1.1 	A bill for an act
1.2 	relating to commerce; regulating franchise agreements between outdoor sport 
1.3 	equipment dealers and manufacturers; imposing title requirements; appropriating 
1.4 	money;proposing coding for new law as Minnesota Statutes, chapters 80G; 
1.5 	86C; repealing Minnesota Statutes 2006, sections 86B.820; 86B.825; 86B.830; 
1.6 	86B.835; 86B.840; 86B.845; 86B.850; 86B.855; 86B.860; 86B.865; 86B.870; 
1.7 	86B.875; 86B.880; 86B.885; 86B.890; 86B.895; 86B.900; 86B.905; 86B.910; 
1.8 	86B.915; 86B.920.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	ARTICLE 1
1.11 	OUTDOOR SPORT EQUIPMENT FRANCHISES

1.12 	Section 1. [80G.01] DEFINITIONS.
1.13 		Subdivision 1.Scope. For the purposes of sections 80G.01 to 80G.07, the terms 
1.14 	defined in this section have the meanings given them.
1.15 		Subd. 2.Outdoor sport equipment. "Outdoor sport equipment" means 
1.16 	snowmobiles as defined in section 84.81, subdivision 3; all-terrain vehicles as defined in 
1.17 	section 84.92, subdivision 8; personal watercraft as defined in section 86B.005, subdivision 
1.18 	14a; watercraft as defined in section 86C.01; and motorcycles, as defined in section 
1.19 	65B.001, subdivision 5, and all attachments and repair parts for all of this equipment.
1.20 		Subd. 3.Outdoor sport equipment manufacturer or manufacturer. "Outdoor 
1.21 	sport equipment manufacturer" or "manufacturer" means a person, partnership, 
1.22 	corporation, association, or other form of business enterprise engaged in the 
1.23 	manufacturing, assembly, or wholesale distribution of outdoor sport equipment.  The term 
1.24 	also includes any successor in interest of the outdoor sport equipment manufacturer, 
1.25 	including any purchaser of assets or stock, any surviving corporation resulting from a 
2.1 	merger or liquidation, any receiver or assignee, or any trustee of the original outdoor 
2.2 	sport equipment manufacturer.
2.3 		Subd. 4.Outdoor sport equipment dealer or dealer. "Outdoor sport equipment 
2.4 	dealer" or "dealer" means a person, partnership, corporation, association, or other form of 
2.5 	business enterprise engaged in acquiring outdoor sport equipment from a manufacturer 
2.6 	and reselling the outdoor sport equipment at wholesale or retail.
2.7 		Subd. 5.Dealership agreement. "Dealership agreement" means an oral or 
2.8 	written agreement of definite or indefinite duration between an outdoor sport equipment 
2.9 	manufacturer and an outdoor sport equipment dealer, which enables the dealer to purchase 
2.10 	equipment from the manufacturer and provides for the rights and obligations of the parties 
2.11 	with respect to the purchase or sale of outdoor sport equipment.

