1.1                          A bill for an act 
  1.2             relating to commerce; providing buyback requirements 
  1.3             related to the sale of farm implements and outdoor 
  1.4             power equipment; amending Minnesota Statutes 2000, 
  1.5             sections 325E.06, subdivisions 1, 4, 5, 6; 325E.0681, 
  1.6             subdivisions 3, 4, 5, 11, 12. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 325E.06, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [OBLIGATION TO REPURCHASE.] Whenever any 
  1.11  person, firm, or corporation engaged in the business of selling 
  1.12  and retailing farm implements and repair parts for farm 
  1.13  implements enters into a written or oral contract, sales 
  1.14  agreement, or security agreement whereby the retailer agrees 
  1.15  with any wholesaler, manufacturer, or distributor of farm 
  1.16  implements, machinery, attachments or repair parts or outdoor 
  1.17  power equipment, attachments, or repair parts to maintain a 
  1.18  stock of parts or complete or whole machines, or attachments, 
  1.19  and thereafter the written or oral contract, sales agreement, or 
  1.20  security agreement is terminated, canceled, or discontinued, 
  1.21  then the wholesaler, manufacturer, or distributor shall pay to 
  1.22  the retailer or credit to the retailer's account, if the 
  1.23  retailer has outstanding any sums owing the wholesaler, 
  1.24  manufacturer, or distributor, unless the retailer should desire 
  1.25  and has a contractual right to keep such merchandise, a sum 
  1.26  equal to 100 percent of the net cost of all unused complete farm 
  2.1   implements, machinery, and attachments or outdoor power 
  2.2   equipment and attachments in new condition which have been 
  2.3   purchased by the retailer from the wholesaler, manufacturer, or 
  2.4   distributor within the 24 months immediately preceding 
  2.5   notification by either party of intent to terminate, cancel, or 
  2.6   discontinue the contract, including transportation charges and 
  2.7   reasonable assembly charges which have been paid by the 
  2.8   retailer, or invoiced to retailer's account by the wholesaler, 
  2.9   manufacturer, or distributor and the following:  
  2.10     (a) 85 95 percent of the current net prices on repair 
  2.11  parts, including superseded parts listed in current price lists 
  2.12  or catalogs in use by the wholesaler, manufacturer, or 
  2.13  distributor or its predecessor on the date of the termination, 
  2.14  cancellation, or discontinuance of the contract; 
  2.15     (b) as to any parts not listed in current price lists or 
  2.16  catalogs, 100 percent of the invoiced price of the repair part 
  2.17  for which the retailer has an invoice which parts had previously 
  2.18  been purchased by the retailer from the wholesaler, 
  2.19  manufacturer, or distributor and are held by the retailer on the 
  2.20  date of the termination, cancellation, or discontinuance of the 
  2.21  contract or thereafter received by the retailer from the 
  2.22  wholesaler, manufacturer, or distributor; and 
  2.23     (c) 50 percent of the most recently published price of all 
  2.24  other parts provided the price list or catalog is not more than 
  2.25  ten years old as of the date of the cancellation or 
  2.26  discontinuance of the contract.; 
  2.27     (d) net cost less 20 percent per year depreciation for five 
  2.28  years following purchase of all data processing and 
  2.29  communications hardware and software the retailer purchased from 
  2.30  the wholesaler, manufacturer, or distributor, or an approved 
  2.31  vendor of the wholesaler, manufacturer, or distributor, to meet 
  2.32  the minimum requirements for the hardware and software as set 
  2.33  forth by the wholesaler, manufacturer, or distributor; and 
  2.34     (e) an amount equal to 75 percent of the net cost to the 
  2.35  retailer of specialized repair tools, including computerized 
  2.36  diagnostic hardware and software, and signage purchased by the 
  3.1   retailer pursuant to the requirements of the wholesaler, 
  3.2   manufacturer, or distributor, except that specialized repair 
  3.3   tools and signage that has never been used must be repurchased 
  3.4   at 100 percent of the retailer's cost.  Specialized repair tools 
  3.5   must be unique to the wholesaler's, manufacturer's, or 
  3.6   distributor's product line, specifically required by the 
  3.7   wholesaler, manufacturer, or distributor, and must be in 
  3.8   complete and usable condition.  The wholesaler, manufacturer, or 
  3.9   distributor may require by contract or agreement that the 
  3.10  retailer resell to the wholesaler, manufacturer, or distributor 
  3.11  the specialized repair tools and signage for the amounts 
  3.12  established in this section or the amount specified in the 
  3.13  dealer agreement or contract or fair market value, whichever is 
  3.14  greater.  
