regular session, 2009 enrolled

of 41Coding: Words which are struck through are deletions from existing law;words in boldface type and underscored are additions.

Regular Session, 2009 ENROLLED

SENATE BILL NO. 175

BY SENATORS MICHOT AND WALSWORTH

Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.

AN ACT1

To amend and reenact R.S. 32:781(5), (6), and (19), 782, 783(A), (F)(1), (2), and (8), and2

(I), 784(B) and (C), 785(C)(1), (D), and (E), 787, 789, 790(A) and (C), 802(A),3

1251, 1252(2)(introductory paragraph), (a), and (c), (4), (8), (9), (12), (13), (16),4

(17), (19), (21), (23)(a), (b)(iv), and (c), (24), (25), (26), (27), (29), (33), (34), (35),5

(36)(a) and (b)(vi), and (37), 1253(A)(introductory paragraph), (1)(introductory6

paragraph), and (2), (3)(a) and (b), and (E), 1254(A)(6), (B)(2), (C)(9), (D)(4) and7

(7), (E)(introductory sentence), (E)(1), (2), (3), (4)(a), (5), (7), (8), (9), (10)(a), and8

(11), (F)(4), and (N), 1255(A)(2), 1256, 1261(1)(a)(introductory paragraph),9

(1)(a)(iv) and (v), and (o), (q) and (t), and (6)(a), 1265, and 1268, to enact R.S.10

32:1252 (39) through (50), 1254(A)(18) and (19), (D)(6)(c), 1257.1, 1258(A)(10),11

1261(7), 1261.1, 1261.2, 1262(A)(5), 1268.1 and 1268.2, and to repeal R.S.12

32:781(1) through (4), (9) through (18), (22) through (25), and (28), 783(F)(7) and13

(10), 784(A)(5) through (8), and Part IV of Chapter 4-C of Title 32 of the Louisiana14

Revised Statutes of 1950, comprised of R.S. 32:811 through 822, relative to the15

distribution and sale of motor vehicles; to provide for changes in definitions within16

the Recreational and Used Motor Vehicle Commission and the Motor Vehicle17

Commission; to provide for changes to the jurisdiction and authority of the18

Recreational and Used Motor Vehicle Commission and the Motor Vehicle19

Commission; to provide for changes to the membership of the Used Motor Vehicle20

Commission and the Motor Vehicle Commission; to transfer authority over21

recreational products from the Recreational and Used Motor Vehicle Commission22

to the Motor Vehicle Commission; to provide for unauthorized acts of a23

SB NO. 175 ENROLLED


manufacturer, distributor, wholesaler, distributor branch, factory branch, or1

converter; to provide for acts of a motor vehicle dealer or specialty dealer; to provide2

for violations; to provide for indemnification of franchised dealers; to provide for3

payments to dealers; to provide for penalties; to provide for repurchase upon4

termination of a franchise; and to provide for related matters.5

Be it enacted by the Legislature of Louisiana:6

Section 1. R.S. 32:781(5), (6), and (19), 782, 783(A), (F)(1), (2), and (8), and (I),7

784(B) and (C), 785(C)(1), (D), and (E), 787, 789, 790(A) and (C), 802(A), 1251,8

1252(2)(introductory paragraph), (a), and (c), (4), (8), (9), (12), (13), (16), (17), (19), (21),9

(23)(a), (b)(iv), and (c), (24), (25), (26), (27), (29), (33), (34), (35), (36)(a) and (b)(vi), and10

(37), 1253(A)(introductory paragraph), (1)(introductory paragraph), and (2), (3)(a) and (b),11

and (E), 1254(A)(6), (B)(2), (C)(9), (D)(4), and (7), (E)(introductory sentence), (E)(1), (2),12

(3), (4)(a), (5), (7), (8), (9), (10)(a), and (11), (F)(4), and (N), 1255(A)(2), 1256,13

1261(1)(a)(introductory paragraph), (1)(a)(iv) and (v), and (o), (q) and (t), and (6)(a), 1265,14

and 1268 are hereby amended and reenacted and R.S. 32:1252 (39) through (50),15

1254(A)(18) and (19), (D)(6)(c), 1257.1, 1258(A)(10), 1261(7), 1261.1, 1261.2, 1262(A)(5),16