2.12 	Sec. 2. [80G.02] TERMINATIONS OR CANCELLATIONS.
2.13 		Subdivision 1.Good cause required. No outdoor sport equipment manufacturer, 
2.14 	directly or through an officer, agent, or employee may terminate, cancel, fail to renew, 
2.15 	or substantially change the competitive circumstances of a dealership agreement without 
2.16 	good cause.  "Good cause" means failure by an outdoor sport equipment dealer to 
2.17 	substantially comply with essential and reasonable requirements imposed upon the dealer 
2.18 	by the dealership agreement, if the requirements are not different from those requirements 
2.19 	imposed on other similarly situated dealers by their terms.  In addition, good cause exists 
2.20 	whenever:
2.21 	(1) without the consent of the outdoor sport equipment manufacturer who shall not 
2.22 	withhold consent unreasonably:  (i) the outdoor sport equipment dealer has transferred an 
2.23 	interest in the outdoor sport equipment dealership; (ii) there has been a withdrawal from 
2.24 	the dealership of an individual proprietor, partner, major shareholder, or the manager of 
2.25 	the dealership; or (iii) there has been a substantial reduction in interest of a partner or 
2.26 	major stockholder;
2.27 	(2) the outdoor sport equipment dealer has filed a voluntary petition in bankruptcy 
2.28 	or has had an involuntary petition in bankruptcy filed against it, which has not been 
2.29 	discharged within 30 days after the filing, there has been a closeout or sale of a substantial 
2.30 	part of the dealer's assets related to the outdoor sport equipment business, or there has 
2.31 	been a commencement of dissolution or liquidation of the dealer;
2.32 	(3) there has been a change, without the prior written approval of the manufacturer, 
2.33 	in the location of the dealer's principal place of business under the dealership agreement;
2.34 	(4) the outdoor sport equipment dealer has defaulted under a chattel mortgage or 
2.35 	other security agreement between the dealer and the outdoor sport equipment manufacturer 
3.1 	or there has been a revocation or discontinuance of a guarantee of the dealer's present or 
3.2 	future obligations to the outdoor sport equipment manufacturer;
3.3 	(5) the outdoor sport equipment dealer has failed to operate in the normal course of 
3.4 	business for seven consecutive days or has otherwise abandoned the business;
3.5 	(6) the outdoor sport equipment dealer has pleaded guilty to or has been convicted of 
3.6 	a felony affecting the relationship between the dealer and manufacturer;
3.7 	(7) the outdoor sport equipment dealer has engaged in conduct which is injurious or 
3.8 	detrimental to the dealer's customers or to the public welfare; or 
3.9 	(8) the outdoor sport equipment dealer, after receiving notice from the manufacturer 
3.10 	of its requirements for reasonable market penetration based on the manufacturer's 
3.11 	experience in other comparable marketing areas, consistently fails to meet the 
3.12 	manufacturer's market penetration requirements.
3.13 		Subd. 2.Notice. Except as otherwise provided in this subdivision, an outdoor 
3.14 	sport equipment manufacturer shall provide an outdoor sport equipment dealer at least 90 
3.15 	days' prior written notice of termination, cancellation, or nonrenewal of the dealership 
3.16 	agreement.  The notice shall state all reasons constituting good cause for the action and 
3.17 	shall provide that the dealer has 60 days in which to cure any claimed deficiency. If the 
3.18 	deficiency is rectified within 60 days, the notice is void.  The notice and right to cure 
3.19 	provisions under this section do not apply if the reason for termination, cancellation, or 
3.20 	nonrenewal is for any reason set forth in subdivision 1, clauses (1) to (7).
3.21 		Subd. 3.Obligation to repurchase. If a dealership agreement is terminated, 
3.22 	canceled, or discontinued, the outdoor sport equipment manufacturer shall pay to the 
3.23 	dealer, or credit to the dealer's account if the dealer has an outstanding amount owed to the 
3.24 	manufacturer, an amount equal to 100 percent of the net cost of all unused outdoor sport 
3.25 	equipment in new condition that has been purchased by the dealer from the manufacturer 
3.26 	within the 24 months immediately preceding notification by either party of intent to 
3.27 	terminate, cancel, or discontinue the agreement.  This amount must include transportation 
3.28 	and reasonable assembly charges that have been paid by the dealer, or invoiced to the 
3.29 	dealer's account by the manufacturer.  The dealer may elect to keep the merchandise 
3.30 	instead of receiving payment, if the contract gives the dealer this right.
3.31 		Subd. 4.Repair parts. (a) The manufacturer shall pay the dealer, or credit to 
3.32 	the dealer's account if the dealer has an outstanding amount owed to the manufacturer, 
3.33 	the following:
3.34 	(1) 95 percent of the current net prices on repair parts, including superseded parts 
3.35 	listed in current price lists or catalogs in use by the manufacturer on the date of the 
3.36 	termination, cancellation, or discontinuance of the agreement;
4.1 	(2) as to any parts not listed in current price lists or catalogs, 100 percent of the 
4.2 	invoiced price of the repair part for which the dealer has an invoice if the parts had 
4.3 	previously been purchased by the dealer from the manufacturer and are held by the 
4.4 	dealer on the date of the termination, cancellation, or discontinuance of the agreement or 
4.5 	received by the dealer from the manufacturer after that date;
4.6 	(3) 50 percent of the most recently published price of all other parts if the price list 
4.7 	or catalog is not more than ten years old as of the date of the termination, cancellation, or 
4.8 	discontinuance of the agreement;
4.9 	(4) net cost less 20 percent per year depreciation for five years following purchase 
4.10 	of all data processing and communications hardware and software the dealer purchased 
4.11 	from the manufacturer or an approved vendor of the manufacturer to meet the minimum 
4.12 	requirements for the hardware and software as set forth by the manufacturer; and 
4.13 	(5) an amount equal to 75 percent of the net cost to the dealer of specialized 
4.14 	repair tools, including computerized diagnostic hardware and software, and signage 
4.15 	purchased by the dealer pursuant to the requirements of the manufacturer. Specialized 
4.16 	repair tools or signage that have never been used must be repurchased at 100 percent of 
4.17 	the dealer's cost. Specialized repair tools must be unique to the manufacturer's product 
4.18 	line, specifically required by the manufacturer, and must be in complete and usable 
4.19 	condition.  The manufacturer may require by contract or agreement that the dealer resell to 
4.20 	the manufacturer such specialized repair tools and signage for the amounts established 
4.21 	in this section or the amount specified in the dealership agreement or contract or fair 
4.22 	market value, whichever is greater.
4.23 	(b) The manufacturer shall pay the dealer, or credit to the dealer's account if the 
4.24 	dealer has an outstanding amount owed to the manufacturer, an amount equal to five 
4.25 	percent of the prices required to be paid or credited by this subdivision for all parts, data 
4.26 	processing and communications hardware and software, and specialized repair tools and 
4.27 	signage returned for the handling, packing, and loading of the parts, data processing and 
4.28 	communications hardware and software, and specialized repair tools and signage back 
4.29 	to the manufacturer unless the manufacturer elects to perform inventory, packing, and 
4.30 	loading of the parts.  Upon the payment or allowance of credit to the dealer's account of 
4.31 	the sum required by this subdivision, the title to and right to possess the outdoor sport 
4.32 	equipment passes to the manufacturer.  However, this section does not affect any security 
4.33 	interest that the manufacturer may have in the inventory of the dealer.
4.34 		Subd. 5.Payment; interest. Payment required to be made under this section must 
4.35 	be made not later than 60 days from the date the outdoor sport equipment is received by 
4.36 	the manufacturer, and if not by then paid, the amount payable by the manufacturer bears 
5.1 	interest at the maximum rate allowed by law from the date the agreement was terminated, 
5.2 	canceled, or discontinued until the date payment is received by the dealer.
5.3 		Subd. 6.Notice of intent to return. In lieu of returning the outdoor sport equipment 
5.4 	to the manufacturer, the dealer may advise the manufacturer that the dealer has outdoor 
5.5 	sport equipment that the dealer intends to return.  The notice of the dealer's intention to 
5.6 	return must be in writing and sworn to before a notary public as to the accuracy of the 
5.7 	listing of outdoor sport equipment and that all of the items are in usable condition.  The 
5.8 	notice must include the name and business address of the person or business who has 
5.9 	possession and custody of the items and where they may be inspected.  The list may be 
5.10 	verified by the manufacturer.  The notice must also state the name and business address of 
5.11 	the person or business who has the authority to serve as the escrow agent of the dealer, to 
5.12 	accept payment or a credit to the dealer's account on behalf of the dealer, and to release the 
5.13 	outdoor sport equipment to the manufacturer.  The notice constitutes the appointment of 
5.14 	the escrow agent to act on the dealer's behalf.
5.15 		Subd. 7.Manufacturer inspection. (a) The manufacturer has 30 days from the date 
5.16 	of the mailing of the notice under subdivision 6, which must be by certified mail, in which 
5.17 	to inspect the outdoor sport equipment and verify the accuracy of the dealer's list.
5.18 	(b) The manufacturer shall, within ten days after inspection:
5.19 	(1) pay the escrow agent;
5.20 	(2) give evidence that a credit to the account of the dealer has been made if the 
5.21 	dealer has an outstanding amount due the manufacturer; or 
5.22 	(3) send to the escrow agent a "dummy credit list" and shipping labels for the return 
5.23 	of the outdoor sport equipment to the manufacturer that are acceptable as returns.
5.24 		Subd. 8.Payment or credit requirements. If the manufacturer sends a credit 
5.25 	list as provided under subdivision 7 to the escrow agent, payment or a credit against 
5.26 	the dealer's indebtedness in accordance with this subdivision for the acceptable returns 
5.27 	must accompany the credit list.  On the receipt of the payment, evidence of a credit 
5.28 	to the account of the dealer or the credit list with payment, the title to, and the right to 
5.29 	possess the outdoor sport equipment acceptable as returns passes to the manufacturer.  The 
5.30 	escrow agent shall ship or cause to be shipped the outdoor sport equipment acceptable 
5.31 	as returns to the manufacturer unless the manufacturer elects to personally perform the 
5.32 	inventory, packing, and loading of the outdoor sport equipment.  When the equipment has 
5.33 	been received by the manufacturer, notice of its receipt shall be sent by certified mail 
5.34 	to the escrow agent who shall then disburse 90 percent of the payment it has received, 
5.35 	less its actual expenses and a reasonable fee for its services, to the dealer.  The escrow 
5.36 	agent shall keep the balance of the funds in the dealer's escrow account until it is notified 
6.1 	that an agreement has been reached as to the nonreturnables.  After being notified of 
6.2 	the agreement, the escrow agent shall disburse the remaining funds and dispose of any 
6.3 	remaining outdoor sport equipment as provided in the agreement.  If no agreement is 
6.4 	reached in a reasonable time, the escrow agent may refer the matter to an arbitrator who 
6.5 	has authority to resolve all unsettled issues in the dispute.
6.6 		Subd. 9.Provisions of contract supplemented. This section is supplemental to an 
6.7 	agreement between the dealer and the manufacturer covering the return of outdoor sport 
6.8 	equipment.  The dealer may elect to pursue either the dealer's contract remedy or the 
6.9 	remedy provided in this section.  An election by the dealer to pursue the contract remedy 
6.10 	does not bar the dealer's right to the remedy provided in this section as to the outdoor sport 
6.11 	equipment not affected by the contract remedy.  Notwithstanding any contrary provision in 
6.12 	this section, the rights of a manufacturer to charge back to the dealer's account amounts 
6.13 	previously paid or credited as a discount incident to the dealer's purchase of goods is not 
6.14 	affected.
6.15 		Subd. 10.Death of dealer; repurchase from heirs. In the event of the death of the 
6.16 	dealer or majority stockholder in a corporation operating a dealership, the manufacturer 
6.17 	shall, unless the heir or heirs of the deceased agree to continue to operate the dealership, 
6.18 	repurchase the merchandise from the heir or heirs upon the same terms and conditions 
6.19 	as are otherwise provided in this section.  In the event the heir or heirs do not agree to 
6.20 	continue to operate the dealership, it shall be deemed a cancellation or discontinuance of 
6.21 	the contract by the dealer under subdivision 1.
6.22 		Subd. 11.Failure to pay sums specified on cancellation of contracts; liability.
 6.23 	In the event that a manufacturer, upon the cancellation of a dealership agreement, fails 
6.24 	or refuses to make payment to the dealer or the dealer's heir or heirs as required by this 
6.25 	section, the manufacturer is liable in a civil action to be brought by the dealer or the 
6.26 	dealer's heir or heirs for:
6.27 	(1) 100 percent of the net cost of the outdoor sport equipment;
6.28 	(2) transportation and reasonable assembly charges, which have been paid by the 
6.29 	dealer;
6.30 	(3) 95 percent of the current net price of repair parts, 100 percent of invoiced prices, 
6.31 	and 50 percent of the price of all other parts as provided in subdivision 4;
6.32 	(4) payment for data processing and communication hardware and software, or 
6.33 	specialized repair tools or signage as outlined in subdivision 4; and 
6.34 	(5) five percent for handling, packing, and loading, if applicable.
6.35 		Subd. 12.Exceptions. Unless a dealer has delivered parts to an escrow agent 
6.36 	pursuant to subdivision 6, this section does not require the repurchase from a dealer 
7.1 	of a repair part where the dealer previously has failed to return the repair part to the 
7.2 	manufacturer after being offered a reasonable opportunity to return the repair part at a 
7.3 	price not less than:
7.4 	(1) 100 percent of the net price of the repair part as listed in the then-current price 
7.5 	list or catalog;
7.6 	(2) 100 percent of the invoiced price; and 
7.7 	(3) 50 percent of the most recent published price as provided in subdivision 4.
7.8 	This section does not require the repurchase from a dealer of repair parts that have a 
7.9 	limited storage life or are otherwise subject to deterioration, such as rubber items, gaskets, 
7.10 	and batteries, unless those items have been purchased from the manufacturer within 
7.11 	the past two years; repair parts which, because of their condition, are not resalable as 
7.12 	new parts without reconditioning; repair parts which have lost required traceability for 
7.13 	quality assurance requirements; and repair parts that were marked nonreturnable or future 
7.14 	nonreturnable when the dealer ordered them.

