S 323 Session 112 (1997-1998)
S 0323 General Bill, By Passailaigue
A BILL TO AMEND CHAPTER 16, TITLE 56, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO MOTORCYCLE SUPPLIERS, SO AS TO PROVIDE FOR REGULATION OF JET-SKI
SUPPLIERS; TO DELETE THE REQUIREMENT THAT ONLY INVENTORY ACQUIRED WITHIN
EIGHTEEN MONTHS BE COMPENSATED UPON FRANCHISE TERMINATION; AND TO CHANGE THE
RELEVANT MARKET AREA WITHIN WHICH A NEW DEALER MUST NOTIFY EXISTING DEALERS OF
HIS INTENTION TO RELOCATE FROM A TEN TO A THREE MILE RADIUS.
02/05/97 Senate Introduced and read first time SJ-6
02/05/97 Senate Referred to Committee on Transportation SJ-6
A BILL
TO AMEND CHAPTER 16, TITLE 56, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO MOTORCYCLE
SUPPLIERS, SO AS TO PROVIDE FOR REGULATION OF
JET-SKI SUPPLIERS; TO DELETE THE REQUIREMENT THAT
ONLY INVENTORY ACQUIRED WITHIN EIGHTEEN MONTHS
BE COMPENSATED UPON FRANCHISE TERMINATION; AND
TO CHANGE THE RELEVANT MARKET AREA WITHIN
WHICH A NEW DEALER MUST NOTIFY EXISTING DEALERS
OF HIS INTENTION TO RELOCATE FROM A TEN TO A
THREE MILE RADIUS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 16, Title 56 of the 1976 Code is amended by
adding:
"CHAPTER 16
Regulation of Motorcycle and Jet-Powered
Watercraft Manufacturers, Distributors, Dealers, and
Wholesal ers
Section 56-16-10. As used in this chapter:
(a) 'Motorcycle' means every motor vehicle having a seat or
saddle for the use of the rider and designed to travel on not more than
two wheels in contact with the ground. This section shall
does not apply to bicycles with helper motors or vehicles
defined in Section 56-5-3510.
(b) 'Jet-ski watercraft' means a watercraft that has an inboard
motor that uses an internal combustion engine powering a water jet
pump as its primary source of motive propulsion.
(b) (c) 'Manufacturer' means any person, resident,
or nonresident who manufacturers or assembles new motorcycles
or jet-powered watercraft, or imports for distribution through
distributors of motor vehicles, including any person, partnership, or
corporation which that acts for and is under the
control of a manufacturer or assembler in connection with the
distribution of motorcycles and jet-powered watercraft and
includes distributor and factory branch.
(c) (d) 'Dealership facilities' means the real estate,
buildings, fixtures, and improvements devoted to the conduct of
business under the franchise by the new motorcycle or
jet-powered watercraft dealer.
(d) (e) `Franchise' means the written agreement
or contract between any new motorcycle or jet-powered
watercraft manufacturer, and any new motorcycle or
jet-powered watercraft dealer which that
purports to fix the legal rights and liabilities of the parties to such
agreement or contract, and pursuant to which the dealer purchases
and resells the franchised product or leases or rents the dealership
premises.
(e) (f) 'Factory branch' means a branch office
maintained by a manufacturer which that
manufactures or assembles motorcycles or jet-powered
watercraft for sale to distributors or motorcycle or
jet-powered watercraft dealers or which that is
maintained for directing and supervising the representatives of the
manufacturer.
(f) (g) `Distributor branch' means a branch office
maintained by distributor who sells or distributes new or used
motorcycles or jet-powered watercraft to motorcycle or
jet-powered watercraft dealers.
(g) (h) `Factory representative' means a
representative employed by a manufacturer or by a factory branch for
the purpose of making or promoting the sale of motorcycles or
jet-powered watercraft or for supervising, servicing, instructing,
or contracting with motorcycle or jet-powered watercraft
dealers or prospective motorcycle or jet-powered watercraft
dealers.
(h) (i) `Distributor representative' means a
representative employed by a distributor branch or distributor.
(i) (j) `Franchiser' means a manufacturer,
distributor, or wholesaler who grants a franchise to a motorcycle
or jet-powered watercraft dealer.
(j) (k) `Franchisee' means a motorcycle or
jet-powered watercraft dealer to whom a franchise is offered or
granted.
(k) (l) `Sale' means the issuance, transfer,
agreement for transfer, exchange, pledge, hypothecation, mortgage
in any form, whether by transfer in trust or otherwise, of any
motorcycle or jet-powered watercraft or interest therein or
of any franchise related thereto and any option, subscription, or other
contract, or solicitation, looking to a sale, or offer or attempt to sell
in any form, whether spoken or written. A gift or delivery of any
motorcycle or jet-powered watercraft or franchise with
respect thereto, with or as a bonus on account of the sale of anything,
is a sale of such motorcycle or jet-powered watercraft or
franchise.