1268.1, and 1268.2 are hereby enacted to read as follows:17

CHAPTER 4-C. LOUISIANA RECREATIONAL18

AND USED MOTOR VEHICLE COMMISSION19

PART I. DEFINITIONS AND GENERAL PROVISIONS20

§781. Definitions21

As used in this Chapter:22

* * *23

(5) "Broker" means any used motor vehicle or recreational product dealer24

who, for a fee or commission, arranges or offers to arrange a transaction involving25

the sale, for purposes other than resale, of a used motor vehicle or recreational26

product.27

(6) "Commission" means the Louisiana Recreational and Used Motor28

Vehicle Commission or its designee.29

* * *30

SB NO. 175 ENROLLED


(19) "Motor vehicle" means any motor-driven car, van, or truck required to1

be registered, which is used or is designed to be used, for the transporting of2

passengers or goods for public, private, commercial, or for-hire purposes and3

includes new and used motor homes, new and used motorcycles, new and used all-4

terrain vehicles, new and used recreational trailers, new and used boat trailers, used5

ambulances, used buses, used fire trucks, used conversion vehicles, used wreckers,6

and new and used semitrailers.7

* * *8

§782. Jurisdiction and authority of commission9

A. The provisions of this Chapter shall not apply to any person, partnership,10

corporation, limited liability company, or other entity that is licensed or regulated by11

the Louisiana Motor Vehicle Commission. If any provision of this Chapter conflicts12

with any provision of Chapter 6 of this Title, the provisions of Chapter 6 of this Title13

shall prevail.14

B. Notwithstanding the provisions of Subsection A of this Section, any15

licensee of the Louisiana Motor Vehicle Commission engaged in any additional16

business not licensed by the Louisiana Motor Vehicle Commission shall be subject17

to licensure by the appropriate licensing authority for such additional business.18

However, nothing herein shall be construed to prohibit a motor vehicle dealer19

licensed by the Louisiana Motor Vehicle Commission or licensed pursuant to this20

Chapter from dispensing any property at retail he has taken in trade for the sale of21

a motor vehicle.22

§783. Recreational and Used Motor Vehicle Commission; appointment and23

qualification; terms of office; powers and duties24

A.(1) There is hereby created the Louisiana Recreational and Used Motor25

Vehicle Commission within the office of the governor to be composed of fourteen26

ten members all appointed by the governor with the confirmation of the Senate. Six27

Five members shall be licensed used motor vehicle or recreational product dealers,28

one selected from each public service commission district. One member shall be a29

licensed automotive dismantler or parts recycler, three members shall be consumers30

SB NO. 175 ENROLLED


selected from the state at large, one member shall be a licensed motorcycle dealer,1

one member shall be a licensed marine dealer, and one member shall be a person2

licensed to conduct used motor vehicle auctions or salvage pool auctions, and one3

member shall be a representative of a manufacturer licensed by this commission.4

Such manufacturer representative shall be a resident of Louisiana. The chairman5

shall be designated by the governor.6

(2) Of the six members who shall be licensed used motor vehicle or7

recreational product dealers, one member shall be a recreational vehicle dealer and8

one member shall be a utility trailer dealer.9

* * *10

F. The commission's powers and duties shall include but are not limited to11

the following:12

(1) Licensing used motor vehicle dealers and salespersons, recreational13

products dealers and salespersons, motor vehicle crushers, dealers of used parts and14

accessories, and dismantlers and parts recyclers.15

(2) Inspecting used motor vehicle dealers, recreational products, motor16

vehicle crushers, dealers of used parts and accessories locations, and dismantlers and17

parts recyclers locations to ensure that they are in an approved location, meet local18

zoning or other municipal requirements, and have sufficient facilities which shall19

include but not be limited to a business sign, a listed and usable telephone number,20

and a sales office.21

* * *22

(8) Serving in the capacity of a receivership to take possession of certificates23

of title from a used motor vehicle dealer or a recreational products dealer who has24

failed or refused to provide a certificate of title to his customer and to further25

distribute those titles to the rightful owners pursuant to R.S. 32:705.26

* * *27

I. The commission shall, in addition to the powers herein conferred, be28

constituted a body politic or political corporation, invested with the powers inherent29

in corporations. It may sue and be sued under the style of the Louisiana Recreational30

