SF 832

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; regulating franchise agreements between outdoor sport
equipment dealers and manufacturers; imposing title requirements; appropriating
money; proposing coding for new law as Minnesota Statutes, chapters 80G;
86C; repealing Minnesota Statutes 2006, sections 86B.820; 86B.825; 86B.830;
86B.835; 86B.840; 86B.845; 86B.850; 86B.855; 86B.860; 86B.865; 86B.870;
86B.875; 86B.880; 86B.885; 86B.890; 86B.895; 86B.900; 86B.905; 86B.910;
86B.915; 86B.920.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

OUTDOOR SPORT EQUIPMENT FRANCHISES

Section 1.

new text begin [80G.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 80G.01 to 80G.07, the terms
defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Outdoor sport equipment. new text end

new text begin "Outdoor sport equipment" means
snowmobiles as defined in section 84.81, subdivision 3; all-terrain vehicles as defined in
section 84.92, subdivision 8; personal watercraft as defined in section 86B.005, subdivision
14a; watercraft as defined in section 86C.01; and motorcycles, as defined in section
65B.001, subdivision 5, and all attachments and repair parts for all of this equipment.
new text end

new text begin Subd. 3. new text end

new text begin Outdoor sport equipment manufacturer or manufacturer. new text end

new text begin "Outdoor
sport equipment manufacturer" or "manufacturer" means a person, partnership,
corporation, association, or other form of business enterprise engaged in the
manufacturing, assembly, or wholesale distribution of outdoor sport equipment. The term
also includes any successor in interest of the outdoor sport equipment manufacturer,
including any purchaser of assets or stock, any surviving corporation resulting from a
merger or liquidation, any receiver or assignee, or any trustee of the original outdoor
sport equipment manufacturer.
new text end

new text begin Subd. 4. new text end

new text begin Outdoor sport equipment dealer or dealer. new text end

new text begin "Outdoor sport equipment
dealer" or "dealer" means a person, partnership, corporation, association, or other form of
business enterprise engaged in acquiring outdoor sport equipment from a manufacturer
and reselling the outdoor sport equipment at wholesale or retail.
new text end

new text begin Subd. 5. new text end

new text begin Dealership agreement. new text end

new text begin "Dealership agreement" means an oral or
written agreement of definite or indefinite duration between an outdoor sport equipment
manufacturer and an outdoor sport equipment dealer, which enables the dealer to purchase
equipment from the manufacturer and provides for the rights and obligations of the parties
with respect to the purchase or sale of outdoor sport equipment.
new text end

Sec. 2.

new text begin [80G.02] TERMINATIONS OR CANCELLATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Good cause required. new text end

new text begin No outdoor sport equipment manufacturer,
directly or through an officer, agent, or employee may terminate, cancel, fail to renew,
or substantially change the competitive circumstances of a dealership agreement without
good cause. "Good cause" means failure by an outdoor sport equipment dealer to
substantially comply with essential and reasonable requirements imposed upon the dealer
by the dealership agreement, if the requirements are not different from those requirements
imposed on other similarly situated dealers by their terms. In addition, good cause exists
whenever:
new text end

new text begin (1) without the consent of the outdoor sport equipment manufacturer who shall not
withhold consent unreasonably: (i) the outdoor sport equipment dealer has transferred an
interest in the outdoor sport equipment dealership; (ii) there has been a withdrawal from
the dealership of an individual proprietor, partner, major shareholder, or the manager of
the dealership; or (iii) there has been a substantial reduction in interest of a partner or
major stockholder;
new text end

new text begin (2) the outdoor sport equipment dealer has filed a voluntary petition in bankruptcy
or has had an involuntary petition in bankruptcy filed against it, which has not been
discharged within 30 days after the filing, there has been a closeout or sale of a substantial
part of the dealer's assets related to the outdoor sport equipment business, or there has
been a commencement of dissolution or liquidation of the dealer;
new text end

new text begin (3) there has been a change, without the prior written approval of the manufacturer,
in the location of the dealer's principal place of business under the dealership agreement;
new text end

new text begin (4) the outdoor sport equipment dealer has defaulted under a chattel mortgage or
other security agreement between the dealer and the outdoor sport equipment manufacturer
or there has been a revocation or discontinuance of a guarantee of the dealer's present or
future obligations to the outdoor sport equipment manufacturer;
new text end

new text begin (5) the outdoor sport equipment dealer has failed to operate in the normal course of
business for seven consecutive days or has otherwise abandoned the business;
new text end

new text begin (6) the outdoor sport equipment dealer has pleaded guilty to or has been convicted of
a felony affecting the relationship between the dealer and manufacturer;
new text end

new text begin (7) the outdoor sport equipment dealer has engaged in conduct which is injurious or
detrimental to the dealer's customers or to the public welfare; or
new text end

new text begin (8) the outdoor sport equipment dealer, after receiving notice from the manufacturer
of its requirements for reasonable market penetration based on the manufacturer's
experience in other comparable marketing areas, consistently fails to meet the
manufacturer's market penetration requirements.
new text end

new text begin Subd. 2. new text end

new text begin Notice. new text end

new text begin Except as otherwise provided in this subdivision, an outdoor
sport equipment manufacturer shall provide an outdoor sport equipment dealer at least 90
days' prior written notice of termination, cancellation, or nonrenewal of the dealership
agreement. The notice shall state all reasons constituting good cause for the action and
shall provide that the dealer has 60 days in which to cure any claimed deficiency. If the
deficiency is rectified within 60 days, the notice is void. The notice and right to cure
provisions under this section do not apply if the reason for termination, cancellation, or
nonrenewal is for any reason set forth in subdivision 1, clauses (1) to (7).
new text end

new text begin Subd. 3. new text end

new text begin Obligation to repurchase. new text end

new text begin If a dealership agreement is terminated,
canceled, or discontinued, the outdoor sport equipment manufacturer shall pay to the
dealer, or credit to the dealer's account if the dealer has an outstanding amount owed to the
manufacturer, an amount equal to 100 percent of the net cost of all unused outdoor sport
equipment in new condition that has been purchased by the dealer from the manufacturer
within the 24 months immediately preceding notification by either party of intent to
terminate, cancel, or discontinue the agreement. This amount must include transportation
and reasonable assembly charges that have been paid by the dealer, or invoiced to the
dealer's account by the manufacturer. The dealer may elect to keep the merchandise
instead of receiving payment, if the contract gives the dealer this right.
new text end

new text begin Subd. 4. new text end

new text begin Repair parts. new text end

new text begin (a) The manufacturer shall pay the dealer, or credit to
the dealer's account if the dealer has an outstanding amount owed to the manufacturer,
the following:
new text end

new text begin (1) 95 percent of the current net prices on repair parts, including superseded parts
listed in current price lists or catalogs in use by the manufacturer on the date of the
termination, cancellation, or discontinuance of the agreement;
new text end

new text begin (2) as to any parts not listed in current price lists or catalogs, 100 percent of the
invoiced price of the repair part for which the dealer has an invoice if the parts had
previously been purchased by the dealer from the manufacturer and are held by the
dealer on the date of the termination, cancellation, or discontinuance of the agreement or
received by the dealer from the manufacturer after that date;
new text end

new text begin (3) 50 percent of the most recently published price of all other parts if the price list
or catalog is not more than ten years old as of the date of the termination, cancellation, or
discontinuance of the agreement;
new text end

