent of the dealer’s investment in the 34 dealer’s business. 35 -4- LSB 2019HV (6) 86 av/nh 4/ 27

H.F. 587 (3) The adequacy of the dealer’s service facilities, 1 equipment, parts, supplies, and personnel. 2 (4) The effect of the proposed termination, cancellation, 3 or nonrenewal of the agreement on the community. 4 (5) The extent and quality of the dealer’s service under the 5 warranties of the recreational vehicles sold. 6 (6) The dealer’s failure to follow agreed upon procedures or 7 standards related to the overall operation of the dealership. 8 (7) The dealer’s performance under the terms of the 9 manufacturer and dealer agreement. 10 d. (1) Except as otherwise provided in this paragraph 11 “d” , a manufacturer or distributor shall provide a dealer with 12 at least ninety days’ prior written notice of termination, 13 cancellation, or nonrenewal of the manufacturer and dealer 14 agreement. 15 (2) (a) The notice shall state all of the reasons for the 16 termination, cancellation, or nonrenewal and shall further 17 state that if, within thirty days following receipt of the 18 notice, the dealer provides to the manufacturer or distributor 19 a written notice of intent to cure all claimed deficiencies, 20 the dealer shall then have ninety days following receipt of 21 the notice to cure the deficiencies. If the dealer fails 22 to provide notice of intent to cure the deficiencies within 23 thirty days following receipt of the notice, the termination, 24 cancellation, or nonrenewal of the agreement for good cause 25 takes effect thirty days following the dealer’s receipt of the 26 notice. 27 (b) If the dealer provides notice of intent to cure the 28 deficiencies stated and the deficiencies are cured by the 29 dealer within ninety days following receipt of the notice, 30 the manufacturer’s or distributor’s notice to the dealer is 31 voided. If the dealer provides notice of intent to cure the 32 deficiencies stated and fails to cure the deficiencies within 33 ninety days following receipt of the notice, the termination, 34 cancellation, or nonrenewal of the agreement for good cause 35 -5- LSB 2019HV (6) 86 av/nh 5/ 27

H.F. 587 takes effect ninety days following the dealer’s receipt of the 1 notice. 2 e. Notwithstanding paragraph “d” , the notice period for 3 termination, cancellation, or nonrenewal of a manufacturer 4 and dealer agreement for good cause may be reduced to thirty 5 days if the grounds for such termination, cancellation, or 6 nonrenewal are due to any of the following factors: 7 (1) The dealer or one of the dealer’s owners has been 8 convicted of or has entered a plea of nolo contendere to a 9 felony. 10 (2) The dealer has abandoned or closed the dealer’s business 11 operations for ten consecutive business days, unless the 12 closing is due to an act of God, a strike, a labor difficulty, 13 or other cause over which the dealer has no control. 14 (3) The dealer has made a significant misrepresentation 15 that materially affects the business relationship of the 16 manufacturer or distributor and the dealer. 17 (4) The dealer’s license has been suspended, revoked, 18 denied, or not renewed. 19 (5) The dealer has committed a material violation of this 20 chapter which is not cured within thirty days after receipt of 21 written notice of the violation. 22 f. Notwithstanding paragraphs “d” and “e” , the manufacturer 23 and dealer agreement may be terminated, canceled, or nonrenewed 24 for good cause at any time if the reason for the termination, 25 cancellation, or nonrenewal is the dealer’s insolvency, the 26 dealer’s declaration of an assignment for the benefit of 27 creditors, or the dealer’s declaration of bankruptcy. 28 2. Termination by dealer. 29 a. A dealer may terminate, cancel, or fail to renew a 30 manufacturer and dealer agreement with good cause. 31 b. If the dealer terminates, cancels, or fails to renew 32 a manufacturer and dealer agreement with good cause, the 33 manufacturer is required to comply with the provisions of 34 section 322E.4. 35 -6- LSB 2019HV (6) 86 av/nh 6/ 27