SB NO. 175 ENROLLED


and Used Motor Vehicle Commission, and all process against the corporation shall1

be served on the chairman or executive director, and all suits on behalf of the2

commission shall be brought by the chairman or his designee. The domicile for the3

purpose of being sued shall be in East Baton Rouge Parish. Service of process shall4

be made upon the chairman or upon the executive director of the commission in5

person. No member of the board shall be held liable as an individual in any suit6

against the board.7

§784. Dealers, manufacturers, and distributors to be licensed; exception8

* * *9

B. Any motor vehicle dealer, not licensed under the provisions of Chapter10

6 of this Title, who rents on a daily basis motor vehicles not of the current year or11

immediate prior year models, that have been titled previously to an ultimate12

purchaser, shall be subject to the regulation of the Louisiana Recreational and Used13

Motor Vehicle Commission.14

C. No person, partnership, corporation, limited liability company, or other15

entity, unless licensed by the commission as a used car dealer or recreational16

products dealer, shall engage in the business as a "broker," "purchasing company,"17

"sales agent," or similar title for the procurement of prospective purchasers for used18

motor vehicles or recreational products.19

§785. Procedures for denial, suspension, or revocation of license; notice; hearings;20

appeals; abandonment of business21

* * *22

C.(1)(a) Except as provided by Subparagraph (b) of this Paragraph, in In23

holding and conducting hearings on complaints of violations of the provisions of this24

Chapter or hearings on the imposition of a civil penalty for any such violation, the25

commission shall give the licensee or other person, firm, association, corporation,26

limited liability company, or trust alleged to have committed such violation at least27

fifteen days written notice specifying the violation charged.28

(b)(i) In the event disputes arise between a marine dealer and a manufacturer29

or distributor of marine products concerning a violation of this Chapter, the30

SB NO. 175 ENROLLED


notification period shall be a minimum of twenty-one days and either party may elect1

within the twenty-one-day notification period to have the complaint or violation2

determined by any court of competent jurisdiction in East Baton Rouge Parish by3

notifying the commission by certified or registered mail of its intent to invoke the4

jurisdiction of any competent court. This election shall be made within the twenty-5

one-day notification period.6

(ii) If either party fails to institute legal proceedings in a court of competent7

jurisdiction in East Baton Rouge Parish within thirty days of its notification to the8

commission, the commission shall proceed with its scheduled hearing after9

renotifying the parties and providing them with at least fifteen days notice of the new10

hearing date.11

(iii) During the notice period provided in Item (i) of this Subparagraph and12

the delay provided for in Item (ii) of this Subparagraph, and provided either party13

seeks judicial relief during either of those time periods and takes reasonable steps to14

pursue such relief, the commission shall withhold any further action on the15

complaint.16

(iv) The provisions of Items (i), (ii), and (iii) of this Subparagraph shall not17

apply to hearings involving complaints of violations of R.S. 32:784(A) and (B), 791,18

792, 793, 804, and 814.19

* * *20

D. When the licensed premises of a used motor vehicle or recreational21

products dealer are abandoned, the dealer is no longer in business, there are no22

salespersons on the premises, all attempts to locate the dealer have been exhausted,23

the business telephone is disconnected, and the business sign has been removed, then24

the used motor vehicle or recreational products dealer's license and the salesperson's25

licenses shall be revoked without a hearing if a request or application for hearing on26

the revocation is not made within five business days following the posting of a notice27

on the front door of the business that said license will be revoked for abandonment28

or violation of the provisions of this Part.29

E. When a licensee is found in violation of any provision of this Chapter,30

SB NO. 175 ENROLLED


relative to the Louisiana Recreational and Used Motor Vehicle Commission, the1

licensee shall attend a four-hour educational seminar. The licensee who is found in2

violation of any provision of this Chapter shall complete the four-hour educational3

seminar within three months of the date the hearing decision becomes final.4

* * *5

§787. Criminal penalties6

Any person, firm, association, corporation, limited liability company, or trust,7

except a manufacturer or distributor which is required to be licensed under the8

provisions of this Chapter, committing a violation of this Chapter shall, upon9

conviction, be fined not less than five hundred dollars nor more than one thousand10

dollars, and each day that a person, firm, association, corporation, or trust violates11

