Senate File 290 - Introduced
SENATE FILE
BY DANIELSON
A BILL FOR
1 An Act relating to the regulation of agreements between
2 manufacturers or distributors, and dealers relating to the
3 sale of recreational vehicles and including applicability
4 provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 DIVISION I
1 2 RECREATIONAL VEHICLE SALES
1 3 Section 1. NEW SECTION. 322E.1 Definitions.
1 4 When used in this chapter, unless the context otherwise
1 5 requires:
1 6 1. "Area of sales responsibility" means the geographical
1 7 area, agreed to by a dealer and a manufacturer or distributor
1 8 in a manufacturer and dealer agreement, within which area
1 9 the dealer has the exclusive right to display and sell the
1 10 manufacturer's or distributor's new recreational vehicles of a
1 11 particular line=make to a consumer.
1 12 2. "Consumer" means a person who is offered or purchases a
1 13 new recreational vehicle in a retail transaction.
1 14 3. "Dealer" means any person, firm, corporation, or business
1 15 entity licensed or required to be licensed as a motor vehicle
1 16 dealer pursuant to chapter 322 or as a travel trailer dealer
1 17 pursuant to chapter 322C.
1 18 4. "Distributor" means any person, firm, corporation, or
1 19 business entity that purchases new recreational vehicles for
1 20 resale to a dealer.
1 21 5. "Factory campaign" means an effort on the part of a
1 22 warrantor to contact a recreational vehicle owner or dealer in
1 23 order to address a part or equipment issue.
1 24 6. "Family member" means a person who is the spouse, child,
1 25 grandchild, parent, sibling, niece, or nephew of a recreational
1 26 vehicle owner or the spouse of such a person.
1 27 7. "Fifth=wheel trailer" means a vehicle, mounted on wheels,
1 28 designed to provide temporary living quarters for recreational,
1 29 camping, or travel use, of such size and weight as to not
1 30 require a special highway movement permit and designed to be
1 31 towed by a motorized vehicle that contains a towing mechanism
1 32 mounted above or forward of the tow vehicle's rear axle.
1 33 8. "Folding camping trailer" means a vehicle mounted on
1 34 wheels and constructed with collapsible partial side walls
1 35 that fold for towing by another vehicle and unfold to provide
2 1 temporary living quarters for recreational, camping, or travel
2 2 use.
2 3 9. "Line=make" means a specific series of recreational
2 4 vehicles that include all of the following:
2 5 a. Are identified by a common series trade name or
2 6 trademark.
2 7 b. Are targeted to a particular market segment, as
2 8 determined by the recreational vehicle's decor, features,
2 9 equipment, size, weight, and price range.
2 10 c. Have lengths and interior floor plans that distinguish
2 11 the recreational vehicle from other recreational vehicles
2 12 with substantially the same decor, features, equipment, size,
2 13 weight, and price range.
2 14 d. Belong to a single, distinct classification of
2 15 recreational vehicle product type having a substantial degree
2 16 of commonality in the construction of the chassis, frame, and
2 17 body, and in price range.
2 18 e. Are authorized for sale by a dealer pursuant to a
2 19 manufacturer and dealer agreement.
2 20 10. "Manufacturer" means any person, firm, corporation,
2 21 or business entity that engages in the manufacturing of
2 22 recreational vehicles.
2 23 11. "Manufacturer and dealer agreement" means a written
2 24 agreement or contract entered into between a manufacturer
2 25 or distributor and a dealer that fixes the rights and
2 26 responsibilities of the parties and pursuant to which the
2 27 dealer sells new recreational vehicles.
2 28 12. "Motor home" means a motorized vehicle which is either
2 29 self=propelled or towed by a consumer=owned vehicle, and
2 30 is primarily designed to provide temporary living quarters
2 31 for recreational, camping, or travel use. A "motor home"
2 32 contains at least four of the following permanently installed
2 33 independent life=support systems which meet the national fire
2 34 protection association standard for recreational vehicles:
2 35 a. A cooking facility with an on=board fuel source.
3 1 b. A potable water supply system that includes at least
3 2 a sink, a faucet, and a water tank with an exterior service
3 3 supply connection.
3 4 c. A toilet with exterior evacuation.
3 5 d. A gas or electric refrigerator.
3 6 e. A heating or air conditioning system with an on=board
3 7 power or fuel source separate from the vehicle engine.
3 8 f. A one hundred ten to one hundred twenty volt power
3 9 supply.
3 10 13. "Park model recreational vehicle" means a vehicle that
3 11 is all of the following:
3 12 a. Designed and marketed primarily not for use as a
3 13 permanent dwelling but as temporary living quarters for
3 14 recreational, camping, travel, or seasonal use.
3 15 b. Between three hundred twenty and four hundred square
3 16 feet in size based on the exterior dimensions of the vehicle
3 17 measured at the largest horizontal projections when erected on
3 18 site including all space which has a ceiling height of more
3 19 than five feet, and any expandable room, slide=out, tip=out,
3 20 or tag=along unit.
3 21 c. Built on a single chassis and not designed to accept
3 22 additional structures, add=ons, or other additions that will
3 23 increase the area as determined in paragraph "b" in excess of
3 24 four hundred square feet.
3 25 d. Built pursuant to a third=party inspection and
3 26 certification process.
3 27 e. Built to the American national standards institute A119.5
3 28 park model recreational vehicle standard.
3 29 14. "Proprietary part" means any part manufactured by or for
3 30 and sold exclusively by a manufacturer.
3 31 15. "Recreational vehicle" means a vehicle which is
3 32 either self=propelled or towed by a consumer=owned vehicle,
3 33 primarily designed to provide temporary living quarters for
3 34 recreational, camping, or travel use that complies with all
3 35 applicable federal vehicle regulations and does not require a
4 1 special highway movement permit to legally use the highways.
4 2 "Recreational vehicle" includes a "motor home" and a "travel
4 3 trailer".
4 4 16. "Supplier" means any person, firm, corporation, or
4 5 business entity that engages in the manufacture of recreational
4 6 vehicle parts, accessories, or components.
4 7 17. "Transient consumer" means a consumer who is temporarily
4 8 traveling through a dealer's area of sales responsibility.
