AB1112: Bill Text

2021 Assembly BILL 1112

March 10, 2022 - Introduced by Representative Krug. Referred to Committee on Jobs and the Economy.

AB1112,1,6 An Act to amend 218.10 (8m); and to create 218.10 (1b), 218.10 (1d), 218.10 (1i), 218.10 (1n), 218.10 (1o), 218.10 (1p), 218.10 (1q), 218.10 (1t), 218.10 (2), 218.10 (7m), 218.10 (7w), 218.10 (8u), 218.10 (8v), 218.10 (8w), 218.10 (10), 218.10 (11), 218.161, 218.162, 218.163, 218.164, 218.165, 218.166, 218.167 and 218.17 of the statutes; relating to: recreational vehicle manufacturers, distributors, and dealers and providing a penalty.

Analysis by the Legislative Reference Bureau

Under current law, recreational vehicle (RV) dealers must be licensed by the Department of Transportation. An RV dealer license may be denied, suspended, or revoked for a number of reasons, including failure to comply with licensing requirements, committing certain types of fraud, or engaging in unconscionable business practices. In addition, persons who violate the statutes governing RV dealer licensure may be required to forfeit between $25 and $100 for a first offense and may be fined between $25 and $100 for a second or subsequent offense within three years.

This bill provides additional regulation of RV dealers and regulates various aspects of the relationship between RV dealers and RV manufacturers or distributors. Specifically, among other things, the bill does all of the following:

1. Requires a dealer agreement between each RV dealer and the manufacturer or distributor of the RVs the dealer sells. The bill further specifies certain contents of the agreement, including an exclusive sales area for each RV dealer.

2. Prohibits RV manufacturers and distributors from terminating or failing to renew a dealer agreement without good cause. The bill provides criteria that must be considered when assessing whether good cause exists.

3. Requires an RV manufacturer or distributor to provide notice before terminating or nonrenewing a dealer agreement and provides that a termination or nonrenewal must be rescinded upon certain actions by an RV dealer.

4. Provides that an RV dealer may terminate or nonrenew an agreement with an RV manufacturer upon 30 days' notice.

5. In certain cases, requires an RV manufacturer to repurchase certain products provided to RV dealers, including new RVs, certain RV accessories, and certain repair equipment, upon termination of a dealer agreement.

6. Requires an RV manufacturer or distributor to allow an RV dealer to designate a family member as a successor to its dealer agreement.

7. Specifies obligations with regard to warranty repairs.

8. Provides that DOT may administratively fine any person who violates the provisions of the bill up to $1,000 for each violation.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1112,1 Section 1. 218.10 (1b) of the statutes is created to read:

AB1112,2,5 218.10 (1b) “Area of sales responsibility” means the geographical area agreed to by the dealer and the manufacturer or distributor in a dealer agreement within which the dealer has the exclusive right to display or sell the manufacturer's new recreational vehicles of a particular line-make.

AB1112,2 Section 2. 218.10 (1d) of the statutes is created to read:

AB1112,2,9 218.10 (1d) “Component manufacturer” means a person, firm, corporation, or business entity that engages in the manufacturing of components, accessories, or parts used in manufacturing recreational vehicles.

AB1112,3 Section 3. 218.10 (1i) of the statutes is created to read:

AB1112,3,4 218.10 (1i) “Dealer agreement” means a written agreement or contract entered into by a dealer and a manufacturer or distributor that fixes the rights and responsibilities of the parties and pursuant to which the dealer sells new recreational vehicles.

AB1112,4 Section 4. 218.10 (1n) of the statutes is created to read:

AB1112,3,7 218.10 (1n) “Distributor” means a person, firm, corporation, or business entity that purchases new recreational vehicles for resale to dealers.

AB1112,5 Section 5. 218.10 (1o) of the statutes is created to read:

AB1112,3,11 218.10 (1o) “Factory campaign” means an effort on the part of a warrantor to contact recreational vehicle owners or dealers in order to address a part or equipment issue.

AB1112,6 Section 6. 218.10 (1p) of the statutes is created to read:

AB1112,3,14 218.10 (1p) “Family member” means an individual's spouse or an individual's child, grandchild, parent, sibling, niece, or nephew or the spouse of any of these.