(l) (m) `Fraud' means, in addition to its normal
legal connotation: a misrepresentation in any manner, whether
intentionally false or due to gross negligence, of a material fact; a
promise or representation not made honestly and in good faith; and
an intentional failure to disclose a material fact.
(m) (n) `Person' means a natural person,
corporation, partnership, trust, or other entity, and, in case of an
entity, it includes any other entity in which it has a majority interest
or effectively controls as well as the individual officers, directors, and
other persons in active control of the activities of each such entity.
(n) (o) `New motorcycle or jet-powered
watercraft' means a motorcycle or jet-powered
watercraft which that has not been previously
sold to any person except a distributor or wholesaler or motorcycle
or jet-powered watercraft dealer for resale.
(o) (p) `Distributor' means any person who sells
or distributes new motorcycles or jet-powered watercraft to
motorcycle or jet-powered watercraft dealers or who
maintains distributor representatives within the State.
(p) (q) `Dealer' or 'motorcycle or jet-powered
watercraft dealer' means any person who sells or attempts to
effect the sale of any motorcycle or jet-powered watercraft.
These terms do not include:
(1) distributors or wholesalers. ;
(2) receivers, trustees, administrators, executors, guardians, or
other persons appointed by or acting under the judgment, or order of
any court. ;
(3) public officers while performing their official duties.
;
(4) persons disposing of motorcycles or jet-powered
watercraft acquired for their own use and so used in good faith
and not for the purpose of avoiding the provisions of law. Any
person who effects or attempts to effect the sale of more than five
motorcycles or jet-powered watercraft in any one calendar
year is considered a dealer or wholesaler, as appropriate, for purposes
of this chapter. ;
(5) finance companies or other financial institutions who sell
repossessed motorcycles or jet-powered watercraft and
insurance companies who sell motorcycles or jet-powered
watercraft they own as an incident to payment made under
policies of insurance.
(q) (r) `Wholesaler' or 'motorcycle or
jet-powered watercraft wholesaler' means any person who sells
or attempts to effect the sale of any used motorcycle or
jet-powered watercraft exclusively to motorcycle or
jet-powered watercraft dealers or to other wholesalers.
Section 56-16-20. Every manufacturer shall specify to the dealer
the delivery and preparation obligations of its motorcycle or
jet-powered watercraft dealers prior to delivery of new
motorcycles or jet-powered watercraft to retail buyers. A
copy of the delivery and preparation obligations of its motorcycle
or jet-powered watercraft dealers and a schedule or
statement of the compensation to be paid or credited to its motorcycle
or jet-powered watercraft dealers for the work and services
they are required to perform in connection with the delivery and
preparation obligations must be filed with the department by every
motorcycle or jet-powered watercraft manufacturer and is a
dealer's only responsibility for product liability as between dealer and
manufacturer. The compensation as set forth on such schedule or
statement must be reasonable and paid or credited as set out in
Section 56-16-30.
Section 56-16-30. Every manufacturer, distributor, wholesaler,
distributor branch or division, factory branch or division, or
wholesale branch or division shall fulfill any warranty agreement and
compensate each of its motorcycle or jet-powered watercraft
dealers for labor and parts. In determination of what constitutes
reasonable compensation under this section, the principal factor to be
given consideration is the prevailing wage rates paid by dealers in the
community in which the dealer is doing business. The hourly labor
rate paid to a dealer for warranty services must not be less than the
rate charged by the dealer for like service to nonwarranty customers
for nonwarranty service and repairs unless the rate is determined to
be unreasonable. Dealers must be reimbursed for the current
manufacturer suggested retail price for parts used on warranty work.
All claims made by motorcycle or jet-powered watercraft
dealers hereunder and under Section 56-16-20 for labor and parts
must be paid within thirty days following their approval. All such
claims are either approved or disapproved within thirty days after
their receipt. When any claim is disapproved the motorcycle or
jet-powered watercraft dealer who submits it must be notified in
writing of its disapproval within such period, and each notice
shall must state the specific grounds upon which the
disapproval is based. Any special handling of claims required by the
manufacturer, distributor, wholesaler, distributor branch or division,
factory branch or division, or wholesale branch or division,
which that is not uniformly required of all dealers of
the type make, may be enforced after thirty days' notice in writing
and upon good and sufficient reason.