H.F. 587 c. (1) Except as otherwise provided in this paragraph “c” , 1 a dealer shall provide a manufacturer or distributor with at 2 least ninety days’ notice of termination, cancellation, or 3 nonrenewal of the manufacturer and dealer agreement. 4 (2) (a) The dealer has the burden of showing good cause 5 and the notice shall state all of the reasons for the proposed 6 termination, cancellation, or nonrenewal. The notice shall 7 further state that if, within thirty days following receipt 8 of the notice, the manufacturer or distributor provides to 9 the dealer a written notice of intent to cure all claimed 10 deficiencies, the manufacturer or distributor shall then 11 have ninety days following receipt of the notice to cure 12 the deficiencies. If the manufacturer or distributor fails 13 to provide notice of intent to cure the deficiencies to the 14 dealer within thirty days following receipt of the notice, 15 the termination, cancellation, or nonrenewal of the agreement 16 for good cause takes effect thirty days following the 17 manufacturer’s or distributor’s receipt of the notice. 18 (b) If the deficiencies stated in the notice are cured by 19 the manufacturer or distributor within ninety days following 20 receipt of the notice, the dealer’s notice to the manufacturer 21 or distributor is voided. If the manufacturer or distributor 22 provides notice of intent to cure the deficiencies stated and 23 fails to cure the deficiencies within ninety days following 24 receipt of the notice, the termination, cancellation, or 25 nonrenewal of the agreement for good cause takes effect ninety 26 days following the manufacturer’s or distributor’s receipt of 27 the notice. 28 d. Notwithstanding paragraph “c” , the notice period for 29 termination, cancellation, or nonrenewal of a manufacturer and 30 dealer agreement by a dealer may be reduced to thirty days if 31 there is good cause for such termination, cancellation, or 32 nonrenewal due to any of the following factors: 33 (1) The manufacturer or distributor has been convicted of or 34 has entered a plea of nolo contendere to a felony. 35 -7- LSB 2019HV (6) 86 av/nh 7/ 27

H.F. 587 (2) The business operations of the manufacturer or 1 distributor have been abandoned or closed for ten consecutive 2 business days, unless the closing is due to an act of God, 3 a strike, a labor difficulty, or other cause over which the 4 manufacturer or distributor has no control. 5 (3) The manufacturer or distributor has made a significant 6 misrepresentation that materially affects the business 7 relationship of the manufacturer or distributor and the dealer. 8 (4) The manufacturer or distributor has committed a 9 material violation of this chapter which is not cured within 10 thirty days after receipt of written notice of the violation. 11 (5) The manufacturer or distributor has declared bankruptcy 12 or insolvency, or an assignment for the benefit of creditors or 13 bankruptcy has occurred. 14 Sec. 4. NEW SECTION . 322E.4 Repurchase or sale of 15 inventory. 16 1. If the dealer terminates, cancels, or does not renew 17 the manufacturer and dealer agreement with good cause as 18 provided in section 322E.3, subsection 2, and the manufacturer 19 or distributor fails to provide notice of intent to cure the 20 claimed deficiencies or fails to cure the claimed deficiencies 21 as provided in section 322E.3, subsection 2, the manufacturer 22 or distributor shall, at the dealer’s option, and within 23 forty-five days after termination, cancellation, or nonrenewal 24 of the agreement, repurchase all of the following: 25 a. (1) All new, untitled recreational vehicles that 26 were acquired from the manufacturer or distributor within 27 twelve months prior to the effective date of the notice of 28 termination, cancellation, or nonrenewal of the agreement, that 29 have not been used except for demonstration purposes, and that 30 have not been altered or damaged, at one hundred percent of the 31 net invoice cost, including transportation, less applicable 32 rebates and discounts to the dealer. 33 (2) In the event that any of the recreational vehicles 34 repurchased pursuant to this paragraph “a” are damaged, but 35 -8- LSB 2019HV (6) 86 av/nh 8/ 27