  3.15  The wholesaler, manufacturer, or distributor shall also pay the 
  3.16  retailer or credit to the retailer's account a sum equal to five 
  3.17  percent of the prices required to be paid or credited by this 
  3.18  subdivision for all parts, data processing and communications 
  3.19  hardware and software, and specialized repair tools and signage 
  3.20  returned for the handling, packing, and loading of the parts 
  3.21  back to the wholesaler, manufacturer, or distributor unless the 
  3.22  wholesaler, manufacturer, or distributor elects to perform 
  3.23  inventorying, packing, and loading of the parts, data processing 
  3.24  and communications hardware and software, and specialized repair 
  3.25  tools and signage itself.  Upon the payment or allowance of 
  3.26  credit to the retailer's account of the sum required by this 
  3.27  subdivision, the title to the farm implements, farm machinery, 
  3.28  attachments or repair parts, or outdoor power equipment and 
  3.29  repair parts for outdoor power equipment, data processing and 
  3.30  communications hardware and software, and specialized repair 
  3.31  tools and signage shall pass to the manufacturer, wholesaler, or 
  3.32  distributor making the payment or allowing the credit and the 
  3.33  manufacturer, wholesaler, or distributor shall be entitled to 
  3.34  the possession of the farm implements, machinery, attachments or 
  3.35  repair parts, or outdoor power equipment and repair parts for 
  3.36  outdoor power equipment, data processing and communications 
  4.1   hardware and software, and specialized repair tools and signage. 
  4.2   However, this section shall not in any way affect any security 
  4.3   interest which the wholesaler, manufacturer, or distributor may 
  4.4   have in the inventory of the retailer.  
  4.5      Payment required to be made under this subdivision must be 
  4.6   made not later than 90 60 days from the date the farm 
  4.7   implements, machinery, attachments, and repair parts, outdoor 
  4.8   power equipment and attachments and repair parts, data 
  4.9   processing and communications hardware and software, and 
  4.10  specialized repair tools and signage are returned by the 
  4.11  retailer received by the manufacturer, and if not by then paid, 
  4.12  the amount payable by the wholesaler, manufacturer, or 
  4.13  distributor bears interest at the rate of 1-1/2 percent per 
  4.14  month maximum rate allowed by law from the date the contract was 
  4.15  terminated, canceled, or discontinued until the date payment is 
  4.16  received by the retailer. 