7.15 	Sec. 3. [80G.03] VIOLATIONS.
7.16 	(a) It is a violation of sections 80G.01 to 80G.07 for an outdoor sport equipment 
7.17 	manufacturer to coerce an outdoor sport equipment dealer to accept delivery of outdoor 
7.18 	sport equipment, which the outdoor sport equipment dealer has not voluntarily ordered.
7.19 	(b) It is a violation of sections 80G.01 to 80G.07 for an outdoor sport equipment 
7.20 	manufacturer to:
7.21 	(1) condition or attempt to condition the sale of outdoor sport equipment on a 
7.22 	requirement that the outdoor sport equipment dealer also purchase other goods or services, 
7.23 	except that an outdoor sport equipment manufacturer may require the dealer to purchase 
7.24 	all parts reasonably necessary to maintain the quality of operation in the field of any 
7.25 	outdoor sport equipment used in the trade area and telecommunication necessary to 
7.26 	communicate with the outdoor sport equipment manufacturer;
7.27 	(2) coerce an outdoor sport equipment dealer into a refusal to purchase the outdoor 
7.28 	sport equipment manufactured by another outdoor sport equipment manufacturer;
7.29 	(3) discriminate in the prices charged for outdoor sport equipment of like grade and 
7.30 	quality sold by the outdoor sport equipment manufacturer to similarly situated outdoor 
7.31 	sport equipment dealers.  This clause does not prevent the use of differentials, which make 
7.32 	only due allowance for difference in the cost of manufacture, sale, or delivery or for the 
7.33 	differing methods or quantities in which the outdoor sport equipment is sold or delivered, 
7.34 	by the outdoor sport equipment manufacturer; or 
8.1 	(4) attempt or threaten to terminate, cancel, fail to renew, or substantially change the 
8.2 	competitive circumstances of the dealership agreement if the attempt or threat is based on 
8.3 	the results of a natural disaster, including a sustained drought in the dealership market 
8.4 	area, a labor dispute, or other circumstance beyond the dealer's control.

8.5 	Sec. 4. [80G.04] WARRANTIES.
8.6 		Subdivision 1.Application. This section applies to all warranty claims submitted by 
8.7 	a dealer to an outdoor sport equipment manufacturer in which the outdoor sport equipment 
8.8 	dealer has complied with the reasonable policies and procedures contained in the outdoor 
8.9 	sport equipment manufacturer's warranty.
8.10 		Subd. 2.Prompt payment. Claims filed for payment under warranty agreements 
8.11 	must be approved or disapproved within 30 days of receipt by the outdoor sport equipment 
8.12 	manufacturer. Unless the outdoor sport equipment dealer agrees to a later date, approved 
8.13 	claims for payment must be paid within 30 days of approval.  When a claim is disapproved, 
8.14 	the outdoor sport equipment manufacturer shall notify the dealer within the 30-day period 
8.15 	stating the specific grounds on which the disapproval is based.  Any claim not specifically 
8.16 	disapproved within 30 days of receipt is deemed approved and must be paid within 30 days.
8.17 		Subd. 3.Posttermination claims. If, after termination of a dealership agreement, a 
8.18 	dealer submits a warranty claim for warranty work performed before the effective date of 
8.19 	the termination, the outdoor sport equipment manufacturer shall approve or disapprove the 
8.20 	claim within 30 days of receipt.
8.21 		Subd. 4.Compensation for warranty work. Warranty work performed by the 
8.22 	dealer must be compensated in accordance with the reasonable and customary amount 
8.23 	of time required to complete the work, expressed in hours and fractions of hours 
8.24 	multiplied by the dealer's established customer hourly retail labor rate, which the dealer 
8.25 	shall communicate to the outdoor sport equipment manufacturer before performing the 
8.26 	warranty work.
8.27 		Subd. 5.Expenses. Expenses expressly excluded under the outdoor sport equipment 
8.28 	manufacturer's warranty to the customer must not be included in claims and are not 
8.29 	required to be paid on requests for compensation from the dealer for warranty work 
8.30 	performed.
8.31 		Subd. 6.Compensation for parts. All parts used by the dealer in performing 
8.32 	warranty work must be paid to the dealer in the amount equal to the dealer's net price 
8.33 	for the parts, plus a minimum of 15 percent to reimburse the dealer for reasonable 
8.34 	costs of doing business in performing warranty service on the outdoor sport equipment 
8.35 	manufacturer's behalf, including, but not limited to, freight and handling costs.
9.1 		Subd. 7.Adjustment for errors. The outdoor sport equipment manufacturer may 
9.2 	adjust for errors discovered during audit, and if necessary, to adjust claims paid in error.
9.3 		Subd. 8.Alternate terms and conditions. A dealer may choose to accept alternate 
9.4 	reimbursement terms and conditions in lieu of the requirements of subdivisions 2 to 
9.5 	7, provided there is a written dealer agreement between the outdoor sport equipment 
9.6 	manufacturer and the dealer providing for compensation to the dealer for warranty labor 
9.7 	costs either as:
9.8 	(1) a discount in the pricing of the equipment to the dealer; or 
9.9 	(2) a lump-sum payment to the dealer.
9.10 	The discount or lump sum must be no less than five percent of the suggested retail price 
9.11 	of the equipment.  If the requirements of this subdivision are met and alternate terms 
9.12 	and conditions are in place, subdivisions 2 to 7 do not apply and the alternate terms and 
9.13 	conditions are enforceable.

9.14 	Sec. 5. [80G.05] STATUS OF INCONSISTENT AGREEMENTS.
9.15 	A term of a dealership agreement either expressed or implied, including a choice of 
9.16 	law provision, which is inconsistent with sections 80G.01 to 80G.07 or that purports to 
9.17 	waive an outdoor sport equipment manufacturer's compliance with sections 80G.01 to 
9.18 	80G.07 is void and unenforceable and does not waive any rights which are provided to 
9.19 	a person by sections 80G.01 to 80G.07.