H.F. 587 do not trigger a consumer disclosure requirement, the amount 1 due to the dealer shall be reduced by the cost to repair the 2 vehicle. Damage incurred prior to delivery to the dealer that 3 was disclosed at the time of delivery does not disqualify 4 repurchase pursuant to this paragraph “a” . 5 b. All undamaged accessories and proprietary parts sold 6 to the dealer for resale within twelve months prior to the 7 effective date of termination, cancellation, or nonrenewal 8 of the agreement, if accompanied by the original invoice, at 9 one hundred five percent of the original net price paid to the 10 manufacturer or distributor, to compensate the dealer for the 11 cost of handling, packing, and shipping the parts for return to 12 the manufacturer or distributor. 13 c. All properly functioning diagnostic equipment, special 14 tools, current signage, or other equipment and machinery 15 that was purchased by the dealer upon the request of the 16 manufacturer or distributor within five years prior to the 17 effective date of the termination, cancellation, or nonrenewal 18 of the agreement, and that can no longer be used in the normal 19 course of the dealer’s ongoing business. 20 2. If recreational vehicles of a particular line-make 21 are not returned or required to be returned by the dealer to 22 the manufacturer or distributor pursuant to the terminated, 23 canceled, or nonrenewed manufacturer and dealer agreement, the 24 dealer may continue to sell all line-makes that were subject to 25 the agreement and are currently in stock until those line-makes 26 are no longer in the dealer’s inventory. 27 Sec. 5. NEW SECTION . 322E.5 Transfer of ownership —— family 28 succession —— objections. 29 1. a. If a dealer desires to make a change in ownership 30 of a dealership by sale of the business assets, a stock 31 transfer, or otherwise, the dealer shall give the manufacturer 32 or distributor that is a party to a manufacturer and dealer 33 agreement written notice of the proposed change at least 34 fifteen business days before the change is effective, including 35 -9- LSB 2019HV (6) 86 av/nh 9/ 27

H.F. 587 all supporting documentation as may be reasonably required by 1 the manufacturer or distributor to determine whether to make an 2 objection to the sale, transfer, or other change in ownership. 3 In the absence of a breach by the dealer of the manufacturer 4 and dealer agreement or a violation of this chapter, the 5 manufacturer or distributor shall not object to the proposed 6 change in ownership unless the objection to the prospective 7 transferee is due to any of the following factors: 8 (1) The transferee has previously been a party to a 9 manufacturer and dealer agreement with the manufacturer or 10 distributor that was terminated, canceled, or nonrenewed by the 11 manufacturer or distributor for good cause. 12 (2) The transferee has been convicted of a felony or any 13 crime of fraud, deceit, or moral turpitude. 14 (3) The transferee lacks any license required by law. 15 (4) The transferee does not have an active line of credit 16 sufficient to purchase the manufacturer’s or distributor’s 17 products. 18 (5) The transferee has undergone bankruptcy, insolvency, 19 a general assignment for the benefit of creditors, or the 20 appointment of a receiver, trustee, or conservator to take 21 possession of the transferee’s business or property within the 22 previous ten years. 23 b. If a manufacturer or distributor objects to a proposed 24 change in ownership of a dealership, the manufacturer or 25 distributor shall give written notice of its reasons for the 26 objection to the dealer within ten business days after receipt 27 of the dealer’s notification and supporting documentation of 28 the proposed change. The manufacturer or distributor has 29 the burden of proof to show that its objection complies with 30 the requirements of this subsection. If the manufacturer or 31 distributor does not give the dealer timely notice of its 32 objection, the proposed change in ownership of the dealership 33 shall be deemed approved. 34 2. a. It is unlawful for a manufacturer or distributor to 35 -10- LSB 2019HV (6) 86 av/nh 10/ 27

