1.1                          A bill for an act 
  1.2             relating to commerce; regulating motor vehicle sales 
  1.3             and distribution; specifying unfair and illegal 
  1.4             practices by manufacturers, distributors, and factory 
  1.5             branches; amending Minnesota Statutes 2000, section 
  1.6             80E.13. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 80E.13, is 
  1.9   amended to read: 
  1.10     80E.13 [UNFAIR PRACTICES BY MANUFACTURERS, DISTRIBUTORS, 
  1.11  FACTORY BRANCHES.] 
  1.12     It is unlawful and an unfair practice for a manufacturer, 
  1.13  distributor, or factory branch to engage in any of the following 
  1.14  practices:  
  1.15     (a) delay, refuse, or fail to deliver new motor vehicles or 
  1.16  new motor vehicle parts or accessories in reasonable time and in 
  1.17  reasonable quantity relative to the new motor vehicle dealer's 
  1.18  facilities and sales potential in the dealer's relevant market 
  1.19  area, after having accepted an order from a new motor vehicle 
  1.20  dealer having a franchise for the retail sale of any new motor 
  1.21  vehicle sold or distributed by the manufacturer or distributor, 
  1.22  if the new motor vehicle or new motor vehicle parts or 
  1.23  accessories are publicly advertised as being available for 
  1.24  delivery or actually being delivered.  This clause is not 
  1.25  violated, however, if the failure is caused by acts or causes 
  1.26  beyond the control of the manufacturer; 
  2.1      (b) refuse to disclose to any new motor vehicle dealer 
  2.2   handling the same line make, the manner and mode of distribution 
  2.3   of that line make within the relevant market area; 
  2.4      (c) obtain money, goods, service, or any other benefit from 
  2.5   any other person with whom the dealer does business, on account 
  2.6   of, or in relation to, the transaction between the dealer and 
  2.7   the other person, other than for compensation for services 
  2.8   rendered, unless the benefit is promptly accounted for, and 
  2.9   transmitted to, the new motor vehicle dealer; 
  2.10     (d) increase prices of new motor vehicles which the new 
  2.11  motor vehicle dealer had ordered for private retail consumers 
  2.12  prior to the dealer's receiving the written official price 
  2.13  increase notification.  A sales contract signed by a private 
  2.14  retail consumer shall constitute evidence of each order if the 
  2.15  vehicle is in fact delivered to that customer.  In the event of 
  2.16  manufacturer price reductions, the amount of any reduction 
  2.17  received by a dealer shall be passed on to the private retail 
  2.18  consumer by the dealer if the retail price was negotiated on the 
  2.19  basis of the previous higher price to the dealer; 
  2.20     (e) offer any refunds or other types of inducements to any 
  2.21  new motor vehicle dealer for the purchase of new motor vehicles 
  2.22  of a certain line make without making the same offer to all 
  2.23  other new motor vehicle dealers in the same line make within the 
  2.24  relevant market area; 
  2.25     (f) release to any outside party, except under subpoena or 
  2.26  in an administrative or judicial proceeding involving the 
  2.27  manufacturer or dealer, any business, financial, or personal 
  2.28  information which may be provided by the dealer to the 
  2.29  manufacturer, without the express written consent of the dealer 
  2.30  or unless pertinent to judicial or governmental administrative 
  2.31  proceedings or to arbitration proceedings of any kind; 
  2.32     (g) deny any new motor vehicle dealer the right of free 
  2.33  association with any other new motor vehicle dealer for any 
  2.34  lawful purpose; 
  2.35     (h) unfairly discriminate among its new motor vehicle 
  2.36  dealers with respect to warranty reimbursement or authority 
  3.1   granted its new vehicle dealers to make warranty adjustments 
  3.2   with retail customers; 
  3.3      (i) compete with a new motor vehicle dealer in the same 
  3.4   line make operating under an agreement or franchise from the 
  3.5   same manufacturer, distributor, or factory branch.  A 
  3.6   manufacturer, distributor, or factory branch is considered to be 
  3.7   competing when it has an ownership interest, other than a 
  3.8   passive interest held for investment purposes, in a dealership 
  3.9   of its line make located within the state.  A manufacturer, 
  3.10  distributor, or factory branch shall not, however, be deemed to 
  3.11  be competing 
  3.12     (1) when operating a dealership, either temporarily or for 
  3.13  a reasonable period, which is for sale to any qualified 
  3.14  independent person at a fair and reasonable price, or when 
  3.15  involved in a bona fide relationship in which an independent 
  3.16  person has made a significant investment subject to loss in the 
  3.17  dealership and can reasonably expect to acquire full ownership 
  3.18  and full management and operational control of the dealership 
  3.19  within a reasonable time on reasonable terms and conditions, or 
  3.20     (2) if it has an existing direct or indirect ownership 
  3.21  interest in a new motor vehicle dealer in this state as of 
