H.F. _____ 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 a vehicle, mounted on wheels, 27 designed to provide temporary living quarters for recreational, 28 camping, or travel use, of such size and weight as to not 29 require a special highway movement permit and designed to be 30 towed by a motorized vehicle that contains a towing mechanism 31 mounted above or forward of the tow vehicle’s rear axle. 32 8. “Folding camping trailer” means a vehicle mounted on 33 wheels and constructed with collapsible partial side walls 34 that fold for towing by another vehicle and unfold to provide 35 -1- LSB 2019HC (5) 86 av/nh 1/ 26

H.F. _____ temporary living quarters for recreational, camping, or travel 1 use. 2 9. “Line-make” means a specific series of recreational 3 vehicles that include all of the following: 4 a. Are identified by a common series trade name or 5 trademark. 6 b. Are targeted to a particular market segment, as 7 determined by the recreational vehicle’s decor, features, 8 equipment, size, weight, and price range. 9 c. Have lengths and interior floor plans that distinguish 10 the recreational vehicle from other recreational vehicles 11 with substantially the same decor, features, equipment, size, 12 weight, and price range. 13 d. Belong to a single, distinct classification of 14 recreational vehicle product type having a substantial degree 15 of commonality in the construction of the chassis, frame, and 16 body, and in price range. 17 e. Are authorized for sale by a dealer pursuant to a 18 manufacturer and dealer agreement. 19 10. “Manufacturer” means any person, firm, corporation, 20 or business entity that engages in the manufacturing of 21 recreational vehicles. 22 11. “Manufacturer and dealer agreement” means a written 23 agreement or contract entered into between a manufacturer 24 or distributor and a dealer that fixes the rights and 25 responsibilities of the parties and pursuant to which the 26 dealer sells new recreational vehicles. 27 12. “Motor home” means a motorized vehicle which is either 28 self-propelled or towed by a consumer-owned vehicle, and 29 is primarily designed to provide temporary living quarters 30 for recreational, camping, or travel use. A “motor home” 31 contains at least four of the following permanently installed 32 independent life-support systems which meet the national fire 33 protection association standard for recreational vehicles: 34 a. A cooking facility with an on-board fuel source. 35 -2- LSB 2019HC (5) 86 av/nh 2/ 26

H.F. _____ b. A potable water supply system that includes at least 1 a sink, a faucet, and a water tank with an exterior service 2 supply connection. 3 c. A toilet with exterior evacuation. 4 d. A gas or electric refrigerator. 5 e. A heating or air conditioning system with an on-board 6 power or fuel source separate from the vehicle engine. 7 f. A one hundred ten to one hundred twenty volt power 8 supply. 9 13. “Park model recreational vehicle” means a vehicle that 10 is all of the following: 11 a. Designed and marketed primarily not for use as a 12 permanent dwelling but as temporary living quarters for 13 recreational, camping, travel, or seasonal use. 14 b. Between three hundred twenty and four hundred square 15 feet in size based on the exterior dimensions of the vehicle 16 measured at the largest horizontal projections when erected on 17 site including all space which has a ceiling height of more 18 than five feet, and any expandable room, slide-out, tip-out, 19 or tag-along unit. 20 c. Built on a single chassis and not designed to accept 21 additional structures, add-ons, or other additions that will 22 increase the area as determined in paragraph “b” in excess of 23 four hundred square feet. 24 d. Built pursuant to a third-party inspection and 25 certification process. 26 e. Built to the American national standards institute A119.5 27 park model recreational vehicle standard. 28 14. “Proprietary part” means any part manufactured by or for 29 and sold exclusively by a manufacturer. 30 15. “Recreational vehicle” means a vehicle which is 31 either self-propelled or towed by a consumer-owned vehicle, 32 primarily designed to provide temporary living quarters for 33 recreational, camping, or travel use that complies with all 34 applicable federal vehicle regulations and does not require a 35 -3- LSB 2019HC (5) 86 av/nh 3/ 26