Section 56-16-40. (A) If a manufacturer seeks to enter
into a franchise establishing an additional new motorcycle or
jet-powered watercraft dealership or relocating an existing new
motorcycle or jet-powered watercraft dealership in a relevant
market area where the line make is represented, the manufacturer
shall, in writing, first notify each new motorcycle or jet-powered
watercraft dealer in this line make in the relevant market area of
the intention to establish an additional dealership or to relocate an
existing dealership in the market area. The relevant market area is a
radius of three ten miles around an existing
dealership. Within fifteen days of receiving the notice or within
fifteen days after the end of any appeal procedure provided by the
manufacturer, the new motorcycle or jet-powered watercraft
dealership may commence a civil action in a court of competent
jurisdiction challenging the establishing or relocating of the new
motorcycle or jet-powered watercraft dealership. Thereafter,
the manufacturer shall may not establish or relocate
the proposed new motorcycle or jet-powered watercraft
dealership unless the court has determined that there is good cause for
permitting the establishment or relocation of the motorcycle or
jet-powered watercraft dealership.
The reopening in a relevant market area of a new motorcycle or
jet-powered watercraft dealership within two miles of a location
at which a former dealership of the same line make had been in
operation within the previous two years is not considered the
establishment of a new motorcycle or jet-powered watercraft
dealership.
The relocation of an existing dealer within its area of responsibility
as defined in the franchise agreement is not subject to this section if
the proposed relocation site is not within five miles of an existing
dealer of the same line make.
(B) In determining whether good cause has been
established for not entering into or relocating an additional franchise
for the same line make, the court shall must take into
consideration the existing circumstances, including, but not limited
to:
(a) (1) the permanency of the investment;
(b) (2) the effect on the retail new motorcycle
or jet-powered watercraft business and the consuming public
in the relevant market area;
(c) (3) whether it is injurious to the public
welfare for an additional new motor dealership to be
established;
(d) (4) whether the new motorcycle or
jet-powered watercraft dealers of the same line make in that
relevant market area are providing adequate competition and
convenient consumer care for the motorcycles or jet-powered
watercraft of the line make in the market area including the
adequacy of motorcycle or jet-powered watercraft sales and
service facilities, equipment, supply of motorcycle or jet-powered
watercraft parts, and qualified service personnel;
(e) (5) whether the new motorcycle or
jet-powered watercraft dealers of the same line make in the
relevant market area are providing adequate market penetration and
representation. Good cause is not shown solely by a desire for further
market penetration;
(f) (6) whether the establishment of an
additional new motorcycle or jet-powered watercraft
dealership would increase competition and therefore be in the public
interest; and
(g) (7) the growth or decline in population and
new motorcycle or jet-powered watercraft registrations in
the relevant market area.
Section 56-16-50. (a) (A) Upon the termination,
nonrenewal, or cancellation of any franchise by the manufacturer or
distributor, pursuant to this section, the new motorcycle or
jet-powered watercraft dealer must be allowed fair and
reasonable compensation by the manufacturer for the:
(1) new motorcycle or jet-powered watercraft
inventory which that has been acquired from the
manufacturer within eighteen months, at a price not to exceed
the original manufacturer's price to the dealer, which
that has not been altered or damaged, and which
that has not been driven more than two hundred miles, and
for which no certificate of title has been issued;
(2) unused, undamaged, and unsold supplies and parts
purchased from the manufacturer, at a price not to exceed the original
manufacturer's price to the dealer, if the supplies and parts are
currently offered for sale by the manufacturer or distributor in its
current parts catalogs and are in salable condition;
(3) equipment and furnishings which that have
not been altered or damaged and which that have
been required by the manufacturer or distributor to be purchased by
the new motorcycle or jet-powered watercraft dealer from
the manufacturer or distributor, or their approved sources;
(4) special tools which that have not been
altered or damaged and which that have been
required by the manufacturer or distributor to be purchased by the
new motorcycle or jet-powered watercraft dealer from the
manufacturer or distributor, or their approved sources, within five
years immediately preceding the termination, nonrenewal, or
cancellation of the franchise.
(b) (B) Fair and reasonable compensation for the
above must be paid by the manufacturer within ninety days of the
effective date of termination, cancellation, or nonrenewal, if the new
motorcycle or jet-powered watercraft dealer has clear title to
the inventory and has conveyed title and possession to the
manufacturer.