this Chapter shall constitute a separate offense.12

* * *13

§789. Sale of used water-damaged vehicles and recreational products14

A. No used motor vehicle or recreational products dealer, nor any person or15

entity, shall sell, transfer, or convey any used motor vehicle or recreational product16

to any person without notifying the buyer or receiver of the vehicle in writing of the17

extent of any water damage from flooding which occurred to the vehicle prior to the18

transaction.19

B. If a sale, transfer, or conveyance of a used motor vehicle or recreational20

product occurs in violation of Subsection A of this Section, the person receiving21

ownership and title to the vehicle who is not otherwise aware of the damage at the22

time of the transaction may bring an action to set aside the transaction within one23

year from the date of the transaction and receive all monies or other property given24

as consideration for the vehicle less a reasonable assessment for miles driven.25

§790. Black market sales; prohibition26

A. No person shall sell used motor vehicles or recreational products by using27

fraudulent practices, such as forgery or providing a false or fraudulent name on a28

certificate of title, to escape the licensing requirements and the payment of license29

fees provided for in Parts II and IV of this Chapter and to escape the payment of state30

SB NO. 175 ENROLLED


and local sales and use tax.1

* * *2

C. The Recreational and Used Motor Vehicle Commission shall have the3

responsibility to enforce the provisions of this Section.4

* * *5

§802. License required; application; fee; duration6

A. It shall be unlawful and shall constitute a misdemeanor for any person,7

firm, association, corporation, or trust to engage in business in whole or in part as,8

or serve in the capacity of, or act as an automotive dismantler and parts recycler,9

automotive dismantler and parts recycler salesperson, or motor vehicle crusher in10

this state without first obtaining a license therefor from the Louisiana Recreational11

and Used Motor Vehicle Commission.12

* * *13

§1251. Declaration of public policy14

The legislature finds and declares that the distribution and sale of motor15

vehicles and recreational products in the state of Louisiana vitally affects the16

general economy of the state, the public interest, and the public welfare, and that in17

order to promote the public interest, and the public welfare, and in the exercise of its18

police power, it is necessary to regulate and to license those persons enumerated in19

R.S. 32:1254 and doing business in Louisiana, in order to prevent frauds,20

impositions, and other abuses upon its citizens, and avoid undue control of the21

independent motor vehicle dealer and recreational products by the their motor22

vehicle manufacturing and distributive organizations and foster and keep alive23

vigorous and healthy competition, by prohibiting unfair practices by which fair and24

honest competition is destroyed or prevented, and to protect the public against the25

creation or perpetuation of monopolies and practices detrimental to the public26

welfare, to prevent the practice of requiring the buying, leasing, or renting of special27

features, appliances, and equipment not desired or requested by the purchaser, lessee,28

or renter, to prevent false and misleading advertising, to prevent unfair practices by29

said licensees, to promote the public safety and prevent disruption of the system of30

SB NO. 175 ENROLLED


distribution of motor vehicles and recreational products to the public and prevent1

deterioration of facilities for servicing motor vehicles and keeping same safe and2

properly functioning, and prevent bankrupting of motor vehicle and recreational3

products dealers and lessors, who might otherwise be caused to fail because of such4

unfair practices and competition, thereby resulting in unemployment, disruption of5

leases, and nonpayment of taxes and loans, and contribute to an inevitable train of6

undesirable consequences, including economic depression.7

§1252. Definitions8

The following words, terms, and phrases, when used in this Chapter, shall9

have the meanings respectively ascribed to them in this Section, except where the10

context clearly indicates a different meaning:11

* * *12

(2) "Broker" means a person who, for a fee or commission, arranges or offers13

to arrange a transaction involving the sale, for purposes other than resale, of a new14

motor vehicle or recreational product, and who is not:15

(a) A motor vehicle dealer or recreational products dealer, or bona fide16

employee of a motor vehicle dealer, when acting on behalf of a motor vehicle or17

recreational products dealer.18

* * *19

(c) At any point in the transaction, the bona fide owner of the motor vehicle20

or recreational product involved in the transaction.21

* * *22

(4) "Community or territory" or "area of responsibility" shall mean the23

licensee's area of principal sales and service responsibility as specified by the24