H.F. _____ special highway movement permit to legally use the highways. 1 “Recreational vehicle” includes a “motor home” and a “travel 2 trailer” . 3 16. “Supplier” means any person, firm, corporation, or 4 business entity that engages in the manufacture of recreational 5 vehicle parts, accessories, or components. 6 17. “Transient consumer” means a consumer who is temporarily 7 traveling through a dealer’s area of sales responsibility. 8 18. “Travel trailer” means a vehicle, mounted on wheels, 9 designed to provide temporary living quarters for recreational, 10 camping, or travel use of such size and weight as to not 11 require a special highway movement permit when towed by a 12 motorized vehicle. “Travel trailer” includes a fifth-wheel 13 travel trailer, folding camping trailer, truck camper, and a 14 park model recreational vehicle, but does not include a vehicle 15 that is so designed as to permit it to be towed exclusively by 16 a motorcycle. 17 19. “Truck camper” means a vehicle designed to be placed in 18 the bed of a pickup truck to provide temporary living quarters 19 for recreational, camping, or travel use. 20 20. “Warrantor” means any person, firm, corporation, or 21 business entity, including any manufacturer or supplier, that 22 provides a written warranty to a consumer in connection with 23 a new recreational vehicle or a part, accessory, or component 24 of a new recreational vehicle. “Warrantor” does not include 25 a dealer, supplier, or other person, firm, corporation, or 26 business entity not controlled by a manufacturer that provides 27 a service contract, mechanical or other insurance, or extended 28 warranties sold for separate consideration to a consumer. 29 Sec. 2. NEW SECTION . 322E.2 Manufacturer and dealer 30 agreements —— area of sales responsibility. 31 1. A manufacturer or distributor shall not sell a new 32 recreational vehicle in this state to or through a dealer 33 without first entering into a written manufacturer and dealer 34 agreement with the dealer that has been signed by both parties. 35 -4- LSB 2019HC (5) 86 av/nh 4/ 26

H.F. _____ A dealer shall not sell a new recreational vehicle in this 1 state without first entering into a written manufacturer and 2 dealer agreement with a manufacturer or distributor that has 3 been signed by both parties. 4 2. A manufacturer and dealer agreement shall designate the 5 area of sales responsibility exclusively assigned to a dealer 6 by the manufacturer or distributor and the manufacturer or 7 distributor shall not change that area or contract with another 8 dealer for sale of the same line-make in the designated area 9 for the duration of the agreement. 10 3. If, subsequent to entering into a manufacturer and 11 dealer agreement, a dealer enters into an agreement with 12 another manufacturer or distributor to sell recreational 13 vehicles, or enters into an agreement to increase the dealer’s 14 preexisting commitment to sell recreational vehicles of another 15 manufacturer or distributor, the manufacturer or distributor 16 may revise the area of sales responsibility designated in the 17 manufacturer and dealer agreement, upon a determination by the 18 manufacturer or distributor that the market penetration of the 19 manufacturer’s or distributor’s products is jeopardized by the 20 dealer’s subsequent agreement to sell or increase the sales of 21 another manufacturer’s or distributor’s recreational vehicles. 22 4. Except as otherwise provided in subsection 3, the area of 23 sales responsibility designated in a manufacturer and dealer 24 agreement shall not be reviewed or changed until at least one 25 year after execution of the agreement without the consent of 26 both parties to the agreement. 27 Sec. 3. NEW SECTION . 322E.3 Manufacturer and dealer 28 agreements —— termination, cancellation, nonrenewal, and 29 alteration. 30 1. Termination by manufacturer or distributor. A 31 manufacturer or distributor, directly or through any authorized 32 officer, agent, or employee, may terminate, cancel, or fail to 33 renew a manufacturer and dealer agreement with or without good 34 cause as follows: 35 -5- LSB 2019HC (5) 86 av/nh 5/ 26

