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First Substitute H.B. 68

Senator Curtis S. Bramble proposes the following substitute bill:




Chief Sponsor: Douglas Sagers

Senate Sponsor: Curtis S. Bramble

             7      LONG TITLE
             8      General Description:
             9          This bill amends the Powersport Vehicle Franchise Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies a provision relating to a franchisor's obligation to pay a franchisee for
             13      unsold vehicles when a powersport vehicle franchise is terminated or not continued.
             14      Money Appropriated in this Bill:
             15          None
             16      Other Special Clauses:
             17          None
             18      Utah Code Sections Affected:
             19      AMENDS:
             20          13-35-307, as last amended by Laws of Utah 2009, Chapter 261
             22      Be it enacted by the Legislature of the state of Utah:
             23          Section 1. Section 13-35-307 is amended to read:
             24           13-35-307. Franchisor's repurchase obligations upon termination or
             25      noncontinuation of franchise.

             26          (1) (a) Except as provided in Subsection (1)(b), if a franchise is terminated or not
             27      continued by the franchisor or franchisee, the franchisor shall pay the franchisee:
             28          (i) the franchisee's cost of new, undamaged, [and] unsold, and unregistered powersport
             29      vehicles in the franchisee's inventory acquired from the franchisor or another franchisee of the
             30      same line-make [representing both the current model year at the time of termination or
             31      noncontinuation and the immediately prior model year vehicles] and invoiced during the
             32      30-month period immediately before the franchise is terminated or not continued;
             33          (ii) any charges made by the franchisor for distribution, delivery, or taxes;
             34          (iii) the franchisee's cost of any accessories added on a vehicle;
             35          (iv) the cost of new, undamaged, and unsold supplies, parts, and accessories as set
             36      forth in the franchisor's catalog at the time of termination or noncontinuation less all
             37      allowances paid or credited to the franchisee by the franchisor;
             38          (v) except as provided in Subsection (1)(c), the fair market value, but not less than the
             39      franchisee's depreciated acquisition cost, of each undamaged sign owned by the franchisee that
             40      bears a common name, trade name, or trademark of the franchisor if acquisition of the sign was
             41      recommended or required by the franchisor;
             42          (vi) the fair market value, but not less than the franchisee's depreciated acquisition cost,
             43      of all special tools, equipment, and furnishings acquired from the franchisor or sources
             44      approved by the franchisor that were recommended or required by the franchisor and are in
             45      good and usable condition; and
             46          (vii) the cost of transporting, handling, packing, and loading powersport vehicles,
             47      supplies, parts, accessories, signs, special tools, equipment, and furnishings.
             48          (b) The franchisor may deduct the sum of all allowances paid or credited to the
             49      franchisee by the franchisor from the amount owed under Subsection (1)(a).
             50          (c) If a franchisee has a sign with multiple manufacturers listed, the franchisor shall
             51      pay only for its pro rata portion of the sign described in Subsection (1)(a)(v).
             52          (2) The franchisor shall pay the franchisee the amounts specified in Subsection (1)
             53      within 90 days after the tender of the property to the franchisor if the franchisee has:
             54          (a) clear title to the property; or
             55          (b) the manufacturer's statement of origin.
             56          (3) If repurchased inventory and equipment are subject to a security interest, the

             57      franchisor may make payment jointly to the franchisee and to the holder of the security interest.

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