new text begin (4) net cost less 20 percent per year depreciation for five years following purchase
of all data processing and communications hardware and software the dealer purchased
from the manufacturer or an approved vendor of the manufacturer to meet the minimum
requirements for the hardware and software as set forth by the manufacturer; and
new text end

new text begin (5) an amount equal to 75 percent of the net cost to the dealer of specialized
repair tools, including computerized diagnostic hardware and software, and signage
purchased by the dealer pursuant to the requirements of the manufacturer. Specialized
repair tools or signage that have never been used must be repurchased at 100 percent of
the dealer's cost. Specialized repair tools must be unique to the manufacturer's product
line, specifically required by the manufacturer, and must be in complete and usable
condition. The manufacturer may require by contract or agreement that the dealer resell to
the manufacturer such specialized repair tools and signage for the amounts established
in this section or the amount specified in the dealership agreement or contract or fair
market value, whichever is greater.
new text end

new text begin (b) The manufacturer shall pay the dealer, or credit to the dealer's account if the
dealer has an outstanding amount owed to the manufacturer, an amount equal to five
percent of the prices required to be paid or credited by this subdivision for all parts, data
processing and communications hardware and software, and specialized repair tools and
signage returned for the handling, packing, and loading of the parts, data processing and
communications hardware and software, and specialized repair tools and signage back
to the manufacturer unless the manufacturer elects to perform inventory, packing, and
loading of the parts. Upon the payment or allowance of credit to the dealer's account of
the sum required by this subdivision, the title to and right to possess the outdoor sport
equipment passes to the manufacturer. However, this section does not affect any security
interest that the manufacturer may have in the inventory of the dealer.
new text end

new text begin Subd. 5. new text end

new text begin Payment; interest. new text end

new text begin Payment required to be made under this section must
be made not later than 60 days from the date the outdoor sport equipment is received by
the manufacturer, and if not by then paid, the amount payable by the manufacturer bears
interest at the maximum rate allowed by law from the date the agreement was terminated,
canceled, or discontinued until the date payment is received by the dealer.
new text end

new text begin Subd. 6. new text end

new text begin Notice of intent to return. new text end

new text begin In lieu of returning the outdoor sport equipment
to the manufacturer, the dealer may advise the manufacturer that the dealer has outdoor
sport equipment that the dealer intends to return. The notice of the dealer's intention to
return must be in writing and sworn to before a notary public as to the accuracy of the
listing of outdoor sport equipment and that all of the items are in usable condition. The
notice must include the name and business address of the person or business who has
possession and custody of the items and where they may be inspected. The list may be
verified by the manufacturer. The notice must also state the name and business address of
the person or business who has the authority to serve as the escrow agent of the dealer, to
accept payment or a credit to the dealer's account on behalf of the dealer, and to release the
outdoor sport equipment to the manufacturer. The notice constitutes the appointment of
the escrow agent to act on the dealer's behalf.
new text end

new text begin Subd. 7. new text end

new text begin Manufacturer inspection. new text end

new text begin (a) The manufacturer has 30 days from the date
of the mailing of the notice under subdivision 6, which must be by certified mail, in which
to inspect the outdoor sport equipment and verify the accuracy of the dealer's list.
new text end

new text begin (b) The manufacturer shall, within ten days after inspection:
new text end

new text begin (1) pay the escrow agent;
new text end

new text begin (2) give evidence that a credit to the account of the dealer has been made if the
dealer has an outstanding amount due the manufacturer; or
new text end

new text begin (3) send to the escrow agent a "dummy credit list" and shipping labels for the return
of the outdoor sport equipment to the manufacturer that are acceptable as returns.
new text end

new text begin Subd. 8. new text end

new text begin Payment or credit requirements. new text end

new text begin If the manufacturer sends a credit
list as provided under subdivision 7 to the escrow agent, payment or a credit against
the dealer's indebtedness in accordance with this subdivision for the acceptable returns
must accompany the credit list. On the receipt of the payment, evidence of a credit
to the account of the dealer or the credit list with payment, the title to, and the right to
possess the outdoor sport equipment acceptable as returns passes to the manufacturer. The
escrow agent shall ship or cause to be shipped the outdoor sport equipment acceptable
as returns to the manufacturer unless the manufacturer elects to personally perform the
inventory, packing, and loading of the outdoor sport equipment. When the equipment has
been received by the manufacturer, notice of its receipt shall be sent by certified mail
to the escrow agent who shall then disburse 90 percent of the payment it has received,
less its actual expenses and a reasonable fee for its services, to the dealer. The escrow
agent shall keep the balance of the funds in the dealer's escrow account until it is notified
that an agreement has been reached as to the nonreturnables. After being notified of
the agreement, the escrow agent shall disburse the remaining funds and dispose of any
remaining outdoor sport equipment as provided in the agreement. If no agreement is
reached in a reasonable time, the escrow agent may refer the matter to an arbitrator who
has authority to resolve all unsettled issues in the dispute.
new text end

new text begin Subd. 9. new text end

new text begin Provisions of contract supplemented. new text end

new text begin This section is supplemental to an
agreement between the dealer and the manufacturer covering the return of outdoor sport
equipment. The dealer may elect to pursue either the dealer's contract remedy or the
remedy provided in this section. An election by the dealer to pursue the contract remedy
does not bar the dealer's right to the remedy provided in this section as to the outdoor sport
equipment not affected by the contract remedy. Notwithstanding any contrary provision in
this section, the rights of a manufacturer to charge back to the dealer's account amounts
previously paid or credited as a discount incident to the dealer's purchase of goods is not
affected.
new text end

new text begin Subd. 10. new text end

new text begin Death of dealer; repurchase from heirs. new text end

new text begin In the event of the death of the
dealer or majority stockholder in a corporation operating a dealership, the manufacturer
shall, unless the heir or heirs of the deceased agree to continue to operate the dealership,
repurchase the merchandise from the heir or heirs upon the same terms and conditions
as are otherwise provided in this section. In the event the heir or heirs do not agree to
continue to operate the dealership, it shall be deemed a cancellation or discontinuance of
the contract by the dealer under subdivision 1.
new text end

new text begin Subd. 11. new text end

new text begin Failure to pay sums specified on cancellation of contracts; liability.
new text end

new text begin In the event that a manufacturer, upon the cancellation of a dealership agreement, fails
or refuses to make payment to the dealer or the dealer's heir or heirs as required by this
section, the manufacturer is liable in a civil action to be brought by the dealer or the
dealer's heir or heirs for:
new text end

new text begin (1) 100 percent of the net cost of the outdoor sport equipment;
new text end

new text begin (2) transportation and reasonable assembly charges, which have been paid by the
dealer;
new text end

new text begin (3) 95 percent of the current net price of repair parts, 100 percent of invoiced prices,
and 50 percent of the price of all other parts as provided in subdivision 4;
new text end

new text begin (4) payment for data processing and communication hardware and software, or
specialized repair tools or signage as outlined in subdivision 4; and
new text end

new text begin (5) five percent for handling, packing, and loading, if applicable.
new text end

new text begin Subd. 12. new text end

new text begin Exceptions. new text end

new text begin Unless a dealer has delivered parts to an escrow agent
pursuant to subdivision 6, this section does not require the repurchase from a dealer
of a repair part where the dealer previously has failed to return the repair part to the
manufacturer after being offered a reasonable opportunity to return the repair part at a
price not less than:
new text end

new text begin (1) 100 percent of the net price of the repair part as listed in the then-current price
list or catalog;
new text end

new text begin (2) 100 percent of the invoiced price; and
new text end

new text begin (3) 50 percent of the most recent published price as provided in subdivision 4.
new text end

new text begin This section does not require the repurchase from a dealer of repair parts that have a
limited storage life or are otherwise subject to deterioration, such as rubber items, gaskets,
and batteries, unless those items have been purchased from the manufacturer within
the past two years; repair parts which, because of their condition, are not resalable as
new parts without reconditioning; repair parts which have lost required traceability for
quality assurance requirements; and repair parts that were marked nonreturnable or future
nonreturnable when the dealer ordered them.
new text end