H.F. _____ a. If the manufacturer or distributor terminates, cancels, 1 or fails to renew a manufacturer and dealer agreement without 2 good cause, the manufacturer or distributor shall comply with 3 the provisions of section 322E.4. 4 b. If the manufacturer or distributor terminates, cancels, 5 or fails to renew a manufacturer and dealer agreement with 6 good cause, the manufacturer or distributor is not required to 7 comply with the provisions of section 322E.4. 8 c. The manufacturer or distributor has the burden of showing 9 good cause for terminating, canceling, or failing to renew a 10 manufacturer and dealer agreement. For purposes of determining 11 whether good cause exists for such termination, cancellation, 12 or nonrenewal of the agreement, any of the following factors 13 may be considered: 14 (1) The extent of the affected dealer’s penetration in the 15 area of sales responsibility. 16 (2) The nature and extent of the dealer’s investment in the 17 dealer’s business. 18 (3) The adequacy of the dealer’s service facilities, 19 equipment, parts, supplies, and personnel. 20 (4) The effect of the proposed termination, cancellation, 21 or nonrenewal of the agreement on the community. 22 (5) The extent and quality of the dealer’s service under the 23 warranties of the recreational vehicles sold. 24 (6) The dealer’s failure to follow agreed upon procedures or 25 standards related to the overall operation of the dealership. 26 (7) The dealer’s performance under the terms of the 27 manufacturer and dealer agreement. 28 d. (1) Except as otherwise provided in this paragraph 29 “d” , a manufacturer or distributor shall provide a dealer with 30 at least ninety days’ prior written notice of termination, 31 cancellation, or nonrenewal of the manufacturer and dealer 32 agreement if the agreement is being terminated, canceled, or 33 nonrenewed with or without good cause. 34 (2) (a) If the proposed termination, cancellation, or 35 -6- LSB 2019HC (5) 86 av/nh 6/ 26

H.F. _____ nonrenewal of the agreement is for good cause, the notice shall 1 state all of the reasons for the termination, cancellation, or 2 nonrenewal and shall further state that if, within thirty days 3 following receipt of the notice, the dealer provides to the 4 manufacturer or distributor a written notice of intent to cure 5 all claimed deficiencies, the dealer shall then have ninety 6 days following receipt of the notice to cure the deficiencies. 7 If the dealer fails to provide notice of intent to cure the 8 deficiencies within thirty days following receipt of the 9 notice, the termination, cancellation, or nonrenewal of the 10 agreement for good cause takes effect thirty days following the 11 dealer’s receipt of the notice. 12 (b) If the dealer provides notice of intent to cure the 13 deficiencies stated and the deficiencies are cured by the 14 dealer within ninety days following receipt of the notice, 15 the manufacturer’s or distributor’s notice to the dealer is 16 voided. If the dealer provides notice of intent to cure the 17 deficiencies stated and fails to cure the deficiencies within 18 ninety days following receipt of the notice, the termination, 19 cancellation, or nonrenewal of the agreement for good cause 20 takes effect ninety days following the dealer’s receipt of the 21 notice. 22 (c) If the dealer has new and untitled inventory of 23 recreational vehicles on hand at the time the termination, 24 cancellation, or nonrenewal of the agreement takes effect for 25 good cause, the inventory may be sold by the dealer as provided 26 in section 322E.4, subsection 2, paragraph “b” . 27 e. Notwithstanding paragraph “d” , the notice period for 28 termination, cancellation, or nonrenewal of a manufacturer 29 and dealer agreement for good cause may be reduced to thirty 30 days if the grounds for such termination, cancellation, or 31 nonrenewal are due to any of the following factors: 32 (1) The dealer or one of the dealer’s owners has been 33 convicted of or has entered a plea of nolo contendere to a 34 felony. 35 -7- LSB 2019HC (5) 86 av/nh 7/ 26