9.20 	Sec. 6. [80G.06] REMEDIES.
9.21 	If an outdoor sport equipment manufacturer violates sections 80G.01 to 80G.07, an 
9.22 	outdoor sport equipment dealer may bring an action against the manufacturer in a court 
9.23 	of competent jurisdiction for damages sustained by the dealer as a consequence of the 
9.24 	manufacturer's violation, together with the actual costs of the action, including reasonable 
9.25 	attorney fees, and the dealer also may be granted injunctive relief against unlawful 
9.26 	termination, cancellation, nonrenewal, or substantial change of competitive circumstances. 
9.27 	The remedies in this section are in addition to any other remedies permitted by law.

9.28 	Sec. 7. [80G.07] APPLICABILITY.
9.29 	Sections 80G.01 to 80G.06 are effective August 1, 2007, and apply to all dealership 
9.30 	agreements now in effect, which have no expiration date and which are continuing 
9.31 	contracts, and all other contracts entered into, amended, or renewed after August 1, 2007. 
9.32 	Any contract in force and effect on August 1, 2007, which terminates after that date and is 
9.33 	not renewed is governed by the law as it existed before August 1, 2007.

10.1 	ARTICLE 2
10.2 	OUTDOOR SPORT EQUIPMENT TITLING REQUIREMENTS

10.3 	Section 1. [86C.01] DEFINITIONS.
10.4 		Subdivision 1.Applicability. The definitions in this section apply to sections 
10.5 	86C.01 to 86C.21.
10.6 		Subd. 2.Commissioner. "Commissioner" means the commissioner of natural 
10.7 	resources.
10.8 		Subd. 3.Dealer. "Dealer" means a person who: (1) is in the business of 
10.9 	manufacturing, distributing, selling, or purchasing new or used outdoor sport equipment; 
10.10 	(2) has an established place of business for the sale, trade, and display of outdoor sport 
10.11 	equipment; and (3) possesses outdoor sport equipment for the purpose of sale or trade.
10.12 		Subd. 4.Department. "Department" means the Department of Natural Resources.
10.13 		Subd. 5.Deputy registrar. "Deputy registrar" means a person appointed or hired by 
10.14 	the commissioner of public safety under section 168.33.
10.15 		Subd. 6.Manufacturer. "Manufacturer" means a person engaged in the business of 
10.16 	constructing or assembling outdoor sport equipment required to have a certificate of title.
10.17 		Subd. 7.Manufacturer's or importer's certificate of origin. "Manufacturer's or 
10.18 	importer's certificate of origin" means a certificate with the authorized signature of the 
10.19 	manufacturer or importer of outdoor sport equipment, describing and identifying the 
10.20 	outdoor sport equipment, giving the name and address of the person to whom the outdoor 
10.21 	sport equipment is first sold by the manufacturer or importer, and containing executed 
10.22 	assignments of the outdoor sport equipment to an applicant for a certificate of title on 
10.23 	the outdoor sport equipment in this state.
10.24 		Subd. 8.Outdoor sport equipment. "Outdoor sport equipment" has the meaning 
10.25 	given the term in article 1, section 1, subdivision 2.
10.26 		Subd. 9.Owner. "Owner" means a person, other than a secured party, having the 
10.27 	title to outdoor sport equipment. "Owner" includes a person entitled to use or possess the 
10.28 	outdoor sport equipment, subject to a security interest in another person, reserved or 
10.29 	created by agreement and securing payment of performance of an obligation, but "owner" 
10.30 	does not include a lessee under a lease not intended as security.
10.31 		Subd. 10.Person. "Person" means an individual, firm, partnership, association, 
10.32 	corporation, or governmental organization.
10.33 		Subd. 11.Secured party. "Secured party" means a secured party as defined in 
10.34 	section 336.9-102(a)(72), having a security interest in outdoor sport equipment and 
10.35 	includes a lienholder.
11.1 		Subd. 12.Security agreement. "Security agreement" has the meaning given it in 
11.2 	section 336.9-102(a)(73).
11.3 		Subd. 13.Security interest. "Security interest" has the meaning given it in section 
11.4 	336.1-201(b)(35), and includes statutory liens for which lien statements are filed.
11.5 		Subd. 14.Titled outdoor sport equipment. "Titled outdoor sport equipment" 
11.6 	means outdoor sport equipment required to have a certificate of title under section 86C.02, 
11.7 	subdivision 1; outdoor sport equipment for which a certificate of title has been issued 
11.8 	under section 86C.02, subdivision 2; or outdoor sport equipment previously issued a 
11.9 	certificate of title or similar document from another jurisdiction.
11.10 		Subd. 15.Watercraft. "Watercraft" means a device used or designed for navigation 
11.11 	on water that is greater than 16 feet in length, as defined in section 86B.005, subdivision 
11.12 	6, but does not include: 
11.13 	(1) a row-type fishing boat of single hull construction, with oar locks and an 
11.14 	outboard motor capacity rating of less than 40 horsepower;
11.15 	(2) a canoe;
11.16 	(3) a kayak;
11.17 	(4) a rowing shell or scull;
11.18 	(5) a ship's lifeboat;
11.19 	(6) a vessel of at least five net tons measured in Code of Federal Regulations, title 46, 
11.20 	part 69, that is documented under Code of Federal Regulations, title 46, subpart 67.01; or
11.21 	(7) a seaplane.
11.22 		Subd. 16.Waters of this state. "Waters of this state" means waters capable of 
11.23 	substantial public use and waters to which the public has access, that are within the 
11.24 	territorial limits of this state, including boundary waters.

11.25 	Sec. 2. [86C.02] CERTIFICATE OF TITLE REQUIRED.
11.26 		Subdivision 1.Requirement. Except as provided in subdivision 2, outdoor sport 
11.27 	equipment used on the waters or the lands of the state must have a certificate of title if the 
11.28 	outdoor sport equipment is kept in the state for more than 90 consecutive days.
11.29 		Subd. 2.Exempt outdoor sport equipment. Outdoor sport equipment is not 
11.30 	required to have a certificate of title if the outdoor sport equipment is:
11.31 	(1) owned by a manufacturer or dealer and held for sale;
11.32 	(2) used by a manufacturer solely for testing;
11.33 	(3) from a jurisdiction other than this state, temporarily using the waters or the 
11.34 	lands of this state;
11.35 	(4) owned by the United States, a state, this state, or a political subdivision;
12.1 	(5) a duck boat used only during duck hunting season;
12.2 	(6) a rice boat used only during the wild rice harvesting season;
12.3 	(7) owned by a person, firm, or corporation operating a resort as defined in section 
12.4 	157.15 or a recreational camping area as defined in section 327.14, subdivision 8, except 
12.5 	with respect to previously titled outdoor sport equipment; or 
12.6 	(8) outdoor sport equipment manufactured prior to August 1, 2007.
12.7 		Subd. 3.Voluntary titling. The owner of a device used or designed for navigation 
12.8 	on water or land and used on the waters or the lands of this state, may obtain a certificate 
12.9 	of title for the device, even though it is not outdoor sport equipment as defined in article 
12.10 	1, section 1, subdivision 2, in the same manner and with the same effect as the owner 
12.11 	of outdoor sport equipment required to be titled under this act. Once titled, the device 
12.12 	is titled outdoor sport equipment as defined in section 86C.01, subdivision 14, and is 
12.13 	and remains subject to sections 86C.01 to 86C.21, to the same extent as outdoor sport 
12.14 	equipment required to be titled.
12.15 		Subd. 4.Title required for transfer. A person may not sell or otherwise transfer 
12.16 	titled outdoor sport equipment without delivering to the person acquiring the outdoor 
12.17 	sport equipment a certificate of title with an assignment on it to show title in the person 
12.18 	acquiring the outdoor sport equipment. A person may not acquire outdoor sport equipment 
12.19 	required to have a certificate of title without obtaining a certificate of title for the outdoor 
12.20 	sport equipment in the person's name.
12.21 		Subd. 5.No legal title without certificate. A person acquiring outdoor sport 
12.22 	equipment through a sale or gift does not acquire a right, title, claim, or interest in the 
12.23 	outdoor sport equipment until the person has been issued a certificate of title to the outdoor 
12.24 	sport equipment or has received a manufacturer's or importer's certificate. A waiver or 
12.25 	estoppel does not operate in favor of that person against another person who has obtained 
12.26 	possession of the certificate of title or manufacturer's or importer's certificate for the 
12.27 	outdoor sport equipment for valuable consideration.
12.28 		Subd. 6.Outdoor sport equipment license may not be issued without title. The 
12.29 	commissioner may not issue or renew an outdoor sport equipment license to an owner 
12.30 	of titled outdoor sport equipment unless the owner has been issued or has applied for a 
12.31 	certificate of title for the outdoor sport equipment.