4 9 18. "Travel trailer" means a vehicle, mounted on wheels,
4 10 designed to provide temporary living quarters for recreational,
4 11 camping, or travel use of such size and weight as to not
4 12 require a special highway movement permit when towed by a
4 13 motorized vehicle. "Travel trailer" includes a fifth=wheel
4 14 travel trailer, folding camping trailer, truck camper, and a
4 15 park model recreational vehicle, but does not include a vehicle
4 16 that is so designed as to permit it to be towed exclusively by
4 17 a motorcycle.
4 18 19. "Truck camper" means a vehicle designed to be placed in
4 19 the bed of a pickup truck to provide temporary living quarters
4 20 for recreational, camping, or travel use.
4 21 20. "Warrantor" means any person, firm, corporation, or
4 22 business entity, including any manufacturer or supplier, that
4 23 provides a written warranty to a consumer in connection with
4 24 a new recreational vehicle or a part, accessory, or component
4 25 of a new recreational vehicle. "Warrantor" does not include
4 26 a dealer, supplier, or other person, firm, corporation, or
4 27 business entity not controlled by a manufacturer that provides
4 28 a service contract, mechanical or other insurance, or extended
4 29 warranties sold for separate consideration to a consumer.
4 30 Sec. 2. NEW SECTION. 322E.2 Manufacturer and dealer
4 31 agreements ==== area of sales responsibility.
4 32 1. A manufacturer or distributor shall not sell a new
4 33 recreational vehicle in this state to or through a dealer
4 34 without first entering into a written manufacturer and dealer
4 35 agreement with the dealer that has been signed by both parties.
5 1 A dealer shall not sell a new recreational vehicle in this
5 2 state without first entering into a written manufacturer and
5 3 dealer agreement with a manufacturer or distributor that has
5 4 been signed by both parties.
5 5 2. A manufacturer and dealer agreement shall designate the
5 6 area of sales responsibility exclusively assigned to a dealer
5 7 by the manufacturer or distributor and the manufacturer or
5 8 distributor shall not change that area or contract with another
5 9 dealer for sale of the same line=make in the designated area
5 10 for the duration of the agreement.
5 11 3. If, subsequent to entering into a manufacturer and
5 12 dealer agreement, a dealer enters into an agreement with
5 13 another manufacturer or distributor to sell recreational
5 14 vehicles, or enters into an agreement to increase the dealer's
5 15 preexisting commitment to sell recreational vehicles of another
5 16 manufacturer or distributor, the manufacturer or distributor
5 17 may revise the area of sales responsibility designated in the
5 18 manufacturer and dealer agreement, upon a determination by the
5 19 manufacturer or distributor that the market penetration of the
5 20 manufacturer's or distributor's products is jeopardized by the
5 21 dealer's subsequent agreement to sell or increase the sales of
5 22 another manufacturer's or distributor's recreational vehicles.
5 23 4. Except as otherwise provided in subsection 3, the area of
5 24 sales responsibility designated in a manufacturer and dealer
5 25 agreement shall not be reviewed or changed until at least one
5 26 year after execution of the agreement without the consent of
5 27 both parties to the agreement.
5 28 Sec. 3. NEW SECTION. 322E.3 Manufacturer and dealer
5 29 agreements ==== termination, cancellation, nonrenewal, and
5 30 alteration.
5 31 1. Termination by manufacturer or distributor. A
5 32 manufacturer or distributor, directly or through any authorized
5 33 officer, agent, or employee, may terminate, cancel, or fail to
5 34 renew a manufacturer and dealer agreement with or without good
5 35 cause as follows:
6 1 a. If the manufacturer or distributor terminates, cancels,
6 2 or fails to renew a manufacturer and dealer agreement without
6 3 good cause, the manufacturer or distributor shall comply with
6 4 the provisions of section 322E.4.
6 5 b. If the manufacturer or distributor terminates, cancels,
6 6 or fails to renew a manufacturer and dealer agreement with
6 7 good cause, the manufacturer or distributor is not required to
6 8 comply with the provisions of section 322E.4.
6 9 c. The manufacturer or distributor has the burden of showing
6 10 good cause for terminating, canceling, or failing to renew a
6 11 manufacturer and dealer agreement. For purposes of determining
6 12 whether good cause exists for such termination, cancellation,
6 13 or nonrenewal of the agreement, any of the following factors
6 14 may be considered:
6 15 (1) The extent of the affected dealer's penetration in the
6 16 area of sales responsibility.
6 17 (2) The nature and extent of the dealer's investment in the
6 18 dealer's business.
6 19 (3) The adequacy of the dealer's service facilities,
6 20 equipment, parts, supplies, and personnel.
6 21 (4) The effect of the proposed termination, cancellation,
6 22 or nonrenewal of the agreement on the community.
6 23 (5) The extent and quality of the dealer's service under the
6 24 warranties of the recreational vehicles sold.
6 25 (6) The dealer's failure to follow agreed upon procedures or
6 26 standards related to the overall operation of the dealership.
6 27 (7) The dealer's performance under the terms of the
6 28 manufacturer and dealer agreement.
6 29 d. (1) Except as otherwise provided in this paragraph
6 30 "d", a manufacturer or distributor shall provide a dealer with
6 31 at least ninety days' prior written notice of termination,
6 32 cancellation, or nonrenewal of the manufacturer and dealer
6 33 agreement if the agreement is being terminated, canceled, or
6 34 nonrenewed with or without good cause.
6 35 (2) (a) If the proposed termination, cancellation, or
7 1 nonrenewal of the agreement is for good cause, the notice shall
7 2 state all of the reasons for the termination, cancellation, or
7 3 nonrenewal and shall further state that if, within thirty days
7 4 following receipt of the notice, the dealer provides to the
7 5 manufacturer or distributor a written notice of intent to cure
7 6 all claimed deficiencies, the dealer shall then have ninety
7 7 days following receipt of the notice to cure the deficiencies.
7 8 If the dealer fails to provide notice of intent to cure the
7 9 deficiencies within thirty days following receipt of the
7 10 notice, the termination, cancellation, or nonrenewal of the
7 11 agreement for good cause takes effect thirty days following the
7 12 dealer's receipt of the notice.