H.F. _____ (2) The dealer has abandoned or closed the dealer’s business 1 operations for ten consecutive business days, unless the 2 closing is due to an act of God, a strike, a labor difficulty, 3 or other cause over which the dealer has no control. 4 (3) The dealer has made a significant misrepresentation 5 that materially affects the business relationship of the 6 manufacturer or distributor and the dealer. 7 (4) The dealer’s license has been suspended, revoked, 8 denied, or not renewed. 9 (5) The dealer has committed a material violation of this 10 chapter which is not cured within thirty days after receipt of 11 written notice of the violation. 12 f. Notwithstanding paragraphs “d” and “e” , the manufacturer 13 and dealer agreement may be terminated, canceled, or nonrenewed 14 for good cause at any time if the reason for the termination, 15 cancellation, or nonrenewal is the dealer’s insolvency, the 16 dealer’s declaration of an assignment for the benefit of 17 creditors, or the dealer’s declaration of bankruptcy. 18 2. Termination by dealer. A dealer may terminate, cancel, 19 or fail to renew a manufacturer and dealer agreement with or 20 without good cause as follows: 21 a. If the dealer terminates, cancels, or fails to renew 22 a manufacturer and dealer agreement without good cause, the 23 dealer shall comply with the provisions of section 322E.4. 24 b. If the dealer terminates, cancels, or fails to renew a 25 manufacturer and dealer agreement with good cause, the dealer 26 is not required to comply with the provisions of section 27 322E.4. 28 c. (1) Except as otherwise provided in this paragraph “c” , 29 a dealer shall provide a manufacturer or distributor with at 30 least ninety days’ notice of termination, cancellation, or 31 nonrenewal of the manufacturer and dealer agreement if the 32 agreement is being terminated, canceled, or nonrenewed with or 33 without good cause. 34 (2) (a) If the termination, cancellation, or nonrenewal 35 -8- LSB 2019HC (5) 86 av/nh 8/ 26

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

H.F. _____ manufacturer or distributor has no control. 1 (3) The manufacturer or distributor has made a significant 2 misrepresentation that materially affects the business 3 relationship of the manufacturer or distributor and the dealer. 4 (4) The manufacturer or distributor has committed a 5 material violation of this chapter which is not cured within 6 thirty days after receipt of written notice of the violation. 7 (5) The manufacturer or distributor has declared bankruptcy 8 or insolvency, or an assignment for the benefit of creditors or 9 bankruptcy has occurred. 10 Sec. 4. NEW SECTION . 322E.4 Repurchase or sale of 11 inventory. 12 1. If the manufacturer and dealer agreement is terminated, 13 canceled, or not renewed by the manufacturer or distributor 14 without good cause as provided in section 322E.3, subsection 15 1, or if the dealer terminates, cancels, or does not renew 16 the manufacturer and dealer agreement with good cause as 17 provided in section 322E.3, subsection 2, and the manufacturer 18 or distributor fails to provide notice of intent to cure the 19 claimed deficiencies or fails to cure the claimed deficiencies 20 as provided in section 322E.3, subsection 2, the manufacturer 21 or distributor shall, at the dealer’s option, and within 22 forty-five days after termination, cancellation, or nonrenewal 23 of the agreement, repurchase all of the following: 24 a. (1) All new, untitled recreational vehicles that 25 were acquired from the manufacturer or distributor within 26 twelve months prior to the effective date of the notice of 27 termination, cancellation, or nonrenewal of the agreement, that 28 have not been used except for demonstration purposes, and that 29 have not been altered or damaged, at one hundred percent of the 30 net invoice cost, including transportation, less applicable 31 rebates and discounts to the dealer. 32 (2) In the event that any of the recreational vehicles 33 repurchased pursuant to this paragraph “a” are damaged, but 34 do not trigger a consumer disclosure requirement, the amount 35 -10- LSB 2019HC (5) 86 av/nh 10/ 26

