EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0605*
HOUSE BILL 605
R4 4lr1419
CF SB 504
By: Delegate Stein
Introduced and read first time: January 24, 2024
Assigned to: Environment and Transportation
A BILL ENTITLED
AN ACT concerning 1
Motor Vehicles – Recreational Vehicle Dealer Agreements 2
FOR the purpose of requiring recreational vehicle dealers to hold a dealer agreement with 3
a recreational vehicle manufacturer to sell the manufacturer’s recreational vehicles 4
in the State; establishing licensing requirements for a recreational vehicle 5
manufacturer, distributor, or factory branch; altering the required terms and 6
conditions of a recreational dealer agreement, including terms and conditions related 7
to termination and nonrenewal of an agreement, transfer of dealer ownership, 8
warranty obligations, dealer inspection and rejection of recreational vehicles, and 9
prohibited acts, dispute resolution, and penalties; and generally relating to 10
recreational vehicle dealer agreements. 11
BY adding to 12
Article – Transportation 13
Section 15–201.1; and 15–1001 through 15–1015 to be under the new subtitle 14
“Subtitle 10. Recreational Vehicle Dealer Agreements” 15
Annotated Code of Maryland 16
(2020 Replacement Volume and 2023 Supplement) 17
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
That the Laws of Maryland read as follows: 19
Article – Transportation 20
15–201.1. 21
THIS SUBTITLE DOES NO T APPLY TO MANUFACTU RERS OR DISTRIBUTORS OF , 22
OR FACTORY BRANCHES FOR, RECREATIONAL VEHICLE S. 23
SUBTITLE 10. RECREATIONAL VEHICLE DEALER AGREEMENTS . 24 2 HOUSE BILL 605
15–1001. 1
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 2
INDICATED. 3
(B) “AREA OF SALES” MEANS THE GEOGRAPHIC AL AREA AGREED TO BY THE 4
DEALER AND THE MANUF ACTURER IN AN AGREEMENT THAT GRANTS THE DEALER 5
THE EXCLUSIVE RIGHT TO DISPLAY OR SELL T HE MANUFACTURER ’S NEW 6
RECREATIONAL VEHICLE S OF A PARTICULAR LI NE–MAKE. 7
(C) (1) “COERCE” MEANS TO COMPEL OR A TTEMPT TO COMPEL AN 8
ACTION OR INACTION BY THREAT OF HARM , BREACH OF CONTRACT, OR OTHER 9
ADVERSE ACTION OR CO NSEQUENCES . 10
(2) “COERCE” INCLUDES THREATENING TO TERMINATE , CANCEL, OR 11
NOT RENEW A DEALER A GREEMENT WITHOUT GOO D CAUSE, OR HOLD OR DELAY 12
PRODUCT DELIVERY AS AN INDUCEMENT TO AME ND THE DEALER AGREEM ENT. 13
(D) “DEALER” MEANS ANY PERSON LICENSED OR REQUIRED TO BE 14
LICENSED TO SELL REC REATIONAL VEHICLES . 15
(E) “DEALER AGREEMENT ” MEANS A WRITTEN AGRE EMENT OR CONTRACT 16
ENTERED INTO BETWEEN A DEALER AND A MANUF ACTURER OR DISTRIBUT OR: 17
(1) THAT STATES THE RIGHT S AND RESPONSIBILITIES OF THE 18
PARTIES; AND 19
(2) UNDER WHICH THE DEALE R MAY SELL NEW RECRE ATIONAL 20
VEHICLES. 21
(F) “DISTRIBUTOR” MEANS ANY PERSON THA T PURCHASES NEW 22
RECREATIONAL VEHICLE S FOR RESALE TO DEAL ERS. 23
(G) “FACTORY BRANCH ” MEANS A BRANCH OFFIC E OF A MANUFACTURER 24
FROM WHICH THE MANUF ACTURER: 25
(1) SELLS OR PROMOTES SAL ES OF A PARTICULAR B RAND OR MAKE 26
OF NEW RECREATIONAL VEHICLES TO DEALERS IN THE STATE; 27
(2) DIRECTS AND SUPERVISE S THE MANUFACTURER ’S 28
REPRESENTATIVES IN T HE STATE; OR 29
HOUSE BILL 605 3
(3) SUPERVISES OR CONTACTS DEALERS OR PROSPECTIVE DEALE RS 1
IN THE STATE. 2
(H) “FACTORY CAMPAIGN ” MEANS AN EFFORT ON T HE PART OF A 3
WARRANTOR TO CONTACT RECREATIONAL VEHICLE OWNERS OR DEALERS TO 4
ADDRESS A PART OR EQ UIPMENT ISSUE. 5
(I) “FAMILY MEMBER ” MEANS A SPOUSE , CHILD, GRANDCHILD , PARENT, 6
SIBLING, NIECE, OR NEPHEW , OR A SPOUSE OF A CHI LD, GRANDCHILD , PARENT, 7
SIBLING, NIECE, OR NEPHEW. 8