7 13 (b) If the dealer provides notice of intent to cure the
7 14 deficiencies stated and the deficiencies are cured by the
7 15 dealer within ninety days following receipt of the notice,
7 16 the manufacturer's or distributor's notice to the dealer is
7 17 voided. If the dealer provides notice of intent to cure the
7 18 deficiencies stated and fails to cure the deficiencies within
7 19 ninety days following receipt of the notice, the termination,
7 20 cancellation, or nonrenewal of the agreement for good cause
7 21 takes effect ninety days following the dealer's receipt of the
7 22 notice.
7 23 (c) If the dealer has new and untitled inventory of
7 24 recreational vehicles on hand at the time the termination,
7 25 cancellation, or nonrenewal of the agreement takes effect for
7 26 good cause, the inventory may be sold by the dealer as provided
7 27 in section 322E.4, subsection 2, paragraph "b".
7 28 e. Notwithstanding paragraph "d", the notice period for
7 29 termination, cancellation, or nonrenewal of a manufacturer
7 30 and dealer agreement for good cause may be reduced to thirty
7 31 days if the grounds for such termination, cancellation, or
7 32 nonrenewal are due to any of the following factors:
7 33 (1) The dealer or one of the dealer's owners has been
7 34 convicted of or has entered a plea of nolo contendere to a
7 35 felony.
8 1 (2) The dealer has abandoned or closed the dealer's business
8 2 operations for ten consecutive business days, unless the
8 3 closing is due to an act of God, a strike, a labor difficulty,
8 4 or other cause over which the dealer has no control.
8 5 (3) The dealer has made a significant misrepresentation
8 6 that materially affects the business relationship of the
8 7 manufacturer or distributor and the dealer.
8 8 (4) The dealer's license has been suspended, revoked,
8 9 denied, or not renewed.
8 10 (5) The dealer has committed a material violation of this
8 11 chapter which is not cured within thirty days after receipt of
8 12 written notice of the violation.
8 13 f. Notwithstanding paragraphs "d" and "e", the manufacturer
8 14 and dealer agreement may be terminated, canceled, or nonrenewed
8 15 for good cause at any time if the reason for the termination,
8 16 cancellation, or nonrenewal is the dealer's insolvency, the
8 17 dealer's declaration of an assignment for the benefit of
8 18 creditors, or the dealer's declaration of bankruptcy.
8 19 2. Termination by dealer. A dealer may terminate, cancel,
8 20 or fail to renew a manufacturer and dealer agreement with or
8 21 without good cause as follows:
8 22 a. If the dealer terminates, cancels, or fails to renew
8 23 a manufacturer and dealer agreement without good cause, the
8 24 dealer shall comply with the provisions of section 322E.4.
8 25 b. If the dealer terminates, cancels, or fails to renew a
8 26 manufacturer and dealer agreement with good cause, the dealer
8 27 is not required to comply with the provisions of section
8 28 322E.4.
8 29 c. (1) Except as otherwise provided in this paragraph "c",
8 30 a dealer shall provide a manufacturer or distributor with at
8 31 least ninety days' notice of termination, cancellation, or
8 32 nonrenewal of the manufacturer and dealer agreement if the
8 33 agreement is being terminated, canceled, or nonrenewed with or
8 34 without good cause.
8 35 (2) (a) If the termination, cancellation, or nonrenewal
9 1 of the agreement is for good cause, the dealer has the burden
9 2 of showing good cause and the notice shall state all of
9 3 the reasons for the proposed termination, cancellation, or
9 4 nonrenewal. The notice shall further state that if, within
9 5 thirty days following receipt of the notice, the manufacturer
9 6 or distributor provides to the dealer a written notice of
9 7 intent to cure all claimed deficiencies, the manufacturer or
9 8 distributor shall then have ninety days following receipt of
9 9 the notice to cure the deficiencies. If the manufacturer or
9 10 distributor fails to provide notice of intent to cure the
9 11 deficiencies to the dealer within thirty days following receipt
9 12 of the notice, the termination, cancellation, or nonrenewal of
9 13 the agreement for good cause takes effect thirty days following
9 14 the manufacturer's or distributor's receipt of the notice.
9 15 (b) If the deficiencies stated in the notice are cured by
9 16 the manufacturer or distributor within ninety days following
9 17 receipt of the notice, the dealer's notice to the manufacturer
9 18 or distributor is voided. If the manufacturer or distributor
9 19 provides notice of intent to cure the deficiencies stated and
9 20 fails to cure the deficiencies within ninety days following
9 21 receipt of the notice, the termination, cancellation, or
9 22 nonrenewal of the agreement for good cause takes effect ninety
9 23 days following the manufacturer's or distributor's receipt of
9 24 the notice.
9 25 d. Notwithstanding paragraph "c", the notice period for
9 26 termination, cancellation, or nonrenewal of a manufacturer and
9 27 dealer agreement by a dealer may be reduced to thirty days if
9 28 there is good cause for such termination, cancellation, or
9 29 nonrenewal due to any of the following factors:
9 30 (1) The manufacturer or distributor has been convicted of or
9 31 has entered a plea of nolo contendere to a felony.
9 32 (2) The business operations of the manufacturer or
9 33 distributor have been abandoned or closed for ten consecutive
9 34 business days, unless the closing is due to an act of God,
9 35 a strike, a labor difficulty, or other cause over which the
10 1 manufacturer or distributor has no control.
10 2 (3) The manufacturer or distributor has made a significant
10 3 misrepresentation that materially affects the business
10 4 relationship of the manufacturer or distributor and the dealer.
10 5 (4) The manufacturer or distributor has committed a
10 6 material violation of this chapter which is not cured within
10 7 thirty days after receipt of written notice of the violation.
10 8 (5) The manufacturer or distributor has declared bankruptcy
10 9 or insolvency, or an assignment for the benefit of creditors or
10 10 bankruptcy has occurred.
10 11 Sec. 4. NEW SECTION. 322E.4 Repurchase or sale of
10 12 inventory.