12.32 	Sec. 3. [86C.03] APPLICATION AND ISSUANCE OF CERTIFICATE OF 
12.33 	TITLE.
12.34 		Subdivision 1.Application. The owner of titled outdoor sport equipment must 
12.35 	apply for the first certificate of title of outdoor sport equipment in this state to the 
13.1 	commissioner or a deputy registrar on a form prescribed by the commissioner. The 
13.2 	appropriate fee under section 86C.11 must accompany the application. The application 
13.3 	must be signed by the owner and contain:
13.4 	(1) the full names, dates of birth, and addresses of owners who are natural persons 
13.5 	and the full names and addresses of other owners;
13.6 	(2) a description of the outdoor sport equipment including its make, model, year, 
13.7 	length if appropriate, the principal material used in construction, and the builder's or 
13.8 	manufacturer's hull or other identification number if appropriate;
13.9 	(3) the date of purchase by the applicant, the name and address of the person from 
13.10 	whom the outdoor sport equipment was acquired;
13.11 	(4) the name and address of the person who is to possess the title and any conditions 
13.12 	of possession; and
13.13 	(5) other information required by the commissioner to determine whether the owner 
13.14 	is entitled to a certificate of title and whether security interests exist in the outdoor sport 
13.15 	equipment.
13.16 		Subd. 2.Issuance. (a) The commissioner shall issue a certificate of title for outdoor 
13.17 	sport equipment upon verification that:
13.18 	(1) the application is genuine;
13.19 	(2) the applicant is the owner of the outdoor sport equipment; and
13.20 	(3) payment of the required fee.
13.21 	(b) The original certificate of title must be mailed to the first secured party disclosed 
13.22 	in the application or, if none, to the owner named in the application.
13.23 		Subd. 3.Contents. (a) A certificate of title issued by the commissioner must contain:
13.24 	(1) the date issued;
13.25 	(2) the full names, dates of birth, and addresses of owners who are natural persons 
13.26 	and the full names and addresses of other owners;
13.27 	(3) the names and addresses of secured parties;
13.28 	(4) the title number assigned to the outdoor sport equipment;
13.29 	(5) a description of the outdoor sport equipment including its make, model, year 
13.30 	of manufacture, length, principal material used in construction, registration number, 
13.31 	and manufacturer's hull or other identification number if appropriate or, if none, the 
13.32 	builder's hull or other identification number assigned to the outdoor sport equipment by 
13.33 	the commissioner if appropriate;
13.34 	(6) spaces for assignment of title by the owner or by the dealer and for warranting 
13.35 	that the signer is the owner and that the outdoor sport equipment is not subject to security 
13.36 	interests, liens, or encumbrances except as noted on the face of the certificate of title;
14.1 	(7) spaces on the certificate for application of title by a new owner subject to the 
14.2 	security interests of secured parties named and for the assignment or release of the security 
14.3 	interest of a secured party; and
14.4 	(8) other information the commissioner may require.
14.5 	(b) A certificate of title issued by the commissioner is prima facie evidence of the 
14.6 	facts appearing on it.
14.7 		Subd. 4.Issuance without absolute proof of ownership. (a) If application is 
14.8 	made for a certificate of title for outdoor sport equipment and the commissioner is not 
14.9 	satisfied of the ownership of the outdoor sport equipment or the existence of security 
14.10 	interests in the outdoor sport equipment, the outdoor sport equipment may be assigned a 
14.11 	title number but the commissioner must:
14.12 	(1) withhold issuance of a certificate of title until the applicant presents documents 
14.13 	that satisfy the commissioner of the applicant's ownership of the outdoor sport equipment 
14.14 	and of security interest in the outdoor sport equipment; or
14.15 	(2) require the applicant to file a bond in the form prescribed by the commissioner 
14.16 	and executed by the applicant as a condition to issuing a certificate of title.
14.17 	(b) A bond filed under this subdivision must be accompanied by the deposit of 
14.18 	cash or executed by a surety company authorized to do business in this state. The bond 
14.19 	must be in an amount equal to 1-1/2 times the value of the outdoor sport equipment as 
14.20 	determined by the commissioner. The bond must be conditioned to indemnify prior 
14.21 	owners, secured parties, and later purchasers of the outdoor sport equipment or persons 
14.22 	acquiring a security interest in the outdoor sport equipment, or successors in interest of 
14.23 	the persons, against expenses, losses, or damages, including reasonable attorney fees, 
14.24 	by reason of the issuance of the certificate of title to the outdoor sport equipment or on 
14.25 	account of a defect in or undisclosed security interest upon the right, title, and interest of 
14.26 	the applicant in the outdoor sport equipment.
14.27 	(c) An interested person has a right of action to recover on the bond for a breach 
14.28 	of its conditions, but the aggregate liability of the surety to all persons may not exceed 
14.29 	the amount of the bond.
14.30 	(d) The commissioner shall return the bond and any deposit accompanying the 
14.31 	bond if:
14.32 	(1) the commissioner has not been notified of the pendency of an action to recover 
14.33 	on the bond;
14.34 	(2) questions of ownership and outstanding security interests have been resolved 
14.35 	to the satisfaction of the commissioner;
15.1 	(3) the bond has been posted for three years or the outdoor sport equipment is not 
15.2 	registered for license purposes in this state under sections 86B.125, 86B.301, and 86B.401
15.3 	to 86B.421; and
15.4 	(4) the currently valid certificate of title is surrendered.
15.5 		Subd. 5.Records. (a) The commissioner shall maintain records of certificates of 
15.6 	title issued under this section according to one of the following systems:
15.7 	(1) under a distinctive title number assigned to outdoor sport equipment;
15.8 	(2) under the registration number awarded to outdoor sport equipment in accordance 
15.9 	with the registration and numbering law of the state where it is registered;
15.10 	(3) alphabetically, under the name of the owner; or
15.11 	(4) under another system determined by the commissioner.
15.12 	(b) Records relating to outdoor sport equipment titling maintained by the 
15.13 	commissioner are public records and are open to public inspection during regular office 
15.14 	hours.
15.15 		Subd. 6.Grounds for refusal to issue certificate of title. The commissioner 
15.16 	may not issue a certificate of title if a required fee is not paid or the commissioner has 
15.17 	reasonable grounds to believe that:
15.18 	(1) the applicant is not the owner of the outdoor sport equipment;
15.19 	(2) the application contains a false statement; or
15.20 	(3) the applicant failed to furnish required information or documents or additional 
15.21 	information the commissioner reasonably requires.