Section 56-16-60. In the event of the termination, cancellation, or
nonrenewal by the manufacturer or distributor under this section,
except termination, cancellation, or nonrenewal for insolvency,
license revocation, conviction of a crime involving moral turpitude,
or fraud by a dealer-owner:
(a) Subject to paragraph (c), if the new motorcycle or
jet-powered watercraft dealer is leasing the dealership facilities
from a lessor other than the manufacturer, the manufacturer
shall must pay the new motorcycle or
jet-powered watercraft dealer a sum equivalent to the rent for the
unexpired term of the lease or one year's rent, whichever is less, or
such longer term as is provided in the franchise agreement between
the dealer and manufacturer; or
(b) Subject to paragraph (c), if the new motorcycle or
jet-powered watercraft dealer owns the dealership facilities, the
manufacturer shall must pay the new motorcycle
or jet-powered watercraft dealers a sum equivalent to the
reasonable rental value of the dealership facilities for one year.
(c) Nothing in this section shall relieve relieves
a lessee or owner, from the obligation to mitigate damages under the
lease, nor prevent a manufacturer from occupying and using the
dealership facilities while paying rent under subsections (a) and (b),
nor prevent a manufacturer from obligations by negotiating a lease
termination, a sublease, or a new lease. Any amounts recovered by
the lessee or owner resulting from mitigation of damages must be
deducted from the amount due from the manufacturer.
Section 56-16-70. The provisions of paragraphs (d) and (e) of
Section 56-16-40 are not applicable when the termination,
nonrenewal, or cancellation of the franchise agreement is the result
of the voluntary act of the dealer.
Section 56-16-80. Any person who engages directly or indirectly
in purposeful contacts within this State in connection with the
offering or advertising for sale or has business dealings with respect
to a motorcycle or jet-powered watercraft within this State
is subject to the provisions of this chapter and is subject to the
jurisdiction of the courts of this State upon service of process in
accordance with the provisions of Chapter 9 of Title 15.
Section 56-16-90. (a) Unfair methods of competition and unfair
or deceptive acts or practices as defined in Section 56-16-100 are
declared to be unlawful.
(b) In construing paragraph (a) the courts may be guided by the
definitions in the Federal Trade Commission Act (15 U.S.C. 45).
Section 56-16-100. (1) It is a violation of paragraph (a) of
Section 56-16-90 for any manufacturer, factory branch, factory
representative, distributor, or wholesaler, distributor branch,
distributor representative, or motorcycle or jet-powered
watercraft dealer to engage in any action which
that is arbitrary, in bad faith, or unconscionable and
which that causes damage to any of the parties or to
the public.
(2) It is a violation of paragraph (a) of Section 56-16-90 for a
manufacturer, a distributor, a wholesaler, a distributor branch or
division, a factory branch or division, or a wholesale branch or
division, or officer, agent, or other representative thereof, to coerce,
or attempt to coerce, any motorcycle or jet-powered
watercraft dealer:
(a) To to order or accept delivery of any
motorcycle or jet-powered watercraft, appliances,
equipment, parts, or accessories therefor, or any other commodity or
commodities which that such motorcycle or
jet-powered watercraft dealer has not voluntarily
ordered. ;
(b) To to order or accept delivery of any
motorcycle or jet-powered watercraft with special features,
appliances, accessories, or equipment not included in the list price of
the motorcycle or jet-powered watercraft as publicly
advertised by the manufacturer thereof. ;
(c) To to order for any person any parts,
accessories, equipment, machinery, tools, appliances, or any
commodity whatsoever.
(3) It is a violation of paragraph (a) of Section 56-16-90 for a
manufacturer, a distributor, a wholesaler, a distributor branch or
division, a factory branch or division, or a wholesale branch or
division, or officer, agent, or other representative thereof:
(a) To to refuse to deliver, in reasonable
quantities and within a reasonable time after receipt of dealer's order,
to any motorcycle or jet-powered watercraft dealer having
a franchise or contractual arrangement for the retail sale of new motor
vehicles sold or distributed by such manufacturer, distributor branch
or division, factory branch or division, or wholesale branch or
division, any such motorcycles or jet-powered watercraft as
are covered by such franchise or contract specifically publicly
advertised by such manufacturer, distributor, wholesaler, distributor
branch or division, factory branch or division, or wholesale branch or
division to be available for immediate delivery. The failure to deliver
any motorcycle or jet-powered watercraft is not a violation
of this chapter if the failure is due to an act of God, work stoppage,
or delay due to a strike or labor difficulty, shortage of materials,
freight embargo, or other cause over which the manufacturer,
distributor, or wholesaler, or any agent thereof, has no
control. ;
(b) To to coerce, or attempt to coerce, any
motorcycle or jet-powered watercraft dealer to enter into any
agreement with such manufacturer, distributor, wholesaler, distributor
branch or division, factory branch or division, or wholesale branch or
division, or officer, agent, or other representative thereof, or to do
any other act prejudicial to such dealer by threatening to cancel any
franchise or any contractual agreement existing between such
manufacturer, distributor, wholesaler, distributor branch or division,
factory branch or division, or wholesale branch or division, and such
dealer. Notice in good faith to any motorcycle or jet-powered
watercraft dealer of such dealer's violation of any terms or
provisions of such franchise or contractual agreement is not a
violation of this chapter. ;
(c) To to terminate or cancel the franchise or
selling agreement of any dealer without due cause. The nonrenewal
