AB489: Bill Text

LRB-1231/4

PJH:wlj:cph

2003 - 2004 LEGISLATURE

2003 Assembly BILL 489

August 29, 2003 - Introduced by Representatives Freese, Gronemus, Ainsworth, Friske, Gielow, Gunderson, Hahn, Hines, Hundertmark, Kestell, Krawczyk, M. Lehman, LeMahieu, McCormick, Montgomery, Olsen, Ott, Petrowski, Shilling, Suder, Van Roy and Vrakas, cosponsored by Senators Leibham, Breske, Brown, Erpenbach, S. Fitzgerald, Kanavas, Plale, Risser, Schultz, Stepp and Welch. Referred to Committee on Transportation.

AB489,1,4 An Act to amend 218.0114 (9) (a) 2., 218.0114 (10) (a), 218.0121 (3m) (b) 2. and 218.0163 (1) (a); and to create 218.0114 (9) (a) 4., 218.0114 (9) (d), 218.0116 (1) (v) and 218.0116 (1) (w) of the statutes; relating to: manufacturers, importers, and distributors of motor vehicles and franchised motor vehicle dealers.

Analysis by the Legislative Reference Bureau

Under current law, each manufacturer, importer, and distributor that wishes to sell motor vehicles in this state must be licensed by the Department of Transportation (DOT). In addition, each manufacturer, importer, or distributor that enters into an agreement with a motor vehicle dealer must file the agreement with DOT. Certain provisions in an agreement are void and prohibited.

Additionally, if a manufacturer, importer or distributor commits certain violations with respect to a motor vehicle dealer, current law allows DOT to revoke the manufacturer's, importer's, or distributor's license. The dealer may also recover damages and attorney fees caused by the violation.

This bill makes void and prohibited any provision in an agreement that waives the dealer's or distributor's right to a jury trial. It also makes void and prohibited a provision that permits a manufacturer, importer, or distributor to compel a dealer or any owner to transfer an ownership interest in, or assets of, the dealership to the manufacturer, importer, or distributor. However, an agreement may provide a manufacturer, importer, or distributor with the right of first refusal to acquire the dealer's assets in the event of a proposed change of ownership or transfer.

The bill also allows DOT to revoke the license of a manufacturer, importer, or distributor if the manufacturer, importer, or distributor fails to offer for sale all models manufactured or distributed for a line make to any of its dealers that hold a franchise to sell that line make.

Finally, the bill allows DOT to revoke the license of a manufacturer, importer, or distributor under most circumstances if the manufacturer, importer, or distributor performs warranty or delivery and preparations work on a vehicle that it does not own or permits a person other than a dealer franchised to sell and service the manufacturer's, importer's, or distributor's vehicles, to perform such work.

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

AB489, s. 1 Section 1. 218.0114 (9) (a) 2. of the statutes is amended to read:

AB489,2,4 218.0114 (9) (a) 2. Prevent a dealer or distributor from bringing an action in a particular forum otherwise available under the law or waive the dealer's or distributor's right to a jury trial.

AB489, s. 2 Section 2. 218.0114 (9) (a) 4. of the statutes is created to read:

AB489,2,9 218.0114 (9) (a) 4. Provide a manufacturer, importer, or distributor with the right or option to compel the dealer or any of its owners to sell or transfer an ownership interest in the dealer or assets of the dealer to the manufacturer, importer, or distributor or an assignee of the manufacturer, importer, or distributor.

AB489, s. 3 Section 3. 218.0114 (9) (d) of the statutes is created to read:

AB489,2,14 218.0114 (9) (d) Notwithstanding par. (a) 4., an agreement may provide a manufacturer, importer, or distributor with the right of first refusal to acquire the dealer's assets in the event of a proposed change of ownership or transfer of dealership assets if all of the requirements of s. 218.0134 (4) (c) are met.

AB489, s. 4 Section 4. 218.0114 (10) (a) of the statutes is amended to read:

AB489,3,3 218.0114 (10) (a) A settlement agreement that is entered into by a dealer or distributor voluntarily and that waives rights, remedies or defenses with respect to a particular dispute existing when the settlement agreement is reached.

AB489, s. 5 Section 5. 218.0116 (1) (v) of the statutes is created to read:

AB489,3,15 218.0116 (1) (v) Being a manufacturer, importer, or distributor who fails or refuses to offer for sale to its same line make franchised dealers all models manufactured or distributed for the line make. The offer for sale may be subject to the manufacturer's, importer's, or distributor's plan or system for the allocation, scheduling, and delivery of such models that complies with the requirements of s. 218.0123. However, the failure to deliver any such motor vehicle shall not be considered a violation of this paragraph if the failure is due to a lack of manufacturing capacity, a strike or labor difficulty, a shortage or materials, a freight embargo, or other cause beyond the control of the manufacture, importer, or distributor. This paragraph does not prohibit reasonable requirements being imposed on dealers for the sale, marketing, or servicing of particular models.

AB489, s. 6 Section 6. 218.0116 (1) (w) of the statutes is created to read:

AB489,3,24 218.0116 (1) (w) 1. Being a manufacturer, importer, or distributor who performs warranty service or delivery and preparation work on a motor vehicle that it does not own or who authorizes or permits a person to perform warranty service or delivery and preparation work on a motor vehicle unless the person is a motor vehicle dealer with whom the manufacturer, importer, or distributor has entered into a franchise agreement for the sale and service of the manufacturer's, importer's, or distributor's motor vehicles. This subdivision shall not prohibit a manufacturer, importer, or distributor from:

AB489,4,3 a. Authorizing the performance of warranty service and delivery and preparation work by a fleet owner, as defined in s. 218.0116 (7) (d) 4., on its own vehicles.

AB489,4,12 b. If warranty service is temporarily not reasonably available to one or more owners of the manufacturer's, importer's, or distributor's vehicles, performing warranty service on such vehicles or authorizing the performance of warranty service on such vehicles by a person who is not a motor vehicle dealer with whom the manufacturer, importer, or distributor has entered into a franchise agreement for the sale and service of the manufacturer's, importer's, or distributor's motor vehicles. Warranty service may be provided or authorized by a manufacturer, importer, or distributor under this subdivision only during the period that warranty service is not otherwise reasonably available.

AB489,4,15 c. Attempting to repair a nonconformity, as defined in s. 218.0171 (1) (f), to a vehicle, if the repair is reasonably necessary to prevent the manufacturer, importer, or distributor from becoming subject to the requirements of s. 218.0171 (2) (b).

AB489,4,19 2. Subdivision 1. does not require a manufacturer, importer, or distributor to perform warranty service, or to authorize or permit warranty service to be performed, under a warranty given by another manufacturer, importer, or distributor or component manufacturer to a retail customer.

AB489, s. 7 Section 7. 218.0121 (3m) (b) 2. of the statutes is amended to read:

AB489,4,24 218.0121 (3m) (b) 2. The dealer operator of the dealership is unable to acquire full ownership of the dealership with his or her own assets or in conjunction with financial investments and loans from investors or lenders other than the factory holding an ownership interest in the dealership.

AB489, s. 8 Section 8. 218.0163 (1) (a) of the statutes is amended to read:

AB489,5,2 218.0163 (1) (a) A violation by any other licensee of s. 218.0116 (1) (bm), (f), (h), (hm), (i), (km), (L), (Lm), (mm), (pm), (q), (qm), (r), (rm), (s), (sm), (t) or, (u), (v), or (w).

AB489, s. 9 Section 9. Initial applicability.

AB489,5,5 (1) This act first applies to a franchise agreement that exists or is entered into on the effective date of this subsection.

AB489,5,6 (End)