  3.22  January 1, 2000, and has no more than four franchised dealers in 
  3.23  this state.  A manufacturer, distributor, or factory branch 
  3.24  described in this clause that has unaffiliated dealers of the 
  3.25  same line make in this state may acquire an interest in existing 
  3.26  dealers of that line make but it may not establish any new 
  3.27  dealership in which it would own an interest or approve an 
  3.28  additional location for the sale of new motor vehicles by an 
  3.29  affiliated dealership.  A manufacturer, distributor, or factory 
  3.30  branch described in this clause is permitted to alter its 
  3.31  ownership interest in a new motor vehicle dealer; 
  3.32     (j) prevent a new motor vehicle dealer from receiving fair 
  3.33  and reasonable compensation for the value of the new motor 
  3.34  vehicle dealership.  There shall be no transfer, assignment of 
  3.35  the franchise, or major change in the executive management of 
  3.36  the dealership, except as is otherwise provided in sections 
  4.1   80E.01 to 80E.17, without consent of the manufacturer, which 
  4.2   shall not be unreasonably withheld.  Denial of the request must 
  4.3   be in writing and delivered to the new motor vehicle dealer 
  4.4   within 60 days after the manufacturer receives the information 
  4.5   necessary to evaluate the proposed transfer.  If a denial is not 
  4.6   sent within this period, the manufacturer shall be deemed to 
  4.7   have given its consent to the proposed transfer or change; 
  4.8      (k) threaten to modify or replace or modify or replace a 
  4.9   franchise with a succeeding franchise that would adversely alter 
  4.10  the rights or obligations of a new motor vehicle dealer under an 
  4.11  existing franchise or that substantially impairs the sales or 
  4.12  service obligations or investments of the motor vehicle dealer; 
  4.13     (l) unreasonably deny the right to acquire factory program 
  4.14  vehicles to any dealer holding a valid franchise from the 
  4.15  manufacturer to sell the same line make of vehicles, provided 
  4.16  that the manufacturer may impose reasonable restrictions and 
  4.17  limitations on the purchase or resale of program vehicles to be 
  4.18  applied equitably to all of its franchised dealers.  For the 
  4.19  purposes of this paragraph, "factory program vehicle" has the 
  4.20  meaning given the term in section 80E.06, subdivision 2; 
  4.21     (m) fail or refuse to offer to its same line make 
  4.22  franchised dealers all models manufactured for that line make, 
  4.23  other than alternative fuel vehicles as defined in section 
  4.24  216C.01, subdivision 1b.  Failure to offer a model is not a 
  4.25  violation of this section if the failure is not arbitrary and is 
  4.26  due to a lack of manufacturing capacity, a strike, labor 
  4.27  difficulty, or other cause over which the manufacturer, 
  4.28  distributor, or factory branch has no control; 
  4.29     (n) require a dealer to pay an extra fee, or remodel, 
  4.30  renovate, or recondition the dealer's existing facilities, or 
  4.31  purchase unreasonable advertising displays, training, tools, or 
  4.32  other materials, or to require the dealer to establish exclusive 
  4.33  facilities or dedicated personnel as a prerequisite to receiving 
  4.34  a model or a series of vehicles~~.~~; or 
  4.35     (o) refuse to offer, conditionally offer, or require a new 
  4.36  motor vehicle dealer to directly or indirectly incur an expense 
  5.1   as a prerequisite to receiving a fundamental franchise benefit. 
  5.2   Fundamental franchise benefit includes the right to: 
  5.3      (1) order and purchase new motor vehicles, parts, and 
  5.4   accessories distributed by the manufacturer or distributor for 
  5.5   timely delivery and in reasonable quantities relative to the new 
  5.6   motor vehicle dealer's sales potential in the dealer's relevant 
  5.7   market area; 
  5.8      (2) use and display all logos, marks, and other 
  5.9   intellectual property maintained by the manufacturer or 
  5.10  distributor; 
  5.11     (3) perform and receive timely payment for warranty 
  5.12  services; 
  5.13     (4) receive data, statistics, and information supplied by 
  5.14  the manufacturer or distributor to any of its franchised 
  5.15  dealers; 
  5.16     (5) receive referrals of retail customers on proportionally 
  5.17  equal terms from the manufacturer or distributor if the 
  5.18  manufacturer or distributor maintains a procedure to provide 
  5.19  such referrals to any of its franchised dealers; 
  5.20     (6) receive advertising, sales, or promotional payments in 
  5.21  the name of the new motor vehicle dealer or its employees on 
  5.22  proportionally equal terms if the manufacturer or distributor 
  5.23  provides such payments to any of its franchised dealers or their 
  5.24  employees; and 
  5.25     (7) participate in programs and receive benefits from 
  5.26  finance subsidiaries or other affiliates of a manufacturer or 
  5.27  distributor on proportionally equal terms if the finance 
  5.28  subsidiary or other affiliate of the manufacturer or distributor 
  5.29  offers such programs or provides such benefits to any franchised 
  5.30  dealers.