of a franchise or selling agreement, without due cause, is an unfair
termination or cancellation, regardless of the terms or provisions of
the franchise or selling agreement. The manufacturer, distributor,
wholesaler, distributor branch or division, factory branch or division,
or wholesale branch or division, or officer, agent, or other
representatives thereof shall notify a motorcycle or jet-powered
watercraft dealer in writing of the termination or cancellation of
the franchise or selling agreement of the dealer at least sixty days
before the effective date thereof, stating the specific grounds for such
termination or cancellation; and such manufacturer, distributor,
wholesaler, distributor branch or division, factory branch or division,
or wholesale branch or division, or officer, agent, or other
representative thereof shall notify a motorcycle or jet-powered
watercraft dealer in writing at least sixty days before the
contractual term of his franchise or selling agreement expires that it
will not be renewed, stating the specific grounds for such nonrenewal
in those cases where there is no intention to renew, and in no event
shall may the contractual term of any such franchise
or selling agreement expire, without the written consent of the
motorcycle or jet-powered watercraft dealer involved, prior
to the expiration of at least sixty days following such written notice.
During the sixty-day period, either party may in appropriate
circumstances petition a court to modify the sixty-day stay or to
extend it pending a final determination of the proceedings on the
merits. The court has authority to grant preliminary and final
injunctive relief. ;
(d) To to resort to or use any false or
misleading advertisement in connection with his business as such
manufacturer, distributor, wholesaler, distributor branch or division,
factory branch or division, or wholesale branch or division, or officer,
agent, or other representative thereof. ;
(e) To to offer to sell or to sell any new
motorcycle or jet-powered watercraft to any motorcycle
or jet-powered watercraft dealer at a lower actual price
therefor than the actual price offered to any other motorcycle or
jet-powered watercraft dealer for the same model cycle similarly
equipped or to utilize any device including, but not limited to, sales
promotion plans or programs which that result in
such lesser actual price. The provisions of this item do not apply to
sales to a motorcycle or jet-powered watercraft dealer for
resale to any unit of the United States Government, the State, or any
of its political subdivisions. The provisions of this paragraph do not
apply to sales to a motorcycle or jet-powered watercraft
dealer of any motorcycle or jet-powered watercraft
ultimately sold, donated, or used by the dealer in a driver education
program. The provisions of this paragraph do not apply so long as a
manufacturer, distributor, or wholesaler, or any agent thereof, offers
to sell or sells new motorcycles or jet-powered watercraft to
all motorcycle or jet-powered watercraft dealers at an equal
price. This provision does not apply to sales by manufacturer,
distributor, or wholesaler to the United States Government or any
agency thereof. ;
(f) To to offer to sell or to sell parts or
accessories to any new motorcycle or jet-powered watercraft
dealer for use in his own business for the purpose of repairing or
replacing it on a comparable part or accessory, at a lower actual price
therefor than the actual price charged to any other new motorcycle
or jet-powered watercraft dealer for similar parts or
accessories for use in his own business. In those cases where
motorcycle or jet-powered watercraft dealers operate and
serve as wholesalers of parts and accessories to retail outlets or other
dealers, whether or not the dealer is regularly designated as a
wholesaler, nothing herein contained may be construed to prevent a
manufacturer, distributor, or wholesaler, or any agent thereof, from
selling to a motorcycle or jet-powered watercraft dealer who
operates and services as a wholesaler of parts and accessories, such
parts and accessories as may be ordered by such motorcycle or
jet-powered watercraft dealer for resale to retail outlets, at a
lower actual price than the actual price charged a motorcycle or
jet-powered watercraft dealer who does not operate or serve as
a wholesaler of parts and accessories. ;
(g) To to prevent or attempt to prevent by
contract or otherwise, any motorcycle or jet-powered
watercraft dealer from changing the capital structure of his
dealership or the means by or through which he finances the
operation of his dealership, provided the dealer at all times meets any
reasonable capital standards agreed to between the dealership and the
manufacturer, distributor or wholesaler, and provided the change by
the dealer does not result in a change in the executive management
of the dealership. ;
(h) To to prevent or attempt to prevent by
contract or otherwise, any motorcycle or jet-powered
watercraft dealer or any officer, partner, or stockholder of any
motorcycle or jet-powered watercraft dealer from selling or
transferring any part of the interest of any of them to any other person
or party. No dealer, officer, partner, or stockholder has the right to
sell, transfer, or assign the franchise or power of management or
control thereunder without the consent of the manufacturer,
distributor, or wholesaler except that the consent is being
unreasonably withheld. ;
(i) To to obtain money, goods, services,
anything of value, or any other benefit from any other person with
whom the motorcycle or jet-powered watercraft dealer does
business, on account of or in relation to the transactions between the
dealer and such other person, unless the benefit is promptly
accounted for and transmitted to the motorcycle or jet-powered
watercraft dealer. ;
(j) To to require a motorcycle or
jet-powered watercraft dealer to assent to a release, assignment,
novation, waiver, or estoppel which that would
relieve any person from liability imposed by this chapter.