15.22 	Sec. 4. [86C.04] DEALER ACQUISITION AND TRANSFER.
15.23 		Subdivision 1.Certificate of origin required. (a) A dealer may not purchase 
15.24 	or acquire new titled outdoor sport equipment without obtaining a manufacturer's or 
15.25 	importer's certificate of origin from the seller.
15.26 	(b) A manufacturer, importer, dealer, or other person may not sell or otherwise 
15.27 	dispose of new titled outdoor sport equipment to a dealer for purposes of display and 
15.28 	resale without delivering to the dealer a manufacturer's or importer's certificate of origin.
15.29 		Subd. 2.Contents of certificate. The manufacturer's or importer's certificate of 
15.30 	origin must be of a form prescribed by the commissioner and contain:
15.31 	(1) a description of the outdoor sport equipment, including its trade name, if 
15.32 	any, year, series or model, and hull material, length, and hull identification number if 
15.33 	appropriate;
15.34 	(2) certification of the date of transfer of the outdoor sport equipment and the name 
15.35 	and address of the person to whom the outdoor sport equipment was transferred;
16.1 	(3) certification that the transfer of the outdoor sport equipment was in ordinary 
16.2 	trade and commerce;
16.3 	(4) the signature and address of a representative of the person transferring the 
16.4 	outdoor sport equipment;
16.5 	(5) an assignment form, including the name and address of the person the outdoor 
16.6 	sport equipment is to be transferred to, a certification that the outdoor sport equipment 
16.7 	is new, and a warranty that the title at the time of delivery is subject only to the security 
16.8 	interests stated on the title; and
16.9 	(6) other information required by the commissioner.
16.10 		Subd. 3.Sale of new outdoor sport equipment. A dealer selling or exchanging 
16.11 	new titled outdoor sport equipment, before delivering the outdoor sport equipment to a 
16.12 	purchaser, shall apply to the commissioner for a new title in the name of the purchaser. 
16.13 	The application must contain the name and address of any secured party holding a security 
16.14 	interest created or reserved at the time of sale and the date of the security agreement 
16.15 	and must be accompanied by a manufacturer's or importer's certificate of origin. The 
16.16 	application must be signed by the dealer and the owner, and the dealer shall promptly mail 
16.17 	or deliver the application to the commissioner or a deputy registrar.
16.18 		Subd. 4.Used outdoor sport equipment acquired for resale. (a) If a dealer buys 
16.19 	or acquires used titled outdoor sport equipment for resale, the dealer must apply to the 
16.20 	commissioner or deputy registrar and obtain a title number before selling or exchanging 
16.21 	the outdoor sport equipment in the same manner as new outdoor sport equipment on forms 
16.22 	the commissioner provides or apply for and obtain a certificate of title.
16.23 	(b) If a dealer acquires used titled outdoor sport equipment for resale and the outdoor 
16.24 	sport equipment is covered by a certificate of title that is surrendered to the dealer by the 
16.25 	owner at the time of delivery of the outdoor sport equipment, the dealer need not send the 
16.26 	certificate of title to the commissioner. Upon transferring the outdoor sport equipment to 
16.27 	another person, the dealer must promptly execute the assignment, showing the name and 
16.28 	address of the person to whom the outdoor sport equipment is transferred and forward 
16.29 	the certificate to the commissioner or deputy registrar with the application for a new 
16.30 	certificate of title.
16.31 		Subd. 5.Outdoor sport equipment with foreign registration. (a) Except as 
16.32 	provided in paragraph (b), an application for a certificate of title for outdoor sport 
16.33 	equipment last registered in another state or foreign country must contain or be 
16.34 	accompanied by:
16.35 	(1) a certificate of title or registration issued by the other state or foreign country; and
17.1 	(2) other information or documents the commissioner requires to establish the 
17.2 	ownership of the outdoor sport equipment and the existence or nonexistence of security 
17.3 	interests.
17.4 	(b) If the state or foreign country where the outdoor sport equipment was 
17.5 	last registered does not issue certificates of title, the application must contain or be 
17.6 	accompanied by:
17.7 	(1) a proper bill of sale or sworn statement of ownership, certificate of registration, 
17.8 	or evidence of ownership as required by the law of the state or foreign country; and
17.9 	(2) any other information or documents the commissioner requires to establish the 
17.10 	ownership of the outdoor sport equipment and the existence or nonexistence of security 
17.11 	interests.

17.12 	Sec. 5. [86C.05] TRANSFER BY OWNER.
17.13 		Subdivision 1.Voluntary transfer. (a) An owner who transfers titled outdoor sport 
17.14 	equipment must execute the assignment and warranty of title to the person to whom the 
17.15 	outdoor sport equipment is transferred in the space provided on the certificate of title 
17.16 	where the outdoor sport equipment is delivered.
17.17 	(b) The person acquiring the outdoor sport equipment must obtain a new certificate 
17.18 	of title by applying to the commissioner or a deputy registrar on a form prescribed by the 
17.19 	commissioner, and submitting the required fee. The application for certificate of title 
17.20 	must be filed within 15 days after delivery of the outdoor sport equipment to the person 
17.21 	acquiring the outdoor sport equipment.
17.22 	(c) Upon request of the owner or the person who acquired the outdoor sport 
17.23 	equipment, a secured party in possession of the certificate of title must deliver the 
17.24 	certificate to the person acquiring the outdoor sport equipment, the commissioner, or a 
17.25 	deputy registrar, unless the transfer is a breach of the security agreement. The delivery of 
17.26 	the certificate does not affect the rights of the secured party under the security agreement.
17.27 	(d) If a security interest or encumbrance is first created at the time of transfer of 
17.28 	ownership, the certificate must be retained by or delivered to the secured party.
17.29 		Subd. 2.Transfer by law. (a) Except as otherwise provided in this chapter, if the 
17.30 	ownership of titled outdoor sport equipment is transferred by operation of law, including 
17.31 	inheritance or bequest, order in bankruptcy, insolvency, replevin, execution, sale, or 
17.32 	satisfaction of mechanic's lien, or repossession upon default in performance of the terms 
17.33 	of a security agreement, the person acquiring the outdoor sport equipment by operation of 
17.34 	law must promptly submit the last certificate of title, if available, or the manufacturer's 
17.35 	or importer's certificate or other satisfactory proof of the transfer of ownership to the 
18.1 	commissioner or deputy registrar with the application for a new certificate of title and 
18.2 	the required fee.
18.3 	(b) If a secured party acquires titled outdoor sport equipment under the terms of a 
18.4 	security agreement or by operation of law, the secured party must promptly submit to the 
18.5 	commissioner, a deputy registrar, or the person acquiring the outdoor sport equipment 
18.6 	from the secured party the last certificate of title, if available, an application for a new 
18.7 	certificate of title with the required fee, and an affidavit by the secured party or an 
18.8 	authorized representative stating the facts entitling the secured party to possession and 
18.9 	ownership of the outdoor sport equipment, including a copy of the journal entry, court 
18.10 	order, or instrument upon which the claim of possession and ownership is founded. If 
18.11 	the secured party cannot produce the required proof of ownership, the secured party 
18.12 	may submit other evidence with the application and the commissioner may issue a new 
18.13 	certificate of title if the evidence provides satisfactory proof of ownership.

18.14 	Sec. 6. [86C.06] TEMPORARY USE PERMITS.
18.15 		Subdivision 1.Issuance to title applicant. (a) The commissioner may issue a 
18.16 	temporary outdoor sport equipment use permit to a person applying for a certificate of 
18.17 	title for new or used outdoor sport equipment to allow that person to operate the outdoor 
18.18 	sport equipment on the waters or lands of the state pending completion of the titling and 
18.19 	outdoor sport equipment licensing process.
18.20 	(b) The outdoor sport equipment use permit must be carried aboard the outdoor sport 
18.21 	equipment to allow immediate inspection. The outdoor sport equipment use permit must 
18.22 	contain a description of the outdoor sport equipment, including its trade name, if any, year, 
18.23 	series or model, and hull material, length, and hull identification number if appropriate, 
18.24 	and other information prescribed by the commissioner. A permit is valid only for the 
18.25 	outdoor sport equipment for which it is issued.
18.26 		Subd. 2.Distribution to dealers. The commissioner may distribute permits in 
18.27 	booklet form to licensed dealers. If the dealer issues a permit, the dealer must submit 
18.28 	an outdoor sport equipment use permit information form to the commissioner. The 
18.29 	commissioner must provide information forms that require the name of the person to 
18.30 	whom the outdoor sport equipment use permit was issued, the outdoor sport equipment 
18.31 	description, dates of issue and expiration, and other information prescribed by the 
18.32 	commissioner.