franchise in effect with any licensee of the commission.25

(a) The area of responsibility of a licensee shall not be comprised of an26

area less than the applicable area provided for in Subparagraphs (b) and (c) of27

this Paragraph, unless approved by the commission pursuant to the provisions28

of this Chapter, or if, on August 15, 2001, such dealer had an effective29

contractual agreement for a smaller area of responsibility.30

SB NO. 175 ENROLLED


(b) A marine dealer's area of responsibility shall mean the marine1

dealer's area of principal sales and service responsibility as specified by the2

contract, franchise, or selling agreement in effect with the manufacturer or3

distributor. The marine manufacturer or distributor shall designate and4

provide to the commission in writing the marine dealer's area of responsibility5

when the contract is granted or, should there be contracts in existence on6

August 15, 2004, without such designation, the commission shall require the7

manufacturer or distributor to designate the area of responsibility. The8

manufacturer or distributor shall adopt uniform procedures to establish the9

area of responsibility that is assigned to a marine dealer. The uniform10

procedures shall include market research information from identified credible11

industry sources that project product sales of the brand of marine product for12

which the contract or franchise agreement is granted. In the absence of such13

designation by the manufacturer or distributor, or in the event that the area of14

responsibility designated by the manufacturer or distributor is rejected by the15

commission and such decision by the commission is affirmed on appeal, the16

marine dealer's area of responsibility shall mean either of the following:17

(i) The area within a fifteen-mile radius of the dealership if the18

dealership is located in a parish containing a population of four hundred19

thousand persons or more.20

(ii) The area within a thirty-mile radius of the dealership if the21

dealership is located in a parish containing a population of less than four22

hundred thousand persons.23

(c) A motorcycle or all-terrain vehicle dealer's area of responsibility24

shall mean the area within at least a thirty-mile radius of the location of his25

dealership.26

* * *27

(8) "Distributor" or "wholesaler" means any person, resident or nonresident,28

who in whole or in part sells or distributes new motor vehicles, or new,29

remanufactured, reconditioned, or rebuilt motor vehicle motors, or recreational30

SB NO. 175 ENROLLED


products to motor vehicle or recreational products dealers, or who maintains1

distributor representatives.2

(9) "Distributor branch" means a branch office maintained by a person,3

resident or nonresident, who in whole or in part sells or distributes new motor4

vehicles or recreational products to motor vehicle or recreational products5

dealers, or for directing or supervising, in whole or in part, its representatives.6

* * *7

(12) "Factory branch" means a branch office maintained by a person who8

fabricates, manufactures, or assembles motor vehicles or recreational products, for9

the sale of motor vehicles or recreational products to distributors, or for the sale10

of motor vehicles or recreational products to motor vehicle or recreational11

products dealers, or for directing or supervising, in whole or in part, its12

representatives.13

(13) "Factory representative" means any officer, agent, or employee14

employed by a person who fabricates, manufactures, or assembles motor vehicles or15

recreational products, or by a factory branch, for the purpose of making or16

promoting the sale of his, its, or their motor vehicles or recreational products, or17

for supervising or contacting his, its, or their dealers or prospective dealers.18

* * *19

(16) "Franchise" means any written contract or agreement between a motor20

vehicle or recreational products dealer, a motor vehicle lessor, or a specialty21

vehicle dealer and a manufacturer, motor vehicle lessor franchisor, or converter of22

a new motor vehicle or specialty vehicle or its distributor or factory branch by which23

the motor vehicle or recreational products dealer, motor vehicle lessor, or specialty24

vehicle dealer is authorized to engage in the business of selling or leasing the25

specific makes, models, or classifications of new motor vehicles, recreational26

products, or specialty vehicles marketed or leased by the manufacturer, motor27

vehicle lessor franchisor, or converter and designated in the franchise agreement or28

any addendum thereto. For purposes of this Chapter, any written modification,29

amendment, or addendum to the original franchise agreement, which changes the30

SB NO. 175 ENROLLED


rights and obligations of the parties to the original franchise agreement, shall1

constitute a new franchise agreement, effective as of the date of the modification,2

amendment, or addendum.3

(17) "Lease facilitator" means a person, other than a motor vehicle or4

recreational products dealer or a bona fide employee of a motor vehicle or5

recreational products dealer, or a motor vehicle lessor or a bona fide employee of6