H.F. 587 fail to provide a dealer with the opportunity to designate, 1 in writing, a family member as a successor to ownership of 2 the dealership in the event of the death, incapacity, or 3 retirement of the dealer. If a dealer desires to designate 4 a family member as a successor to a dealership, the dealer 5 shall give the manufacturer or distributor that is a party 6 to the manufacturer and dealer agreement with the dealer 7 written notice of the proposed designation or modification of 8 a previous designation at least fifteen business days before 9 the designation or proposed modification of a designation is 10 effective, including all supporting documentation as may be 11 reasonably required by the manufacturer or distributor to 12 determine whether to make an objection to the succession plan. 13 In the absence of a breach by the dealer of the manufacturer 14 and dealer agreement or a violation of this chapter, the 15 manufacturer or distributor shall not object to the designated 16 successor unless the objection is due to any of the following 17 factors: 18 (1) The designated successor has previously been a party to 19 a manufacturer and dealer agreement with the manufacturer or 20 distributor that was terminated, canceled, or nonrenewed by the 21 manufacturer or distributor for good cause. 22 (2) The designated successor has been convicted of a felony 23 or any crime of fraud, deceit, or moral turpitude. 24 (3) The designated successor lacks any license required by 25 law at the time of succession. 26 (4) The designated successor does not have an active 27 line of credit sufficient to purchase the manufacturer’s or 28 distributor’s products at the time of succession. 29 (5) The designated successor has undergone bankruptcy, 30 insolvency, a general assignment for the benefit of creditors, 31 or the appointment of a receiver, trustee, or conservator to 32 take possession of the designated successor’s business or 33 property within the previous ten years. 34 b. It is unlawful for a manufacturer or distributor to 35 -11- LSB 2019HV (6) 86 av/nh 11/ 27

H.F. 587 prevent or refuse to honor the succession of a designated 1 family member to ownership of a dealership when the dealer 2 is deceased, incapacitated, or has retired, unless the 3 manufacturer or distributor has provided to the dealer written 4 notice of the manufacturer’s or distributor’s objections to 5 the succession within ten days after receipt of the dealer’s 6 designation of a successor or modification of the dealer’s 7 succession plan. If a manufacturer or distributor objects 8 to the proposed succession of a designated family member of 9 the dealer to the dealership, the manufacturer or distributor 10 shall give written notice of its reasons for the objection 11 to the dealer within ten business days after receipt of the 12 dealer’s notification and supporting documentation of the 13 proposed succession or modification of the succession plan. 14 The manufacturer or distributor has the burden of proof to 15 show that the objection complies with the requirements of 16 this subsection. If the manufacturer or distributor does not 17 give the dealer timely notice of its objection, the proposed 18 succession plan for ownership of the dealership shall be 19 deemed approved. However, a family member of the dealer may 20 not succeed to ownership of the dealership if the succession 21 involves, without the manufacturer’s or distributor’s consent, 22 a relocation of the dealership or alteration of the terms and 23 conditions of the manufacturer and dealer agreement. 24 Sec. 6. NEW SECTION . 322E.6 Warranty obligations. 25 1. A warrantor shall do all of the following: 26 a. Specify in writing to each dealer what obligations 27 the dealer has, if any, for preparation and delivery of, and 28 warranty services on, the warrantor’s products. 29 b. Compensate the dealer for warranty services required of 30 the dealer by the warrantor. 31 c. Provide the dealer with a schedule of compensation and 32 time allowances for the performance of warranty services. The 33 schedule of compensation shall include reasonable compensation 34 for diagnostic services performed as well as warranty services. 35 -12- LSB 2019HV (6) 86 av/nh 12/ 27