  4.17     In lieu of the return of the farm implements, machinery, 
  4.18  attachments, and repair parts, or outdoor power equipment and 
  4.19  attachments and repair parts, data processing and communications 
  4.20  hardware and software, and specialized repair tools and signage 
  4.21  to the wholesaler, manufacturer, or distributor, the retailer 
  4.22  may advise the wholesaler, manufacturer, or distributor that the 
  4.23  retailer has implements, machinery, attachments, or repair 
  4.24  parts, or outdoor power equipment and attachments and repair 
  4.25  parts, data processing and communications hardware and software, 
  4.26  and specialized repair tools and signage that the retailer 
  4.27  intends to return.  The notice of the dealer's intention to 
  4.28  return must be in writing, sworn to before a notary public as to 
  4.29  the accuracy of the listing of implements, machinery, 
  4.30  attachments, or repair parts, or outdoor power equipment and 
  4.31  attachments and repair parts, data processing and communications 
  4.32  hardware and software, and specialized repair tools and signage 
  4.33  and that all of the items are in usable condition.  The notice 
  4.34  must include the name and business address of the person or 
  4.35  business who has possession and custody of the machinery and 
  4.36  parts and where the machinery and parts may be inspected and the 
  5.1   list of farm implements, machinery, attachments, or repair 
  5.2   parts, or outdoor power equipment and attachments and repair 
  5.3   parts, data processing and communications hardware and software, 
  5.4   and specialized repair tools and signage may be verified.  The 
  5.5   notice must also state the name and business address of the 
  5.6   person or business who has the authority to serve as the escrow 
  5.7   agent of the retailer, to accept payment or a credit to the 
  5.8   retailer's account on behalf of the retailer, and to release the 
  5.9   machinery and parts to the wholesaler, manufacturer, or 
  5.10  distributor.  The notice constitutes the appointment of the 
  5.11  escrow agent to act on the retailer's behalf.  The wholesaler, 
  5.12  manufacturer, or distributor has 30 days from the date of the 
  5.13  mailing of the notice, which shall be by certified mail, in 
  5.14  which to inspect the machinery and parts and verify the accuracy 
  5.15  of the retailer's list.  The wholesaler, manufacturer, or 
  5.16  distributor shall, within ten days after inspection: 
  5.17     (1) pay the escrow agent; 
  5.18     (2) give evidence that a credit to the account of the 
  5.19  retailer has been made if the retailer has outstanding sums due 
  5.20  the wholesaler, manufacturer, or distributor; or 
  5.21     (3) send to the escrow agent a "dummy credit list" and 
  5.22  shipping labels for the return of the machinery or parts to the 
  5.23  wholesaler, manufacturer, or distributor that are acceptable as 
  5.24  returns.  
  5.25     If the wholesaler, manufacturer, or distributor sends a 
  5.26  credit list to the escrow agent, payment or a credit against the 
  5.27  dealer's indebtedness in accordance with this subdivision for 
  5.28  the acceptable returns shall accompany the credit list.  On the 
  5.29  receipt of the payment, evidence of a credit to the account of 
  5.30  the retailer or the credit list with payment, the title to the 
  5.31  farm implements, farm machinery, attachments, or repair parts, 
  5.32  outdoor power equipment and attachments and repair parts, data 
  5.33  processing and communications hardware and software, and 
  5.34  specialized repair tools and signage acceptable as returns 
  5.35  passes to the manufacturer, wholesaler, or distributor making 
  5.36  the payment or allowing the credit and the manufacturer, 
  6.1   wholesaler, or distributor is entitled to keep the farm 
  6.2   implements, machinery, attachments, or repair parts, or outdoor 
  6.3   power equipment and attachments and repair parts, data 
  6.4   processing and communications hardware and software, and 
  6.5   specialized repair tools and signage.  The escrow agent shall 
  6.6   ship or cause to be shipped the machinery and parts acceptable 
  6.7   as returns to the wholesaler, manufacturer, or distributor 
  6.8   unless the wholesaler, manufacturer, or distributor elects to 
  6.9   personally perform the inventorying, packing and loading of the 
  6.10  machinery and parts.  When the machinery or parts have been 
  6.11  received by the wholesaler, manufacturer, or distributor, notice 
  6.12  of the receipt of the machinery or parts shall be sent by 
  6.13  certified mail to the escrow agent who shall then disburse 90 
  6.14  percent of the payment it has received, less its actual expenses 
  6.15  and a reasonable fee for its services, to the retailer.  The 
  6.16  escrow agent shall keep the balance of the funds in the 
  6.17  retailer's escrow account until it is notified that an agreement 
  6.18  has been reached as to the nonreturnables after which the escrow 
  6.19  agent shall disburse the remaining funds and dispose of any 
  6.20  remaining parts or machinery as provided in the settlement.  If 
  6.21  no settlement is reached in a reasonable time, the escrow agent 
  6.22  may refer the matter to an arbitrator who has authority to 
  6.23  resolve all unsettled issues in the dispute. 