(J) “LICENSE” MEANS A MANUFACTURER , DISTRIBUTOR, OR FACTORY 9
BRANCH LICENSE ISSUE D BY THE ADMINISTRATION UNDER THIS SUBTITLE. 10
(K) “LINE–MAKE” MEANS A SPECIFIC SER IES OF RECREATIONAL VEHICLES 11
THAT: 12
(1) IS TARGETED TO A PART ICULAR MARKET SEGMEN T, AS 13
DETERMINED BY ITS DE COR, FEATURES, EQUIPMENT, SIZE, WEIGHT, AND PRICE 14
RANGE; 15
(2) HAS LENGTHS AND INTER IOR FLOOR PLANS THAT DISTINGUISH 16
THE RECREATIONAL VEH ICLES FROM OTHER SIM ILAR MODELS; AND 17
(3) BELONGS TO A SINGLE D ISTINCT CLASSIFICATI ON OF 18
RECREATIONAL VEHICLE PRODUCT TYPE THAT HA S A SUBSTANTIAL DEGR EE OF 19
COMMONALITY IN THE C ONSTRUCTION , CHASSIS, FRAME, AND BODY STYLE . 20
(L) “MANUFACTURER ” MEANS ANY PERSON ENG AGED IN THE 21
MANUFACTURING OF REC REATIONAL VEHICLES . 22
(M) “MODEL” MEANS A SERIES OF RE CREATIONAL VEHICLE P RODUCTS 23
IDENTIFIED BY A COMM ON SERIES TRADE NAME OR TRADEMARK . 24
(N) “PROPRIETARY PART ” MEANS ANY PART MANUF ACTURED BY OR FOR 25
THE MANUFACTURER OR SOLD EXCLUSIVELY BY THE MANUFACTURER . 26
(O) (1) “RECREATIONAL VEHICLE ” MEANS A VEHICLE THAT IS: 27
(I) EITHER SELF–PROPELLED OR TOWED B Y A TOW VEHICLE ; 28
AND 29
4 HOUSE BILL 605
(II) DESIGNED TO PROVIDE T EMPORARY LIVING QUAR TERS 1
FOR RECREATIO NAL, CAMPING, OR TRAVEL USE . 2
(2) “RECREATIONAL VEHICLE ” INCLUDES: 3
(I) A MOTOR HOME ; 4
(II) A TRAVEL TRAILER ; 5
(III) A FIFTH–WHEEL TRAVEL TRAILER ; 6
(IV) A TRUCK CAMPER ; AND 7
(V) A FOLDING CAMPING TRAI LER. 8
(P) “TRANSIENT CUSTOMER ” MEANS A CUSTOMER WHO IS TEMP ORARILY 9
TRAVELING THROUGH A DEALER’S AREA OF SALES. 10
(Q) (1) “WARRANTOR” MEANS ANY PERSON THA T GIVES A WARRANTY I N 11
CONNECTION WITH NEW RECREATIONAL VEHICLE PARTS, ACCESSORIES, OR 12
COMPONENTS . 13
(2) “WARRANTOR” DOES NOT INCLUDE SER VICE CONTRACTS, 14
INSURANCE, OR EXTENDED WARRANTI ES SOLD FOR SEPARATE CONSIDERATION BY 15
A DEALER OR PERSON N OT AFFILIATED WITH A MANUFACTURER OR DIST RIBUTOR. 16
15–1002. 17
(A) A MANUFACTURER MAY NOT TRANSFER ANY NEW REC REATIONAL 18
VEHICLE TO ANY DEALE R OR DISTRIBUTOR IN THE STATE UNLESS THE 19
MANUFACTURER IS LICE NSED BY THE ADMINISTRATION UNDER THIS SUBTITLE. 20
(B) A DISTRIBUTOR MAY NOT TRANSFER ANY NEW REC REATIONAL VEHICLE 21
TO ANY DEALER IN THE STATE UNLESS THE DIST RIBUTOR IS LICENSED BY THE 22
ADMINISTRATION UNDER THIS SUBTITLE. 23
(C) A PERSON MAY NOT CONDU CT THE BUSINESS OF A FACTORY BRANCH OF 24
A RECREATIONAL VEHIC LE MANUFACTURER UNLE SS THE PERSON IS LIC ENSED BY 25
THE ADMINISTRATION UNDER THIS SUBTITLE. 26
15–1003. 27
HOUSE BILL 605 5
(A) IN ADDITION TO THE IN FORMATION REQUIRED U NDER SUBTITLE 1 OF 1
THIS TITLE, EACH APPLICATION FOR A LICENSE UNDER THIS SUBTITLE SHALL 2
INCLUDE: 3
(1) THE ADDRESS OF THE PR INCIPAL PLACE OF BUS INESS OF THE 4
APPLICANT; 5
(2) THE ADDRESS OF EACH P LACE OF BUSINESS FRO M WHICH THE 6
APPLICANT WILL MAKE SUBSTANTIAL CONTACTS WITH DEALERS IN THE STATE; AND 7
(3) THE NATURE OF THE BUS INESS TO BE CONDUCTE D AT EACH 8
ADDRESS. 9
(B) EACH APPLICANT FOR A LICENSE SHALL SUBMIT AS PART OF THE 10
APPLICATION: 11
(1) A COPY OF EACH FORM FO R ANY NEW VEHICLE WA RRANTY 12
CURRENTLY PROVIDED O R OFFERED BY THE APPLI CANT; 13
(2) A COPY OF EACH FRANCHI SE CONTRACT AND ANY OTHER 14
CONTRACT WITH DEALER S USED BY THE APPLIC ANT, TOGETHER WITH A LIST OF 15
DEALERS IN THE STATE WHO HOLD A FRAN CHISE FROM THE APPLI CANT; 16
(3) A COPY OF THE VEHICLE PREPARATION AND DELIVERY 17
OBLIGATIONS OF THE D EALERS DESCRIBED IN ITEM (2) OF THIS SUBSECTION ; AND 18
(4) A STATEMENT OF THE COM PENSATION STRUCTURE THE 19