H.F. 587 2. Time allowances for the diagnosis and performance of 1 warranty services shall be reasonable for the service to 2 be performed. In determining what constitutes reasonable 3 compensation under this section, the principle factors to be 4 given consideration are the actual wage rates being paid by the 5 dealer and the actual retail wage rates being charged by other 6 dealers in the community in which the dealer is doing business. 7 The compensation of a dealer for warranty services shall not be 8 less than the lowest actual retail wage rates charged by the 9 dealer for like nonwarranty services as long as such actual 10 wage rates are reasonable. 11 3. A warrantor shall reimburse a dealer for any warranty 12 part, accessory, or complete component at actual wholesale cost 13 plus a minimum of a thirty percent handling charge, up to a 14 maximum of one hundred fifty dollars and the cost, if any, of 15 freight to return such part, component, or accessory to the 16 warrantor. 17 4. Warranty audits of dealer records may be conducted by a 18 warrantor within twelve months from the payment of a warranty 19 claim, and dealer claims for warranty compensation shall not 20 be denied except for cause, such as performance of nonwarranty 21 repairs, material noncompliance with the warrantor’s published 22 policies and procedures, lack of material documentation, fraud, 23 or misrepresentation. 24 5. A dealer shall submit claims for compensation for the 25 performance of warranty services to the warrantor within 26 forty-five days after completion of the warranty services. 27 6. A dealer shall immediately notify a warrantor verbally 28 or in writing if the dealer is unable to perform diagnostic 29 services and warranty services within ten days of receipt of a 30 verbal or written complaint from a consumer. 31 7. A warrantor shall disapprove a claim submitted by 32 a dealer for compensation for the performance of warranty 33 services, in writing, within forty-five days after submission 34 of the claim in the manner and form prescribed by the 35 -13- LSB 2019HV (6) 86 av/nh 13/ 27

H.F. 587 warrantor. A claim not specifically disapproved as required 1 by this subsection shall be deemed approved and shall be paid 2 within sixty days of submission of the claim. 3 8. A warrantor shall not do any of the following: 4 a. Fail to perform any of the warrantor’s obligations with 5 respect to its warranted products. 6 b. Fail to include, in written notices of a factory campaign 7 to recreational vehicle owners and dealers, the expected date 8 by which necessary parts and equipment, including tires and 9 chassis or chassis parts, will be available to dealers to 10 perform the factory campaign work. The warrantor may ship 11 parts to a dealer to effect factory campaign work, and, if such 12 parts are in excess of the dealer’s requirements, the dealer 13 may return unused, undamaged parts to the warrantor for credit 14 after completion of the factory campaign. 15 c. Fail to compensate the warrantor’s dealers for authorized 16 repairs effected by the dealer on merchandise damaged in 17 manufacture or in transit to the dealer by a carrier designated 18 by the warrantor, factory branch, distributor, or distributor 19 branch. 20 d. Fail to compensate the warrantor’s dealers in accordance 21 with the schedule of compensation provided to the dealer 22 pursuant to this section if the warranty services for which 23 compensation is claimed are performed in a timely and competent 24 manner as required in this section. 25 e. Intentionally misrepresent in any way to consumers that 26 warranties with respect to the manufacture, performance, or 27 design of recreational vehicles are made by the dealer as 28 warrantor or co-warrantor. 29 f. Require the warrantor’s dealers to make warranties to a 30 consumer that are in any manner related to the manufacture of 31 the recreational vehicle. 32 9. A dealer shall not do any of the following: 33 a. Fail to perform predelivery inspection functions in a 34 competent and timely manner, as specified by the warrantor. 35 -14- LSB 2019HV (6) 86 av/nh 14/ 27

H.F. 587 b. Fail to perform warranty services authorized by the 1 warrantor in a competent and timely manner on any transient 2 consumer’s recreational vehicle of a line-make sold or serviced 3 by that dealer. 4 c. Fail to accurately document the time spent completing 5 each repair, the total number of repair attempts conducted on 6 a single unit, and the number of repair attempts for the same 7 repair conducted on a single recreational vehicle. 8 d. Fail to notify the warrantor within ten days of a second 9 repair attempt on a recreational vehicle which impairs the use, 10 value, or safety of the vehicle. 11 e. Fail to maintain written records, including a consumer’s 12 signature, regarding the amount of time a unit is stored for 13 the consumer’s convenience during a repair. 14 f. Make fraudulent warranty claims or misrepresent the terms 15 of any warranty. 16 Sec. 7. NEW SECTION . 322E.7 Indemnification. 17 1. a. Notwithstanding the terms of a manufacturer and 18 dealer agreement, a warrantor shall indemnify and hold harmless 19 the warrantor’s dealer against any losses or damages to the 20 extent that the losses or damages are caused by the negligence 21 or willful misconduct of the warrantor. 22 b. A dealer shall not be denied indemnification for failure 23 to discover, disclose, or remedy a defect in the design or 24 manufacturing of a new recreational vehicle. A dealer may 25 be denied indemnification if the dealer fails to remedy a 26 known and announced defect in accordance with the written 27 instructions of the warrantor for whom the dealer is obligated 28 to perform warranty services. 29 c. A dealer shall provide to the warrantor a copy of any 30 pending lawsuit in which allegations are made that are covered 31 by the provisions of this subsection within ten days after 32 receiving notice of such lawsuit. 33 d. Notwithstanding any provision to the contrary, this 34 subsection continues to apply even after a new recreational 35 -15- LSB 2019HV (6) 86 av/nh 15/ 27

