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Office of the Revisor of Statutes

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

                             CHAPTER 72-H.F.No. 933 
                  An act relating to commerce; providing buyback 
                  requirements related to the sale of farm implements 
                  and outdoor power equipment; amending Minnesota 
                  Statutes 2000, sections 325E.06, subdivisions 1, 4, 5, 
                  6; 325E.0681, subdivisions 3, 4, 5, 11, 12. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 325E.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [OBLIGATION TO REPURCHASE.] Whenever any 
        person, firm, or corporation engaged in the business of selling 
        and retailing farm implements and repair parts for farm 
        implements enters into a written or oral contract, sales 
        agreement, or security agreement whereby the retailer agrees 
        with any wholesaler, manufacturer, or distributor of farm 
        implements, machinery, attachments or repair parts or outdoor 
        power equipment, attachments, or repair parts to maintain a 
        stock of parts or complete or whole machines, or attachments, 
        and thereafter the written or oral contract, sales agreement, or 
        security agreement is terminated, canceled, or discontinued, 
        then the wholesaler, manufacturer, or distributor shall pay to 
        the retailer or credit to the retailer's account, if the 
        retailer has outstanding any sums owing the wholesaler, 
        manufacturer, or distributor, unless the retailer should desire 
        and has a contractual right to keep such merchandise, a sum 
        equal to 100 percent of the net cost of all unused complete farm 
        implements, machinery, and attachments or outdoor power 
        equipment and attachments in new condition which have been 
        purchased by the retailer from the wholesaler, manufacturer, or 
        distributor within the 24 months immediately preceding 
        notification by either party of intent to terminate, cancel, or 
        discontinue the contract, including transportation charges and 
        reasonable assembly charges which have been paid by the 
        retailer, or invoiced to retailer's account by the wholesaler, 
        manufacturer, or distributor and the following:  
           (a) 85 95 percent of the current net prices on repair 
        parts, including superseded parts listed in current price lists 
        or catalogs in use by the wholesaler, manufacturer, or 
        distributor or its predecessor on the date of the termination, 
        cancellation, or discontinuance of the contract; 
           (b) 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 retailer has an invoice which parts had previously 
        been purchased by the retailer from the wholesaler, 
        manufacturer, or distributor and are held by the retailer on the 
        date of the termination, cancellation, or discontinuance of the 
        contract or thereafter received by the retailer from the 
        wholesaler, manufacturer, or distributor; and 
           (c) 50 percent of the most recently published price of all 
        other parts provided the price list or catalog is not more than 
        ten years old as of the date of the cancellation or 
        discontinuance of the contract.; 
           (d) net cost less 20 percent per year depreciation for five 
        years following purchase of all data processing and 
        communications hardware and software the retailer purchased from 
        the wholesaler, manufacturer, or distributor, or an approved 
        vendor of the wholesaler, manufacturer, or distributor, to meet 
        the minimum requirements for the hardware and software as set 
        forth by the wholesaler, manufacturer, or distributor; and 
           (e) an amount equal to 75 percent of the net cost to the 
        retailer of specialized repair tools, including computerized 
        diagnostic hardware and software, and signage purchased by the 
        retailer pursuant to the requirements of the wholesaler, 
        manufacturer, or distributor, except that specialized repair 
        tools and signage that has never been used must be repurchased 
        at 100 percent of the retailer's cost.  Specialized repair tools 
        must be unique to the wholesaler's, manufacturer's, or 
        distributor's product line, specifically required by the 
        wholesaler, manufacturer, or distributor, and must be in 
        complete and usable condition.  The wholesaler, manufacturer, or 
        distributor may require by contract or agreement that the 
        retailer resell to the wholesaler, manufacturer, or distributor 
        the specialized repair tools and signage for the amounts 
        established in this section or the amount specified in the 
        dealer agreement or contract or fair market value, whichever is 
        greater.  
        The wholesaler, manufacturer, or distributor shall also pay the 
        retailer or credit to the retailer's account a sum 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 
        back to the wholesaler, manufacturer, or distributor unless the 
        wholesaler, manufacturer, or distributor elects to perform 
        inventorying, packing, and loading of the parts, data processing 
        and communications hardware and software, and specialized repair 
        tools and signage itself.  Upon the payment or allowance of 
        credit to the retailer's account of the sum required by this 
        subdivision, the title to the farm implements, farm machinery, 
        attachments or repair parts, or outdoor power equipment and 
        repair parts for outdoor power equipment, data processing and 
        communications hardware and software, and specialized repair 
        tools and signage shall pass to the manufacturer, wholesaler, or 
        distributor making the payment or allowing the credit and the 
        manufacturer, wholesaler, or distributor shall be entitled to 
        the possession of the farm implements, machinery, attachments or 
        repair parts, or outdoor power equipment and repair parts for 
        outdoor power equipment, data processing and communications 
        hardware and software, and specialized repair tools and signage. 