a motor vehicle lessor, who engages in one or both of the following activities:7

(a) Holds himself out to any person as a "motor vehicle leasing company"8

or "motor vehicle leasing agent" or uses a similar title, for the purpose of soliciting9

or procuring a person to enter into a contract or agreement to become the lessee of10

a motor vehicle or recreational product that is not, and will not be, titled in the11

name of and registered to the lease facilitator.12

(b) Otherwise solicits a person to enter into a contract or agreement to13

become a lessee of a vehicle that is not, and will not be, titled in the name of and14

registered to the lease facilitator, or who is otherwise engaged in the business of15

securing lessees or prospective lessees of motor vehicles or recreational products16

that are not, and will not be, titled in the name of and registered to the facilitator.17

* * *18

(19) "Manufacturer" means any person, resident or nonresident, who19

fabricates, manufactures, or assembles new motor vehicles, recreational products,20

or new, remanufactured, reconditioned, or rebuilt motor vehicle or marine motors.21

It does not include a person who converts, modifies, or otherwise alters a motor22

vehicle or motor vehicle motor manufactured by another person or one who uses a23

motor vehicle or motor vehicle motor manufactured by another person, to construct24

a motor home as defined in this Section.25

* * *26

(21) "Motor vehicle" means any motor driven car, van, or truck required to27

be registered which is used, or is designed to be used, for the transporting of28

passengers or goods for public, private, commercial, or for hire purposes; but does29

not include those vehicles which are commonly known as motor homes, mobile30

SB NO. 175 ENROLLED


homes, trailers, semi-trailers, boat trailers, or motorcycles.1

* * *2

(23)(a) "Motor vehicle lessor" shall mean any person, not excluded by3

Subparagraph (b) of this Paragraph, engaged in the motor vehicle, recreational4

products, or specialty vehicle leasing or rental business. It shall also include a5

subsidiary of any such entity.6

(b) The term "motor vehicle lessor" does not include any of the following:7

* * *8

(iv) Financial institutions engaged in the leasing of motor vehicles,9

recreational products, or specialty vehicles.10

(c) Any motor vehicle lessor who rents on a daily basis motor vehicles,11

recreational products, or specialty vehicles not of the current year or immediate12

prior year models that have been titled previously to an ultimate purchaser, and who13

is otherwise not required to obtain a license under this Chapter, shall be subject to14

the regulation of the Louisiana Recreational and Used Motor Vehicle Commission.15

(24) "Motor vehicle lessor franchisor" means any person who grants a16

franchise to any person granting the right to lease or rent a motor vehicle,17

recreational product, or specialty vehicle under its trade name, trademark, or18

service mark or to sell used motor vehicles, recreational products, or specialty19

vehicles formerly a part of its rental fleet.20

(25) "Motor vehicle lessor agent" means any natural person, other than a21

daily rental person, employed by a motor vehicle lessor licensed by the commission22

whose duties include the leasing, renting or offering for lease or rent motor vehicles,23

recreational products, or specialty vehicles on behalf of said motor vehicle lessor.24

(26) "Motor vehicle salesman" means any natural person employed by a25

licensee of the commission whose duties include the selling, leasing, or offering for26

sale or lease, financing or insuring motor vehicles, recreational products, or27

specialty vehicles on behalf of said licensee.28

(27) "New motor vehicle," "new recreational product," or "new specialty29

vehicle" means a motor vehicle, recreational product, or specialty vehicle, the30

SB NO. 175 ENROLLED


legal title to which has never been transferred by a manufacturer, distributor, or1

dealer to an ultimate purchaser.2

* * *3

(29) "Retail sale" or "sale at retail" means the act or attempted act of selling,4

bartering, exchanging, or otherwise disposing of a motor vehicle, recreational5

product, or specialty vehicle to an ultimate purchaser for use as a consumer.6

* * *7

(33) "Subsidiary " shall mean any person engaged in the selling or leasing8

of motor vehicles, recreational products, or specialty vehicles, in which a majority9

of the ownership interests of such entity is owned by a holder of a license issued by10

the commission.11

(34) "Ultimate purchaser" means, with respect to any new motor vehicle,12

recreational product, or specialty vehicle, the first person, other than a dealer13