H.F. 587 vehicle is titled. 1 2. a. Notwithstanding the terms of a manufacturer and 2 dealer agreement, a dealer shall indemnify and hold harmless 3 the dealer’s warrantor against any losses or damages to the 4 extent that the losses or damages are caused by the negligence 5 or willful misconduct of the dealer. 6 b. A warrantor shall provide to the dealer a copy of any 7 pending lawsuit in which allegations are made that are covered 8 by the provisions of this subsection within ten days after 9 receiving notice of such lawsuit. 10 c. Notwithstanding any provision to the contrary, this 11 subsection continues to apply even after a new recreational 12 vehicle is titled. 13 Sec. 8. NEW SECTION . 322E.8 Inspection and rejection by 14 dealer. 15 1. Whenever a new recreational vehicle is damaged prior 16 to transit or is damaged in transit to the dealer and the 17 carrier or means of transportation has been selected by the 18 manufacturer or distributor, the dealer shall notify the 19 manufacturer or distributor of the damage within the time frame 20 specified in the manufacturer and dealer agreement and shall do 21 either of the following: 22 a. Request from the manufacturer or distributor 23 authorization to replace the components, parts, or accessories 24 damaged or otherwise repair the vehicle to make the vehicle 25 ready for sale. 26 b. Reject the vehicle within the time frame set forth in 27 subsection 4. 28 2. If the manufacturer or distributor refuses to authorize 29 repair of the new recreational vehicle within ten days after 30 receipt of notification, or if the dealer rejects the new 31 recreational vehicle because of damage, ownership of the 32 vehicle shall revert to the manufacturer or distributor. 33 3. The dealer shall exercise due care when in custody of 34 a damaged new recreational vehicle, but the dealer shall have 35 -16- LSB 2019HV (6) 86 av/nh 16/ 27

H.F. 587 no other obligations, financial or otherwise, with respect to 1 that vehicle following rejection of the vehicle as provided in 2 subsection 4. 3 4. The time frame for inspection and rejection of a damaged 4 new recreational vehicle by a dealer shall be included in the 5 manufacturer and dealer agreement and shall not be less than 6 two business days after the physical delivery of the vehicle 7 to the dealer. 8 5. Any new recreational vehicle that has, at the time of 9 delivery to the dealer, an unreasonable amount of miles on the 10 vehicle’s odometer, as determined by the dealer, may be subject 11 to rejection by the dealer and ownership of the vehicle shall 12 revert to the manufacturer or distributor. In no instance 13 shall a dealer deem an amount less than the distance between 14 the dealer and the manufacturer’s factory or between the dealer 15 and the distributor’s point of distribution, plus one hundred 16 miles, as an unreasonable amount of miles. 17 Sec. 9. NEW SECTION . 322E.8A Coercion of dealer prohibited. 18 1. A manufacturer or distributor shall not coerce or attempt 19 to coerce a dealer to do any of the following: 20 a. Purchase a product that the dealer did not order. 21 b. Enter into an agreement with the manufacturer or 22 distributor. 23 c. Enter into an agreement that requires the dealer to 24 submit its disputes to binding arbitration or otherwise waive 25 rights or responsibilities provided for under this chapter. 26 2. As used in this section, “coerce” includes but is not 27 limited to doing any of the following: 28 a. Threatening to terminate, cancel, or not renew a 29 manufacturer and dealer agreement without good cause. 30 b. Threatening to withhold product lines the dealer is 31 entitled to purchase pursuant to the manufacturer and dealer 32 agreement. 33 c. Threatening to delay product delivery as an inducement to 34 amending the manufacturer and dealer agreement. 35 -17- LSB 2019HV (6) 86 av/nh 17/ 27