(4) It is a violation of paragraph (a) of Section 56-16-90 for a
motorcycle or jet-powered watercraft dealer:
(a) To to require a purchaser of a new
motorcycle or jet-powered watercraft, as a condition of sale
and delivery thereof, to also purchase special features, appliances,
equipment, parts, or accessories not desired or requested by the
purchaser. This prohibition does not apply as to special features,
appliances, equipment, parts, or accessories which
that are already installed on the motorcycle or
jet-powered watercraft when received by the dealer provided the
motorcycle or jet-powered watercraft dealer prior to the
consummation of the purchase reveals to the purchaser the substance
of this paragraph. ;
(b) To to represent and sell as a new
motorcycle or jet-powered watercraft any motorcycle or
jet-powered watercraft which that has been used
and operated for demonstration purposes or which
that is otherwise a used motorcycle or jet-powered
watercraft. ;
(c) To to resort to or use any false or
misleading advertisement in connection with his business as such
motorcycle or jet-powered watercraft dealer.
(5) There is created the Office of Administrator, within the
Attorney General's office, and he shall appoint such personnel within
his office for the purpose of regulating this chapter. The
Administrator has the power to investigate, issue cease and desist
orders and injunctive relief on any valid abuse connected with the
sale, rental, or leasing of a new or used motorcycle or
jet-powered watercraft. This power only applies after reasonable
attempts by the consumer have been made with the seller, dealer,
manufacturer, or lessor of the motorcycle or jet-powered
watercraft to alleviate the complaint.
Section 56-16-110. Every manufacturer shall specify to the dealer
the delivery and preparation obligations of its motorcycle or
jet-powered watercraft dealers prior to delivery of new
motorcycles or jet-powered watercraft to retail buyers. A
copy of the delivery and preparation obligations of its motorcycle
or jet-powered watercraft dealers and a schedule or
statement of the compensation to be paid or credited to its motorcycle
or jet-powered watercraft dealers for the work and services
they are required to perform in connection with such delivery and
preparation obligations must be filed with the department by every
motorcycle or jet-powered watercraft manufacturer and
shall constitute constitutes any such dealer's only
responsibility for product liability as between the dealer and the
manufacturer. The compensation as set forth on the schedule or
statement is reasonable and paid or credited as set out in Section
56-16-30.
Section 56-16-120. It is unlawful directly or indirectly to impose
unreasonable restrictions on the motorcycle or jet-powered
watercraft dealer or franchisee relative to transfer, sale, right to
renew, termination, discipline, noncompetition covenants, site-control
(whether by sublease, collateral pledge of lease, or otherwise), right
of first refusal to purchase, option to purchase, compliance with
subjective standards, and assertion of legal or equitable rights.
Section 56-16-130. In connection with a sale of a motorcycle
or jet-powered watercraft to the State or to any political
subdivision thereof, no manufacturer, distributor, or wholesaler may
offer any discounts, refunds, or any other similar type of inducement
to any dealer without making the same offer to all other of its dealers
within the relevant market area and, if such inducements are made,
the manufacturer, distributor, or wholesaler must give simultaneous
notice thereof to all of its dealers within the relevant market area who
have requested such notice.
Section 56-16-140. (A) Before engaging in business as a
motorcycle or jet-powered watercraft dealer or wholesaler
in this State, every person must first make application to the
department for a license. Every license issued expires twelve months
from the date of issue and must be prominently displayed at the
established place of business. The fee for the license is fifty dollars.
The license applies to only one place of business of the applicant and
is not transferable to any other person or place of business. A
person engaged in business as a motorcycle or jet-powered
watercraft dealer or wholesaler in the same place of business is
required to obtain only one license for both activities.