10 13 1. If the manufacturer and dealer agreement is terminated,
10 14 canceled, or not renewed by the manufacturer or distributor
10 15 without good cause as provided in section 322E.3, subsection
10 16 1, or if the dealer terminates, cancels, or does not renew
10 17 the manufacturer and dealer agreement with good cause as
10 18 provided in section 322E.3, subsection 2, and the manufacturer
10 19 or distributor fails to provide notice of intent to cure the
10 20 claimed deficiencies or fails to cure the claimed deficiencies
10 21 as provided in section 322E.3, subsection 2, the manufacturer
10 22 or distributor shall, at the dealer's option, and within
10 23 forty=five days after termination, cancellation, or nonrenewal
10 24 of the agreement, repurchase all of the following:
10 25 a. (1) All new, untitled recreational vehicles that
10 26 were acquired from the manufacturer or distributor within
10 27 twelve months prior to the effective date of the notice of
10 28 termination, cancellation, or nonrenewal of the agreement, that
10 29 have not been used except for demonstration purposes, and that
10 30 have not been altered or damaged, at one hundred percent of the
10 31 net invoice cost, including transportation, less applicable
10 32 rebates and discounts to the dealer.
10 33 (2) In the event that any of the recreational vehicles
10 34 repurchased pursuant to this paragraph "a" are damaged, but
10 35 do not trigger a consumer disclosure requirement, the amount
11 1 due to the dealer shall be reduced by the cost to repair the
11 2 vehicle. Damage incurred prior to delivery to the dealer that
11 3 was disclosed at the time of delivery does not disqualify
11 4 repurchase pursuant to this paragraph "a".
11 5 b. All undamaged accessories and proprietary parts sold
11 6 to the dealer for resale within twelve months prior to the
11 7 effective date of termination, cancellation, or nonrenewal
11 8 of the agreement, if accompanied by the original invoice, at
11 9 one hundred five percent of the original net price paid to the
11 10 manufacturer or distributor, to compensate the dealer for the
11 11 cost of handling, packing, and shipping the parts for return to
11 12 the manufacturer or distributor.
11 13 c. All properly functioning diagnostic equipment, special
11 14 tools, current signage, or other equipment and machinery
11 15 that was purchased by the dealer upon the request of the
11 16 manufacturer or distributor within five years prior to the
11 17 effective date of the termination, cancellation, or nonrenewal
11 18 of the agreement, and that can no longer be used in the normal
11 19 course of the dealer's ongoing business.
11 20 2. a. A dealer is not prohibited from selling the remaining
11 21 inventory of a particular line=make that is in stock after
11 22 a dealer and manufacturer agreement has been terminated,
11 23 canceled, or nonrenewed by a manufacturer or distributor
11 24 without good cause as provided in section 322E.3, subsection 1.
11 25 b. If recreational vehicles of a particular line=make
11 26 are not returned or required to be returned by the dealer to
11 27 the manufacturer or distributor pursuant to the terminated,
11 28 canceled, or nonrenewed manufacturer and dealer agreement, the
11 29 dealer may continue to sell all line=makes that were subject to
11 30 the agreement and are currently in stock until those line=makes
11 31 are no longer in the dealer's inventory.
11 32 Sec. 5. NEW SECTION. 322E.5 Transfer of ownership ==== family
11 33 succession ==== objections.
11 34 1. a. If a dealer desires to make a change in ownership
11 35 of a dealership by sale of the business assets, a stock
12 1 transfer, or otherwise, the dealer shall give the manufacturer
12 2 or distributor that is a party to a manufacturer and dealer
12 3 agreement written notice of the proposed change at least
12 4 fifteen business days before the change is effective, including
12 5 all supporting documentation as may be reasonably required by
12 6 the manufacturer or distributor to determine whether to make an
12 7 objection to the sale, transfer, or other change in ownership.
12 8 In the absence of a breach by the dealer of the manufacturer
12 9 and dealer agreement or a violation of this chapter, the
12 10 manufacturer or distributor shall not object to the proposed
12 11 change in ownership unless the objection to the prospective
12 12 transferee is due to any of the following factors:
12 13 (1) The transferee has previously been a party to a
12 14 manufacturer and dealer agreement with the manufacturer or
12 15 distributor that was terminated, canceled, or nonrenewed by the
12 16 manufacturer or distributor for good cause.
12 17 (2) The transferee has been convicted of a felony or any
12 18 crime of fraud, deceit, or moral turpitude.
12 19 (3) The transferee lacks any license required by law.
12 20 (4) The transferee does not have an active line of credit
12 21 sufficient to purchase the manufacturer's or distributor's
12 22 products.
12 23 (5) The transferee has undergone bankruptcy, insolvency,
12 24 a general assignment for the benefit of creditors, or the
12 25 appointment of a receiver, trustee, or conservator to take
12 26 possession of the transferee's business or property within the
12 27 previous ten years.
12 28 b. If a manufacturer or distributor objects to a proposed
12 29 change in ownership of a dealership, the manufacturer or
12 30 distributor shall give written notice of its reasons for the
12 31 objection to the dealer within ten business days after receipt
12 32 of the dealer's notification and supporting documentation of
12 33 the proposed change. The manufacturer or distributor has
12 34 the burden of proof to show that its objection complies with
12 35 the requirements of this subsection. If the manufacturer or
13 1 distributor does not give the dealer timely notice of its
13 2 objection, the proposed change in ownership of the dealership
13 3 shall be deemed approved.
13 4 2. a. It is unlawful for a manufacturer or distributor to
13 5 fail to provide a dealer with the opportunity to designate,
13 6 in writing, a family member as a successor to ownership of
13 7 the dealership in the event of the death, incapacity, or
13 8 retirement of the dealer. If a dealer desires to designate
13 9 a family member as a successor to a dealership, the dealer
13 10 shall give the manufacturer or distributor that is a party
13 11 to the manufacturer and dealer agreement with the dealer
13 12 written notice of the proposed designation or modification of
13 13 a previous designation at least fifteen business days before
13 14 the designation or proposed modification of a designation is
13 15 effective, including all supporting documentation as may be
13 16 reasonably required by the manufacturer or distributor to
13 17 determine whether to make an objection to the succession plan.
13 18 In the absence of a breach by the dealer of the manufacturer
13 19 and dealer agreement or a violation of this chapter, the
13 20 manufacturer or distributor shall not object to the designated
13 21 successor unless the objection is due to any of the following
13 22 factors:
13 23 (1) The designated successor has previously been a party to
13 24 a manufacturer and dealer agreement with the manufacturer or
13 25 distributor that was terminated, canceled, or nonrenewed by the
13 26 manufacturer or distributor for good cause.
13 27 (2) The designated successor has been convicted of a felony
13 28 or any crime of fraud, deceit, or moral turpitude.
13 29 (3) The designated successor lacks any license required by
13 30 law at the time of succession.