H.F. _____ due to the dealer shall be reduced by the cost to repair the 1 vehicle. Damage incurred prior to delivery to the dealer that 2 was disclosed at the time of delivery does not disqualify 3 repurchase pursuant to this paragraph “a” . 4 b. All undamaged accessories and proprietary parts sold 5 to the dealer for resale within twelve months prior to the 6 effective date of termination, cancellation, or nonrenewal 7 of the agreement, if accompanied by the original invoice, at 8 one hundred five percent of the original net price paid to the 9 manufacturer or distributor, to compensate the dealer for the 10 cost of handling, packing, and shipping the parts for return to 11 the manufacturer or distributor. 12 c. All properly functioning diagnostic equipment, special 13 tools, current signage, or other equipment and machinery 14 that was purchased by the dealer upon the request of the 15 manufacturer or distributor within five years prior to the 16 effective date of the termination, cancellation, or nonrenewal 17 of the agreement, and that can no longer be used in the normal 18 course of the dealer’s ongoing business. 19 2. a. A dealer is not prohibited from selling the remaining 20 inventory of a particular line-make that is in stock after 21 a dealer and manufacturer agreement has been terminated, 22 canceled, or nonrenewed by a manufacturer or distributor 23 without good cause as provided in section 322E.3, subsection 1. 24 b. If recreational vehicles of a particular line-make 25 are not returned or required to be returned by the dealer to 26 the manufacturer or distributor pursuant to the terminated, 27 canceled, or nonrenewed manufacturer and dealer agreement, the 28 dealer may continue to sell all line-makes that were subject to 29 the agreement and are currently in stock until those line-makes 30 are no longer in the dealer’s inventory. 31 Sec. 5. NEW SECTION . 322E.5 Transfer of ownership —— family 32 succession —— objections. 33 1. a. If a dealer desires to make a change in ownership 34 of a dealership by sale of the business assets, a stock 35 -11- LSB 2019HC (5) 86 av/nh 11/ 26

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

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

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

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

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

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

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

H.F. _____ 3. The dealer shall exercise due care when in custody of a 1 damaged new recreational vehicle, but the dealer shall have no 2 other obligations, financial or otherwise, with respect to that 3 vehicle. 4 4. The time frame for inspection and rejection of a damaged 5 new recreational vehicle by a dealer shall be included in the 6 manufacturer and dealer agreement and shall not be less than 7 two business days after the physical delivery of the vehicle 8 to the dealer. 9 5. Any new recreational vehicle that has, at the time of 10 delivery to the dealer, an unreasonable amount of miles on the 11 vehicle’s odometer, as determined by the dealer, may be subject 12 to rejection by the dealer and ownership of the vehicle shall 13 revert to the manufacturer or distributor. In no instance 14 shall a dealer deem an amount less than the distance between 15 the dealer and the manufacturer’s factory or between the dealer 16 and the distributor’s point of distribution, plus one hundred 17 miles, as an unreasonable amount of miles. 18 Sec. 9. NEW SECTION . 322E.9 Civil actions —— mediation. 19 1. A dealer, manufacturer, distributor, or warrantor 20 injured by another party’s violation of this chapter may bring 21 a civil action in district court to recover actual damages 22 resulting from such violation. The court shall award attorney 23 fees and costs to the prevailing party in such an action. 24 Venue for a civil action authorized by this section shall be 25 exclusively in the county in which the dealer’s business is 26 located. In an action involving more than one dealer, venue 27 may be in any county in which any dealer that is a party to the 28 action is located. 29 2. Prior to bringing suit under this section, the party 30 alleging a violation of this chapter shall serve a written 31 demand for mediation upon the alleged offending party. 32 a. The demand for mediation shall be served upon the alleged 33 offending party via certified mail at the address stated in the 34 manufacturer and dealer agreement between the parties. 35 -19- LSB 2019HC (5) 86 av/nh 19/ 26