        However, this section shall not in any way affect any security 
        interest which the wholesaler, manufacturer, or distributor may 
        have in the inventory of the retailer.  
           Payment required to be made under this subdivision must be 
        made not later than 90 60 days from the date the farm 
        implements, machinery, attachments, and repair parts, outdoor 
        power equipment and attachments and repair parts, data 
        processing and communications hardware and software, and 
        specialized repair tools and signage are returned by the 
        retailer received by the manufacturer, and if not by then paid, 
        the amount payable by the wholesaler, manufacturer, or 
        distributor bears interest at the rate of 1-1/2 percent per 
        month maximum rate allowed by law from the date the contract was 
        terminated, canceled, or discontinued until the date payment is 
        received by the retailer. 
           In lieu of the return of the farm implements, machinery, 
        attachments, and repair parts, or outdoor power equipment and 
        attachments and repair parts, data processing and communications 
        hardware and software, and specialized repair tools and signage 
        to the wholesaler, manufacturer, or distributor, the retailer 
        may advise the wholesaler, manufacturer, or distributor that the 
        retailer has implements, machinery, attachments, or repair 
        parts, or outdoor power equipment and attachments and repair 
        parts, data processing and communications hardware and software, 
        and specialized repair tools and signage that the retailer 
        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 implements, machinery, 
        attachments, or repair parts, or outdoor power equipment and 
        attachments and repair parts, data processing and communications 
        hardware and software, and specialized repair tools and signage 
        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 machinery and 
        parts and where the machinery and parts may be inspected and the 
        list of farm implements, machinery, attachments, or repair 
        parts, or outdoor power equipment and attachments and repair 
        parts, data processing and communications hardware and software, 
        and specialized repair tools and signage may be verified.  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 retailer, to accept payment or a credit to the 
        retailer's account on behalf of the retailer, and to release the 
        machinery and parts to the wholesaler, manufacturer, or 
        distributor.  The notice constitutes the appointment of the 
        escrow agent to act on the retailer's behalf.  The wholesaler, 
        manufacturer, or distributor has 30 days from the date of the 
        mailing of the notice, which shall be by certified mail, in 
        which to inspect the machinery and parts and verify the accuracy 
        of the retailer's list.  The wholesaler, manufacturer, or 
        distributor shall, within ten days after inspection: 
           (1) pay the escrow agent; 
           (2) give evidence that a credit to the account of the 
        retailer has been made if the retailer has outstanding sums due 
        the wholesaler, manufacturer, or distributor; or 
           (3) send to the escrow agent a "dummy credit list" and 
        shipping labels for the return of the machinery or parts to the 
        wholesaler, manufacturer, or distributor that are acceptable as 
        returns.  
           If the wholesaler, manufacturer, or distributor sends a 
        credit list to the escrow agent, payment or a credit against the 
        dealer's indebtedness in accordance with this subdivision for 
        the acceptable returns shall accompany the credit list.  On the 
        receipt of the payment, evidence of a credit to the account of 
        the retailer or the credit list with payment, the title to the 
        farm implements, farm machinery, attachments, or repair parts, 
        outdoor power equipment and attachments and repair parts, data 
        processing and communications hardware and software, and 
        specialized repair tools and signage acceptable as returns 
        passes to the manufacturer, wholesaler, or distributor making 
        the payment or allowing the credit and the manufacturer, 
        wholesaler, or distributor is entitled to keep the farm 
        implements, machinery, attachments, or repair parts, or outdoor 
        power equipment and attachments and repair parts, data 
        processing and communications hardware and software, and 
        specialized repair tools and signage.  The escrow agent shall 
        ship or cause to be shipped the machinery and parts acceptable 
        as returns to the wholesaler, manufacturer, or distributor 
        unless the wholesaler, manufacturer, or distributor elects to 
        personally perform the inventorying, packing and loading of the 
        machinery and parts.  When the machinery or parts have been 
        received by the wholesaler, manufacturer, or distributor, notice 
        of the receipt of the machinery or parts 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 retailer.  The 
        escrow agent shall keep the balance of the funds in the 
        retailer's escrow account until it is notified that an agreement 
        has been reached as to the nonreturnables after which the escrow 
        agent shall disburse the remaining funds and dispose of any 
        remaining parts or machinery as provided in the settlement.  If 
        no settlement 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. 2.  Minnesota Statutes 2000, section 325E.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION OF 
        CONTRACTS; LIABILITY.] In the event that any manufacturer, 
        wholesaler, or distributor of farm implements, machinery, 
        attachments and repair parts, or outdoor power equipment and 
        attachments and repair parts, data processing and communications 
        hardware and software, and specialized repair tools and signage, 
        upon the cancellation of a contract by either a retailer or such 
        manufacturer, wholesaler, or distributor, fails or refuses to 
        make payment to the dealer or the dealer's heir or heirs as 
        required by this section, the manufacturer, wholesaler, or 
        distributor shall be liable in a civil action to be brought by 
        the retailer or the retailer's heir or heirs for (a) 100 percent 
        of the net cost of the farm implements, machinery, and 
        attachments, (b) transportation charges and reasonable assembly 
        which have been paid by the retailer, (c) 85 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 1, and (d) five percent for handling, 
        packing and loading, if applicable.  