APPLICANT AGREES TO PAY A DEALER FOR PAR TS SUPPLIED AND WORK DONE BY A 20
DEALER UNDER : 21
(I) THE PREPARATION AND D ELIVERY OBLIGATIONS OF THE 22
DEALER; OR 23
(II) ANY OUTSTANDING EXPRE SS OR IMPLIED NEW 24
RECREATIONAL VEHICLE WARRANTY. 25
15–1004. 26
(A) EACH LICENSEE SHALL P AY AN ANNUAL FEE TO THE ADMINISTRATION 27
FOR EACH LICENSE YEA R OR PART OF A LICEN SE YEAR FOR WHICH TH E LICENSE IS 28
ISSUED. 29
6 HOUSE BILL 605
(B) THE ANNUAL LICENSE FE E FOR A MANUFACTURER OR A DISTRIBUTOR 1
SHALL BE ESTABLISHED BY THE ADMINISTRATION BASED ON THE COMBINED 2
NUMBER OF NEW RECREA TIONAL VEHICLES TRAN SFERRED BY THE MANUF ACTURER 3
OR DISTRIBUTOR TO DE ALERS IN THE STATE DURING THE PRECEDING LICENS E 4
YEAR. 5
(C) THE ANNUAL LICENSE FE E FOR A FACTORY BRAN CH SHALL BE 6
ESTABLISHED BY THE ADMINISTRATION . 7
15–1005. 8
(A) AFTER THE ADMINISTRATION NOTIFI ES A MANUFACTURER OR 9
DISTRIBUTOR OF NEW R ECREATIONAL VEHICLES OF THE APPROVAL OF A N 10
APPLICATION FOR A LICEN SE AND BEFORE THE ADMINISTRATION ISSUES A 11
LICENSE, THE MANUFACTURER OR DISTRIBUTOR SHALL FI LE WITH THE 12
ADMINISTRATION A SURE TY BOND IN THE FORM AND WITH THE SURETY THAT THE 13
ADMINISTRATION REQUIR ES. 14
(B) (1) THE AMOUNT OF THE SUR ETY BOND SHALL BE BASED ON THE 15
NUMBER OF NEW RECREA TIONAL VEHICLES TRAN SFERRED BY THE MANUF ACTURER 16
OR DISTRIBUTOR TO DE ALERS IN THE STATE DURING THE PREC EDING LICENSE 17
YEAR, AS FOLLOWS: 18
(I) IF 1 TO 50 VEHICLES WERE TRANSF ERRED, A $25,000 19
SURETY BOND ; 20
(II) IF 51 TO 500 VEHICLES WERE TRANSF ERRED, A $50,000 21
SURETY BOND ; 22
(III) IF 501 TO 10,000 VEHICLES WERE TRANSF ERRED, A 23
$100,000 SURETY BOND ; AND 24
(IV) IF MORE THAN 10,000 VEHICLES WERE TRANSF ERRED, A 25
$300,000 SURETY BOND . 26
(2) EACH SURETY BOND SHAL L CONTINUOUSLY MAINTAIN THE 27
AMOUNT SPECIFIED IN THIS SUBSECTION . 28
(3) A MANUFACTURER OR DIST RIBUTOR NEED NOT FIL E MORE THAN 29
ONE BOND REGARDLESS OF THE NUMBER OF MAK ES OF RECREATIONAL V EHICLES 30
MANUFACTURED OR DIST RIBUTED. 31
15–1006. 32 HOUSE BILL 605 7
A LICENSE ISSUED UNDER THIS SUBTITLE AUTHOR IZES THE LICENSEE TO 1
CONDUCT THE BUSINESS OF A MANUFACTURER , DISTRIBUTOR, OR FACTORY 2
BRANCH DURING THE LI CENSE YEAR FOR WHICH IT IS ISSUED. 3
15–1007. 4
(A) IN THIS SECTION , “GOOD FAITH” MEANS HONESTY IN FAC T AND THE 5
OBSERVANCE OF REASON ABLE COMMERCIAL STAN DARDS OF FAIR DEALIN G IN THE 6
TRADE. 7
(B) A MANUFACTURER , DISTRIBUTOR, OR FACTORY BRANCH , WHETHER 8
DIRECTLY OR THROUGH AN AGENT, AN EMPLOYEE , OR A REPRESENTATIVE , MAY NOT 9
FAIL TO ACT IN GOOD FAITH: 10
(1) IN ACTING OR PURPORTI NG TO ACT UNDER THE TERMS, 11
PROVISIONS, OR CONDITIONS OF ANY FRANCHISE AGREEMENT ; OR 12
(2) IN ANY TRANSACTION OR CONDUCT GOVERNED BY THIS 13
SUBTITLE. 14
15–1008. 15
(A) A MANUFACTURER OR DIST RIBUTOR MAY NOT SELL A NEW 16
RECREATIONAL VEHICLE IN THE STATE TO OR THROUGH A DEALER WITHOUT 17
HAVING FIRST ENTERED INTO A WRITTEN DEALE R AGREEMENT THAT HAS BEEN 18
SIGNED BY BOTH PARTI ES. 19
(B) (1) EXCEPT AS SPECIFIED I N PARAGRAPH (2) OF THIS SUBSECTION , 20
THE MANUFACTURER SHA LL DESIGNATE THE DUR ATION OF THE D EALER 21
AGREEMENT AND THE AR EA OF SALES EXCLUSIV ELY ASSIGNED TO A DE ALER IN THE 22
DEALER AGREEMENT AND MAY NOT MAKE CHANGES TO THE TERMS SPECIFI ED IN 23
THE AGREEMENT . 24
(2) THE TERMS SPECIFIED I N THE DEALER AGREEME NT MAY BE 25
ALTERED WITH WRITTEN MUTUAL CONSENT O F BOTH PARTIES. 26
(C) A DEALER MAY NOT SELL A NEW RECREATIONAL V EHICLE IN THE STATE 27
UNLESS: 28
(1) THE DEALER IS LICENSE D BY THE ADMINISTRATION UNDER 29