13 31 (4) The designated successor does not have an active
13 32 line of credit sufficient to purchase the manufacturer's or
13 33 distributor's products at the time of succession.
13 34 (5) The designated successor has undergone bankruptcy,
13 35 insolvency, a general assignment for the benefit of creditors,
14 1 or the appointment of a receiver, trustee, or conservator to
14 2 take possession of the designated successor's business or
14 3 property within the previous ten years.
14 4 b. It is unlawful for a manufacturer or distributor to
14 5 prevent or refuse to honor the succession of a designated
14 6 family member to ownership of a dealership when the dealer
14 7 is deceased, incapacitated, or has retired, unless the
14 8 manufacturer or distributor has provided to the dealer written
14 9 notice of the manufacturer's or distributor's objections to
14 10 the succession within ten days after receipt of the dealer's
14 11 designation of a successor or modification of the dealer's
14 12 succession plan. If a manufacturer or distributor objects
14 13 to the proposed succession of a designated family member of
14 14 the dealer to the dealership, the manufacturer or distributor
14 15 shall give written notice of its reasons for the objection
14 16 to the dealer within ten business days after receipt of the
14 17 dealer's notification and supporting documentation of the
14 18 proposed succession or modification of the succession plan.
14 19 The manufacturer or distributor has the burden of proof to
14 20 show that the objection complies with the requirements of
14 21 this subsection. If the manufacturer or distributor does not
14 22 give the dealer timely notice of its objection, the proposed
14 23 succession plan for ownership of the dealership shall be
14 24 deemed approved. However, a family member of the dealer may
14 25 not succeed to ownership of the dealership if the succession
14 26 involves, without the manufacturer's or distributor's consent,
14 27 a relocation of the dealership or alteration of the terms and
14 28 conditions of the manufacturer and dealer agreement.
14 29 Sec. 6. NEW SECTION. 322E.6 Warranty obligations.
14 30 1. A warrantor shall do all of the following:
14 31 a. Specify in writing to each dealer what obligations
14 32 the dealer has, if any, for preparation and delivery of, and
14 33 warranty services on, the warrantor's products.
14 34 b. Compensate the dealer for warranty services required of
14 35 the dealer by the warrantor.
15 1 c. Provide the dealer with a schedule of compensation and
15 2 time allowances for the performance of warranty services. The
15 3 schedule of compensation shall include reasonable compensation
15 4 for diagnostic services performed as well as warranty services.
15 5 2. Time allowances for the diagnosis and performance of
15 6 warranty services shall be reasonable for the service to
15 7 be performed. In determining what constitutes reasonable
15 8 compensation under this section, the principle factors to be
15 9 given consideration are the actual wage rates being paid by the
15 10 dealer and the actual retail wage rates being charged by other
15 11 dealers in the community in which the dealer is doing business.
15 12 The compensation of a dealer for warranty services shall not be
15 13 less than the lowest actual retail wage rates charged by the
15 14 dealer for like nonwarranty services as long as such actual
15 15 wage rates are reasonable.
15 16 3. A warrantor shall reimburse a dealer for any warranty
15 17 part, accessory, or complete component at actual wholesale cost
15 18 plus a minimum of a thirty percent handling charge, up to a
15 19 maximum of one hundred fifty dollars and the cost, if any, of
15 20 freight to return such part, component, or accessory to the
15 21 warrantor.
15 22 4. Warranty audits of dealer records may be conducted by a
15 23 warrantor on a reasonable basis, and dealer claims for warranty
15 24 compensation shall not be denied except for cause, such as
15 25 performance of nonwarranty repairs, material noncompliance with
15 26 the warrantor's published policies and procedures, lack of
15 27 material documentation, fraud, or misrepresentation.
15 28 5. A dealer shall submit claims for compensation for the
15 29 performance of warranty services to the warrantor within
15 30 forty=five days after completion of the warranty services.
15 31 6. A dealer shall immediately notify a warrantor verbally
15 32 or in writing if the dealer is unable to perform diagnostic
15 33 services and warranty services within ten days of receipt of a
15 34 verbal or written complaint from a consumer.
15 35 7. A warrantor shall disapprove a claim submitted by
16 1 a dealer for compensation for the performance of warranty
16 2 services, in writing, within forty=five days after submission
16 3 of the claim in the manner and form prescribed by the
16 4 warrantor. A claim not specifically disapproved as required
16 5 by this subsection shall be deemed approved and shall be paid
16 6 within sixty days of submission of the claim.
16 7 8. A warrantor shall not do any of the following:
16 8 a. Fail to perform any of the warrantor's obligations with
16 9 respect to its warranted products.
16 10 b. Fail to include, in written notices of a factory campaign
16 11 to recreational vehicle owners and dealers, the expected date
16 12 by which necessary parts and equipment, including tires and
16 13 chassis or chassis parts, will be available to dealers to
16 14 perform the factory campaign work. The warrantor may ship
16 15 parts to a dealer to effect factory campaign work, and, if such
16 16 parts are in excess of the dealer's requirements, the dealer
16 17 may return unused parts to the warrantor for credit after
16 18 completion of the factory campaign.
16 19 c. Fail to compensate the warrantor's dealers for authorized
16 20 repairs effected by the dealer on merchandise damaged in
16 21 manufacture or in transit to the dealer by a carrier designated
16 22 by the warrantor, factory branch, distributor, or distributor
16 23 branch.
16 24 d. Fail to compensate the warrantor's dealers in accordance
16 25 with the schedule of compensation provided to the dealer
16 26 pursuant to this section if the warranty services for which
16 27 compensation is claimed are performed in a timely and competent
16 28 manner as required in this section.
16 29 e. Intentionally misrepresent in any way to consumers that
16 30 warranties with respect to the manufacture, performance, or
16 31 design of recreational vehicles are made by the dealer as
16 32 warrantor or co=warrantor.
16 33 f. Require the warrantor's dealers to make warranties to a
16 34 consumer that are in any manner related to the manufacture of
16 35 the recreational vehicle.
17 1 9. A dealer shall not do any of the following:
17 2 a. Fail to perform predelivery inspection functions in a
17 3 competent and timely manner, as specified by the warrantor.
17 4 b. Fail to perform warranty services authorized by the
17 5 warrantor in a competent and timely manner on any transient
17 6 consumer's recreational vehicle of a line=make sold or serviced
17 7 by that dealer.
