FINAL BILL REPORT
ESHB 1664
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
C 232 L 09
Synopsis as Enacted
Brief Description: Addressing the termination, cancellation, or nonrenewal of motorsports manufacturer and dealer franchise agreements.
Sponsors: House Committee on Commerce & Labor (originally sponsored by Representatives Wood, Conway, Hinkle and Ormsby).
House Committee on Commerce & Labor
Senate Committee on Labor, Commerce & Consumer Protection
Background:
Many aspects of the franchise relationship between motorsports vehicle manufacturers and motorsports vehicle dealers are regulated by the Department of Licensing (Department). "Motorsports vehicles" are defined as motorcycles, mopeds, snowmobiles, personal watercraft, and four-wheel all-terrain vehicles.
Prior to the termination, cancellation, or nonrenewal of a franchise, a manufacturer must give written notice to the Department and the dealer. If the manufacturer terminates, cancels, or fails to renew a franchise, the manufacturer must pay the dealer:
the dealer cost of unused, undamaged, and unsold new motorsports vehicles;
the dealer cost for all unused, undamaged, and unsold supplies, parts, and accessories in original packaging;
the dealer cost for all unused, undamaged, and unsold inventory;
the fair market value of each undamaged sign owned by the dealer that bears a common name, trade name, or trademark of the manufacturer; and
the fair market value of all special tools owned or leased by the dealer.
The manufacturer must pay the specified sums within 90 days after the tender of the property, if the dealer has clear title to the property and is in a position to convey that title to the manufacturer. To the extent the franchise agreement provides for payment or reimbursement to the dealer in excess of that specified by law, the provisions of the franchise agreement will control.
Summary:
The manufacturer is required to pay specified sums to the dealer upon the termination, cancellation, or nonrenewal of a franchise regardless of who initiated it.
The manufacturer must pay the dealer the specified sums within 90 days after the termination, cancellation, or nonrenewal of the franchise if the dealer has clear title to the property, or can provide clear title to the property upon payment by the manufacturer, and is in a position to convey that title to the manufacturer.
Manufacturers are only required to repurchase motorsports vehicles that were acquired by the dealer in the ordinary course of business.
Votes on Final Passage:
House | 97 | 0 | |
Senate | 43 | 0 |
Effective: | July 26, 2009 |