SUBTITLE 3 OF THIS TITLE; 30
8 HOUSE BILL 605
(2) THE DEALER HAS ENTERE D INTO A DEALER AGRE EMENT; AND 1
(3) THE DEALER IS SELLING WITHIN THE A REA OF SALES 2
DESIGNATED IN THE DE ALER AGREEMENT . 3
(D) (1) A MANUFACTURER OR DIST RIBUTOR SHALL DISTRI BUTE 4
RECREATIONAL VEHICLE S TO ITS DEALERS IN A FAIR AND EQUITABLE MANNER. 5
(2) ON REQUEST , A MANUFACTURER OR DI STRIBUTOR SHALL 6
PROVIDE INFORMATION ON ITS MANNER OF DISTRIBUTI ON TO DEALERS . 7
(E) A MANUFACTURER OR DIST RIBUTOR SHALL PROVID E ADEQUATE 8
REPAIR INSTRUCTIONS TO ITS LICENSED DEAL ERS TO FACILITATE TH E DEALERS 9
PERFORMING PROPER SE RVICE AND REPAIRS ON RECREATIONAL VEHICLE S. 10
15–1009. 11
(A) (1) A MANUFACTURER OR DIST RIBUTOR MAY TERMINAT E, CANCEL, 12
OR FAIL TO RENEW A M ODEL, LINE–MAKE, OR DEALER AGREEMENT WITH A DEALER 13
ONLY FOR GOOD CAUSE . 14
(2) (I) THE MANUFACTURER OR D ISTRIBUTOR HAS THE B URDEN 15
OF SHOWING GOOD CAUS E FOR THE TERMINATI ON OR CANCELLATION O F OR 16
FAILURE TO RENEW A M ODEL, LINE–MAKE, OR DEALER AGREEMENT WITH A 17
DEALER. 18
(II) THE DETERMINATION OF GOOD CAUSE SHALL BE BASED ON: 19
1. THE EXTENT OF THE DEA LER’S PENETRATION INTO 20
THE RELEVANT MARKET AREA FOR THE RELEVAN T MODEL OR LINE–MAKE; 21
2. THE NATURE AND EXTENT OF THE DEALER ’S 22
INVESTMENT IN THE DE ALER’S BUSINESS; 23
3. THE ADEQUACY OF THE D EALER’S SERVICE 24
FACILITIES, EQUIPMENT, PARTS, SUPPLIES, AND PERSONNEL ; 25
4. THE EFFECT OF THE PRO POSED ACTION ON THE 26
COMMUNITY ; 27
5. THE EXTENT AND QUALIT Y OF THE DEALER’S SERVICE 28
UNDER RECREATIONAL V EHICLE WARRANTIES ; 29
HOUSE BILL 605 9
6. ANY FAILURE OF THE DE ALER TO FOLLOW 1
AGREED–ON PROCEDURES AND ST ANDARDS RELATED TO T HE OVERALL OPERATION 2
OF THE DEALERSHIP CO NSISTENT WITH THE LA W AND THE DEALER AGREEMENT ; 3
AND 4
7. THE DEALER’S PERFORMANCE UNDER THE TERMS OF 5
THE DEALER AGREEMENT . 6
(B) ON RENEWAL OF A DEALE R AGREEMENT , A MANUFACTURER OR 7
DISTRIBUTOR MAY NOT REQUIRE ADDITIONAL I NVENTORY STOCKING 8
REQUIREMENTS OR INCR EASED SALES TARGETS IN EXCESS OF THE MAR KET 9
GROWTH IN THE DEALER ’S AREA OF SALES. 10
(C) (1) EXCEPT AS OTHERWISE P ROVIDED IN THIS SUBS ECTION, A 11
MANUFACTURER OR DIST RIBUTOR SHALL PROVID E A DEALER WITH WRIT TEN 12
NOTICE AT LEAST 120 DAYS BEFORE THE TERM INATION, CANCELLATION , OR 13
NONRENEWAL OF A MODEL , LINE–MAKE, OR DEALER AGREEMENT . 14
(2) THE NOTICE SHALL STAT E ALL REASONS FOR TH E PROPOSED 15
TERMINATION , CANCELLATION , OR NONRENEWAL . 16
(3) (I) WITHIN 30 DAYS FOLLOWING RECEI PT OF THE NOTICE , A 17
DEALER MAY PROVIDE W RITTEN NOTICE OF INT ENT TO RECTIFY ALL CL AIMED 18
DEFICIENCIES. 19
(II) IF THE DEFICIENCIES A RE RECTIFIED BY THE DEALER 20
WITHIN 120 DAYS FOLLOWING THE N OTICE OF INTENT TO R ECTIFY, THE 21
MANUFACTURER ’S OR DISTRIBUTOR ’S NOTICE OF TERMINAT ION IS VOID. 22
(III) SUBJECT TO PARAGRAPH (5) OF THIS SUBSECTION , IF A 23
DEALER FAILS TO PROV IDE TIMELY WRITTEN N OTICE OF INTENT TO R ECTIFY OR 24
FAILS TO RECTIFY WIT HIN 120 DAYS AFTER NOTICE OF INTENT TO RECTIFY , THE 25
TERMINATION , CANCELLATION , OR NONRENEWAL OF THE DEALER AGREEMENT 26
SHALL TAKE EFFECT . 27
(4) THE 120–DAY NOTICE PERIOD SH ALL BE REDUCED TO 30 DAYS IF 28
THE TERMINATION , CANCELLATION , OR NONRENEWAL IS DUE TO: 29
(I) A DEALER OR ONE OF THE DEALER’S OWNERS BEING 30
CONVICTED OF , OR ENTERING A PLEA O F NOLO CONTENDERE TO , A FELONY; 31
10 HOUSE BILL 605
(II) THE ABANDON MENT OR CLOSING OF T HE BUSINESS 1
OPERATIONS OF THE DE ALER FOR 10 CONSECUTIVE BUSINESS DAYS, UNLESS THE 2
CLOSING IS DUE TO A CAUSE THAT IS OUT OF THE DEALER’S CONTROL; 3
