Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2001, Regular Session
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parts, including superseded parts listed in current price lists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.
Official Publication of the State of Minnesota
Revisor of Statutes