purchasing in his capacity as a dealer, who in good faith purchases such new motor14

vehicles, recreational products, or specialty vehicles for purposes other than15

resale. "Ultimate purchaser" shall not include a person who purchases a motor16

vehicle or recreational product for purposes of altering or remanufacturing the17

motor vehicle or recreational product for future resale.18

(35) "Used motor vehicle" means a motor vehicle, recreational product, or19

specialty vehicle, the legal title of which has been transferred by a manufacturer,20

distributor, or dealer to an ultimate purchaser.21

(36)(a) "Used motor vehicle dealer" means any person, whose business is to22

sell, or offer for sale, display, or advertise used motor vehicles, recreational23

products, or specialty vehicles, or any person who holds a license from the24

commission and is not excluded by Subparagraph (b) of this Paragraph.25

(b) "Used motor vehicle dealer" shall not include any of the following:26

* * *27

(vi) Used motor vehicle dealers licensed pursuant to R.S. 32:771 32:781 et28

seq.29

(37) "Used motor vehicle facility" means any facility which is owned and30

SB NO. 175 ENROLLED


operated by a licensee of the commission and offers for sale used motor vehicles,1

recreational products, or specialty vehicles.2

* * *3

(39) "All-terrain vehicle" commonly referred to as "ATV" means any4

vehicle with three or more low-pressure flotation-type tires designed by the5

manufacturer or any vehicle altered to be used as an off-road recreational6

vehicle. "All-terrain vehicle" shall also include all-terrain vehicle trailers.7

"All-terrain vehicle" shall not include golf carts.8

(40) "Boat" means a component of a marine product that is not9

equipped with an outboard or inboard/outboard motor attached thereto.10

(41) "Boat package" means a boat that is equipped from its11

manufacturer or distributor with an inboard, outboard, or inboard/outboard12

motor or engine attached thereto, installed thereon, or shipped or invoiced13

together as a package. For the purposes of this Chapter, the boat package14

brand shall be determined by the brand of the boat.15

(42) "Marine dealer" means any person who holds a bona fide contract16

or franchise with a manufacturer or distributor of marine products, except for17

a person engaged in the business of renting or selling new or used watercraft or18

boats adapted to be powered only by an occupant's energy, and who holds a19

license as a marine dealer under the provisions of this Chapter.20

(43) "Marine motor" means a motor that is a component of a marine21

product that is sold separately from a boat when delivered to the marine dealer22

by the distributor or manufacturer.23

(44) "Marine product" means a new or used watercraft, boat, or motor24

designed for recreational or commercial use on water and a boat or watercraft25

trailer. The term also includes an outboard motor or a boat with an26

inboard/outboard motor attached to it. The term shall not mean a watercraft27

designed for use primarily for commercial purposes or new or used watercraft28

or boats adapted to be powered only by occupant's energy.29

(45) "Marine product line" means a particular model of a marine30

SB NO. 175 ENROLLED


product designed for recreational or commercial use on water.1

(46) "Motorcycle" means a motor vehicle having a seat or saddle for the2

use of the rider and designed to travel on not more than three wheels in contact3

with the ground but excluding a tractor and electric-powered scooters.4

(47) "Recreational products" means new and unused motorcycles, all-5

terrain vehicles, marine products, recreational vehicles, and trailers as defined6

in this Chapter.7

(48) "Recreational products dealer" means any person who, for a8

commission or with intent to make a profit or gain of money or other thing of9

value, buys, sells, brokers, exchanges, auctions, offers, or attempts to negotiate10

a sale or exchange of an interest in recreational products and who is engaged11

wholly or in part in the business of buying and selling recreational products in12

the state of Louisiana.13

(a) The term shall also include anyone not licensed under Chapter 6 of14

Title 32 of the Louisiana Revised Statutes of 1950, who sells recreational15

products and who rents on a daily basis recreational products, not of the16

current year or immediate prior year models, that have been titled previously17

to an ultimate purchaser.18

(b) "Recreational products dealer" shall not include any of the19

following:20

(i) Receivers, trustees, administrators, executors, guardians, or other21

persons appointed by or acting under the judgment or order of any court.22

(ii) Public officers while performing their official duties.23

(iii) Employees of recreational products dealers when engaged in the24

specific performance of their duties as such employees.25

(iv) Mortgagees or secured parties as to sales of recreational products26

constituting collateral on a mortgage or security agreement.27

(v) Insurance companies.28

(vi) Auctioneers or auction houses who are not engaged in the auction29

of recreational products as the principal part of their business, including but30

