SF 865

Introduction - 80th Legislature (1997 - 1998)

Posted on 12/15/2009 12:00 a.m.

  1.1                          A bill for an act 
  1.2             relating to commerce; regulating rental-purchase 
  1.3             agreements; modifying the definitions of certain 
  1.4             terms; providing evidence of the cash price of 
  1.5             property; limiting charges for cost-of-lease services; 
  1.6             amending Minnesota Statutes 1996, sections 325F.84, 
  1.7             subdivision 3, and by adding a subdivision; 325F.85; 
  1.8             and 325F.91, by adding subdivisions. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1996, section 325F.84, 
  1.11  subdivision 3, is amended to read: 
  1.12     Subd. 3.  [CASH PRICE.] "Cash price" means an amount equal 
  1.13  to the equivalent fair market value for goods offered under a 
  1.14  consumer credit sale as provided under section 325G.15. the fair 
  1.15  market value of the property.  The fair market value of the 
  1.16  property means the price at which retail sellers are selling and 
  1.17  retail buyers are buying the same or substantially similar 
  1.18  property for cash in the same trade area in which the lessor's 
  1.19  place of business is located.  Cash price may be evidenced as 
  1.20  provided in section 325F.91, subdivision 2a. 
  1.21     Sec. 2.  Minnesota Statutes 1996, section 325F.84, is 
  1.22  amended by adding a subdivision to read: 
  1.23     Subd. 4a.  [COST OF LEASE SERVICES.] "Cost-of-lease 
  1.24  services" means the total dollar amount a lessor charges under a 
  1.25  rental-purchase agreement in addition to the cash price of the 
  1.26  goods.  Cost-of-lease services includes, but is not limited to, 
  1.27  charges for delivery, set up, pick up, servicing or warranty of 
  2.1   the goods, early purchase option, right to terminate the 
  2.2   transaction at any time without penalty, the right to reinstate 
  2.3   a terminated rental-purchase agreement without losing rights or 
  2.4   options previously acquired, and the fee a lessor charges under 
  2.5   a rental-purchase agreement for the option to acquire ownership 
  2.6   of the goods over time by renewing the agreement in lieu of 
  2.7   acquiring ownership of the goods by cash price. 
  2.8      Sec. 3.  Minnesota Statutes 1996, section 325F.85, is 
  2.9   amended to read: 
  2.10     325F.85 [APPLICATION OF OTHER LAW.] 
  2.11     If the consumer protection provisions of sections 325F.84 
  2.12  to 325F.97 conflict with sections 325G.15 and 325G.16, sections 
  2.13  325F.84 to 325F.97 apply to a rental-purchase agreement and 
  2.14  supersede sections 325G.15 and 325G.16. 
  2.15     Sections 325G.15 and 325G.16 and chapter 334 do not apply 
  2.16  to rental-purchase agreements. 
  2.17     Sec. 4.  Minnesota Statutes 1996, section 325F.91, is 
  2.18  amended by adding a subdivision to read: 
  2.19     Subd. 2a.  [EVIDENCE OF CASH PRICE.] Evidence of cash price 
  2.20  of the property may include published prices or advertisements 
  2.21  by retailers of substantially similar product selling in the 
  2.22  same trade area in which the lessor's place of business is 
  2.23  located, if the prices were published or disseminated within the 
  2.24  90-day period preceding the date of the rental-purchase 
  2.25  agreement or an amount equal to 2.4 times the documented actual 
  2.26  cost, including freight charges and applicable taxes, of the 
  2.27  rental-purchase property from an unaffiliated wholesaler, 
  2.28  distributor, or manufacturer.  A lessor shall maintain records 
  2.29  that establish that the price disclosed as the cash price in a 
  2.30  rental-purchase agreement is the cash price as defined in 
  2.31  section 325F.84, subdivision 3.  A copy of each rental purchase 
  2.32  agreement and of the records required by this subdivision must 
  2.33  be maintained for two years following the termination of the 
  2.34  agreement. 
  2.35     Sec. 5.  Minnesota Statutes 1996, section 325F.91, is 
  2.36  amended by adding a subdivision to read: 
  3.1      Subd. 4.  [COST-OF-LEASE SERVICES.] The total dollar amount 
  3.2   charged by the lessor for the cost-of-lease services under a 
  3.3   rental-purchase agreement must not exceed an amount equal to the 
  3.4   original cash price of the property. 
  3.5      Sec. 6.  [EFFECTIVE DATE.] 
  3.6      Sections 1 to 5 are effective the day following final 
  3.7   enactment and apply to agreements entered into on and after that 
  3.8   date.