(III) A SIGNIFICANT MISREPRE SENTATION BY A DEALE R 4
MATERIALLY AFFECTING THE BUSINESS REL ATIONSHIP; OR 5
(IV) A SUSPENSION OR REVOCA TION OF A DEALER ’S LICENSE, 6
OR FAILURE BY A DEAL ER TO RENEW A DEALER ’S LICENSE. 7
(5) THE NOTICE PROVISIONS OF THIS SECTION DO N OT APPLY IF THE 8
REASON FOR TERMINATI ON, CANCELLATION , OR NONRENEWAL IS INS OLVENCY, THE 9
OCCURRENCE OF AN ASS IGNMENT FOR THE BENE FIT OF CREDITORS , OR 10
BANKRUPTCY . 11
(D) (1) A DEALER MAY TERMINATE , CANCEL, OR NOT RENEW A MODEL , A 12
LINE–MAKE, OR THE DEALER AGREEM ENT WITH A MANUFACTU RER OR 13
DISTRIBUTOR WITH OR WITHOUT GOOD CAUSE A T ANY TIME BY GIVING 30 DAYS’ 14
WRITTEN NOTICE TO TH E MANUFACTURER OR DI STRIBUTOR. 15
(2) (I) IF THE TERMINATION , CANCELLATION , OR NONRENEWAL 16
OF THE MODEL , LINE–MAKE, OR DEALER AGREEMENT IS FOR GOOD CAUSE , THE 17
DEALER HAS THE BURDE N OF SHOWING GOOD CA USE. 18
(II) A DETERMINATION OF GOOD CAUS E MAY BE BASED ON : 19
1. A MANUFACTURER OR DIST RIBUTOR BEING 20
CONVICTED OF , OR ENTERING A PLEA O F NOLO CONTENDERE TO , A FELONY; 21
2. THE BUSINESS OPERATIO NS HAVING BEEN 22
ABANDONED OR CLOSED FOR 10 CONSECUTIVE DAYS , UNLESS THE CLOSING IS DUE 23
TO A CAUSE THAT IS O UT OF THE CONTROL OF THE MANUFACTURER OR 24
DISTRIBUTOR; 25
3. A SIGNIFICANT MISREPRE SENTATION BY THE 26
MANUFACTURER OR DIST RIBUTOR THAT MATERIA LLY AFFECTS THE BUSI NESS 27
RELATIONSHIP ; 28
4. A DECLARATION BY THE M ANUFACTURER OR 29
DISTRIBUTOR OF INSOLVEN CY, THE OCCURRENCE OF AN ASSIGNMENT FOR THE 30
BENEFIT OF CREDITORS , OR BANKRUPTCY ; 31
HOUSE BILL 605 11
5. A MANUFACTURER ’S OR DISTRIBUTOR ’S MATERIAL 1
VIOLATION OF THE DEA LER AGREEMENT THAT I S NOT CURED WITHIN 120 DAYS 2
AFTER WRITTEN NOTICE BY THE DEALER; 3
6. A MANUFACTURER OR DIST RIBUTOR COERCING OR 4
ATTEMPTING TO COERCE A DEALER; 5
7. A MANUFACTURER OR DIST RIBUTOR VIOLATING AN 6
AREA OF SALES PROTEC TION OR ALLOWING OTH ER DEALERS TO VIOLAT E AN AREA 7
OF SALES PROTECTION ; OR 8
8. A MATERIAL VIOLATION OF THIS SECTION THAT IS 9
NOT CURED WITHIN 30 DAYS AFTER WRITTEN N OTICE OF THE VIOLATI ON BY THE 10
DEALER. 11
(E) IF THE DEALER AGREEME NT IS TERMINATED , CANCELED, OR NOT 12
RENEWED BY THE DEALE R FOR GOOD CAUSE , WITHIN 45 DAYS AFTER THE 13
TERMINATION , CANCELLATION , OR NONRENEWAL , THE MANUFACTURER OR 14
DISTRIBUTOR SHALL , AT REQUEST OF THE DE ALER, REPURCHASE : 15
(1) ALL NEW , UNALTERED , UNDAMAGED , AND UNTITLED 16
RECREATIONAL VEHICLE S THAT WERE ACQUIRED FROM THE MANUFACTURE R OR 17
DISTRIBUTOR WITHIN 18 MONTHS BEFORE THE TE RMINATION, CANCELLATION , OR 18
NONRENEWAL , AT 100% OF THE INVOICE COST , INCLUDING TRANSPORTA TION 19
COSTS, EXCEPT THAT IF ANY R ECREATIONAL VEHICLE IS DAMAGED, THE AMOUNT 20
DUE TO THE DEALER SH ALL BE REDUCED BY TH E COST TO REPAIR THE DAMAGE; 21
(2) ALL NEW, UNDAMAGED ACC ESSORIES AND PROPRIE TARY PARTS 22
WITH THE ORIGINAL IN VOICE SOLD TO THE DE ALER FOR RESALE WITH IN 12 MONTHS 23
BEFORE THE TERMINATI ON, CANCELLATION , OR NONRENEWAL OF THE DEALER 24
AGREEMENT , AT 105% OF THE DEALER ’S ORIGINAL PRICE PAI D; AND 25
(3) ANY PROPERLY FUNCTI ONING DIAGNOSTIC EQU IPMENT, 26
SPECIALTY TOOLS , CURRENT SIGNAGE , OR OTHER EQUIPMENT A ND MACHINERY 27
THAT WAS PURCHASED W ITHIN 5 YEARS BEFORE THE TER MINATION, 28
CANCELLATION , OR NONRENEWAL AND CA N NO LONGER BE USED IN THE NORMAL 29
COURSE OF BUSINESS , AT 100% OF THE DEALER’S ORIGINAL PRICE PAI D, PLUS 30
FREIGHT, DESTINATION, DELIVERY, AND ANY APPLICABLE T AX. 31
(F) IF THE DEALER AGREEME NT IS TERMINATED , CANCELED, OR NOT 32