Sec. 3.

new text begin [80G.03] VIOLATIONS.
new text end

new text begin (a) It is a violation of sections 80G.01 to 80G.07 for an outdoor sport equipment
manufacturer to coerce an outdoor sport equipment dealer to accept delivery of outdoor
sport equipment, which the outdoor sport equipment dealer has not voluntarily ordered.
new text end

new text begin (b) It is a violation of sections 80G.01 to 80G.07 for an outdoor sport equipment
manufacturer to:
new text end

new text begin (1) condition or attempt to condition the sale of outdoor sport equipment on a
requirement that the outdoor sport equipment dealer also purchase other goods or services,
except that an outdoor sport equipment manufacturer may require the dealer to purchase
all parts reasonably necessary to maintain the quality of operation in the field of any
outdoor sport equipment used in the trade area and telecommunication necessary to
communicate with the outdoor sport equipment manufacturer;
new text end

new text begin (2) coerce an outdoor sport equipment dealer into a refusal to purchase the outdoor
sport equipment manufactured by another outdoor sport equipment manufacturer;
new text end

new text begin (3) discriminate in the prices charged for outdoor sport equipment of like grade and
quality sold by the outdoor sport equipment manufacturer to similarly situated outdoor
sport equipment dealers. This clause does not prevent the use of differentials, which make
only due allowance for difference in the cost of manufacture, sale, or delivery or for the
differing methods or quantities in which the outdoor sport equipment is sold or delivered,
by the outdoor sport equipment manufacturer; or
new text end

new text begin (4) attempt or threaten to terminate, cancel, fail to renew, or substantially change the
competitive circumstances of the dealership agreement if the attempt or threat is based on
the results of a natural disaster, including a sustained drought in the dealership market
area, a labor dispute, or other circumstance beyond the dealer's control.
new text end

Sec. 4.

new text begin [80G.04] WARRANTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin This section applies to all warranty claims submitted by
a dealer to an outdoor sport equipment manufacturer in which the outdoor sport equipment
dealer has complied with the reasonable policies and procedures contained in the outdoor
sport equipment manufacturer's warranty.
new text end

new text begin Subd. 2. new text end

new text begin Prompt payment. new text end

new text begin Claims filed for payment under warranty agreements
must be approved or disapproved within 30 days of receipt by the outdoor sport equipment
manufacturer. Unless the outdoor sport equipment dealer agrees to a later date, approved
claims for payment must be paid within 30 days of approval. When a claim is disapproved,
the outdoor sport equipment manufacturer shall notify the dealer within the 30-day period
stating the specific grounds on which the disapproval is based. Any claim not specifically
disapproved within 30 days of receipt is deemed approved and must be paid within 30 days.
new text end

new text begin Subd. 3. new text end

new text begin Posttermination claims. new text end

new text begin If, after termination of a dealership agreement, a
dealer submits a warranty claim for warranty work performed before the effective date of
the termination, the outdoor sport equipment manufacturer shall approve or disapprove the
claim within 30 days of receipt.
new text end

new text begin Subd. 4. new text end

new text begin Compensation for warranty work. new text end

new text begin Warranty work performed by the
dealer must be compensated in accordance with the reasonable and customary amount
of time required to complete the work, expressed in hours and fractions of hours
multiplied by the dealer's established customer hourly retail labor rate, which the dealer
shall communicate to the outdoor sport equipment manufacturer before performing the
warranty work.
new text end

new text begin Subd. 5. new text end

new text begin Expenses. new text end

new text begin Expenses expressly excluded under the outdoor sport equipment
manufacturer's warranty to the customer must not be included in claims and are not
required to be paid on requests for compensation from the dealer for warranty work
performed.
new text end

new text begin Subd. 6. new text end

new text begin Compensation for parts. new text end

new text begin All parts used by the dealer in performing
warranty work must be paid to the dealer in the amount equal to the dealer's net price
for the parts, plus a minimum of 15 percent to reimburse the dealer for reasonable
costs of doing business in performing warranty service on the outdoor sport equipment
manufacturer's behalf, including, but not limited to, freight and handling costs.
new text end

new text begin Subd. 7. new text end

new text begin Adjustment for errors. new text end

new text begin The outdoor sport equipment manufacturer may
adjust for errors discovered during audit, and if necessary, to adjust claims paid in error.
new text end

new text begin Subd. 8. new text end

new text begin Alternate terms and conditions. new text end

new text begin A dealer may choose to accept alternate
reimbursement terms and conditions in lieu of the requirements of subdivisions 2 to
7, provided there is a written dealer agreement between the outdoor sport equipment
manufacturer and the dealer providing for compensation to the dealer for warranty labor
costs either as:
new text end

new text begin (1) a discount in the pricing of the equipment to the dealer; or
new text end

new text begin (2) a lump-sum payment to the dealer.
new text end

new text begin The discount or lump sum must be no less than five percent of the suggested retail price
of the equipment. If the requirements of this subdivision are met and alternate terms
and conditions are in place, subdivisions 2 to 7 do not apply and the alternate terms and
conditions are enforceable.
new text end

Sec. 5.

new text begin [80G.05] STATUS OF INCONSISTENT AGREEMENTS.
new text end

new text begin A term of a dealership agreement either expressed or implied, including a choice of
law provision, which is inconsistent with sections 80G.01 to 80G.07 or that purports to
waive an outdoor sport equipment manufacturer's compliance with sections 80G.01 to
80G.07 is void and unenforceable and does not waive any rights which are provided to
a person by sections 80G.01 to 80G.07.
new text end

Sec. 6.

new text begin [80G.06] REMEDIES.
new text end

new text begin If an outdoor sport equipment manufacturer violates sections 80G.01 to 80G.07, an
outdoor sport equipment dealer may bring an action against the manufacturer in a court
of competent jurisdiction for damages sustained by the dealer as a consequence of the
manufacturer's violation, together with the actual costs of the action, including reasonable
attorney fees, and the dealer also may be granted injunctive relief against unlawful
termination, cancellation, nonrenewal, or substantial change of competitive circumstances.
The remedies in this section are in addition to any other remedies permitted by law.
new text end

Sec. 7.

new text begin [80G.07] APPLICABILITY.
new text end

new text begin Sections 80G.01 to 80G.06 are effective August 1, 2007, and apply to all dealership
agreements now in effect, which have no expiration date and which are continuing
contracts, and all other contracts entered into, amended, or renewed after August 1, 2007.
Any contract in force and effect on August 1, 2007, which terminates after that date and is
not renewed is governed by the law as it existed before August 1, 2007.
new text end