H.F. 587 Sec. 10. NEW SECTION . 322E.9 Civil actions —— mediation. 1 1. A dealer, manufacturer, distributor, or warrantor 2 injured by another party’s violation of this chapter may bring 3 a civil action in district court to recover actual damages 4 resulting from such violation. Venue for a civil action 5 authorized by this section shall be exclusively in the county 6 in which the dealer’s business is located. In an action 7 involving more than one dealer, venue may be in any county in 8 which any dealer that is a party to the action is located. 9 2. Prior to bringing suit under this section, the party 10 alleging a violation of this chapter may serve a written 11 request for mediation upon the alleged offending party. 12 a. The request for mediation shall be served upon the 13 alleged offending party via certified mail at the address 14 stated in the manufacturer and dealer agreement between the 15 parties. 16 b. The request for mediation shall contain a brief statement 17 of the dispute or violation alleged and relief sought by the 18 party filing the request. 19 c. Within twenty days after service of a request for 20 mediation, the party that was served with the request shall 21 send via certified mail a written response indicating whether 22 the party is willing to mediate the dispute. If both parties 23 agree to mediation, the parties shall mutually select an 24 independent certified mediator and shall meet with that 25 mediator for the purpose of attempting to resolve the dispute 26 or alleged violation. The meeting place for the mediation 27 shall be in this state at a location selected by the mediator. 28 The mediator may extend the date for the meeting for good cause 29 shown by either party or upon stipulation of both parties. 30 d. If the dispute will be mediated, the service of a request 31 for mediation under this section shall toll the time for the 32 filing of any complaint, petition, protest, or other action 33 under this chapter until representatives of both parties have 34 met with the mutually selected mediator for the purpose of 35 -18- LSB 2019HV (6) 86 av/nh 18/ 27

H.F. 587 attempting to resolve the dispute or alleged violation. If a 1 complaint, petition, protest, or other action has been filed 2 before that meeting, the court shall enter an order suspending 3 any proceeding or action on such complaint, petition, protest, 4 or other action until the mediation meeting has occurred and 5 may, upon written stipulation of all parties to the proceeding 6 or action that they wish to continue mediation under this 7 section, enter an order suspending the proceeding or action for 8 as long a period of time as the court considers appropriate. 9 e. Each party to the mediation shall bear their own costs 10 for attorney fees and shall divide equally among them the cost 11 of the mediator. 12 3. In addition to the remedies provided in this section, 13 and notwithstanding the existence of any additional remedy at 14 law, a manufacturer, distributor, warrantor, or dealer may 15 apply to the district court for the grant, upon a hearing and 16 for cause shown, of a temporary or permanent injunction, or 17 both, restraining any person from acting as a dealer without 18 being properly licensed, from violating or continuing to 19 violate any of the provisions of this chapter, or from failing 20 or refusing to comply with the requirements of this chapter. 21 Such injunction shall be issued without bond. A single act in 22 violation of the provisions of this chapter shall be sufficient 23 cause to authorize the issuance of an injunction pursuant to 24 this subsection. 25 Sec. 11. NEW SECTION . 322E.10 Jurisdiction. 26 1. A condition, stipulation, or provision in a manufacturer 27 and dealer agreement restricting jurisdiction to a forum 28 outside this state is void. 29 2. A condition, stipulation, or provision in a manufacturer 30 and dealer agreement providing that the dealer consents to the 31 jurisdiction of a forum outside this state is void. 32 3. A civil action or proceeding arising out of a 33 manufacturer and dealer agreement may be commenced wherever 34 jurisdiction over the parties or subject matter exists, even 35 -19- LSB 2019HV (6) 86 av/nh 19/ 27