RENEWED BY THE MANUF ACTURER OR DISTRIBUT OR WITHOUT GOOD CAUS E, THE 33
MANUFACTURER OR DIST RIBUTOR SHALL RE PURCHASE DEALER INVE NTORY AS 34
PROVIDED IN SUBSECTI ON (E) OF THIS SECTION. 35 12 HOUSE BILL 605
(G) A DEALER IS NOT PROHIB ITED FROM SELLING TH E REMAINING 1
IN–STOCK INVENTORY OF A PARTICULAR MODEL OR LINE–MAKE AFTER A DEALER 2
AGREEMENT HAS BEEN T ERMINATED, CANCELED, OR NOT RENEW ED BY THE 3
MANUFACTURER OR DIST RIBUTOR. 4
(H) WHEN TAKING ON AN ADD ITIONAL LINE–MAKE OF A RECREATION AL 5
VEHICLE, A DEALER SHALL NOTIF Y IN WRITING ANY MAN UFACTURER OR 6
DISTRIBUTOR WITH WHO M THE DEALER HAS A D EALER AGREEMENT OF A SIMILAR 7
LINE–MAKE AT LEAST 30 DAYS BEFORE ENTERING INTO A DEALER AGREEM ENT FOR 8
THE ADDITIONAL LINE –MAKE. 9
15–1010. 10
(A) (1) IF A DEALER DESIRES T O MAKE A TRANSFER IN OWNERSHIP BY 11
SALE OF THE BUSINESS ASSETS, STOCK TRANSFER , OR ANY OTHER METHOD , THE 12
DEALER SHALL GIVE A MANUFACTURER OR DIST RIBUTOR THAT HAS ENT ERED INTO 13
A DEALER AGREEMENT W ITH THE DEALER WRITT EN NOTICE AT LEAST 10 BUSINESS 14
DAYS BEFORE THE TRAN SFER, INCLUDING ALL SUPPOR TING DOCUMENTATION A S 15
MAY BE REASONABLY RE QUIRED BY THE MANUFA CTURER OR DISTRIBUTO R TO 16
DETERMINE WHETHER AN OBJECTION TO THE TRANSFER MAY BE MADE . 17
(2) A MANUFACTURER OR DIST RIBUTOR MAY NOT OBJE CT TO THE 18
PROPOSED TRANSFER OF OWNERSHIP UNLESS THE PROSPECTIVE TRANSFER EE: 19
(I) HAS BEEN TERMINATED F OR CAUSE BY THE 20
MANUFACTURER OR DIST RIBUTOR; 21
(II) HAS BEEN CONVICTED OF A FELONY OR ANY CRIM E OF 22
MORAL TURPITUDE ; 23
(III) LACKS ANY DEALER LICE NSE REQUIRED BY LAW ; 24
(IV) LACKS AN ACTIVE LINE OF CREDIT SUFFICIENT TO 25
PURCHASE THE MANUFAC TURER’S OR DISTRIBUTOR ’S PRODUCT; OR 26
(V) HAS UNDERGONE BANKRUP TCY, INSOLVENCY, A GENERAL 27
ASSIGNMENT FOR THE B ENEFIT OF CREDITORS , OR THE APPOINTMENT O F A 28
RECEIVER, TRUSTEE, OR CONSERVATOR TO TA KE POSSESSION OF THE 29
TRANSFEREE ’S BUSINESS PROPERTY . 30
(B) (1) IF THE MANUFACTURER O R DISTRIBUTOR OBJECT S TO A 31
PROPOSED CHANGE OF O WNERSHIP, THE MANUFACTURER OR DISTRIBUTOR SHALL 32 HOUSE BILL 605 13
GIVE WRITTEN NOTICE TO THE DEALER WITHIN 7 BUSINESS DAYS AFTER R ECEIPT 1
OF THE DEALER ’S NOTIFICATION AND C OMPLETE DOCUMENTATIO N. 2
(2) IF THE MANUFACTURER O R DISTRIBUTOR DOES N OT GIVE TIMELY 3
NOTICE OF THE OBJECT ION, THE TRANSFER SHALL B E DEEMED APPROVED . 4
(C) (1) A DEALER SHALL HAVE AN OPPORTUNITY TO DESIGNATE , IN 5
WRITING, A FAMILY MEMBER AS A SUCCESSOR TO THE DEA LER’S BUSINESS IN THE 6
EVENT OF DEATH , INCAPACITY, OR RETIREMENT OF THE DEALER. 7
(2) A MANUFACTURER OR DIST RIBUTOR MAY OBJECT T O THE 8
SUCCESSOR WITHIN 10 BUSINESS DAYS AFTER RECEIPT OF THE DEALER’S 9
SUCCESSION PLAN ONLY IF THE SUCCESSOR : 10
(I) WAS CONVICTED OF A FE LONY OR CRIME OF MOR AL 11
TURPITUDE; 12
(II) DECLARED BANKRUPTCY O R INSOLVENCY WITHIN THE 13
PREVIOUS 10 YEARS; 14
(III) LACKS AN ACTIVE LINE OF CREDIT SUFFICIENT TO 15
PURCHASE THE MANU FACTURER’S OR DISTRIBUTOR ’S PRODUCT; 16
(IV) LACKS ANY DEALER ’S LICENSE REQUIRED B Y LAW; OR 17
(V) WOULD CAUSE OR HAS CA USED A BREACH OF THE DEALER 18
AGREEMENT . 19
15–1011. 20
(A) (1) EACH WARRANTOR SHALL : 21
(I) SPECIFY IN WRITING EA CH DEALER’S OBLIGATIONS FOR 22
PREPARATION , DELIVERY, AND WARRANTY SERVICE FOR THE WARRANTOR ’S 23
PRODUCTS; 24
(II) COMPENSATE THE DEALER FOR WARRANTY SERVICE 25
PERFORMED BY THE DEA LER THAT IS COVERED BY THE WARRANTY ; AND 26
(III) PROVIDE THE DEALER A SCHEDULE OF COMPENSA TION TO 27
BE PAID AND THE REASONA BLE TIME ALLOWANCE F OR THE PERFORMANCE O F ANY 28