  6.24     Sec. 2.  Minnesota Statutes 2000, section 325E.06, 
  6.25  subdivision 4, is amended to read: 
  6.26     Subd. 4.  [FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION OF 
  6.27  CONTRACTS; LIABILITY.] In the event that any manufacturer, 
  6.28  wholesaler, or distributor of farm implements, machinery, 
  6.29  attachments and repair parts, or outdoor power equipment and 
  6.30  attachments and repair parts, data processing and communications 
  6.31  hardware and software, and specialized repair tools and signage, 
  6.32  upon the cancellation of a contract by either a retailer or such 
  6.33  manufacturer, wholesaler, or distributor, fails or refuses to 
  6.34  make payment to the dealer or the dealer's heir or heirs as 
  6.35  required by this section, the manufacturer, wholesaler, or 
  6.36  distributor shall be liable in a civil action to be brought by 
  7.1   the retailer or the retailer's heir or heirs for (a) 100 percent 
  7.2   of the net cost of the farm implements, machinery, and 
  7.3   attachments, (b) transportation charges and reasonable assembly 
  7.4   which have been paid by the retailer, (c) 85 95 percent of the 
  7.5   current net price of repair parts, 100 percent of invoiced 
  7.6   prices and 50 percent of the price of all other parts as 
  7.7   provided in subdivision 1, and (d) five percent for handling, 
  7.8   packing and loading, if applicable.  
  7.9      Sec. 3.  Minnesota Statutes 2000, section 325E.06, 
  7.10  subdivision 5, is amended to read: 
  7.11     Subd. 5.  [EXCEPTIONS.] Unless a retailer has delivered 
  7.12  parts to an escrow agent pursuant to subdivision 1, this section 
  7.13  shall not require the repurchase from a retailer of a repair 
  7.14  part where the retailer previously has failed to return the 
  7.15  repair part to the wholesaler, manufacturer, or distributor 
  7.16  after being offered a reasonable opportunity to return the 
  7.17  repair part at a price not less than (a) 85 95 percent of the 
  7.18  net price of the repair part as listed in the then current price 
  7.19  list or catalog, (b) 100 percent of the invoiced price, and (c) 
  7.20  50 percent of the most recent published price as provided in 
  7.21  subdivision 1.  This section shall not require the repurchase 
  7.22  from a retailer of repair parts which have a limited storage 
  7.23  life or are otherwise subject to deterioration, such as rubber 
  7.24  items, gaskets and batteries, unless those items have been 
  7.25  purchased from the wholesaler, manufacturer, or distributor 
  7.26  within the past two years; repair parts in broken or damaged 
  7.27  packages; single repair parts priced as a set of two or more 
  7.28  items; and repair parts which because of their condition are not 
  7.29  resalable as new parts without new packaging or reconditioning; 
  7.30  repair parts which have lost required traceability for quality 
  7.31  assurance requirements; and repair parts that were marked 
  7.32  nonreturnable or future nonreturnable when the retailer ordered 
  7.33  them.  
  7.34     Sec. 4.  Minnesota Statutes 2000, section 325E.06, 
  7.35  subdivision 6, is amended to read: 
  7.36     Subd. 6.  [DEFINITION.] (a) For the purposes of this 
  8.1   section "farm implements" mean every vehicle designed or adapted 
  8.2   and used exclusively for agricultural operations and only 
  8.3   incidentally operated or used upon the highways. 
  8.4      (b) For the purposes of this section, "outdoor power 
  8.5   equipment" does not include motorcycles, boats, personal 
  8.6   watercraft, snowmobiles, or all-terrain vehicles designed for 
  8.7   recreation. 