18.33 	Sec. 7. [86C.07] DUPLICATE CERTIFICATE.
19.1 		Subdivision 1.Form and issuance. (a) The commissioner may issue a duplicate 
19.2 	certificate of title under this section. The duplicate certificate of title must be a certified 
19.3 	copy plainly marked "duplicate" across its face and must contain the legend: "This 
19.4 	duplicate certificate of title may be subject to the rights of a person under the original 
19.5 	certificate." It must be mailed to the first secured party named in it or, if none, to the owner. 
19.6 	The commissioner shall indicate in the department records that a duplicate has been issued.
19.7 	(b) As a condition to issuing a duplicate certificate of title, the commissioner may 
19.8 	require a bond from the applicant in the manner and form prescribed in section 86B.830, 
19.9 	subdivision 4, paragraph (b). 
19.10 		Subd. 2.Waiting period to issue new certificate of title. The commissioner may 
19.11 	not issue a new certificate of title to a person acquiring outdoor sport equipment under an 
19.12 	application made on a duplicate certificate of title until at least 15 days after receiving 
19.13 	the application.
19.14 		Subd. 3.Disappearance of original certificate. If a certificate of title is lost, stolen, 
19.15 	or destroyed, the owner or legal representative of the owner named in the certificate 
19.16 	may obtain a duplicate by applying to the commissioner, furnishing information the 
19.17 	commissioner requires concerning the original certificate, and the circumstances of its 
19.18 	loss or destruction.
19.19 		Subd. 4.Mutilated or illegible certificate. If an original certificate of title is 
19.20 	mutilated or rendered illegible, the person in possession of the title must return it to the 
19.21 	commissioner with the application for a duplicate.
19.22 		Subd. 5.Recovery of lost or stolen certificate. If a lost or stolen certificate of title 
19.23 	for which a duplicate has been issued is recovered, the lost or stolen certificate of title 
19.24 	must be surrendered promptly to the commissioner for cancellation.

19.25 	Sec. 8. [86C.08] SUSPENSION OR REVOCATION OF CERTIFICATE.
19.26 		Subdivision 1.Suspension or revocation. The commissioner shall suspend 
19.27 	or revoke a certificate of title upon notice and reasonable opportunity to be heard if 
19.28 	authorized by law or if the commissioner finds that:
19.29 	(1) the certificate of title was fraudulently procured or erroneously issued; or
19.30 	(2) the outdoor sport equipment has been scrapped, dismantled, or destroyed.
19.31 		Subd. 2.Duties of owner. If the commissioner suspends or revokes a certificate 
19.32 	of title, the owner or person in possession of the certificate of title, immediately upon 
19.33 	receiving notice of the suspension or revocation, shall mail or deliver the certificate to 
19.34 	the commissioner.
20.1 		Subd. 3.Seizure or impoundment. The commissioner may seize and impound 
20.2 	a certificate of title that has been suspended or revoked.
20.3 		Subd. 4.Subsequent good faith purchaser. Suspension or revocation of a 
20.4 	certificate of title does not affect the validity of a subsequent transfer to a purchaser relying 
20.5 	in good faith on the assignment of a suspended or revoked title if the certificate of title 
20.6 	was not surrendered to or seized by the commissioner under subdivisions 2 and 3, and 
20.7 	the commissioner shall issue a new certificate of title to an applicant who is a good faith 
20.8 	purchaser for value in those circumstances.

20.9 	Sec. 9. [86C.09] RESPONSIBILITIES OF COMMISSIONER.
20.10 	The commissioner shall prescribe and provide suitable forms of applications, 
20.11 	certificates of title, notices of security interests, and other notices and forms necessary to 
20.12 	implement this chapter. In addition, the commissioner may:
20.13 	(1) make necessary investigations to procure information required to implement 
20.14 	this chapter;
20.15 	(2) assign a new identification number, if appropriate, to outdoor sport equipment 
20.16 	if the outdoor sport equipment does not have a number or the number is destroyed or 
20.17 	obliterated; or
20.18 	(3) adopt and enforce rules necessary to implement this chapter.

20.19 	Sec. 10. [86C.10] PENALTIES.
20.20 		Subdivision 1.Felony. A person is guilty of a felony and punishable by 
20.21 	imprisonment for a term of not more than four years, or payment of a fine of not more 
20.22 	than $5,000, or both, if the person with fraudulent intent:
20.23 	(1) uses a false or fictitious name or address, makes a material false statement, 
20.24 	fails to disclose a security interest, or conceals any other material fact in an application 
20.25 	for a certificate of title; or
20.26 	(2) submits a false, forged, or fictitious document in support of an application for a 
20.27 	certificate of title.
20.28 		Subd. 2.Misdemeanor. A person is guilty of a misdemeanor if that person:
20.29 	(1) with fraudulent intent permits another to use or possess a certificate of title who 
20.30 	is not entitled to use or possess the certificate of title;
20.31 	(2) willfully fails to mail or deliver a certificate of title to the commissioner or a 
20.32 	deputy registrar within ten days after the time required;
20.33 	(3) willfully fails to deliver to a person acquiring outdoor sport equipment a 
20.34 	certificate of title within ten days after the time required;
21.1 	(4) commits a fraud in an application for a certificate of title; or
21.2 	(5) fails to notify the commissioner of a fact as required by law.

21.3 	Sec. 11. [86C.11] TITLE FEES.
21.4 		Subdivision 1.Fees. (a) The fee to be paid to the commissioner:
21.5 	(1) for issuing an original certificate of title, including the concurrent notation of an 
21.6 	assignment of the security interest and its subsequent release or satisfaction, is $15;
21.7 	(2) for each security interest when first noted upon a certificate of title, including the 
21.8 	concurrent notation of an assignment of the security interest and its subsequent release or 
21.9 	satisfaction, is $10;
21.10 	(3) for transferring the interest of an owner and issuing a new certificate of title, is 
21.11 	$10;
21.12 	(4) for each assignment of a security interest when first noted on a certificate of title, 
21.13 	unless noted concurrently with the security interest, is $1; and
21.14 	(5) for issuing a duplicate certificate of title, is $4.
21.15 	(b) In addition to other statutory fees and taxes, a filing fee of $7 is imposed on every 
21.16 	outdoor sport equipment title application. The filing fee must be shown as a separate item 
21.17 	on title renewal notices sent by the commissioner.
21.18 		Subd. 2.Concurrent applications. If a person applies for an original or a new 
21.19 	certificate of title for outdoor sport equipment concurrently with an application for transfer 
21.20 	of license of the outdoor sport equipment to the applicant, the fee prescribed in subdivision 
21.21 	1 is in lieu of any other fees prescribed for a transfer of ownership or license of the outdoor 
21.22 	sport equipment to the applicant. 
21.23 		Subd. 3.Fees paid before title issued. Subject to subdivision 2, the commissioner 
21.24 	may not issue a certificate of title for outdoor sport equipment until the fees prescribed 
21.25 	by subdivision 1 and other law for a prior transfer of ownership or license of the outdoor 
21.26 	sport equipment have been paid. 
21.27 		Subd. 4.Deposit of fee. (a) Fees collected under this section, except fees collected 
21.28 	on watercraft, must be deposited in the state treasury and credited to an outdoor sport 
21.29 	recreation account which is created in the state treasury in the natural resources fund and 
21.30 	which is appropriated by law for outdoor sport recreation purposes established by law, 
21.31 	except a deputy registrar who originates an application shall retain the filing fee under 
21.32 	subdivision 1, paragraph (b).
21.33 	(b) Fees collected under this section on watercraft must be deposited as provided 
21.34 	in section 86B.706.