SERVICE AND REPAIRS UNDER A WARRANTY . 29
14 HOUSE BILL 605
(2) IF THE SCHEDULE OF CO MPENSATION DOES NOT INCLUDE A 1
PARTICULAR SERVICE O R REPAIR, A WARRANTOR SHALL RE IMBURSE THE DEALER 2
A REASONABLE AMOUNT FOR THE SERVICE OR REPAIR . 3
(B) (1) A WARRANTOR SHALL REIM BURSE THE DEALER FOR ANY 4
WARRANTY PART AT WHO LESALE COST PLUS A 30% HANDLING CHARGE . 5
(2) THE MAXIMUM HANDLING CHARGE UNDER THIS SU BSECTION IS 6
$300. 7
(3) A WARRANTOR SHALL REIM BURSE A DEALER THE C OST OF 8
FREIGHT TO RETURN A WARRANTY PART , AN ACCESSORY , OR A COMPONENT TO TH E 9
WARRANTOR , IF THE RETURN IS REQ UESTED BY THE WARRAN TOR. 10
(C) WARRANTY AUDITS OF DE ALER RECORDS MAY BE CONDUCTED BY THE 11
WARRANTOR ON A REASO NABLE BASIS. 12
(D) (1) A DEALER SHALL SU BMIT A WARRANTY CLAI M WITHIN 45 DAYS 13
AFTER COMPLETING THE WORK. 14
(2) A WARRANTOR MAY DISAPP ROVE WARRANTY CLAIMS ONLY IN 15
WRITING WITHIN 45 DAYS AFTER THE DATE THE WARRANTY CLAIM W AS SUBMITTED 16
BY THE DEALER IN THE MANNER PRESCRIBED BY THE WARRANTOR . 17
(3) CLAIMS NOT DISAPPROVE D IN WRITING WITHIN 45 DAYS SHALL 18
BE DEEMED TO BE APPR OVED AND SHALL BE PA ID BY THE WARRANTOR WITHIN 60 19
DAYS. 20
(E) A DEALER SHALL GIVE NO TICE TO A WARRANTOR AS SOON AS 21
REASONABLY POSSIBLE IF THE DEALER IS UNA BLE OR UNWILLING TO PERFORM 22
MATERIAL OR REPETITI VE WARRANTY REPAIRS . 23
(F) IT IS A VIOLATION OF THIS SECTION FOR ANY WARRANTOR TO : 24
(1) FAIL TO PERFORM ANY O F ITS WARRANTY OBLIG ATIONS WITH 25
RESPECT TO ITS WARRA NTED PRODUCTS ; 26
(2) FAIL TO INCLUDE WRITT EN NOTICES OF FACTOR Y CAMPAIGNS TO 27
RECREATIONAL VEHICLE OWNERS AND DEALERS F OR THE EXPECTED DATE BY 28
WHICH PARTS AND EQUI PMENT WILL BE AVAILA BLE TO DEALERS TO PE RFORM THE 29
CAMPAIGN WORK ; 30
HOUSE BILL 605 15
(3) IF THE CARRIER IS DES IGNATED BY THE MANUF ACTURER, 1
DISTRIBUTOR, OR WARRANTOR , FAIL TO COMPENSATE A DEALER F OR AUTHORIZED 2
REPAIRS PERFORMED BY A DEALER FOR A PRODU CT DAMAGED IN TRANSI T TO THE 3
DEALER; 4
(4) FAIL TO COMPENSATE AN Y DEALER FOR AUTHORI ZED WARRANTY 5
SERVICE IN ACCORDANC E WITH THE TIME ALLO WANCES SET FORTH IN THE 6
SCHEDULE OF COMPENS ATION, IF PERFORMED IN A TI MELY MANNER ; 7
(5) INTENTIONALLY MISREPR ESENT TO PURCHASERS OF 8
RECREATIONAL VEHICLE S THAT A DEALER IS A WARRANTOR OR CO –WARRANTOR ; 9
OR 10
(6) REQUIRE A DEALER TO M AKE WARRANTIES TO CU STOMERS IN 11
ANY MANNER RELATED T O THE MANUFACTU RING OF A RECREATION AL VEHICLE. 12
(G) IT IS A VIOLATION OF THIS SECTION FOR A D EALER TO: 13
(1) FAIL TO PERFORM PREDE LIVERY INSPECTION FU NCTIONS AS 14
SPECIFIED BY THE WAR RANTOR; 15
(2) FAIL TO PERFORM WARRA NTY SERVICE WORK AUT HORIZED BY 16
THE WARRANTOR IN A R EASONABLY TIMELY MANN ER ON ANY TRANSIENT 17
CUSTOMER’S RECREATIONAL VEHIC LE OF THE SAME LINE –MAKE; 18
(3) FAIL TO TRACK ACTUAL TIME EXPENDED TO PER FORM WARRANTY 19
WORK NOT GOVERNED BY TIME ALLOWANCE IN TH E SCHEDULE OF COMPEN SATION; 20
(4) CLAIM AN AGENCY RELAT IONSHIP WITH A WARRANT OR; OR 21
(5) MISREPRESENT THE TERM S OF A WARRANTY . 22
(H) UNLESS SPECIFIED IN T HE TERMS OF A DEALER AGREEMENT , IT IS A 23
VIOLATION OF THIS SE CTION FOR: 24
(1) A WARRANTOR TO FAIL TO INDEMNIFY, DEFEND, AND HOLD 25
HARMLESS A DEALER AG AINST ANY LOSSES OR DAMAGE S TO THE EXTENT THE 26
LOSSES OR DAMAGES AR E CAUSED BY THE NEGL IGENCE OR MISCONDUCT OF THE 27
WARRANTOR ; OR 28
(2) A DEALER TO FAIL TO IN DEMNIFY, DEFEND, AND HOLD HARMLESS 29
A WARRANTOR AGAINST ANY LOSSES OR DAMAGE S TO THE EXTENT THE LOSSES OR 30
DAMAGES ARE CAUSED B Y THE NEGLIGENCE OR MISCONDUCT OF THE DE ALER. 31 16 HOUSE BILL 605
