AB640: Bill Text

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2007 - 2008 LEGISLATURE

2007 Assembly BILL 640

December 21, 2007 - Introduced by Representatives Kaufert, Musser, A. Ott, Mursau, Soletski, Townsend, Sherman, Sheridan and Vruwink, cosponsored by Senators Hansen, Cowles, Olsen, Leibham, Ellis, Roessler, A. Lasee and Breske. Referred to Committee on Transportation.

AB640,1,3 An Act to amend 165.25 (4) (ar); and to create subchapter XI of chapter 218 [precedes 218.60] of the statutes; relating to: powersports vehicle manufacturers, distributors, and dealers and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill creates provisions governing the relationship between powersports vehicle manufacturers and distributors, including their agents, officers, factory representatives, and affiliates (collectively referred to as franchisors), and powersports vehicle dealers (dealers). Under the bill, a powersports vehicle is an all-terrain vehicle, snowmobile, lightweight utility vehicle, personal watercraft, off-road motorcycle, or moped. The bill imposes numerous restrictions on franchisors, including prohibiting franchisors from doing any of the following:

1. Discriminating between dealers in certain ways, including in the pricing of powersports vehicles, parts, or accessories or in unfair allocations or delivery of vehicles.

2. Competing with dealers in certain ways, including by acting as a dealer or owning, operating, or controlling a dealership or service facility.

3. Requiring or coercing dealers to involuntarily accept, buy, or order powersports vehicles, parts, or accessories, or other commodities or services, or to order or accept delivery of powersports vehicles with features not included in the vehicles' advertised list prices and not voluntarily requested or required by law.

4. Taking certain actions related to the capital structure or financing of dealerships or unreasonably requiring dealers to change the locations of, or substantially alter, their places of business.

5. Failing to hold harmless and indemnify dealers in certain circumstances.

6. Failing to timely pay dealers' valid claims on grounds related to dealers' inventories.

7. Charging dealers increased prices without giving specified notice.

8. Permitting factory authorized warranty service to be performed upon powersports vehicles or accessories by persons other than dealers.

9. Paying less than dealers charge their retail customers for parts.

10. Paying dealers an amount for labor that is less than the amount dealers charge their retail customers for labor.

11. Requiring or coercing dealers to grant rights of first refusal or other preferences related to purchasing dealer franchises.

12. Imposing on dealers certain requirements related to powersports vehicle deliveries, inventories, advertising displays, and dealership facilities.

13. Requiring that arbitration or legal proceedings take place outside this state.

Under the bill, a franchisor may be required to forfeit not less than $100 nor more than $1,000 for each violation of these restrictions. The Department of Agriculture, Trade and Consumer Protection (DATCP) has jurisdiction to investigate and enforce these restrictions, and DATCP, represented by the Department of Justice, or a district attorney may bring an action on behalf of the state. In addition, any dealer injured by a violation of these restrictions may bring a civil action against the violating franchisor for temporary or permanent injunctive relief or for damages or both. The dealer may recover three times the amount of actual damages caused by the violation, as well as costs and reasonable attorney fees.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB640, s. 1 Section 1. 165.25 (4) (ar) of the statutes is amended to read:

AB640,2,7 165.25 (4) (ar) The department of justice shall furnish all legal services required by the department of agriculture, trade and consumer protection relating to the enforcement of ss. 100.171, 100.173, 100.174, 100.175, 100.177, 100.18, 100.182, 100.20, 100.205, 100.207, 100.209, 100.21, 100.28, 100.37, 100.42, 100.50, 100.51, and 100.195, subch. XI of ch. 218, and chs. 126, 136, 344, 704, 707, and 779, together with any other services as are necessarily connected to the legal services.

AB640, s. 2 Section 2. Subchapter XI of chapter 218 [precedes 218.60] of the statutes is created to read:

AB640,3,3 Chapter 218

AB640,3,6 Subchapter XI POWERSPORTS VEHICLE MANUFACTURERS, DISTRIBUTORS, AND dealers

AB640,3,7 218.60 Definitions. In this subchapter:

AB640,3,12 (1) "Affiliate" means, with respect to a powersports vehicle manufacturer or powersports vehicle distributor or factory branch of either, a parent company, wholly or partially owned subsidiary, or any other person controlled by or under common control with the powersports vehicle manufacturer, powersports vehicle distributor, or factory branch.

AB640,3,13 (2) "All-terrain vehicle" has the meaning given in s. 340.01 (2g).

AB640,3,14 (3) "Business entity" has the meaning given in s. 13.62 (5).

AB640,3,16 (4) "Department" means the department of agriculture, trade and consumer protection.

AB640,3,20 (5) "Golf cart" means a vehicle whose speed attainable in one mile does not exceed 20 miles per hour on a paved, level surface, and is designed and intended to convey one or more persons and equipment to play the game of golf in an area designated as a golf course.

AB640,3,25 (6) "Lightweight utility vehicle" means an engine-driven device having a gross weight of more than 700 pounds but not more than 1,999 pounds that is designed to travel on 4 or more low-pressure tires, is equipped with a cargo area, and is used primarily off a highway. "Lightweight utility vehicle" does not include golf carts or low-speed vehicles.

AB640,4,3 (7) "Low-pressure tire" means a tire that is designed to be mounted on a rim with a maximum diameter of 14 inches and to be inflated with an operating pressure not to exceed 20 pounds per square inch as recommended by the manufacturer.

AB640,4,7 (8) "Low-speed vehicle" means a low-speed vehicle, as defined in 49 CFR 571.3, that satisfies the equipment standards under 49 CFR 571.500 and that was originally manufactured to meet the applicable equipment standards under 49 CFR 571.500. "Low-speed vehicle" does not include a golf cart.

AB640,4,8 (9) "Moped" has the meaning given in s. 340.01 (29m).

AB640,4,10 (10) "Off-road motorcycle" means a motorcycle, as defined in s. 340.01 (32), that is not required to be registered under ch. 341.

AB640,4,11 (11) "Personal watercraft" has the meaning given in s. 30.50 (9d).

AB640,4,13 (12) "Powersports vehicle" means an all-terrain vehicle, snowmobile, lightweight utility vehicle, personal watercraft, off-road motorcycle, or moped.

AB640,4,14 (13) (a) "Powersports vehicle dealer" means any of the following:

AB640,4,17 1. A business entity engaged in the business of selling any all-terrain vehicle, snowmobile, lightweight utility vehicle, personal watercraft, off-road motorcycle, or moped for a profit at wholesale or retail.

AB640,4,19 2. An all-terrain vehicle dealer registered with the department of natural resources under s. 23.33 (2) (dm) 1.

AB640,4,21 3. A snowmobile dealer registered with the department of natural resources under s. 350.12 (3) (c) 1.

AB640,4,23 4. A moped dealer licensed by the department of transportation under s. 218.41.

AB640,5,3 (b) "Powersports vehicle dealer" does not include any dealer licensed under subch. I of this chapter with respect to any category of powersports vehicle for which that license applies.

AB640,5,4 (14) (a) "Powersports vehicle distributor" means any of the following: