1.1                          A bill for an act 
  1.2             relating to commerce; regulating payment for certain 
  1.3             warranty work by farm implement dealers; changing the 
  1.4             definition of heavy and utility equipment; amending 
  1.5             Minnesota Statutes 2002, section 325E.068, subdivision 
  1.6             2; proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 325E. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [325E.0631] [WARRANTIES.] 
  1.10     Subdivision 1.  [APPLICATION.] The requirements of this 
  1.11  section apply to all warranty claims submitted by a dealer to a 
  1.12  supplier. 
  1.13     Subd. 2.  [PROMPT PAYMENT.] Claims filed for payment under 
  1.14  warranty agreements must be approved or disapproved within 30 
  1.15  days of receipt by the supplier.  Approved claims for payment 
  1.16  must be paid within 30 days of their approval.  When a claim is 
  1.17  disapproved, the supplier shall notify the dealer within the 
  1.18  30-day period stating the specific grounds on which the 
  1.19  disapproval is based.  Any claim not specifically disapproved 
  1.20  within 30 days of receipt is deemed approved and must be paid 
  1.21  within 30 days. 
  1.22     Subd. 3.  [POST-TERMINATION CLAIMS.] If, after termination 
  1.23  of a contract, a dealer submits a warranty claim for warranty 
  1.24  work performed before the effective date of the termination, the 
  1.25  supplier shall approve or disapprove the claim within 30 days of 
  1.26  receipt. 
  2.1      Subd. 4.  [COMPENSATION FOR WARRANTY WORK.] Warranty work 
  2.2   performed by the dealer must be compensated in accordance with 
  2.3   the reasonable and customary amount of time required to complete 
  2.4   the work, expressed in hours and fractions of hours multiplied 
  2.5   by the dealer's established customer hourly retail labor rate, 
  2.6   which the dealer shall communicate to the supplier before 
  2.7   performing the warranty work. 
  2.8      Subd. 5.  [EXPENSES.] Expenses expressly excluded under the 
  2.9   supplier's warranty to the customer must not be included in 
  2.10  claims and are not required to be paid on requests for 
  2.11  compensation from the dealer for warranty work performed. 
  2.12     Subd. 6.  [COMPENSATION FOR PARTS.] All parts used by the 
  2.13  dealer in performing warranty work must be paid to the dealer in 
  2.14  the amount equal to the dealer's net price for the parts, plus a 
  2.15  minimum of 15 percent to reimburse the dealer for reasonable 
  2.16  costs of doing business in performing warranty service on the 
  2.17  supplier's behalf, including but not limited to freight and 
  2.18  handling costs. 
  2.19     Subd. 7.  [ADJUSTMENT FOR ERRORS.] The supplier may adjust 
  2.20  for errors discovered during audit, and if necessary, to adjust 
  2.21  claims paid in error. 
  2.22     Subd. 8.  [ALTERNATE TERMS AND CONDITIONS.] A dealer may 
  2.23  choose to accept alternate reimbursement terms and conditions in 
  2.24  lieu of the requirements of subdivisions 2 to 7, provided there 
  2.25  is a written dealer agreement between the supplier and the 
  2.26  dealer providing for compensation to the dealer for warranty 
  2.27  labor costs either as:  (1) a discount in the pricing of the 
  2.28  equipment to the dealer; or (2) a lump sum payment to the 
  2.29  dealer.  The discount or lump sum must be no less than five 
  2.30  percent of the suggested retail price of the equipment.  If the 
  2.31  requirements of this subdivision are met and alternate terms and 
  2.32  conditions are in place, subdivisions 2 to 7 do not apply and 
  2.33  the alternate terms and conditions are enforceable. 
  2.34     Sec. 2.  Minnesota Statutes 2002, section 325E.068, 
  2.35  subdivision 2, is amended to read: 
  2.36     Subd. 2.  [HEAVY AND UTILITY EQUIPMENT.] "Heavy and utility 
  3.1   equipment," "heavy equipment," or "equipment" means equipment 
  3.2   and parts for equipment including but not limited to: 
  3.3      (1) excavators, crawler tractors, wheel loaders, 
  3.4   compactors, pavers, backhoes, hydraulic hammers, cranes, fork 
  3.5   lifts, compressors, generators, attachments and repair parts for 
  3.6   them, and other equipment, including attachments and repair 
  3.7   parts, used in all types of construction of buildings, highways, 
  3.8   airports, dams, or other earthen structures or in moving, stock 
  3.9   piling, or distribution of materials used in such construction; 
  3.10  ~~or~~ 
  3.11     (2) trucks and truck parts; or 
  3.12     (3) equipment used for, or adapted for use in, mining or 
  3.13  forestry applications.