(I) INDEMNIFICATION UNDER THIS SUBSECTION SHAL L INCLUDE COURT 1
COSTS, REASONABLE ATTORNEY ’S FEES, AND EXPERT WITNESS F EES INCURRED BY 2
THE DEFENDING PARTY . 3
15–1012. 4
(A) WHEN A NEW RECREAT IONAL VEHICLE IS DAM AGED BEFORE TRANSIT 5
TO THE DEALER , OR IS DAMAGED IN TRA NSIT TO THE DEALER A ND THE 6
MANUFACTURER OR DIST RIBUTOR WAS RESPONSI BLE FOR TRANSIT , THE DEALER 7
SHALL: 8
(1) NOTIFY THE MANUFACTUR ER OR DISTRIBUTOR OF THE DAMAGE 9
WITHIN THE TIME FRA ME SPECIFIED IN THE DEALER AGREEMENT ; 10
(2) REQUEST AUTHORIZATION TO REPLACE THE COMPO NENTS, 11
PARTS, OR ACCESSORIES DAMAG ED; AND 12
(3) REJECT THE RECREATION AL VEHICLE WITHIN 2 DAYS AFTER 13
PHYSICAL DELIVERY OF THE RECREATIONAL VEH ICLE. 14
(B) (1) IF A DEALER DETERMINES THAT A RE CREATIONAL VEHICLE A T 15
THE TIME OF DELIVERY HAS AN UNREASONABLE AMOUNT OF MILES ON T HE 16
ODOMETER , THE RECREATIONAL VEH ICLE MAY BE SUBJECT TO REJECTION BY THE 17
DEALER AND REVERSION OF THE RECREATIONAL VEHICLE TO THE MANUF ACTURER 18
OR DISTRIBUTOR. 19
(2) A DEALER MAY NOT DEEM LESS THAN THE DISTAN CE BETWEEN 20
THE DEALER AND THE M ANUFACTURER ’S FACTORY OR A DISTR IBUTOR’S POINT OF 21
DISTRIBUTION, AS APPROPRIATE , PLUS 100 MILES AS AN UNREASON ABLE AMOUNT 22
OF MILES. 23
15–1013. 24
(A) A MANUFACTURER , DISTRIBUTOR, OR FACTORY BRANCH , WHETHER 25
DIRECTLY OR THROUGH AN AGENT , AN EMPLOYEE , AN AFFILIATE , OR A 26
REPRESENTATIVE , MAY NOT COERCE OR AT TEMPT TO COERCE A DE ALER TO: 27
(1) PURCHASE A PRODUCT TH E DEALER DID NOT ORD ER; 28
(2) ENTER INTO AN AGREEME NT WITH THE MANUFACTURER OR 29
DISTRIBUTOR; 30
HOUSE BILL 605 17
(3) TAKE ACTION THAT IS U NFAIR OR UNREASONABL E TO THE 1
DEALER; OR 2
(4) FORGO EXERCISING A RI GHT AUTHORIZED BY A DEALER 3
AGREEMENT OR ANY LAW GOVERNING THE BUSINE SS RELATIONSHIP . 4
(B) A DEALER BEARS THE BUR DEN OF PROOF REGAR DING THE PROHIBITED 5
ACTS DESCRIBED IN TH IS SECTION. 6
15–1014. 7
(A) NOTWITHSTANDING ANY A DMINISTRATIVE OR CRI MINAL SANCTIONS 8
IMPOSED BY THIS SUBT ITLE, IF A PERSON SUFFERS FINANCIAL INJURY OR OTHER 9
DAMAGE AS A RESULT O F A VIOLATION OF THI S SUBTITLE BY ANY O THER PERSON , 10
WHETHER OR NOT THAT OTHER PERSON HAS BEE N FOUND GUILTY OF A CRIMINAL 11
VIOLATION, THE INJURED PERSON M AY RECOVER DAMAGES A ND REASONABLE 12
ATTORNEY’S FEES IN ANY COURT OF COMPETENT JURISDI CTION. 13
(B) (1) BEFORE BRINGING A CIV IL ACTION UNDER THIS SECTION, THE 14
PARTY BRINGING THE A CTION SHALL SERVE A WRITTEN DEMAND FOR M EDIATION 15
ON THE OFFENDING PAR TY. 16
(2) THE PARTIES TO MEDIAT ION SHALL PAY THEIR OWN COSTS FOR 17
ATTORNEY’S FEES AND DIVIDE TH E MEDIATOR COST EQUA LLY. 18
(3) THIS SUBSECTION DOES NOT APP LY TO AN ACTION FOR 19
INJUNCTIVE RELIEF . 20
(C) A DEALER, MANUFACTURER , DISTRIBUTOR, FACTORY BRANCH , OR 21
WARRANTOR MAY APPLY FOR A GRANT OF INJUN CTIVE RELIEF FROM A VIOLATION 22
OF THIS SUBTITLE OR A REFUSAL TO COMPLY WITH A REQUIREMENT O F THIS 23
SUBTITLE. 24
15–1015. 25
(A) THE ADMINISTRATION MAY SU SPEND OR REVOKE ANY DEALER, 26
MANUFACTURER , DISTRIBUTOR, OR FACTORY BRANCH LICENSE ON A FINDING THAT 27
A PARTY VIOLATED THI S SUBTITLE. 28
(B) THE ADMINISTRATION MAY IM POSE A FINE NOT EXCE EDING $1,000 FOR 29
EACH VIOLATION OF TH IS SUBTITLE. 30
18 HOUSE BILL 605
(C) A DEALER, MANUFACTURER , DISTRIBUTOR, FACTORY BRANCH , OR 1
WARRANTOR IS ENTITLE D TO A HEARING UNDER TITLE 12, SUBTITLE 2 OF THIS 2
ARTICLE TO CONTEST A N ACTION OR FINE IMP OSED UNDER THIS SECT ION. 3
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 4
October 1, 2024. 5