17 8 c. Fail to accurately document the time spent completing
17 9 each repair, the total number of repair attempts conducted on
17 10 a single unit, and the number of repair attempts for the same
17 11 repair conducted on a single recreational vehicle.
17 12 d. Fail to notify the warrantor within ten days of a second
17 13 repair attempt on a recreational vehicle which impairs the use,
17 14 value, or safety of the vehicle.
17 15 e. Fail to maintain written records, including a consumer's
17 16 signature, regarding the amount of time a unit is stored for
17 17 the consumer's convenience during a repair.
17 18 f. Make fraudulent warranty claims or misrepresent the terms
17 19 of any warranty.
17 20 Sec. 7. NEW SECTION. 322E.7 Indemnification.
17 21 1. a. Notwithstanding the terms of a manufacturer and
17 22 dealer agreement, a warrantor shall indemnify and hold harmless
17 23 the warrantor's dealer against any losses or damages to the
17 24 extent that the losses or damages are caused by the negligence
17 25 or willful misconduct of the warrantor.
17 26 b. A dealer shall not be denied indemnification for failure
17 27 to discover, disclose, or remedy a defect in the design or
17 28 manufacturing of a new recreational vehicle. A dealer may
17 29 be denied indemnification if the dealer fails to remedy a
17 30 known and announced defect in accordance with the written
17 31 instructions of the warrantor for whom the dealer is obligated
17 32 to perform warranty services.
17 33 c. A dealer shall provide to the warrantor a copy of any
17 34 pending lawsuit in which allegations are made that are covered
17 35 by the provisions of this subsection within ten days after
18 1 receiving notice of such lawsuit.
18 2 d. Notwithstanding any provision to the contrary, this
18 3 subsection continues to apply even after a new recreational
18 4 vehicle is titled.
18 5 2. a. Notwithstanding the terms of a manufacturer and
18 6 dealer agreement, a dealer shall indemnify and hold harmless
18 7 the dealer's warrantor against any losses or damages to the
18 8 extent that the losses or damages are caused by the negligence
18 9 or willful misconduct of the dealer.
18 10 b. A warrantor shall provide to the dealer a copy of any
18 11 pending lawsuit in which allegations are made that are covered
18 12 by the provisions of this subsection within ten days after
18 13 receiving notice of such lawsuit.
18 14 c. Notwithstanding any provision to the contrary, this
18 15 subsection continues to apply even after a new recreational
18 16 vehicle is titled.
18 17 Sec. 8. NEW SECTION. 322E.8 Inspection and rejection by
18 18 dealer.
18 19 1. Whenever a new recreational vehicle is damaged prior
18 20 to transit or is damaged in transit to the dealer and the
18 21 carrier or means of transportation has been selected by the
18 22 manufacturer or distributor, the dealer shall notify the
18 23 manufacturer or distributor of the damage within the time frame
18 24 specified in the manufacturer and dealer agreement and shall do
18 25 either of the following:
18 26 a. Request from the manufacturer or distributor
18 27 authorization to replace the components, parts, or accessories
18 28 damaged or otherwise repair the vehicle.
18 29 b. Reject the vehicle within the time frame set forth in
18 30 subsection 4.
18 31 2. If the manufacturer or distributor refuses to authorize
18 32 repair of the damage within ten days after receipt of
18 33 notification, or if the dealer rejects the new recreational
18 34 vehicle because of damage, ownership of the vehicle shall
18 35 revert to the manufacturer or distributor.
19 1 3. The dealer shall exercise due care when in custody of a
19 2 damaged new recreational vehicle, but the dealer shall have no
19 3 other obligations, financial or otherwise, with respect to that
19 4 vehicle.
19 5 4. The time frame for inspection and rejection of a damaged
19 6 new recreational vehicle by a dealer shall be included in the
19 7 manufacturer and dealer agreement and shall not be less than
19 8 two business days after the physical delivery of the vehicle
19 9 to the dealer.
19 10 5. Any new recreational vehicle that has, at the time of
19 11 delivery to the dealer, an unreasonable amount of miles on the
19 12 vehicle's odometer, as determined by the dealer, may be subject
19 13 to rejection by the dealer and ownership of the vehicle shall
19 14 revert to the manufacturer or distributor. In no instance
19 15 shall a dealer deem an amount less than the distance between
19 16 the dealer and the manufacturer's factory or between the dealer
19 17 and the distributor's point of distribution, plus one hundred
19 18 miles, as an unreasonable amount of miles.
19 19 Sec. 9. NEW SECTION. 322E.9 Civil actions ==== mediation.
19 20 1. A dealer, manufacturer, distributor, or warrantor
19 21 injured by another party's violation of this chapter may bring
19 22 a civil action in district court to recover actual damages
19 23 resulting from such violation. The court shall award attorney
19 24 fees and costs to the prevailing party in such an action.
19 25 Venue for a civil action authorized by this section shall be
19 26 exclusively in the county in which the dealer's business is
19 27 located. In an action involving more than one dealer, venue
19 28 may be in any county in which any dealer that is a party to the
19 29 action is located.
19 30 2. Prior to bringing suit under this section, the party
19 31 alleging a violation of this chapter shall serve a written
19 32 demand for mediation upon the alleged offending party.
19 33 a. The demand for mediation shall be served upon the alleged
19 34 offending party via certified mail at the address stated in the
19 35 manufacturer and dealer agreement between the parties.
20 1 b. The demand for mediation shall contain a brief statement
20 2 of the dispute or violation alleged and relief sought by the
20 3 party filing the demand.
20 4 c. Within twenty days after service of a demand for
20 5 mediation, the parties shall mutually select an independent
20 6 certified mediator and shall meet with that mediator for
20 7 the purpose of attempting to resolve the dispute or alleged
20 8 violation. The meeting place for the mediation shall be
20 9 in this state at a location selected by the mediator. The
20 10 mediator may extend the date for the meeting for good cause
20 11 shown by either party or upon stipulation of both parties.
