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Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1991 

                         CHAPTER 71-H.F.No. 832 
           An act relating to commerce; regulating heavy and 
          utility equipment dealership agreements; providing for 
          returns and repurchases under certain circumstances; 
          providing remedies; amending Minnesota Statutes 1990, 
          section 325E.0681, by adding subdivisions. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 3.  [OBLIGATION TO REPURCHASE.] If a dealership 
agreement is terminated, canceled, or discontinued, the 
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 heavy and utility 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 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. 
    Sec. 2.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 4.  [REPAIR PARTS.] (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:  
    (1) 85 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including superseded parts listed in current price lists or 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; 
    (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; and 
    (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. 
   (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 returned for the handling, packing, and loading of the 
parts back to the manufacturer unless the manufacturer elects to 
perform inventorying, packing, and loading of the parts itself.  
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 heavy and utility 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.  
    Sec. 3.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 5.  [PAYMENT; INTEREST.] Payment required to be made 
under this section must be made not later than 90 days from the 
date the heavy and utility equipment is returned by the dealer, 
and if not by then paid, the amount payable by the manufacturer 
bears interest at the rate of 1-1/2 percent per month from the 
date the agreement was terminated, canceled, or discontinued 
until the date payment is received by the dealer. 
    Sec. 4.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 6.  [NOTICE OF INTENT TO RETURN.] In lieu of 
returning the heavy and utility equipment to the manufacturer, 
the dealer may advise the manufacturer that the dealer has heavy 
and utility equipment that the dealer intends to return.  The 
notice of the dealer's intention to return must be in writing, 
sworn to before a notary public as to the accuracy of the 
listing of heavy and utility 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 them 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 heavy and utility equipment to 
the manufacturer.  The notice constitutes the appointment of the 
escrow agent to act on the dealer's behalf.  
    Sec. 5.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 7.  [MANUFACTURER INSPECTION.] (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 heavy and utility equipment and verify the accuracy 
of the dealer's list.  
    (b) The manufacturer shall, within ten days after 
inspection: 
    (1) pay the escrow agent; 
    (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 
    (3) send to the escrow agent a "dummy credit list" and 
shipping labels for the return of the heavy and utility 
equipment to the manufacturer that are acceptable as returns.  
    Sec. 6.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 8.  [PAYMENT OR CREDIT REQUIREMENTS.] 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 heavy and utility equipment acceptable 
as returns passes to the manufacturer.  The escrow agent shall 
ship or cause to be shipped the heavy and utility equipment 
acceptable as returns to the manufacturer unless the 
manufacturer elects to personally perform the inventorying, 
packing, and loading of the heavy and utility equipment.  When 
they have been received by the manufacturer, notice of their 
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 heavy and 
utility 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. 
    Sec. 7.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 9.  [PROVISIONS OF CONTRACT SUPPLEMENTED.] This 
section is supplemental to an agreement between the dealer and 
the manufacturer covering the return of heavy and utility 
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 heavy and utility equipment not affected by the contract 
remedy.  Notwithstanding anything contained 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.  A repurchase 
made under this section is not subject to the bulk transfers 
law, sections 336.6-101 to 336.6-111. 
    Sec. 8.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 10.  [DEATH OF DEALER; REPURCHASE FROM HEIRS.] 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.  
    Sec. 9.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 11.  [FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION 
OF CONTRACTS; LIABILITY.] 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:  (1) 100 percent of the net cost of the heavy or utility 
equipment; (2) transportation charges which have been paid by 
the dealer; (3) 85 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 1, and (4) 
five percent for handling, packing, and loading, if applicable.  
    Sec. 10.  Minnesota Statutes 1990, section 325E.0681, is 
amended by adding a subdivision to read: 
    Subd. 12.  [EXCEPTIONS.] Unless a dealer has delivered 
parts to an escrow agent pursuant to subdivision 1, 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:  (1) 85 
percent of the net price of the repair part as listed in the 
then current price list or catalog; (2) 100 percent of the 
invoiced price; and (3) 50 percent of the most recent published 
price as provided in subdivision 1. 
    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; repair parts in broken or damaged 
packages; single repair parts priced as a set of two or more 
items; and repair parts which because of their condition are not 
resalable as new parts without new packaging or reconditioning. 
    Sec. 11.  [EFFECTIVE DATE.] 
    Sections 1 to 10 are effective the day after final 
enactment and apply to contracts now in effect that have no 
expiration date and are continuing contracts and all other 
contracts entered into or renewed after the date of final 
enactment.  A contract in force the day of final enactment, 
which by its terms will terminate on a later date and which is 
not renewed, is governed by the law as it existed before the day 
of final enactment. 
    Presented to the governor May 7, 1991 
    Signed by the governor May 10, 1991, 9:18 a.m.