  8.8      Sec. 5.  Minnesota Statutes 2000, section 325E.0681, 
  8.9   subdivision 3, is amended to read: 
  8.10     Subd. 3.  [OBLIGATION TO REPURCHASE.] If a dealership 
  8.11  agreement is terminated, canceled, or discontinued, the 
  8.12  equipment manufacturer shall pay to the dealer, or credit to the 
  8.13  dealer's account if the dealer has an outstanding amount owed to 
  8.14  the manufacturer, an amount equal to 100 percent of the net cost 
  8.15  of all unused heavy and utility equipment in new condition that 
  8.16  has been purchased by the dealer from the manufacturer within 
  8.17  the 24 months immediately preceding notification by either party 
  8.18  of intent to terminate, cancel, or discontinue the agreement.  
  8.19  This amount must include transportation and reasonable assembly 
  8.20  charges that have been paid by the dealer, or invoiced to the 
  8.21  dealer's account by the manufacturer.  The dealer may elect to 
  8.22  keep the merchandise instead of receiving payment, if the 
  8.23  contract gives the dealer this right. 
  8.24     Sec. 6.  Minnesota Statutes 2000, section 325E.0681, 
  8.25  subdivision 4, is amended to read: 
  8.26     Subd. 4.  [REPAIR PARTS.] (a) The manufacturer shall pay 
  8.27  the dealer, or credit to the dealer's account if the dealer has 
  8.28  an outstanding amount owed to the manufacturer, the following:  
  8.29     (1) 85 95 percent of the current net prices on repair 
  8.30  parts, including superseded parts listed in current price lists 
  8.31  or catalogs in use by the manufacturer on the date of the 
  8.32  termination, cancellation, or discontinuance of the agreement; 
  8.33     (2) as to any parts not listed in current price lists or 
  8.34  catalogs, 100 percent of the invoiced price of the repair part 
  8.35  for which the dealer has an invoice if the parts had previously 
  8.36  been purchased by the dealer from the manufacturer and are held 
  9.1   by the dealer on the date of the termination, cancellation, or 
  9.2   discontinuance of the agreement or received by the dealer from 
  9.3   the manufacturer after that date; and 
  9.4      (3) 50 percent of the most recently published price of all 
  9.5   other parts if the price list or catalog is not more than ten 
  9.6   years old as of the date of the termination, cancellation, or 
  9.7   discontinuance of the agreement.; 
  9.8      (4) net cost less 20 percent per year depreciation for five 
  9.9   years following purchase of all data processing and 
  9.10  communications hardware and software the retailer purchased from 
  9.11  the wholesaler, manufacturer, or distributor, or an approved 
  9.12  vendor of the wholesaler, manufacturer, or distributor, to meet 
  9.13  the minimum requirements for the hardware and software as set 
  9.14  forth by the wholesaler, manufacturer, or distributor; and 
  9.15     (5) an amount equal to 75 percent of the net cost to the 
  9.16  retailer of specialized repair tools, including computerized 
  9.17  diagnostic hardware and software, and signage purchased by the 
  9.18  retailer pursuant to the requirements of the wholesaler, 
  9.19  manufacturer, or distributor.  Specialized repair tools or 
  9.20  signage that have never been used must be repurchased at 100 
  9.21  percent of the retailer's cost.  Specialized repair tools must 
  9.22  be unique to the wholesaler's, manufacturer's, or distributor's 
  9.23  product line, specifically required by the wholesaler, 
  9.24  manufacturer, or distributor, and must be in complete and usable 
  9.25  condition.  The wholesaler, manufacturer, or distributor may 
  9.26  require by contract or agreement that the retailer resell to the 
  9.27  wholesaler, manufacturer, or distributor such specialized repair 
  9.28  tools and signage for the amounts established in this section or 
  9.29  the amount specified in the dealer agreement or contract or fair 
  9.30  market value, whichever is greater. 