ARTICLE 2

OUTDOOR SPORT EQUIPMENT TITLING REQUIREMENTS

Section 1.

new text begin [86C.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin The definitions in this section apply to sections
86C.01 to 86C.21. new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of natural
resources.
new text end

new text begin Subd. 3. new text end

new text begin Dealer. new text end

new text begin "Dealer" means a person who: (1) is in the business of
manufacturing, distributing, selling, or purchasing new or used outdoor sport equipment;
(2) has an established place of business for the sale, trade, and display of outdoor sport
equipment; and (3) possesses outdoor sport equipment for the purpose of sale or trade.
new text end

new text begin Subd. 4. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Natural Resources.
new text end

new text begin Subd. 5. new text end

new text begin Deputy registrar. new text end

new text begin "Deputy registrar" means a person appointed or hired by
the commissioner of public safety under section 168.33. new text end

new text begin Subd. 6. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" means a person engaged in the business of
constructing or assembling outdoor sport equipment required to have a certificate of title.
new text end

new text begin Subd. 7. new text end

new text begin Manufacturer's or importer's certificate of origin. new text end

new text begin "Manufacturer's or
importer's certificate of origin" means a certificate with the authorized signature of the
manufacturer or importer of outdoor sport equipment, describing and identifying the
outdoor sport equipment, giving the name and address of the person to whom the outdoor
sport equipment is first sold by the manufacturer or importer, and containing executed
assignments of the outdoor sport equipment to an applicant for a certificate of title on
the outdoor sport equipment in this state.
new text end

new text begin Subd. 8. new text end

new text begin Outdoor sport equipment. new text end

new text begin "Outdoor sport equipment" has the meaning
given the term in article 1, section 1, subdivision 2.
new text end

new text begin Subd. 9. new text end

new text begin Owner. new text end

new text begin "Owner" means a person, other than a secured party, having the
title to outdoor sport equipment. "Owner" includes a person entitled to use or possess the
outdoor sport equipment, subject to a security interest in another person, reserved or
created by agreement and securing payment of performance of an obligation, but "owner"
does not include a lessee under a lease not intended as security.
new text end

new text begin Subd. 10. new text end

new text begin Person. new text end

new text begin "Person" means an individual, firm, partnership, association,
corporation, or governmental organization.
new text end

new text begin Subd. 11. new text end

new text begin Secured party. new text end

new text begin "Secured party" means a secured party as defined in
section 336.9-102(a)(72), having a security interest in outdoor sport equipment and
includes a lienholder. new text end

new text begin Subd. 12. new text end

new text begin Security agreement. new text end

new text begin "Security agreement" has the meaning given it in
section 336.9-102(a)(73). new text end

new text begin Subd. 13. new text end

new text begin Security interest. new text end

new text begin "Security interest" has the meaning given it in section
336.1-201(b)(35), and includes statutory liens for which lien statements are filed. new text end

new text begin Subd. 14. new text end

new text begin Titled outdoor sport equipment. new text end

new text begin "Titled outdoor sport equipment"
means outdoor sport equipment required to have a certificate of title under section 86C.02,
subdivision 1; outdoor sport equipment for which a certificate of title has been issued
under section 86C.02, subdivision 2; or outdoor sport equipment previously issued a
certificate of title or similar document from another jurisdiction.
new text end

new text begin Subd. 15. new text end

new text begin Watercraft. new text end

new text begin "Watercraft" means a device used or designed for navigation
on water that is greater than 16 feet in length, as defined in section 86B.005, subdivision
6, but does not include:
new text end

new text begin (1) a row-type fishing boat of single hull construction, with oar locks and an
outboard motor capacity rating of less than 40 horsepower;
new text end

new text begin (2) a canoe;
new text end

new text begin (3) a kayak;
new text end

new text begin (4) a rowing shell or scull;
new text end

new text begin (5) a ship's lifeboat;
new text end

new text begin (6) a vessel of at least five net tons measured in Code of Federal Regulations, title 46,
part 69, that is documented under Code of Federal Regulations, title 46, subpart 67.01; or new text end

new text begin (7) a seaplane.
new text end

new text begin Subd. 16. new text end

new text begin Waters of this state. new text end

new text begin "Waters of this state" means waters capable of
substantial public use and waters to which the public has access, that are within the
territorial limits of this state, including boundary waters.
new text end

Sec. 2.

new text begin [86C.02] CERTIFICATE OF TITLE REQUIRED.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin Except as provided in subdivision 2, outdoor sport
equipment used on the waters or the lands of the state must have a certificate of title if the
outdoor sport equipment is kept in the state for more than 90 consecutive days.
new text end

new text begin Subd. 2. new text end

new text begin Exempt outdoor sport equipment. new text end

new text begin Outdoor sport equipment is not
required to have a certificate of title if the outdoor sport equipment is:
new text end

new text begin (1) owned by a manufacturer or dealer and held for sale;
new text end

new text begin (2) used by a manufacturer solely for testing;
new text end

new text begin (3) from a jurisdiction other than this state, temporarily using the waters or the
lands of this state;
new text end

new text begin (4) owned by the United States, a state, this state, or a political subdivision;
new text end

new text begin (5) a duck boat used only during duck hunting season;
new text end

new text begin (6) a rice boat used only during the wild rice harvesting season;
new text end

new text begin (7) owned by a person, firm, or corporation operating a resort as defined in section
157.15 or a recreational camping area as defined in section 327.14, subdivision 8, except
with respect to previously titled outdoor sport equipment; or
new text end

new text begin (8) outdoor sport equipment manufactured prior to August 1, 2007.
new text end

new text begin Subd. 3. new text end

new text begin Voluntary titling. new text end

new text begin The owner of a device used or designed for navigation
on water or land and used on the waters or the lands of this state, may obtain a certificate
of title for the device, even though it is not outdoor sport equipment as defined in article
1, section 1, subdivision 2, in the same manner and with the same effect as the owner
of outdoor sport equipment required to be titled under this act. Once titled, the device
is titled outdoor sport equipment as defined in section 86C.01, subdivision 14, and is
and remains subject to sections 86C.01 to 86C.21, to the same extent as outdoor sport
equipment required to be titled. new text end

new text begin Subd. 4. new text end

new text begin Title required for transfer. new text end

new text begin A person may not sell or otherwise transfer
titled outdoor sport equipment without delivering to the person acquiring the outdoor
sport equipment a certificate of title with an assignment on it to show title in the person
acquiring the outdoor sport equipment. A person may not acquire outdoor sport equipment
required to have a certificate of title without obtaining a certificate of title for the outdoor
sport equipment in the person's name.
new text end

new text begin Subd. 5. new text end

new text begin No legal title without certificate. new text end

new text begin A person acquiring outdoor sport
equipment through a sale or gift does not acquire a right, title, claim, or interest in the
outdoor sport equipment until the person has been issued a certificate of title to the outdoor
sport equipment or has received a manufacturer's or importer's certificate. A waiver or
estoppel does not operate in favor of that person against another person who has obtained
possession of the certificate of title or manufacturer's or importer's certificate for the
outdoor sport equipment for valuable consideration.
new text end

new text begin Subd. 6. new text end

new text begin Outdoor sport equipment license may not be issued without title. new text end

new text begin The
commissioner may not issue or renew an outdoor sport equipment license to an owner
of titled outdoor sport equipment unless the owner has been issued or has applied for a
certificate of title for the outdoor sport equipment.
new text end