H.F. _____ b. The demand for mediation shall contain a brief statement 1 of the dispute or violation alleged and relief sought by the 2 party filing the demand. 3 c. Within twenty days after service of a demand for 4 mediation, the parties shall mutually select an independent 5 certified mediator and shall meet with that mediator for 6 the purpose of attempting to resolve the dispute or alleged 7 violation. The meeting place for the mediation shall be 8 in this state at a location selected by the mediator. The 9 mediator may extend the date for the meeting for good cause 10 shown by either party or upon stipulation of both parties. 11 d. The service of a demand for mediation under this 12 section shall toll the time for the filing of any complaint, 13 petition, protest, or other action under this chapter until 14 representatives of both parties have met with the mutually 15 selected mediator for the purpose of attempting to resolve 16 the dispute or alleged violation. If a complaint, petition, 17 protest, or other action has been filed before that meeting, 18 the court shall enter an order suspending any proceeding or 19 action on such complaint, petition, protest, or other action 20 until the mediation meeting has occurred and may, upon written 21 stipulation of all parties to the proceeding or action that 22 they wish to continue mediation under this section, enter an 23 order suspending the proceeding or action for as long a period 24 of time as the court considers appropriate. 25 e. Each party to the mediation shall bear their own costs 26 for attorney fees and shall divide equally among them the cost 27 of the mediator. 28 3. In addition to the remedies provided in this section, 29 and notwithstanding the existence of any additional remedy at 30 law, a manufacturer, distributor, warrantor, or dealer may 31 apply to the district court for the grant, upon a hearing and 32 for cause shown, of a temporary or permanent injunction, or 33 both, restraining any person from acting as a dealer without 34 being properly licensed, from violating or continuing to 35 -20- LSB 2019HC (5) 86 av/nh 20/ 26

H.F. _____ violate any of the provisions of this chapter, or from failing 1 or refusing to comply with the requirements of this chapter. 2 Such injunction shall be issued without bond. A single act in 3 violation of the provisions of this chapter shall be sufficient 4 cause to authorize the issuance of an injunction pursuant to 5 this subsection. 6 DIVISION II 7 COORDINATING AMENDMENTS 8 Sec. 10. Section 321.1, subsection 36C, paragraphs b and c, 9 Code 2015, are amended to read as follows: 10 b. “Travel trailer” means a vehicle without motive power 11 used, manufactured, or constructed to permit its use as a 12 conveyance upon the public streets and highways and designed 13 to permit its use as a place of human habitation by one or more 14 persons. The vehicle may be up to eight feet six inches in 15 width and its overall length shall not exceed forty forty-five 16 feet. The vehicle shall be customarily or ordinarily used for 17 vacation or recreational purposes and not used as a place of 18 permanent habitation. If the vehicle is used in this state as 19 a place of human habitation for more than ninety consecutive 20 days in one location it shall be classed as a manufactured or 21 mobile home regardless of the size limitations provided in this 22 paragraph. 23 c. “Fifth-wheel travel trailer” means a type of travel 24 trailer which is towed by a pickup by a connecting device known 25 as a fifth wheel. However, this type of travel trailer may 26 have an overall length which shall not exceed forty forty-five 27 feet. 28 Sec. 11. Section 322.2, subsection 13, Code 2015, is amended 29 to read as follows: 30 13. “Motor vehicle” means any self-propelled vehicle subject 31 to registration under chapter 321 , including a motor home as 32 defined in section 322E.1 . 33 Sec. 12. Section 322.3, subsection 1, Code 2015, is amended 34 to read as follows: 35 -21- LSB 2019HC (5) 86 av/nh 21/ 26

H.F. _____ 1. A person shall not engage in this state in the business 1 of selling at retail new motor vehicles of any make or 2 represent or advertise that the person is engaged or intends 3 to engage in such business in this state unless the person 4 is authorized to do so by a contract in writing with the 5 manufacturer or distributor of such make of new motor vehicles 6 and unless the department has licensed the person as a motor 7 vehicle dealer in this state in motor vehicles of such make 8 and has issued to the person a license in writing as provided 9 in this chapter . A person shall not engage in this state in 10 the business of selling at retail new motor vehicles that are 11 recreational vehicles as defined in section 322E.1, unless the 12 person is authorized to do so by a manufacturer and dealer 13 agreement as provided in chapter 322E. 14 Sec. 13. Section 322A.1, subsection 8, Code 2015, is amended 15 to read as follows: 16 8. “Motor vehicle” means “motor vehicles” as defined in 17 chapter 321 which are subject to registration pursuant to the 18 provisions thereof , except those motor vehicles defined as 19 recreational vehicles in section 322E.1 . 20 Sec. 14. Section 322C.2, subsection 4, Code 2015, is amended 21 by striking the subsection and inserting in lieu thereof the 22 following: 23 4. “Fifth-wheel trailer” means the same as defined in 24 section 322E.1. 25 Sec. 15. Section 322C.2, Code 2015, is amended by adding the 26 following new subsections: 27 NEW SUBSECTION . 4A. “ Folding camping trailer” means the 28 same as defined in section 322E.1. 29 NEW SUBSECTION . 6A. “Park model recreational vehicle” means 30 the same as defined in section 322E.1. 31 Sec. 16. Section 322C.2, subsection 10, Code 2015, is 32 amended by striking the subsection and inserting in lieu 33 thereof the following: 34 10. “Travel trailer” means the same as defined in section 35 -22- LSB 2019HC (5) 86 av/nh 22/ 26