  9.31     (b) The manufacturer shall pay the dealer, or credit to the 
  9.32  dealer's account, if the dealer has an outstanding amount owed 
  9.33  to the manufacturer, an amount equal to five percent of the 
  9.34  prices required to be paid or credited by this subdivision for 
  9.35  all parts, data processing and communications hardware and 
  9.36  software, and specialized repair tools and signage returned for 
 10.1   the handling, packing, and loading of the parts, data processing 
 10.2   and communications hardware and software, and specialized repair 
 10.3   tools and signage back to the manufacturer unless the 
 10.4   manufacturer elects to perform inventorying, packing, and 
 10.5   loading of the parts itself.  Upon the payment or allowance of 
 10.6   credit to the dealer's account of the sum required by this 
 10.7   subdivision, the title to and right to possess the heavy and 
 10.8   utility equipment passes to the manufacturer.  However, this 
 10.9   section does not affect any security interest that the 
 10.10  manufacturer may have in the inventory of the dealer.  
 10.11     Sec. 7.  Minnesota Statutes 2000, section 325E.0681, 
 10.12  subdivision 5, is amended to read: 
 10.13     Subd. 5.  [PAYMENT; INTEREST.] Payment required to be made 
 10.14  under this section must be made not later than 90 60 days from 
 10.15  the date the heavy and utility equipment is returned by the 
 10.16  dealer received by the manufacturer, and if not by then paid, 
 10.17  the amount payable by the manufacturer bears interest at 
 10.18  the rate of 1-1/2 percent per month maximum rate allowed by law 
 10.19  from the date the agreement was terminated, canceled, or 
 10.20  discontinued until the date payment is received by the dealer. 
 10.21     Sec. 8.  Minnesota Statutes 2000, section 325E.0681, 
 10.22  subdivision 11, is amended to read: 
 10.23     Subd. 11.  [FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION 
 10.24  OF CONTRACTS; LIABILITY.] In the event that a manufacturer, upon 
 10.25  the cancellation of a dealership agreement, fails or refuses to 
 10.26  make payment to the dealer or the dealer's heir or heirs as 
 10.27  required by this section, the manufacturer is liable in a civil 
 10.28  action to be brought by the dealer or the dealer's heir or heirs 
 10.29  for:  (1) 100 percent of the net cost of the heavy or utility 
 10.30  equipment; (2) transportation and reasonable assembly charges 
 10.31  which have been paid by the dealer; (3) 85 95 percent of the 
 10.32  current net price of repair parts, 100 percent of invoiced 
 10.33  prices, and 50 percent of the price of all other parts as 
 10.34  provided in subdivision 1; and (4) payment for data processing 
 10.35  and communication hardware and software, or specialized repair 
 10.36  tools or signage as outlined in subdivision 1, paragraph (d); 
 11.1   and (5) five percent for handling, packing, and loading, if 
 11.2   applicable.  
 11.3      Sec. 9.  Minnesota Statutes 2000, section 325E.0681, 
 11.4   subdivision 12, is amended to read: 
 11.5      Subd. 12.  [EXCEPTIONS.] Unless a dealer has delivered 
 11.6   parts to an escrow agent pursuant to subdivision 1, this section 
 11.7   does not require the repurchase from a dealer of a repair part 
 11.8   where the dealer previously has failed to return the repair part 
 11.9   to the manufacturer after being offered a reasonable opportunity 
 11.10  to return the repair part at a price not less than:  (1) 85 100 
 11.11  percent of the net price of the repair part as listed in the 
 11.12  then current price list or catalog; (2) 100 percent of the 
 11.13  invoiced price; and (3) 50 percent of the most recent published 
 11.14  price as provided in subdivision 1. 
 11.15     This section does not require the repurchase from a dealer 
 11.16  of repair parts that have a limited storage life or are 
 11.17  otherwise subject to deterioration, such as rubber items, 
 11.18  gaskets, and batteries, unless those items have been purchased 
 11.19  from the wholesaler, manufacturer, or distributor within the 
 11.20  past two years; repair parts in broken or damaged packages; 
 11.21  single repair parts priced as a set of two or more items; and 
 11.22  repair parts which because of their condition are not resalable 
 11.23  as new parts without new packaging or reconditioning; repair 
 11.24  parts which have lost required traceability for quality 
 11.25  assurance requirements; and repair parts that were marked 
 11.26  nonreturnable or future nonreturnable when the retailer ordered 
 11.27  them.