(B) A person who fails to secure a license as required in this
chapter is guilty of a misdemeanor and, upon conviction, must be
fined:
(1) not less than fifty dollars nor more than two hundred dollars
or imprisoned for not more than thirty days for the first offense;
(2) not less than two hundred dollars nor more than one
thousand dollars or imprisoned for not more than six months, or both,
for the second offense; and
(3) not less than one thousand dollars nor more than ten
thousand dollars or imprisoned for not more than two years, or both,
for the third or any subsequent offense.
For purposes of this subsection, the sale of each motorcycle or
jet-powered watercraft constitutes a separate offense.
Section 56-16-150. (1) Before any license as a 'wholesaler' or
'dealer' is issued to an applicant, he must file an application with the
Department department and furnish the information
the Department department may require, including,
but not limited to, information adequately identifying by name and
address any individual who owns or controls ten percent or more of
the interest in the business. The policy of this section is full
disclosure.
(2) Each applicant for licensure as a motorcycle or
jet-powered watercraft dealer or wholesaler must furnish a surety
bond in the penal amount of fifteen thousand dollars on a form to be
prescribed by the director of the department. The bond must be given
to the Department department and executed by the
applicant, as principal, and by a corporate surety company authorized
to do business in this State, as surety. The bond must be conditioned
upon the applicant or licensee complying with the provisions of the
statutes applicable to the license and as indemnification for any loss
or damage suffered by an owner of a motorcycle or jet-powered
watercraft, or his legal representative, by reason of any fraud
practiced or fraudulent representation made in connection with the
sale or transfer of a motorcycle or jet-powered watercraft by
a licensed dealer or wholesaler or the dealer's or wholesaler's agent
acting for the dealer or wholesaler or within the scope of employment
of the agent or any loss or damage suffered by reason of the violation
by the dealer or wholesaler or his agent, of any of the provisions of
this chapter. An owner or his legal representative who suffers the
loss or damage has a right of action against the dealer or wholesaler
and against the dealer's or wholesaler's surety upon the bond and may
recover damages as provided in this chapter. A new bond or a
proper continuation certificate must be delivered to the
Department department annually before the license
is renewed. However, regardless of the number of years a bond
remains in effect, the aggregate liability of the surety for any and all
claims is limited to fifteen thousand dollars on each bond and to the
amount of the actual loss incurred. The surety has the right to
terminate its liability under the bond by giving the
Department department thirty days' written notice of
its intent to cancel the bond. The cancellation does not affect any
liability incurred or accrued prior to the cancellation.
(3) If, during any license year, there is any change in the
information that a dealer or wholesaler gave the Department
department in obtaining or retaining a license under this
section, the licensee shall must report the change to
the Department department within thirty days after
the change occurs on the form the Department
department requires.
(4) In the event a licensee ceases being a dealer or wholesaler, he
shall must, within ten days thereafter, notify the
Department department of this fact and return to the
Department department any license issued pursuant
to this chapter and all current dealer license plates issued to the dealer
or wholesaler.
Section 56-16-160. No dealer may be issued or allowed to
maintain a motorcycle or jet-powered watercraft dealer's
license unless:
(1) The dealer maintains a bona fide established place of
business for conducting the business of selling or exchanging
motorcycles or jet-powered watercraft, either or both of
which must be the principal business conducted from the fixed
location. The sale of motorcycles or jet-powered watercraft
or motor driven cycles need not be the principal business conducted
from the fixed location. A bona fide established place of business for
any motorcycle or jet-powered watercraft dealer includes a
permanent, enclosed building or structure, not excluding a
permanently installed mobile home containing at least ninety-six
square feet of floor space, actually occupied by the applicant and
easily accessible by the public, at which a permanent business of
bartering, trading, or selling of motorcycles or jet-powered
watercraft or displaying vehicles for bartering, trading, or selling
is carried on, wherein the public may contact the owner or operator
at all reasonable times and in which must be kept and maintained the
books, records, and files required by this chapter. A bona fide
established place of business does not mean a residence, tent,
temporary stand, or other temporary quarters.
(2) The dealer's place of business must display a permanent sign
with letters at least six inches in height, clearly readable from the
nearest major avenue of traffic. The sign must clearly identify the
licensed business.
(3) The dealer's place of business must have a reasonable area
or lot to properly display motorcycles or jet-powered
watercraft.
Section 56-16-170. (A) Every dealer or wholesaler shall keep
complete records of each transaction under which a motorcycle or
jet-powered watercraft is transferred for a period of not less than
four years from the date of the transaction. The records must show
the true name and correct address of the person or persons from
whom the motorcycle or jet-powered watercraft was
acquired and the date of the transaction; a correct description of the
motorcycle or jet-powered watercraft, when transferred; the
true name and correct address of the person to whom the motorcycle
or jet-powered watercraft was transferred; and the date of the
transaction. The description of the motorcycle or jet-powered
watercraft must include the motorcycle or jet-powered
watercraft identification number, make, model, type of body, and
the odometer readings at the time the motorcycle or jet-powered
watercraft, if applicable, was transferred to and from the dealer
or wholesaler. These records must be open at all reasonable times
for inspection and copying by the department or any of its duly
authorized agents.
