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H.B. 119 Enrolled

             1     

POWERSPORT VEHICLE FRANCHISE ACT
             2      REVISIONS
             3      2009 GENERAL SESSION
             4      STATE OF UTAH
             5      Chief Sponsor: James R. Gowans
             6      Senate Sponsor: Curtis S. Bramble
             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies a powersport vehicle franchisor's obligations upon the termination of
             11      a franchise by a franchisee.
             12      Highlighted Provisions:
             13          This bill:
             14          .    requires a powersport franchisor to pay certain amounts to a franchisee upon
             15      termination of the franchise by the franchisee; and
             16          .    makes technical changes.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          13-35-307, as enacted by Laws of Utah 2002, Chapter 234
             24     
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 13-35-307 is amended to read:
             27           13-35-307. Franchisor's repurchase obligations upon termination or
             28      noncontinuation of franchise.
             29          (1) (a) [Upon the termination or noncontinuation of a franchise] Except as provided in

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             30      Subsection (1)(b), if a franchise is terminated or not continued by the franchisor or franchisee,
             31      the franchisor shall pay the franchisee:
             32          [(a)] (i) the franchisee's cost of new, undamaged, and unsold powersport vehicles in
             33      the franchisee's inventory acquired from the franchisor or another franchisee of the same
             34      line-make representing both the current model year at the time of termination or
             35      noncontinuation and the immediately prior model year vehicles[:];
             36          [(i) plus] (ii) any charges made by the franchisor[,] for distribution, delivery, or taxes;
             37          [(ii) plus] (iii) the franchisee's cost of any accessories added on [the] a vehicle [shall
             38      be repurchased]; [and]
             39          [(iii) less all allowances paid or credited to the franchisee by the franchisor;]
             40          [(b)] (iv) the cost of [all] new, undamaged, and unsold supplies, parts, and accessories
             41      as set forth in the franchisor's catalog at the time of termination or noncontinuation [for the
             42      supplies, parts, and accessories,] less all allowances paid or credited to the franchisee by the
             43      franchisor;
             44          [(c)] (v) except as provided in Subsection (1)(c), the fair market value, but not less
             45      than the franchisee's depreciated acquisition cost, of each undamaged sign owned by the
             46      franchisee that bears a common name, trade name, or trademark of the franchisor if
             47      acquisition of the sign was recommended or required by the franchisor[. If a franchisee has a
             48      sign with multiple manufacturers listed, the franchisor is only responsible for its pro rata
             49      portion of the sign];
             50          [(d)] (vi) the fair market value, but not less than the franchisee's depreciated
             51      acquisition cost, of all special tools, equipment, and furnishings acquired from the franchisor
             52      or sources approved by the franchisor that were recommended or required by the franchisor
             53      and are in good and usable condition; and
             54          [(e)] (vii) the cost of transporting, handling, packing, and loading powersport vehicles,
             55      supplies, parts, accessories, signs, special tools, equipment, and furnishings.
             56          (b) The franchisor may deduct the sum of all allowances paid or credited to the
             57      franchisee by the franchisor from the amount owed under Subsection (1)(a).

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             58          (c) If a franchisee has a sign with multiple manufacturers listed, the franchisor shall
             59      pay only for its pro rata portion of the sign described in Subsection (1)(a)(v).
             60          (2) The franchisor shall pay the franchisee the amounts specified in Subsection (1)
             61      within 90 days after the tender of the property to the franchisor if the franchisee has:
             62          (a) [has] clear title to the property; [and] or
             63          (b) [is in a position to convey title to the franchisor] the manufacturer's statement of
             64      origin.
             65          (3) If repurchased inventory and equipment are subject to a security interest, the
             66      franchisor may make payment jointly to the franchisee and to the holder of the security
             67      interest.

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