Sec. 3.

new text begin [86C.03] APPLICATION AND ISSUANCE OF CERTIFICATE OF
TITLE.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The owner of titled outdoor sport equipment must
apply for the first certificate of title of outdoor sport equipment in this state to the
commissioner or a deputy registrar on a form prescribed by the commissioner. The
appropriate fee under section 86C.11 must accompany the application. The application
must be signed by the owner and contain: new text end

new text begin (1) the full names, dates of birth, and addresses of owners who are natural persons
and the full names and addresses of other owners;
new text end

new text begin (2) a description of the outdoor sport equipment including its make, model, year,
length if appropriate, the principal material used in construction, and the builder's or
manufacturer's hull or other identification number if appropriate;
new text end

new text begin (3) the date of purchase by the applicant, the name and address of the person from
whom the outdoor sport equipment was acquired;
new text end

new text begin (4) the name and address of the person who is to possess the title and any conditions
of possession; and
new text end

new text begin (5) other information required by the commissioner to determine whether the owner
is entitled to a certificate of title and whether security interests exist in the outdoor sport
equipment.
new text end

new text begin Subd. 2. new text end

new text begin Issuance. new text end

new text begin (a) The commissioner shall issue a certificate of title for outdoor
sport equipment upon verification that:
new text end

new text begin (1) the application is genuine;
new text end

new text begin (2) the applicant is the owner of the outdoor sport equipment; and
new text end

new text begin (3) payment of the required fee.
new text end

new text begin (b) The original certificate of title must be mailed to the first secured party disclosed
in the application or, if none, to the owner named in the application.
new text end

new text begin Subd. 3. new text end

new text begin Contents. new text end

new text begin (a) A certificate of title issued by the commissioner must contain:
new text end

new text begin (1) the date issued;
new text end

new text begin (2) the full names, dates of birth, and addresses of owners who are natural persons
and the full names and addresses of other owners;
new text end

new text begin (3) the names and addresses of secured parties;
new text end

new text begin (4) the title number assigned to the outdoor sport equipment;
new text end

new text begin (5) a description of the outdoor sport equipment including its make, model, year
of manufacture, length, principal material used in construction, registration number,
and manufacturer's hull or other identification number if appropriate or, if none, the
builder's hull or other identification number assigned to the outdoor sport equipment by
the commissioner if appropriate;
new text end

new text begin (6) spaces for assignment of title by the owner or by the dealer and for warranting
that the signer is the owner and that the outdoor sport equipment is not subject to security
interests, liens, or encumbrances except as noted on the face of the certificate of title;
new text end

new text begin (7) spaces on the certificate for application of title by a new owner subject to the
security interests of secured parties named and for the assignment or release of the security
interest of a secured party; and
new text end

new text begin (8) other information the commissioner may require.
new text end

new text begin (b) A certificate of title issued by the commissioner is prima facie evidence of the
facts appearing on it.
new text end

new text begin Subd. 4. new text end

new text begin Issuance without absolute proof of ownership. new text end

new text begin (a) If application is
made for a certificate of title for outdoor sport equipment and the commissioner is not
satisfied of the ownership of the outdoor sport equipment or the existence of security
interests in the outdoor sport equipment, the outdoor sport equipment may be assigned a
title number but the commissioner must:
new text end

new text begin (1) withhold issuance of a certificate of title until the applicant presents documents
that satisfy the commissioner of the applicant's ownership of the outdoor sport equipment
and of security interest in the outdoor sport equipment; or
new text end

new text begin (2) require the applicant to file a bond in the form prescribed by the commissioner
and executed by the applicant as a condition to issuing a certificate of title.
new text end

new text begin (b) A bond filed under this subdivision must be accompanied by the deposit of
cash or executed by a surety company authorized to do business in this state. The bond
must be in an amount equal to 1-1/2 times the value of the outdoor sport equipment as
determined by the commissioner. The bond must be conditioned to indemnify prior
owners, secured parties, and later purchasers of the outdoor sport equipment or persons
acquiring a security interest in the outdoor sport equipment, or successors in interest of
the persons, against expenses, losses, or damages, including reasonable attorney fees,
by reason of the issuance of the certificate of title to the outdoor sport equipment or on
account of a defect in or undisclosed security interest upon the right, title, and interest of
the applicant in the outdoor sport equipment.
new text end

new text begin (c) An interested person has a right of action to recover on the bond for a breach
of its conditions, but the aggregate liability of the surety to all persons may not exceed
the amount of the bond.
new text end

new text begin (d) The commissioner shall return the bond and any deposit accompanying the
bond if:
new text end

new text begin (1) the commissioner has not been notified of the pendency of an action to recover
on the bond;
new text end

new text begin (2) questions of ownership and outstanding security interests have been resolved
to the satisfaction of the commissioner;
new text end

new text begin (3) the bond has been posted for three years or the outdoor sport equipment is not
registered for license purposes in this state under sections 86B.125, 86B.301, and 86B.401
to 86B.421; and new text end

new text begin (4) the currently valid certificate of title is surrendered.
new text end

new text begin Subd. 5. new text end

new text begin Records. new text end

new text begin (a) The commissioner shall maintain records of certificates of
title issued under this section according to one of the following systems:
new text end

new text begin (1) under a distinctive title number assigned to outdoor sport equipment;
new text end

new text begin (2) under the registration number awarded to outdoor sport equipment in accordance
with the registration and numbering law of the state where it is registered;
new text end

new text begin (3) alphabetically, under the name of the owner; or
new text end

new text begin (4) under another system determined by the commissioner.
new text end

new text begin (b) Records relating to outdoor sport equipment titling maintained by the
commissioner are public records and are open to public inspection during regular office
hours.
new text end

new text begin Subd. 6. new text end

new text begin Grounds for refusal to issue certificate of title. new text end

new text begin The commissioner
may not issue a certificate of title if a required fee is not paid or the commissioner has
reasonable grounds to believe that:
new text end

new text begin (1) the applicant is not the owner of the outdoor sport equipment;
new text end

new text begin (2) the application contains a false statement; or
new text end

new text begin (3) the applicant failed to furnish required information or documents or additional
information the commissioner reasonably requires.
new text end

Sec. 4.

new text begin [86C.04] DEALER ACQUISITION AND TRANSFER.
new text end

new text begin Subdivision 1. new text end

new text begin Certificate of origin required. new text end

new text begin (a) A dealer may not purchase
or acquire new titled outdoor sport equipment without obtaining a manufacturer's or
importer's certificate of origin from the seller.
new text end

new text begin (b) A manufacturer, importer, dealer, or other person may not sell or otherwise
dispose of new titled outdoor sport equipment to a dealer for purposes of display and
resale without delivering to the dealer a manufacturer's or importer's certificate of origin.
new text end

new text begin Subd. 2. new text end

new text begin Contents of certificate. new text end

new text begin The manufacturer's or importer's certificate of
origin must be of a form prescribed by the commissioner and contain:
new text end

new text begin (1) a description of the outdoor sport equipment, including its trade name, if
any, year, series or model, and hull material, length, and hull identification number if
appropriate;
new text end

new text begin (2) certification of the date of transfer of the outdoor sport equipment and the name
and address of the person to whom the outdoor sport equipment was transferred;
new text end

new text begin (3) certification that the transfer of the outdoor sport equipment was in ordinary
trade and commerce;
new text end

new text begin (4) the signature and address of a representative of the person transferring the
outdoor sport equipment;
new text end

new text begin (5) an assignment form, including the name and address of the person the outdoor
sport equipment is to be transferred to, a certification that the outdoor sport equipment
is new, and a warranty that the title at the time of delivery is subject only to the security
interests stated on the title; and
new text end

new text begin (6) other information required by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Sale of new outdoor sport equipment. new text end

new text begin A dealer selling or exchanging
new titled outdoor sport equipment, before delivering the outdoor sport equipment to a
purchaser, shall apply to the commissioner for a new title in the name of the purchaser.
The application must contain the name and address of any secured party holding a security
interest created or reserved at the time of sale and the date of the security agreement
and must be accompanied by a manufacturer's or importer's certificate of origin. The
application must be signed by the dealer and the owner, and the dealer shall promptly mail
or deliver the application to the commissioner or a deputy registrar.
new text end

new text begin Subd. 4. new text end

new text begin Used outdoor sport equipment acquired for resale. new text end

new text begin (a) If a dealer buys
or acquires used titled outdoor sport equipment for resale, the dealer must apply to the
commissioner or deputy registrar and obtain a title number before selling or exchanging
the outdoor sport equipment in the same manner as new outdoor sport equipment on forms
the commissioner provides or apply for and obtain a certificate of title.
new text end

new text begin (b) If a dealer acquires used titled outdoor sport equipment for resale and the outdoor
sport equipment is covered by a certificate of title that is surrendered to the dealer by the
owner at the time of delivery of the outdoor sport equipment, the dealer need not send the
certificate of title to the commissioner. Upon transferring the outdoor sport equipment to
another person, the dealer must promptly execute the assignment, showing the name and
address of the person to whom the outdoor sport equipment is transferred and forward
the certificate to the commissioner or deputy registrar with the application for a new
certificate of title.
new text end

new text begin Subd. 5. new text end

new text begin Outdoor sport equipment with foreign registration. new text end

new text begin (a) Except as
provided in paragraph (b), an application for a certificate of title for outdoor sport
equipment last registered in another state or foreign country must contain or be
accompanied by:
new text end

new text begin (1) a certificate of title or registration issued by the other state or foreign country; and
new text end

new text begin (2) other information or documents the commissioner requires to establish the
ownership of the outdoor sport equipment and the existence or nonexistence of security
interests.
new text end

new text begin (b) If the state or foreign country where the outdoor sport equipment was
last registered does not issue certificates of title, the application must contain or be
accompanied by:
new text end

new text begin (1) a proper bill of sale or sworn statement of ownership, certificate of registration,
or evidence of ownership as required by the law of the state or foreign country; and
new text end

new text begin (2) any other information or documents the commissioner requires to establish the
ownership of the outdoor sport equipment and the existence or nonexistence of security
interests.
new text end

Sec. 5.

new text begin [86C.05] TRANSFER BY OWNER.
new text end

new text begin Subdivision 1. new text end

new text begin Voluntary transfer. new text end

new text begin (a) An owner who transfers titled outdoor sport
equipment must execute the assignment and warranty of title to the person to whom the
outdoor sport equipment is transferred in the space provided on the certificate of title
where the outdoor sport equipment is delivered.
new text end

new text begin (b) The person acquiring the outdoor sport equipment must obtain a new certificate
of title by applying to the commissioner or a deputy registrar on a form prescribed by the
commissioner, and submitting the required fee. The application for certificate of title
must be filed within 15 days after delivery of the outdoor sport equipment to the person
acquiring the outdoor sport equipment.
new text end

new text begin (c) Upon request of the owner or the person who acquired the outdoor sport
equipment, a secured party in possession of the certificate of title must deliver the
certificate to the person acquiring the outdoor sport equipment, the commissioner, or a
deputy registrar, unless the transfer is a breach of the security agreement. The delivery of
the certificate does not affect the rights of the secured party under the security agreement.
new text end

new text begin (d) If a security interest or encumbrance is first created at the time of transfer of
ownership, the certificate must be retained by or delivered to the secured party.
new text end

new text begin Subd. 2. new text end

new text begin Transfer by law. new text end

new text begin (a) Except as otherwise provided in this chapter, if the
ownership of titled outdoor sport equipment is transferred by operation of law, including
inheritance or bequest, order in bankruptcy, insolvency, replevin, execution, sale, or
satisfaction of mechanic's lien, or repossession upon default in performance of the terms
of a security agreement, the person acquiring the outdoor sport equipment by operation of
law must promptly submit the last certificate of title, if available, or the manufacturer's
or importer's certificate or other satisfactory proof of the transfer of ownership to the
commissioner or deputy registrar with the application for a new certificate of title and
the required fee.
new text end

new text begin (b) If a secured party acquires titled outdoor sport equipment under the terms of a
security agreement or by operation of law, the secured party must promptly submit to the
commissioner, a deputy registrar, or the person acquiring the outdoor sport equipment
from the secured party the last certificate of title, if available, an application for a new
certificate of title with the required fee, and an affidavit by the secured party or an
authorized representative stating the facts entitling the secured party to possession and
ownership of the outdoor sport equipment, including a copy of the journal entry, court
order, or instrument upon which the claim of possession and ownership is founded. If
the secured party cannot produce the required proof of ownership, the secured party
may submit other evidence with the application and the commissioner may issue a new
certificate of title if the evidence provides satisfactory proof of ownership.
new text end

Sec. 6.

new text begin [86C.06] TEMPORARY USE PERMITS.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance to title applicant. new text end

new text begin (a) The commissioner may issue a
temporary outdoor sport equipment use permit to a person applying for a certificate of
title for new or used outdoor sport equipment to allow that person to operate the outdoor
sport equipment on the waters or lands of the state pending completion of the titling and
outdoor sport equipment licensing process.
new text end

new text begin (b) The outdoor sport equipment use permit must be carried aboard the outdoor sport
equipment to allow immediate inspection. The outdoor sport equipment use permit must
contain a description of the outdoor sport equipment, including its trade name, if any, year,
series or model, and hull material, length, and hull identification number if appropriate,
and other information prescribed by the commissioner. A permit is valid only for the
outdoor sport equipment for which it is issued.
new text end

new text begin Subd. 2. new text end

new text begin Distribution to dealers. new text end

new text begin The commissioner may distribute permits in
booklet form to licensed dealers. If the dealer issues a permit, the dealer must submit
an outdoor sport equipment use permit information form to the commissioner. The
commissioner must provide information forms that require the name of the person to
whom the outdoor sport equipment use permit was issued, the outdoor sport equipment
description, dates of issue and expiration, and other information prescribed by the
commissioner.
new text end

Sec. 7.