(B) The records kept by the dealer or wholesaler must be
maintained in a reasonably organized and orderly fashion with all
entries being legible to the ordinary person upon inspection. Any
records which that are illegible or incapable of
accurate interpretation by either the record keeper or the department's
inspector or agent are not in compliance with this section.
(C) If any dealer or wholesaler fails to keep the required records
or fails to make them available to the department or its duly
authorized agents immediately upon a reasonable request, the dealer
or wholesaler is guilty of a misdemeanor and, upon conviction, must
be fined not less than fifty dollars nor more than two hundred dollars
or imprisoned for up to thirty days. The failure to keep or to make
available to the department or its duly authorized agents complete
records on each separate motorcycle or jet-powered
watercraft constitutes a separate offense.
Section 56-16-180. Any license issued under this chapter may be
denied, suspended, or revoked if the applicant or licensee or an
agency of the applicant or licensee acting for the applicant or licensee
is determined by the Department department to have:
(a) Made made a material misstatement in the
application for the license;
(b) Violated violated any provision of this
chapter;
(c) Been been found by a court or competent
jurisdiction to have committed any fraud connected with the sale or
transfer of a motorcycle or jet-powered watercraft;
(d) Employed employed fraudulent devices,
methods, or practices in connection with meeting the requirements
placed on dealers and wholesalers by the laws of this State;
(e) Been been convicted of any violation of law
involving the acquisition or transfer of a title to a motorcycle or
jet-powered watercraft or of any violation of law involving
tampering with, altering, or removing motorcycle or jet-powered
watercraft identification numbers or markings;
(f) Been been found by a court of competent
jurisdiction to have violated any federal or state law regarding the
disconnecting, resetting, altering, or other unlawful tampering with
a motorcycle or jet-powered watercraft odometer, if
applicable, including the provisions of 15 U.S.C. Sections
1981-1991;
(g) Refused refused or failed to comply with
the Department department's reasonable requests to
inspect or copy the records, books, and files of the dealer or
wholesaler or failed to maintain records of each motorcycle or
jet-powered watercraft transaction as required by this chapter or
by state and federal law pertaining to odometer records; or
(h) Given given, loaned, or sold a dealer license
plate to any person or otherwise to have allowed the use of any dealer
license plate in any way not authorized by Section 56-3-2320. Any
dealer license plate issued to a dealer or wholesaler pursuant to
Section 56-3-2320 which that is determined by the
Department department to be improperly displayed
on any motorcycle or jet-powered watercraft or in the
possession of any unauthorized person is prima facie evidence of a
violation of this section by the dealer or wholesaler to whom the
license plate was originally issued.
The Department department shall notify the
licensee or applicant in writing at the mailing address provided in his
application of its intention to deny, suspend, or revoke his license at
least twenty days in advance and shall provide the licensee an
opportunity for a hearing pursuant to the Administrative Procedures
Act of this State. A licensee desiring a hearing shall
must request it in writing within ten days of receiving notice
of the proposed denial, suspension, or revocation of his dealer's or
wholesaler's license.
Upon the denial, suspension, or revocation of a license, the licensee
shall must immediately return to the
Department department the license and all dealer
license plates.
Section 56-16-200. (1) In addition to temporary or permanent
injunctive relief as provided in Section 56-16-100(3)(c), any person
who is injured in his business or property by reason of anything
forbidden in this chapter may sue therefor in the court of common
pleas and recover double the actual damages by him sustained, and
the cost of suit, including a reasonable attorney's fee.
(2) When the action is one of common or general interest to many
persons or when the parties are numerous and it is impracticable to
bring them all before the court, one or more may sue for the benefit
of the whole, including actions for injunctive relief.
(3) In an action for money damages, if the jury finds that the
defendant acted maliciously, the jury may award punitive damages
not to exceed three times the actual damages.
(4) A final judgment, order, or decree rendered against a person in
any civil, criminal, or administrative proceeding under the United
States antitrust laws, under the Federal Trade Commission Act, or
under this chapter constitutes prima facie evidence against the person
subject to the conditions of the United States Antitrust Law (15
U.S.C. Section 16).
Section 56-16-210. Any contract or part thereof or practice
thereunder in violation of any provision of this chapter is against
public policy and is void and unenforceable."
SECTION 2. This act takes effect upon approval by the Governor.
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