AB1112,7 Section 7. 218.10 (1q) of the statutes is created to read:

AB1112,3,21 218.10 (1q) “Fifth-wheel travel trailer" means a vehicle mounted on wheels that is designed to provide temporary living quarters for recreational, camping, or travel use, that is of a size and weight that a special highway movement permit is not required, and that is designed to be towed by a motor vehicle that contains a towing mechanism that is mounted above or forward of the rear axle of the tow vehicle.

AB1112,8 Section 8. 218.10 (1t) of the statutes is created to read:

AB1112,3,25 218.10 (1t) “Line-make” means a specific series of recreational vehicle products, the sale of which may be authorized by a dealer agreement, that satisfies all of the following:

AB1112,4,2 (a) Is targeted to a particular market segment, as determined by the decor, features, equipment, size, weight, and price range.

AB1112,4,5 (b) Has lengths and interior floor plans that distinguish the series of recreational vehicle products from other series with substantially the same decor, features, equipment, weight, and price.

AB1112,4,8 (c) Belongs to a single, distinct classification of recreational vehicle product type having a substantial degree of commonality in the construction of the chassis, frame, and body.

AB1112,9 Section 9. 218.10 (2) of the statutes is created to read:

AB1112,4,11 218.10 (2) “Model” is a series of recreational vehicle products identified by a common series trade name or trademark that is a subset of a line-make.

AB1112,10 Section 10. 218.10 (7m) of the statutes is created to read:

AB1112,4,14 218.10 (7m) “Park model recreational vehicle” means a recreational vehicle that is all of the following:

AB1112,4,16 (a) Designed and marketed as temporary living quarters for recreational, camping, travel, or seasonal use.

AB1112,4,17 (b) Not permanently affixed to real property for use as a permanent dwelling.

AB1112,4,19 (c) Built on a single chassis mounted on wheels with a gross trailer area not exceeding 400 square feet in the setup mode.

AB1112,4,21 (d) Certified by the manufacturer as complying with the ANSI A119.5 Park Model Recreational Vehicle Standard.

AB1112,11 Section 11. 218.10 (7w) of the statutes is created to read:

AB1112,4,24 218.10 (7w) “Proprietary part” means any part manufactured by or for and sold exclusively by the manufacturer.

AB1112,12 Section 12. 218.10 (8m) of the statutes is amended to read:

AB1112,5,6 218.10 (8m) “Recreational vehicle" has the meaning given in s. 340.01 (48r) means a vehicle that is designed to be towed upon a highway by a motor vehicle, that is equipped and used, or intended to be used, primarily for temporary or recreational human habitation, that has walls of rigid construction, and that does not exceed 45 feet in length. “Recreational vehicle” includes a fifth-wheel travel trailer, park model recreational vehicle, travel trailer, and truck camper.

AB1112,13 Section 13. 218.10 (8u) of the statutes is created to read:

AB1112,5,9 218.10 (8u) “Transient customer” means a customer who is temporarily traveling through a dealer's area of sales responsibility.

AB1112,14 Section 14. 218.10 (8v) of the statutes is created to read:

AB1112,5,14 218.10 (8v) “Travel trailer” means a vehicle that is mounted on wheels, that is designed to provide temporary living quarters for recreational, camping, or travel use, and that is of a size or weight that a special highway movement permit is not required when towed by a motor vehicle.

AB1112,15 Section 15. 218.10 (8w) of the statutes is created to read:

AB1112,5,19 218.10 (8w) “Truck camper" means a portable unit that is constructed to provide temporary living quarters for recreational, camping, or travel use and that consists of a roof, floor, and sides and that is designed to be loaded onto and unloaded from the back of a pickup truck.

AB1112,16 Section 16. 218.10 (10) of the statutes is created to read:

AB1112,5,23 218.10 (10) “Warrantor” means a person, firm, corporation, or business entity that gives a warranty in connection with a new recreational vehicle or parts, accessories, or components of a new recreational vehicle.

AB1112,17 Section 17. 218.10 (11) of the statutes is created to read:

AB1112,6,3 218.10 (11) “Warranty” does not include service contracts, mechanical or other insurance, or extended warranties sold for separate consideration by a dealer or other person not controlled by a manufacturer.

AB1112,18 Section 18. 218.161 of the statutes is created to read:

AB1112,6,8 218.161 Dealer agreement requirement. (1) A manufacturer or distributor may not sell a new recreational vehicle in this state to or through a dealer without having first entered into a dealer agreement with a dealer that has been signed by both parties.