new text begin [86C.07] DUPLICATE CERTIFICATE.
new text end

new text begin Subdivision 1. new text end

new text begin Form and issuance. new text end

new text begin (a) The commissioner may issue a duplicate
certificate of title under this section. The duplicate certificate of title must be a certified
copy plainly marked "duplicate" across its face and must contain the legend: "This
duplicate certificate of title may be subject to the rights of a person under the original
certificate." It must be mailed to the first secured party named in it or, if none, to the owner.
The commissioner shall indicate in the department records that a duplicate has been issued.
new text end

new text begin (b) As a condition to issuing a duplicate certificate of title, the commissioner may
require a bond from the applicant in the manner and form prescribed in section new text begin 86B.830,
subdivision 4 new text end , paragraph (b).
new text end

new text begin Subd. 2. new text end

new text begin Waiting period to issue new certificate of title. new text end

new text begin The commissioner may
not issue a new certificate of title to a person acquiring outdoor sport equipment under an
application made on a duplicate certificate of title until at least 15 days after receiving
the application.
new text end

new text begin Subd. 3. new text end

new text begin Disappearance of original certificate. new text end

new text begin If a certificate of title is lost, stolen,
or destroyed, the owner or legal representative of the owner named in the certificate
may obtain a duplicate by applying to the commissioner, furnishing information the
commissioner requires concerning the original certificate, and the circumstances of its
loss or destruction.
new text end

new text begin Subd. 4. new text end

new text begin Mutilated or illegible certificate. new text end

new text begin If an original certificate of title is
mutilated or rendered illegible, the person in possession of the title must return it to the
commissioner with the application for a duplicate.
new text end

new text begin Subd. 5. new text end

new text begin Recovery of lost or stolen certificate. new text end

new text begin If a lost or stolen certificate of title
for which a duplicate has been issued is recovered, the lost or stolen certificate of title
must be surrendered promptly to the commissioner for cancellation.
new text end

Sec. 8.

new text begin [86C.08] SUSPENSION OR REVOCATION OF CERTIFICATE.
new text end

new text begin Subdivision 1. new text end

new text begin Suspension or revocation. new text end

new text begin The commissioner shall suspend
or revoke a certificate of title upon notice and reasonable opportunity to be heard if
authorized by law or if the commissioner finds that:
new text end

new text begin (1) the certificate of title was fraudulently procured or erroneously issued; or
new text end

new text begin (2) the outdoor sport equipment has been scrapped, dismantled, or destroyed.
new text end

new text begin Subd. 2. new text end

new text begin Duties of owner. new text end

new text begin If the commissioner suspends or revokes a certificate
of title, the owner or person in possession of the certificate of title, immediately upon
receiving notice of the suspension or revocation, shall mail or deliver the certificate to
the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Seizure or impoundment. new text end

new text begin The commissioner may seize and impound
a certificate of title that has been suspended or revoked.
new text end

new text begin Subd. 4. new text end

new text begin Subsequent good faith purchaser. new text end

new text begin Suspension or revocation of a
certificate of title does not affect the validity of a subsequent transfer to a purchaser relying
in good faith on the assignment of a suspended or revoked title if the certificate of title
was not surrendered to or seized by the commissioner under subdivisions 2 and 3, and
the commissioner shall issue a new certificate of title to an applicant who is a good faith
purchaser for value in those circumstances.
new text end

Sec. 9.

new text begin [86C.09] RESPONSIBILITIES OF COMMISSIONER.
new text end

new text begin The commissioner shall prescribe and provide suitable forms of applications,
certificates of title, notices of security interests, and other notices and forms necessary to
implement this chapter. In addition, the commissioner may:
new text end

new text begin (1) make necessary investigations to procure information required to implement
this chapter;
new text end

new text begin (2) assign a new identification number, if appropriate, to outdoor sport equipment
if the outdoor sport equipment does not have a number or the number is destroyed or
obliterated; or
new text end

new text begin (3) adopt and enforce rules necessary to implement this chapter.
new text end

Sec. 10.

new text begin [86C.10] PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Felony. new text end

new text begin A person is guilty of a felony and punishable by
imprisonment for a term of not more than four years, or payment of a fine of not more
than $5,000, or both, if the person with fraudulent intent:
new text end

new text begin (1) uses a false or fictitious name or address, makes a material false statement,
fails to disclose a security interest, or conceals any other material fact in an application
for a certificate of title; or
new text end

new text begin (2) submits a false, forged, or fictitious document in support of an application for a
certificate of title.
new text end

new text begin Subd. 2. new text end

new text begin Misdemeanor. new text end

new text begin A person is guilty of a misdemeanor if that person:
new text end

new text begin (1) with fraudulent intent permits another to use or possess a certificate of title who
is not entitled to use or possess the certificate of title;
new text end

new text begin (2) willfully fails to mail or deliver a certificate of title to the commissioner or a
deputy registrar within ten days after the time required;
new text end

new text begin (3) willfully fails to deliver to a person acquiring outdoor sport equipment a
certificate of title within ten days after the time required;
new text end

new text begin (4) commits a fraud in an application for a certificate of title; or
new text end

new text begin (5) fails to notify the commissioner of a fact as required by law.
new text end

Sec. 11.

new text begin [86C.11] TITLE FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Fees. new text end

new text begin (a) The fee to be paid to the commissioner:
new text end

new text begin (1) for issuing an original certificate of title, including the concurrent notation of an
assignment of the security interest and its subsequent release or satisfaction, is $15;
new text end

new text begin (2) for each security interest when first noted upon a certificate of title, including the
concurrent notation of an assignment of the security interest and its subsequent release or
satisfaction, is $10;
new text end

new text begin (3) for transferring the interest of an owner and issuing a new certificate of title, is
$10;
new text end

new text begin (4) for each assignment of a security interest when first noted on a certificate of title,
unless noted concurrently with the security interest, is $1; and
new text end

new text begin (5) for issuing a duplicate certificate of title, is $4.
new text end

new text begin (b) In addition to other statutory fees and taxes, a filing fee of $7 is imposed on every
outdoor sport equipment title application. The filing fee must be shown as a separate item
on title renewal notices sent by the commissioner.
new text end

new text begin Subd. 2. new text end

new text begin Concurrent applications. new text end

new text begin If a person applies for an original or a new
certificate of title for outdoor sport equipment concurrently with an application for transfer
of license of the outdoor sport equipment to the applicant, the fee prescribed in subdivision
1 is in lieu of any other fees prescribed for a transfer of ownership or license of the outdoor
sport equipment to the applicant.
new text end

new text begin Subd. 3. new text end

new text begin Fees paid before title issued. new text end

new text begin Subject to subdivision 2, the commissioner
may not issue a certificate of title for outdoor sport equipment until the fees prescribed
by subdivision 1 and other law for a prior transfer of ownership or license of the outdoor
sport equipment have been paid.
new text end

new text begin Subd. 4. new text end

new text begin Deposit of fee. new text end

new text begin (a) Fees collected under this section, except fees collected
on watercraft, must be deposited in the state treasury and credited to an outdoor sport
recreation account which is created in the state treasury in the natural resources fund and
which is appropriated by law for outdoor sport recreation purposes established by law,
except a deputy registrar who originates an application shall retain the filing fee under
subdivision 1, paragraph (b).
new text end

new text begin (b) Fees collected under this section on watercraft must be deposited as provided
in section 86B.706.
new text end

Sec. 12.

new text begin [86C.12] INAPPLICABLE LIENS AND SECURITY INTERESTS.
new text end

new text begin The requirements of this chapter relating to security interests and certificate of title
do not apply to or affect:
new text end

new text begin (1) a lien given by statute or rule of law to a supplier of services or materials for
the outdoor sport equipment while the outdoor sport equipment is in the possession of
the lienholder;
new text end

new text begin (2) a lien given by statute to the United States, this state, or a political subdivision
of this state; or
new text end

new text begin (3) a security interest in outdoor sport equipment created by a manufacturer or dealer
who holds the outdoor sport equipment for sale.
new text end

Sec. 13.

new text begin [86C.13] SECURITY INTERESTS.
new text end

new text begin Subdivision 1. new text end

new text begin Validity. new text end

new text begin Unless excepted by section 86C.12, a security interest in
titled outdoor sport equipment is not valid against creditors of the owner or subsequent
transferees or secured parties of the outdoor sport equipment unless perfected as provided
in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Perfection. new text end

new text begin A security interest is perfected by the delivery to the
commissioner of the existing certificate of title, if any, or an application for a certificate
of title, containing the name and address of the secured party, the date of the security
agreement, and the required fee. A security interest is perfected as of the time of the
delivery. The method provided in this chapter is exclusive.
new text end

Sec. 14.

new text begin [86C.14] OWNER-CREATED SECURITY INTEREST.
new text end

new text begin Paragraphs (a) to (d) apply if an owner creates a security interest in titled outdoor
sport equipment.
new text end

new text begin (a) The owner shall immediately execute the application in the space provided on the
certificate of title or on a separate form prescribed by the commissioner, show the name
and address of the secured party on the certificate, and have the certificate, application,
and required fee delivered to the secured party.
new text end

new text begin (b) The secured party shall immediately have the certificate, application, and
required fee mailed or delivered to the commissioner.
new text end

new text begin (c) Upon request of the owner or subordinate secured party, a secured party in
possession of the certificate of title shall either (1) mail or deliver the certificate to the
subordinate secured party for delivery to the commissioner, or (2) upon receiving from the
subordinate secured party the owner's application and the required fee, mail or deliver
them to the commissioner with the certificate. The delivery of the certificate does not
affect the rights of the first secured party under the security agreement.
new text end

new text begin (d) Upon receiving the certificate of title, application, and required fee, the
commissioner shall either endorse on the certificate or issue a new certificate containing
the name and address of the new secured party, and mail or deliver the certificate to the
first secured party named on it.
new text end

Sec. 15.

new text begin [86C.15] LICENSED OUTDOOR SPORT EQUIPMENT PREVIOUSLY
PERFECTED.
new text end

new text begin If a security interest in previously licensed outdoor sport equipment is perfected
under other applicable Minnesota law on January 1, 2007, the security interest continues
perfected:
new text end

new text begin (1) until its perfection lapses under the law under which it was perfected or would
lapse in the absence of a further filing; or
new text end

new text begin (2) until a certificate of title for the outdoor sport equipment is issued and the
security interest is perfected under section 86C.13.
new text end

new text begin The assignment, release, or satisfaction of a security interest in previously licensed
outdoor sport equipment is governed by the laws under which it was perfected.
new text end

Sec. 16.

new text begin [86C.16] SATISFACTION OF SECURITY INTEREST.
new text end

new text begin Subdivision 1. new text end

new text begin Release. new text end

new text begin Upon the satisfaction of a security interest in outdoor sport
equipment for which the certificate of title is in the possession of the secured party, the
secured party, within 15 days, shall execute a release of the security interest in the space
provided on the certificate or as prescribed by the commissioner, and mail or deliver
the certificate and release to the next secured party named or, if none, to the owner or a
person who delivers to the secured party an authorization from the owner to receive the
certificate. The owner, other than a dealer holding the outdoor sport equipment for resale,
shall promptly have the certificate, the release, and the required fee mailed or delivered
to the commissioner, who shall release the secured party's rights on the certificate or
issue a new certificate.
new text end

new text begin Subd. 2. new text end

new text begin Release of subordinate security interest. new text end

new text begin Upon the satisfaction of a
security interest in outdoor sport equipment for which the certificate of title is in the
possession of a prior secured party, the secured party whose security interest is satisfied
shall execute a release in the form prescribed by the commissioner and, within 15 days after
satisfaction, deliver the release to the owner or a person who delivers to the secured party.
new text end

Sec. 17.

new text begin [86C.17] DISCLOSURE OF SECURITY AGREEMENT.
new text end

new text begin A secured party named in a certificate of title, upon written request of the owner or
other secured party named on the certificate, must disclose pertinent information about
the security agreement and the indebtedness secured by it.
new text end

Sec. 18.

new text begin [86C.18] EFFECT OF SUSPENSION OR REVOCATION ON
SECURITY INTEREST.
new text end

new text begin Suspension or revocation of a certificate of title does not, in itself, affect the validity
of a security interest noted on it.
new text end

Sec. 19.

new text begin [86C.19] PREVIOUSLY LICENSED OUTDOOR SPORT EQUIPMENT
UNDISCLOSED SECURITY INTERESTS.
new text end

new text begin If the commissioner is not satisfied that there are no undisclosed security interests
created before the outdoor sport equipment is initially titled, the commissioner may, in
addition to its options under section 86C.03, subdivision 4, issue a distinctive certificate of
title for the outdoor sport equipment containing the legend: "This outdoor sport equipment
may be subject to an undisclosed lien," and any other information the commissioner
prescribes.
new text end

Sec. 20.

new text begin [86C.20] LIENS ATTACHING TO OUTDOOR SPORT EQUIPMENT.
new text end

new text begin (a) A nonpossessory lien on titled outdoor sport equipment is not perfected unless a
lien statement is filed with the commissioner.
new text end

new text begin (b) The lien statement must include:
new text end

new text begin (1) the outdoor sport equipment owner's name and address;
new text end

new text begin (2) the statute under which the lien is taken;
new text end

new text begin (3) the name and address of the lienholder; and
new text end

new text begin (4) the title number of the outdoor sport equipment.
new text end

new text begin (c) The commissioner shall note the time and date of filing the lien statement.
new text end

Sec. 21.

new text begin [86C.21] STOLEN OUTDOOR SPORT EQUIPMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Duty of peace officers. new text end

new text begin A peace officer aware of stolen or converted
outdoor sport equipment shall immediately furnish the commissioner with information
concerning the theft or conversion.
new text end

new text begin Subd. 2. new text end

new text begin Duty of commissioner. new text end

new text begin The commissioner, upon receiving a report of
the theft or conversion of outdoor sport equipment, shall record the report information,
including the make of the stolen or converted outdoor sport equipment and its builder's
hull or other identification number, if any. The commissioner shall prepare a list of
outdoor sport equipment reported stolen and those recovered as disclosed by the reports
submitted. The report may be distributed as the commissioner deems advisable.
new text end

new text begin Subd. 3. new text end

new text begin Duty of owner. new text end

new text begin If stolen or converted outdoor sport equipment is
recovered, the owner shall immediately notify the commissioner.
new text end

Sec. 22. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 86B.820; 86B.825; 86B.830; 86B.835; 86B.840;
86B.845; 86B.850; 86B.855; 86B.860; 86B.865; 86B.870; 86B.875; 86B.880; 86B.885;
86B.890; 86B.895; 86B.900; 86B.905; 86B.910; 86B.915; and 86B.920, new text end new text begin are repealed.
new text end