22.1 	Sec. 12. [86C.12] INAPPLICABLE LIENS AND SECURITY INTERESTS.
22.2 	The requirements of this chapter relating to security interests and certificate of title 
22.3 	do not apply to or affect:
22.4 	(1) a lien given by statute or rule of law to a supplier of services or materials for 
22.5 	the outdoor sport equipment while the outdoor sport equipment is in the possession of 
22.6 	the lienholder;
22.7 	(2) a lien given by statute to the United States, this state, or a political subdivision 
22.8 	of this state; or
22.9 	(3) a security interest in outdoor sport equipment created by a manufacturer or dealer 
22.10 	who holds the outdoor sport equipment for sale.

22.11 	Sec. 13. [86C.13] SECURITY INTERESTS.
22.12 		Subdivision 1.Validity. Unless excepted by section 86C.12, a security interest in 
22.13 	titled outdoor sport equipment is not valid against creditors of the owner or subsequent 
22.14 	transferees or secured parties of the outdoor sport equipment unless perfected as provided 
22.15 	in this chapter. 
22.16 		Subd. 2.Perfection. A security interest is perfected by the delivery to the 
22.17 	commissioner of the existing certificate of title, if any, or an application for a certificate 
22.18 	of title, containing the name and address of the secured party, the date of the security 
22.19 	agreement, and the required fee. A security interest is perfected as of the time of the 
22.20 	delivery. The method provided in this chapter is exclusive.

22.21 	Sec. 14. [86C.14] OWNER-CREATED SECURITY INTEREST.
22.22 	Paragraphs (a) to (d) apply if an owner creates a security interest in titled outdoor 
22.23 	sport equipment.
22.24 	(a) The owner shall immediately execute the application in the space provided on the 
22.25 	certificate of title or on a separate form prescribed by the commissioner, show the name 
22.26 	and address of the secured party on the certificate, and have the certificate, application, 
22.27 	and required fee delivered to the secured party.
22.28 	(b) The secured party shall immediately have the certificate, application, and 
22.29 	required fee mailed or delivered to the commissioner.
22.30 	(c) Upon request of the owner or subordinate secured party, a secured party in 
22.31 	possession of the certificate of title shall either (1) mail or deliver the certificate to the 
22.32 	subordinate secured party for delivery to the commissioner, or (2) upon receiving from the 
22.33 	subordinate secured party the owner's application and the required fee, mail or deliver 
23.1 	them to the commissioner with the certificate. The delivery of the certificate does not 
23.2 	affect the rights of the first secured party under the security agreement.
23.3 	(d) Upon receiving the certificate of title, application, and required fee, the 
23.4 	commissioner shall either endorse on the certificate or issue a new certificate containing 
23.5 	the name and address of the new secured party, and mail or deliver the certificate to the 
23.6 	first secured party named on it.

23.7 	Sec. 15. [86C.15] LICENSED OUTDOOR SPORT EQUIPMENT PREVIOUSLY 
23.8 	PERFECTED.
23.9 	If a security interest in previously licensed outdoor sport equipment is perfected 
23.10 	under other applicable Minnesota law on January 1, 2007, the security interest continues 
23.11 	perfected:
23.12 	(1) until its perfection lapses under the law under which it was perfected or would 
23.13 	lapse in the absence of a further filing; or
23.14 	(2) until a certificate of title for the outdoor sport equipment is issued and the 
23.15 	security interest is perfected under section 86C.13.
23.16 	The assignment, release, or satisfaction of a security interest in previously licensed 
23.17 	outdoor sport equipment is governed by the laws under which it was perfected.

23.18 	Sec. 16. [86C.16] SATISFACTION OF SECURITY INTEREST.
23.19 		Subdivision 1.Release. Upon the satisfaction of a security interest in outdoor sport 
23.20 	equipment for which the certificate of title is in the possession of the secured party, the 
23.21 	secured party, within 15 days, shall execute a release of the security interest in the space 
23.22 	provided on the certificate or as prescribed by the commissioner, and mail or deliver 
23.23 	the certificate and release to the next secured party named or, if none, to the owner or a 
23.24 	person who delivers to the secured party an authorization from the owner to receive the 
23.25 	certificate. The owner, other than a dealer holding the outdoor sport equipment for resale, 
23.26 	shall promptly have the certificate, the release, and the required fee mailed or delivered 
23.27 	to the commissioner, who shall release the secured party's rights on the certificate or 
23.28 	issue a new certificate.
23.29 		Subd. 2.Release of subordinate security interest. Upon the satisfaction of a 
23.30 	security interest in outdoor sport equipment for which the certificate of title is in the 
23.31 	possession of a prior secured party, the secured party whose security interest is satisfied 
23.32 	shall execute a release in the form prescribed by the commissioner and, within 15 days after 
23.33 	satisfaction, deliver the release to the owner or a person who delivers to the secured party.

24.1 	Sec. 17. [86C.17] DISCLOSURE OF SECURITY AGREEMENT.
24.2 	A secured party named in a certificate of title, upon written request of the owner or 
24.3 	other secured party named on the certificate, must disclose pertinent information about 
24.4 	the security agreement and the indebtedness secured by it.

24.5 	Sec. 18. [86C.18] EFFECT OF SUSPENSION OR REVOCATION ON 
24.6 	SECURITY INTEREST.
24.7 	Suspension or revocation of a certificate of title does not, in itself, affect the validity 
24.8 	of a security interest noted on it.

24.9 	Sec. 19. [86C.19] PREVIOUSLY LICENSED OUTDOOR SPORT EQUIPMENT 
24.10 	UNDISCLOSED SECURITY INTERESTS.
24.11 	If the commissioner is not satisfied that there are no undisclosed security interests 
24.12 	created before the outdoor sport equipment is initially titled, the commissioner may, in 
24.13 	addition to its options under section 86C.03, subdivision 4, issue a distinctive certificate of 
24.14 	title for the outdoor sport equipment containing the legend: "This outdoor sport equipment 
24.15 	may be subject to an undisclosed lien," and any other information the commissioner 
24.16 	prescribes. 

24.17 	Sec. 20. [86C.20] LIENS ATTACHING TO OUTDOOR SPORT EQUIPMENT.
24.18 	(a) A nonpossessory lien on titled outdoor sport equipment is not perfected unless a 
24.19 	lien statement is filed with the commissioner.
24.20 	(b) The lien statement must include:
24.21 	(1) the outdoor sport equipment owner's name and address;
24.22 	(2) the statute under which the lien is taken;
24.23 	(3) the name and address of the lienholder; and
24.24 	(4) the title number of the outdoor sport equipment.
24.25 	(c) The commissioner shall note the time and date of filing the lien statement.

24.26 	Sec. 21. [86C.21] STOLEN OUTDOOR SPORT EQUIPMENT.
24.27 		Subdivision 1.Duty of peace officers. A peace officer aware of stolen or converted 
24.28 	outdoor sport equipment shall immediately furnish the commissioner with information 
24.29 	concerning the theft or conversion.
24.30 		Subd. 2.Duty of commissioner. The commissioner, upon receiving a report of 
24.31 	the theft or conversion of outdoor sport equipment, shall record the report information, 
24.32 	including the make of the stolen or converted outdoor sport equipment and its builder's 
25.1 	hull or other identification number, if any. The commissioner shall prepare a list of 
25.2 	outdoor sport equipment reported stolen and those recovered as disclosed by the reports 
25.3 	submitted. The report may be distributed as the commissioner deems advisable.
25.4 		Subd. 3.Duty of owner. If stolen or converted outdoor sport equipment is 
25.5 	recovered, the owner shall immediately notify the commissioner.

25.6 	Sec. 22.  REPEALER.
 25.7 	Minnesota Statutes 2006, sections 86B.820; 86B.825; 86B.830; 86B.835; 86B.840; 
25.8 	86B.845; 86B.850; 86B.855; 86B.860; 86B.865; 86B.870; 86B.875; 86B.880; 86B.885; 
25.9 	86B.890; 86B.895; 86B.900; 86B.905; 86B.910; 86B.915; and 86B.920, are repealed.