AB1112,6,13 (2) The manufacturer shall designate the area of sales responsibility exclusively assigned to a dealer in the dealer agreement and may not change the area of sales responsibility or contract with another dealer for sale of the same model or line-make, as specified in the agreement, in the designated area of sales responsibility during the duration of the agreement.

AB1112,6,17 (3) The terms of the dealer agreement, including the area of sales responsibility, may not be reviewed or changed during the duration of the dealer agreement without the written mutual consent of the parties. The duration of the dealer agreement shall be stated in the dealer agreement.

AB1112,6,21 (4) A dealer may not sell a new recreational vehicle in this state without having first entered into a dealer agreement with a manufacturer or distributor and may not sell outside the area of sales responsibility designated in the agreement under sub. (2).

AB1112,6,24 (5) A manufacturer may not unilaterally issue a policy or procedure that violates or substantially alters a provision of the dealer agreement during the duration of the agreement.

AB1112,7,3 (6) A manufacturer shall distribute new recreational vehicles to its dealers in a fair and equitable manner. If requested, a manufacturer shall provide information on its manner of distribution.

AB1112,7,5 (7) A manufacturer shall provide its dealer with adequate technical data to perform proper service and repairs.

AB1112,19 Section 19. 218.162 of the statutes is created to read:

AB1112,7,12 218.162 Termination of dealer agreement. (1) (a) A manufacturer or distributor, directly or through any officer, agent, or employee, may terminate, cancel, or fail to renew a model, line-make, or entire dealer agreement only with good cause, and, upon renewal, may not require additional inventory stocking requirements or increased retail sales targets in excess of the market growth in the dealer's area of sales responsibility.

AB1112,7,16 (b) A manufacturer or distributor has the burden of showing good cause for terminating, canceling, or failing to renew a model, line-make, or dealer agreement with a dealer. For purposes of determining whether there is good cause for the proposed action, any of the following factors may be considered:

AB1112,7,18 1. The extent of the affected dealer's penetration in the relevant market area for the relevant model or line-make.

AB1112,7,19 2. The nature and extent of the dealer's investment in its business.

AB1112,7,21 3. The adequacy of the dealer's service facilities, equipment, parts, supplies, and personnel.

AB1112,7,22 4. The effect of the proposed action on the community.

AB1112,7,24 5. The extent and quality of the dealer's service under recreational vehicle warranties.

AB1112,8,3 6. The failure to follow agreed-upon, reasonable procedures or standards related to the overall operation of the dealership consistent with the law and the dealer agreement.

AB1112,8,4 7. The dealer's performance under the terms of its dealer agreement.

AB1112,8,7 (c) 1. Except as provided in this paragraph, a manufacturer or distributor shall provide a dealer with at least 120 days' prior written notice of termination, cancellation, or nonrenewal of a model, line-make, or entire dealer agreement.

AB1112,8,17 2. The notice under subd. 1. shall state all reasons for the proposed termination, cancellation, or nonrenewal and shall state that if, within 30 days following receipt of the notice, the dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the dealer will then have 120 days following receipt of the notice to rectify the deficiencies. If the deficiencies are rectified within 120 days, the manufacturer's or distributor's notice is voided. If the dealer fails to provide the notice of intent to cure the deficiencies in the prescribed period, the termination, cancellation, or nonrenewal takes effect 30 days after the dealer's receipt of the notice unless the dealer has new and untitled inventory on hand that may be disposed of as provided under sub. (3).

AB1112,8,19 3. The notice period under subd. 1. may be reduced to 30 days if the grounds for termination, cancellation, or nonrenewal are due to any of the following:

AB1112,8,20 a. A dealer or one of its owners being convicted of a felony.

AB1112,8,23 b. The abandonment or closing of the business operations of the dealer for 10 consecutive business days unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the dealer has no control.

AB1112,8,25 c. A significant misrepresentation by the dealer materially affecting the business relationship.

AB1112,9,2 d. A suspension of, revocation of, or refusal to renew the dealer's license by the department.

AB1112,9,5 4. The notice provisions of this paragraph do not apply if the reason for termination, cancellation, or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors, or bankruptcy.

AB1112,9,11 (2) A dealer may terminate, cancel, or fail to renew a model, line-make, or entire dealer agreement with a manufacturer or distributor with or without good cause at any time by giving 30 days' written notice to the manufacturer. If the termination, cancellation, or nonrenewal is for good cause, the dealer has the burden of showing good cause. Any of the following items, among others, may be deemed good cause for the proposed action by a dealer: