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Minnesota Legislature

Office of the Revisor of Statutes

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

                             CHAPTER 78-H.F.No. 547 
                  An act relating to commerce; regulating payment for 
                  certain warranty work by farm implement dealers; 
                  changing the definition of heavy and utility 
                  equipment; amending Minnesota Statutes 2002, section 
                  325E.068, subdivision 2; proposing coding for new law 
                  in Minnesota Statutes, chapter 325E. 
           Section 1.  [325E.0631] [WARRANTIES.] 
           Subdivision 1.  [APPLICATION.] The requirements of this 
        section apply to all warranty claims submitted by a dealer to a 
        farm equipment manufacturer in which the farm equipment dealer 
        has complied with the reasonable policies and procedures 
        contained in the farm equipment manufacturer's warranty. 
           Subd. 2.  [PROMPT PAYMENT.] Claims filed for payment under 
        warranty agreements must be approved or disapproved within 30 
        days of receipt by the farm equipment manufacturer.  Unless the 
        farm equipment dealer agrees to a later date, approved claims 
        for payment must be paid within 30 days of their approval.  When 
        a claim is disapproved, the farm 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. 
           Subd. 3.  [POST-TERMINATION CLAIMS.] If, after termination 
        of a contract, a dealer submits a warranty claim for warranty 
        work performed before the effective date of the termination, the 
        farm equipment manufacturer shall approve or disapprove the 
        claim within 30 days of receipt. 
           Subd. 4.  [COMPENSATION FOR WARRANTY WORK.] 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 farm equipment 
        manufacturer before performing the warranty work. 
           Subd. 5.  [EXPENSES.] Expenses expressly excluded under the 
        farm 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 
           Subd. 6.  [COMPENSATION FOR PARTS.] 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 
        farm equipment manufacturer's behalf, including but not limited 
        to freight and handling costs. 
           Subd. 7.  [ADJUSTMENT FOR ERRORS.] The farm equipment 
        manufacturer may adjust for errors discovered during audit, and 
        if necessary, to adjust claims paid in error. 
           Subd. 8.  [ALTERNATE TERMS AND CONDITIONS.] 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 farm equipment 
        manufacturer and the dealer providing for compensation to the 
        dealer for warranty labor costs either as:  (1) a discount in 
        the pricing of the equipment to the dealer; or (2) a lump sum 
        payment to the dealer.  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 
           Sec. 2.  Minnesota Statutes 2002, section 325E.068, 
        subdivision 2, is amended to read: 
           Subd. 2.  [HEAVY AND UTILITY EQUIPMENT.] "Heavy and utility 
        equipment," "heavy equipment," or "equipment" means equipment 
        and parts for equipment including but not limited to: 
           (1) excavators, crawler tractors, wheel loaders, 
        compactors, pavers, backhoes, hydraulic hammers, cranes, fork 
        lifts, compressors, generators, attachments and repair parts for 
        them, and other equipment, including attachments and repair 
        parts, used in all types of construction of buildings, highways, 
        airports, dams, or other earthen structures or in moving, stock 
        piling, or distribution of materials used in such construction; 
           (2) trucks and truck parts; or 
           (3) equipment used for, or adapted for use in, mining or 
        forestry applications. 
           Presented to the governor May 19, 2003 
           Signed by the governor May 22, 2003, 9:08 p.m.