20 12 d. The service of a demand for mediation under this
20 13 section shall toll the time for the filing of any complaint,
20 14 petition, protest, or other action under this chapter until
20 15 representatives of both parties have met with the mutually
20 16 selected mediator for the purpose of attempting to resolve
20 17 the dispute or alleged violation. If a complaint, petition,
20 18 protest, or other action has been filed before that meeting,
20 19 the court shall enter an order suspending any proceeding or
20 20 action on such complaint, petition, protest, or other action
20 21 until the mediation meeting has occurred and may, upon written
20 22 stipulation of all parties to the proceeding or action that
20 23 they wish to continue mediation under this section, enter an
20 24 order suspending the proceeding or action for as long a period
20 25 of time as the court considers appropriate.
20 26 e. Each party to the mediation shall bear their own costs
20 27 for attorney fees and shall divide equally among them the cost
20 28 of the mediator.
20 29 3. In addition to the remedies provided in this section,
20 30 and notwithstanding the existence of any additional remedy at
20 31 law, a manufacturer, distributor, warrantor, or dealer may
20 32 apply to the district court for the grant, upon a hearing and
20 33 for cause shown, of a temporary or permanent injunction, or
20 34 both, restraining any person from acting as a dealer without
20 35 being properly licensed, from violating or continuing to
21 1 violate any of the provisions of this chapter, or from failing
21 2 or refusing to comply with the requirements of this chapter.
21 3 Such injunction shall be issued without bond. A single act in
21 4 violation of the provisions of this chapter shall be sufficient
21 5 cause to authorize the issuance of an injunction pursuant to
21 6 this subsection.
21 7 DIVISION II
21 8 COORDINATING AMENDMENTS
21 9 Sec. 10. Section 321.1, subsection 36C, paragraphs b and c,
21 10 Code 2015, are amended to read as follows:
21 11 b. "Travel trailer" means a vehicle without motive power
21 12 used, manufactured, or constructed to permit its use as a
21 13 conveyance upon the public streets and highways and designed
21 14 to permit its use as a place of human habitation by one or more
21 15 persons. The vehicle may be up to eight feet six inches in
21 16 width and its overall length shall not exceed forty forty=five
21 17 feet. The vehicle shall be customarily or ordinarily used for
21 18 vacation or recreational purposes and not used as a place of
21 19 permanent habitation. If the vehicle is used in this state as
21 20 a place of human habitation for more than ninety consecutive
21 21 days in one location it shall be classed as a manufactured or
21 22 mobile home regardless of the size limitations provided in this
21 23 paragraph.
21 24 c. "Fifth=wheel travel trailer" means a type of travel
21 25 trailer which is towed by a pickup by a connecting device known
21 26 as a fifth wheel. However, this type of travel trailer may
21 27 have an overall length which shall not exceed forty forty=five
21 28 feet.
21 29 Sec. 11. Section 322.2, subsection 13, Code 2015, is amended
21 30 to read as follows:
21 31 13. "Motor vehicle" means any self=propelled vehicle subject
21 32 to registration under chapter 321, including a motor home as
21 33 defined in section 322E.1.
21 34 Sec. 12. Section 322.3, subsection 1, Code 2015, is amended
21 35 to read as follows:
22 1 1. A person shall not engage in this state in the business
22 2 of selling at retail new motor vehicles of any make or
22 3 represent or advertise that the person is engaged or intends
22 4 to engage in such business in this state unless the person
22 5 is authorized to do so by a contract in writing with the
22 6 manufacturer or distributor of such make of new motor vehicles
22 7 and unless the department has licensed the person as a motor
22 8 vehicle dealer in this state in motor vehicles of such make
22 9 and has issued to the person a license in writing as provided
22 10 in this chapter. A person shall not engage in this state in
22 11 the business of selling at retail new motor vehicles that are
22 12 recreational vehicles as defined in section 322E.1, unless the
22 13 person is authorized to do so by a manufacturer and dealer
22 14 agreement as provided in chapter 322E.
22 15 Sec. 13. Section 322A.1, subsection 8, Code 2015, is amended
22 16 to read as follows:
22 17 8. "Motor vehicle" means "motor vehicles" as defined in
22 18 chapter 321 which are subject to registration pursuant to the
22 19 provisions thereof, except those motor vehicles defined as
22 20 recreational vehicles in section 322E.1.
22 21 Sec. 14. Section 322C.2, subsection 4, Code 2015, is amended
22 22 by striking the subsection and inserting in lieu thereof the
22 23 following:
22 24 4. "Fifth=wheel trailer" means the same as defined in
22 25 section 322E.1.
22 26 Sec. 15. Section 322C.2, Code 2015, is amended by adding the
22 27 following new subsections:
22 28 NEW SUBSECTION. 4A. "Folding camping trailer" means the
22 29 same as defined in section 322E.1.
22 30 NEW SUBSECTION. 6A. "Park model recreational vehicle" means
22 31 the same as defined in section 322E.1.
22 32 Sec. 16. Section 322C.2, subsection 10, Code 2015, is
22 33 amended by striking the subsection and inserting in lieu
22 34 thereof the following:
22 35 10. "Travel trailer" means the same as defined in section
23 1 322E.1.
23 2 Sec. 17. Section 322C.3, subsection 1, Code 2015, is amended
23 3 to read as follows:
23 4 1. A person shall not engage in this state in the business
23 5 of selling at retail new travel trailers of any make, or
23 6 represent or advertise that the person is engaged or intends
23 7 to engage in such business in this state, unless the person is
23 8 authorized by a contract in writing between that person and the
23 9 manufacturer or distributor of that make of new travel trailers
23 10 to sell the trailers in this state as provided in chapter 322E,
23 11 and unless the department has issued to the person a license as
23 12 a travel trailer dealer for the same make of travel trailer.
23 13 Sec. 18. Section 322C.3, subsections 5 and 7, Code 2015, are
23 14 amended by striking the subsections.
23 15 DIVISION III
23 16 APPLICABILITY
23 17 Sec. 19. APPLICABILITY. The provisions of this Act apply
23 18 to manufacturer and dealer agreements that are entered into or
23 19 renewed on or after July 1, 2016.
23 20 EXPLANATION
23 21 The inclusion of this explanation does not constitute agreement with
23 22 the explanation's substance by the members of the general assembly.
23 23 This bill regulates agreements between manufacturers or
23 24 distributors, and dealers relating to the sale of recreational
23 25 vehicles and includes coordinating amendments and applicability
23 26 provisions.
