AB 439

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, or

off-road motorcycle. The bill imposes numerous restrictions on franchisors,

including prohibiting franchisors from doing any of the following:

1. Discriminating between dealers in certain ways, including: not offering the

same wholesale order programs to all powersports vehicle dealers; tying dealer

incentives for retail customers to placement of dealer orders; and providing for an

unfair, unreasonable, or inequitable method for the allocation, scheduling, or

delivery of new powersports vehicles, parts, or accessories to dealers.

2. Making secret payments or providing other secret compensation to dealers

if certain consequences result.

3. Giving preferential treatment to some powersports vehicle dealers over

others in the delivery of new powersports vehicles, parts, or accessories.

4. Competing with a dealer by, for more than one year, acting as a dealer or

owning, operating, or controlling a dealership in this state.

5. Taking certain actions related to the capital structure, financing, or location

of dealerships.

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

7. Preventing a dealer from receiving reasonable compensation for a

powersports vehicle or from freely associating with other dealers.

8. Charging dealers increased prices without specified prior notice.

9. Reimbursing anyone other than an authorized dealer for warranty service.

10. Paying less than the amount of the franchisor's suggested retail price for

parts used by dealers to perform warranty work.

11. Paying dealers an amount for labor that is less than the amount dealers

charge their retail customers for labor.

12. Requiring or coercing dealers to grant rights of first refusal or other

preferences related to purchasing dealer franchises.

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

state.

The bill also specifies that a franchisor may, without violating the restrictions

identified above, offer by auction powersports vehicles to all dealers and provide

certain programs to dealers.

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