H.F. _____ 322E.1. 1 Sec. 17. Section 322C.3, subsection 1, Code 2015, is amended 2 to read as follows: 3 1. A person shall not engage in this state in the business 4 of selling at retail new travel trailers of any make, or 5 represent or advertise that the person is engaged or intends 6 to engage in such business in this state, unless the person is 7 authorized by a contract in writing between that person and the 8 manufacturer or distributor of that make of new travel trailers 9 to sell the trailers in this state as provided in chapter 322E , 10 and unless the department has issued to the person a license as 11 a travel trailer dealer for the same make of travel trailer. 12 Sec. 18. Section 322C.3, subsections 5 and 7, Code 2015, are 13 amended by striking the subsections. 14 DIVISION III 15 APPLICABILITY 16 Sec. 19. APPLICABILITY. The provisions of this Act apply 17 to manufacturer and dealer agreements that are entered into or 18 renewed on or after July 1, 2016. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill regulates agreements between manufacturers or 23 distributors, and dealers relating to the sale of recreational 24 vehicles and includes coordinating amendments and applicability 25 provisions. 26 DIVISION I. New Code chapter 322E regulates manufacturer 27 and dealer agreements fixing the rights and responsibilities of 28 each party pertaining to the sale of new recreational vehicles 29 in the state. A “recreational vehicle” is a vehicle that is 30 either self-propelled or towed by a consumer-owned tow vehicle 31 and is primarily designed to provide temporary living quarters 32 for recreational, camping, or travel use. A “recreational 33 vehicle” includes a “motor home” which is a motorized vehicle, 34 and a “travel trailer” such as a fifth-wheel trailer, folding 35 -23- LSB 2019HC (5) 86 av/nh 23/ 26

H.F. _____ camping trailer, truck camper, or a park model recreational 1 vehicle, which is nonmotorized and towable. 2 A manufacturer or distributor, and a dealer are required 3 to enter into a written manufacturer and dealer agreement 4 before selling new recreational vehicles in the state. The 5 agreement must designate the dealer’s exclusive area of sales 6 responsibility. A manufacturer or distributor, or a dealer 7 may terminate, cancel, or fail to renew the agreement with or 8 without cause and the bill specifies notification requirements, 9 what factors may be considered in determining whether good 10 cause exists, and requirements concerning repurchase or sale of 11 remaining inventory of recreational vehicles and outstanding 12 financial obligations between the parties to the agreement. 13 The party that terminates, cancels, or fails to renew the 14 agreement for good cause has the burden of showing cause. 15 The bill requires that a dealer that desires to make a change 16 in ownership of the dealership give notice to the manufacturer 17 or distributor of the proposed change. The manufacturer or 18 distributor is not allowed to object to the proposal unless the 19 objection is due to factors specified in the bill concerning 20 the proposed transferee. The manufacturer must make a written 21 objection and has the burden of proving that the objection 22 complies with the bill’s requirements. 23 A manufacturer or distributor is prohibited from failing to 24 provide a dealer with the opportunity to designate a family 25 member as a successor to the dealership in the event of the 26 dealer’s death, incapacity, or retirement so long as the 27 dealer gives written notice of the designation before it takes 28 effect. The manufacturer or distributor cannot object to the 29 designation unless the dealer is in breach of the manufacturer 30 and dealer agreement or in violation of the provisions of new 31 Code chapter 322E or the objection is due to other specified 32 factors. A manufacturer or distributor is prohibited from 33 refusing to honor the succession of the designated family 34 member unless the manufacturer or distributor has provided the 35 -24- LSB 2019HC (5) 86 av/nh 24/ 26

H.F. _____ dealer with written notice of an objection to the dealer’s 1 designation after receiving notice of the designation. 2 In regards to warranty obligations on new recreational 3 vehicles, the bill requires the warrantor, that person 4 providing a written warranty on the vehicles, to specify the 5 dealer’s obligations for preparation, delivery, and warranty 6 services on the warrantor’s products and how the dealer will 7 be compensated for provision of those services. The bill 8 specifies the warrantor’s and dealer’s obligations to each 9 other concerning warranties. 10 The bill provides that both the warrantor and the dealer have 11 duties to indemnify and hold each other harmless to the extent 12 that losses or damages are caused by the negligence or willful 13 misconduct of the other. These duties continue even after a 14 new recreational vehicle is titled. 15 The bill specifies the rights and obligations of a dealer and 16 a manufacturer or distributor when a new recreational vehicle 17 is damaged in transit. The bill specifies a time frame for a 18 dealer to inspect a delivered vehicle and to either reject or 19 request to repair the damaged vehicle. 20 A dealer, manufacturer, distributor, or warrantor injured 21 by another party’s violation of the provisions of new Code 22 chapter 322E may bring a civil action in district court to 23 recover actual damages and the prevailing party in the action 24 is entitled to attorney fees and costs. However, prior to 25 bringing suit, the party alleging the violation is required 26 to serve a demand for mediation upon the alleged offending 27 party. The parties must mutually select and share the cost of 28 retaining an independent mediator to attempt to resolve the 29 dispute or alleged violation. Service of the mediation demand 30 tolls the time for filing any other proceeding or action and 31 the district court is required to suspend any proceeding or 32 action until the mediation meeting occurs. In addition to any 33 other remedy, either party may apply to the district court for 34 a temporary or permanent injunction. 35 -25- LSB 2019HC (5) 86 av/nh 25/ 26

H.F. _____ DIVISION II. Division II of the bill includes coordinating 1 amendments. 2 Code chapter 321 (motor vehicles and law of the road) is 3 amended to provide that travel trailers and fifth-wheel travel 4 trailers shall not exceed 45 feet, instead of 40 feet in 5 length. 6 Code chapter 322 (motor vehicle manufacturers, distributors, 7 wholesalers, and dealers) is amended to provide that “motor 8 vehicle” includes a “motor home” as defined in new Code chapter 9 322E. Code section 322.3(1) is amended to prohibit a person 10 from selling a motor vehicle that also meets the definition 11 of a “recreational vehicle” pursuant to new Code chapter 12 322E, unless the person is authorized to do so pursuant to a 13 manufacturer and dealer agreement that meets the requirements 14 of new Code chapter 322E. 15 Code chapter 322A (motor vehicle franchisors) is amended 16 to provide that Code chapter 322A does not apply to a motor 17 vehicle that is defined as a “recreational vehicle” pursuant to 18 new Code chapter 322E. 19 Code chapter 322C (travel trailer dealers, manufacturers, 20 and distributors) is amended to include definitions of 21 recreational vehicles that are consistent with the definitions 22 in new Code chapter 322E. Code section 322C.3(1) is amended 23 to provide that the required manufacturer or distributor and 24 dealer agreement must be made in accordance with the provisions 25 of new Code chapter 322E. Code section 322C.3 is amended to 26 strike two provisions concerning manufacturers or distributors, 27 and dealers of travel trailers that are inconsistent with 28 provisions contained in new Code chapter 322E. 29 DIVISION III. The provisions of the bill apply to 30 manufacturer and dealer agreements pertaining to the sale of 31 new recreational vehicles that are entered into or renewed on 32 or after July 1, 2016. 33 -26- LSB 2019HC (5) 86 av/nh 26/ 26