           Sec. 3.  Minnesota Statutes 2000, section 325E.06, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXCEPTIONS.] Unless a retailer has delivered 
        parts to an escrow agent pursuant to subdivision 1, this section 
        shall not require the repurchase from a retailer of a repair 
        part where the retailer previously has failed to return the 
        repair part to the wholesaler, manufacturer, or distributor 
        after being offered a reasonable opportunity to return the 
        repair part at a price not less than (a) 85 95 percent of the 
        net price of the repair part as listed in the then current price 
        list or catalog, (b) 100 percent of the invoiced price, and (c) 
        50 percent of the most recent published price as provided in 
        subdivision 1.  This section shall not require the repurchase 
        from a retailer of repair parts which 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 wholesaler, manufacturer, or distributor 
        within the past two years; 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; 
        repair parts which have lost required traceability for quality 
        assurance requirements; and repair parts that were marked 
        nonreturnable or future nonreturnable when the retailer ordered 
        them.  
           Sec. 4.  Minnesota Statutes 2000, section 325E.06, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DEFINITION.] (a) For the purposes of this 
        section "farm implements" mean every vehicle designed or adapted 
        and used exclusively for agricultural operations and only 
        incidentally operated or used upon the highways. 
           (b) For the purposes of this section, "outdoor power 
        equipment" does not include motorcycles, boats, personal 
        watercraft, snowmobiles, or all-terrain vehicles designed for 
        recreation. 
           Sec. 5.  Minnesota Statutes 2000, section 325E.0681, 
        subdivision 3, is amended 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 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. 
           Sec. 6.  Minnesota Statutes 2000, section 325E.0681, 
        subdivision 4, is amended 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 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; 
           (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.; 
           (4) net cost less 20 percent per year depreciation for five 
        years following purchase of all data processing and 
        communications hardware and software the retailer purchased from 
        the wholesaler, manufacturer, or distributor, or an approved 
        vendor of the wholesaler, manufacturer, or distributor, to meet 
        the minimum requirements for the hardware and software as set 
        forth by the wholesaler, manufacturer, or distributor; and 
           (5) an amount equal to 75 percent of the net cost to the 
        retailer of specialized repair tools, including computerized 
        diagnostic hardware and software, and signage purchased by the 
        retailer pursuant to the requirements of the wholesaler, 
        manufacturer, or distributor.  Specialized repair tools or 
        signage that have never been used must be repurchased at 100 
        percent of the retailer's cost.  Specialized repair tools must 
        be unique to the wholesaler's, manufacturer's, or distributor's 
        product line, specifically required by the wholesaler, 
        manufacturer, or distributor, and must be in complete and usable 
        condition.  The wholesaler, manufacturer, or distributor may 
        require by contract or agreement that the retailer resell to the 
        wholesaler, manufacturer, or distributor such specialized repair 
        tools and signage for the amounts established in this section or 
        the amount specified in the dealer agreement or contract or fair 
        market value, whichever is greater. 
           (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 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. 7.  Minnesota Statutes 2000, section 325E.0681, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PAYMENT; INTEREST.] Payment required to be made 
        under this section must be made not later than 90 60 days from 
        the date the heavy and utility equipment is returned by the 
        dealer received by the manufacturer, and if not by then paid, 
        the amount payable by the manufacturer bears interest at 
        the rate of 1-1/2 percent per month maximum rate allowed by law 
        from the date the agreement was terminated, canceled, or 
        discontinued until the date payment is received by the dealer. 
           Sec. 8.  Minnesota Statutes 2000, section 325E.0681, 
        subdivision 11, is amended 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 and reasonable assembly charges 
        which have been paid by the dealer; (3) 85 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 1; and (4) payment for data processing 
        and communication hardware and software, or specialized repair 
        tools or signage as outlined in subdivision 1, paragraph (d); 
        and (5) five percent for handling, packing, and loading, if 
        applicable.  
           Sec. 9.  Minnesota Statutes 2000, section 325E.0681, 
        subdivision 12, is amended 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) 85 100 
        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, unless those items have been purchased 
        from the wholesaler, manufacturer, or distributor within the 
        past two years; 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; repair 
        parts which have lost required traceability for quality 
        assurance requirements; and repair parts that were marked 
        nonreturnable or future nonreturnable when the retailer ordered 
        them. 
           Presented to the governor May 2, 2001 
           Signed by the governor May 4, 2001, 10:43 a.m.