23 27 DIVISION I. New Code chapter 322E regulates manufacturer
23 28 and dealer agreements fixing the rights and responsibilities of
23 29 each party pertaining to the sale of new recreational vehicles
23 30 in the state. A "recreational vehicle" is a vehicle that is
23 31 either self=propelled or towed by a consumer=owned tow vehicle
23 32 and is primarily designed to provide temporary living quarters
23 33 for recreational, camping, or travel use. A "recreational
23 34 vehicle" includes a "motor home" which is a motorized vehicle,
23 35 and a "travel trailer" such as a fifth=wheel trailer, folding
24 1 camping trailer, truck camper, or a park model recreational
24 2 vehicle, which is nonmotorized and towable.
24 3 A manufacturer or distributor, and a dealer are required
24 4 to enter into a written manufacturer and dealer agreement
24 5 before selling new recreational vehicles in the state. The
24 6 agreement must designate the dealer's exclusive area of sales
24 7 responsibility. A manufacturer or distributor, or a dealer
24 8 may terminate, cancel, or fail to renew the agreement with or
24 9 without cause and the bill specifies notification requirements,
24 10 what factors may be considered in determining whether good
24 11 cause exists, and requirements concerning repurchase or sale of
24 12 remaining inventory of recreational vehicles and outstanding
24 13 financial obligations between the parties to the agreement.
24 14 The party that terminates, cancels, or fails to renew the
24 15 agreement for good cause has the burden of showing cause.
24 16 The bill requires that a dealer that desires to make a change
24 17 in ownership of the dealership give notice to the manufacturer
24 18 or distributor of the proposed change. The manufacturer or
24 19 distributor is not allowed to object to the proposal unless the
24 20 objection is due to factors specified in the bill concerning
24 21 the proposed transferee. The manufacturer must make a written
24 22 objection and has the burden of proving that the objection
24 23 complies with the bill's requirements.
24 24 A manufacturer or distributor is prohibited from failing to
24 25 provide a dealer with the opportunity to designate a family
24 26 member as a successor to the dealership in the event of the
24 27 dealer's death, incapacity, or retirement so long as the
24 28 dealer gives written notice of the designation before it takes
24 29 effect. The manufacturer or distributor cannot object to the
24 30 designation unless the dealer is in breach of the manufacturer
24 31 and dealer agreement or in violation of the provisions of new
24 32 Code chapter 322E or the objection is due to other specified
24 33 factors. A manufacturer or distributor is prohibited from
24 34 refusing to honor the succession of the designated family
24 35 member unless the manufacturer or distributor has provided the
25 1 dealer with written notice of an objection to the dealer's
25 2 designation after receiving notice of the designation.
25 3 In regards to warranty obligations on new recreational
25 4 vehicles, the bill requires the warrantor, that person
25 5 providing a written warranty on the vehicles, to specify the
25 6 dealer's obligations for preparation, delivery, and warranty
25 7 services on the warrantor's products and how the dealer will
25 8 be compensated for provision of those services. The bill
25 9 specifies the warrantor's and dealer's obligations to each
25 10 other concerning warranties.
25 11 The bill provides that both the warrantor and the dealer have
25 12 duties to indemnify and hold each other harmless to the extent
25 13 that losses or damages are caused by the negligence or willful
25 14 misconduct of the other. These duties continue even after a
25 15 new recreational vehicle is titled.
25 16 The bill specifies the rights and obligations of a dealer and
25 17 a manufacturer or distributor when a new recreational vehicle
25 18 is damaged in transit. The bill specifies a time frame for a
25 19 dealer to inspect a delivered vehicle and to either reject or
25 20 request to repair the damaged vehicle.
25 21 A dealer, manufacturer, distributor, or warrantor injured
25 22 by another party's violation of the provisions of new Code
25 23 chapter 322E may bring a civil action in district court to
25 24 recover actual damages and the prevailing party in the action
25 25 is entitled to attorney fees and costs. However, prior to
25 26 bringing suit, the party alleging the violation is required
25 27 to serve a demand for mediation upon the alleged offending
25 28 party. The parties must mutually select and share the cost of
25 29 retaining an independent mediator to attempt to resolve the
25 30 dispute or alleged violation. Service of the mediation demand
25 31 tolls the time for filing any other proceeding or action and
25 32 the district court is required to suspend any proceeding or
25 33 action until the mediation meeting occurs. In addition to any
25 34 other remedy, either party may apply to the district court for
25 35 a temporary or permanent injunction.
26 1 DIVISION II. Division II of the bill includes coordinating
26 2 amendments.
26 3 Code chapter 321 (motor vehicles and law of the road) is
26 4 amended to provide that travel trailers and fifth=wheel travel
26 5 trailers shall not exceed 45 feet, instead of 40 feet in
26 6 length.
26 7 Code chapter 322 (motor vehicle manufacturers, distributors,
26 8 wholesalers, and dealers) is amended to provide that "motor
26 9 vehicle" includes a "motor home" as defined in new Code chapter
26 10 322E. Code section 322.3(1) is amended to prohibit a person
26 11 from selling a motor vehicle that also meets the definition
26 12 of a "recreational vehicle" pursuant to new Code chapter
26 13 322E, unless the person is authorized to do so pursuant to a
26 14 manufacturer and dealer agreement that meets the requirements
26 15 of new Code chapter 322E.
26 16 Code chapter 322A (motor vehicle franchisors) is amended
26 17 to provide that Code chapter 322A does not apply to a motor
26 18 vehicle that is defined as a "recreational vehicle" pursuant to
26 19 new Code chapter 322E.
26 20 Code chapter 322C (travel trailer dealers, manufacturers,
26 21 and distributors) is amended to include definitions of
26 22 recreational vehicles that are consistent with the definitions
26 23 in new Code chapter 322E. Code section 322C.3(1) is amended
26 24 to provide that the required manufacturer or distributor and
26 25 dealer agreement must be made in accordance with the provisions
26 26 of new Code chapter 322E. Code section 322C.3 is amended to
26 27 strike two provisions concerning manufacturers or distributors,
26 28 and dealers of travel trailers that are inconsistent with
26 29 provisions contained in new Code chapter 322E.
26 30 DIVISION III. The provisions of the bill apply to
26 31 manufacturer and dealer agreements pertaining to the sale of
26 32 new recreational vehicles that are entered into or renewed on
26 33 or after July 1, 2016.
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