SB NO. 175 ENROLLED


not limited to the following auctions: estate auctions, bankruptcy auctions, farm1

equipment auctions, or government auctions.2

(49) "Recreational vehicle" means a motorized or towable vehicle that3

combines transportation and temporary living quarters for travel, recreation,4

and camping. For purposes of this Chapter, a "recreational vehicle" includes5

new and used motor homes, new and used travel trailers, new and used fifth-6

wheel travel trailers, new and used folding camper trailers, and slide-in truck7

campers.8

(50) "Trailer" means every single vehicle without motive power9

designed for carrying property or passengers wholly on its own structure,10

drawn by a motor vehicle which carries no part of the weight and load of the11

trailer on its own wheels and having one or more load carrying axles. "Trailer"12

includes but is not limited to utility trailers, boat trailers, recreational trailers,13

semitrailers, livestock trailers, and dump trailers.14

§1253. Motor Vehicle Commission; appointment and qualifications of members;15

terms of office; organization; oath; official bond; compensation;16

powers and duties17

A. The Louisiana Motor Vehicle Commission is hereby created within the18

office of the governor and shall be composed of fifteen eighteen members appointed19

by the governor, as follows:20

(1) A chairman of the commission shall be appointed from the state at large.21

Eleven Fourteen members shall be appointed in such manner that at least one, but22

no more than two, shall be from each of the commission districts as listed below:23

* * *24

(2) Each of the commissioners appointed under the provisions of Paragraph25

(1) of this Subsection shall have been an actively engaged licensee of the26

commission or its previous Louisiana licensing commission for not less than five27

consecutive years prior to such appointment, and be a holder of such a license at all28

times while a member of the commission. Being engaged in more than one such29

pursuit shall not disqualify a person otherwise qualified from serving on the30

SB NO. 175 ENROLLED


commission. Of these members, one member shall be primarily engaged in the1

business of lease or rental, one member shall be primarily engaged in the business2

of heavy truck sales, three members shall be primarily engaged in the business3

of recreational products, and one member shall be primarily engaged in the4

business of sales finance.5

(3)(a) Each of the three remaining appointive members shall be a public6

member who is not a licensee under this Chapter and shall be appointed from the7

state at large. These three commissioners shall have the sole function of hearing and8

deciding matters concerning brokers and disputes between manufacturers,9

distributors, converters, motor vehicle lessor franchisors, or representatives and10

motor vehicle dealers, recreational products dealers, specialty vehicle dealers, and11

motor vehicle lessors.12

(b) This function shall be performed only when so requested in writing at the13

time of the filing of the initial protest or initial answer to the protest by a consumer,14

motor vehicle dealer, or manufacturer against a broker; or by a manufacturer,15

distributor, converter, motor vehicle lessor franchisor, representative, motor vehicle16

lessor, specialty vehicle dealer, or motor vehicle dealer who is a party to a dispute.17

If no party requests a hearing before these commissioners, the commissioners18

appointed pursuant to Paragraph (1) of this Subsection shall retain jurisdiction over19

the dispute. Should a consumer, broker, manufacturer, distributor, converter, motor20

vehicle lessor franchisor, representative, motor vehicle lessor, specialty vehicle21

dealer, recreational product dealer, or motor vehicle dealer make the request as set22

forth above, the commissioners appointed pursuant to Paragraph (1) of this23

Subsection shall not participate, deliberate, or in any way take part in the hearing.24

* * *25

E. The commission is hereby vested with the powers and duties necessary26

and proper to enable it to fully and effectively carry out the provisions and objects27

of this Chapter, and is hereby authorized and empowered to make and enforce all28

reasonable rules and regulations and to adopt and prescribe all forms necessary to29

accomplish said purpose, and the enumeration of any power or authority herein shall30

SB NO. 175 ENROLLED


not be construed to deny, impair, disparage, or limit any others necessary to the1

attainment thereof. A copy of all rules and regulations adopted by the commission2

shall be published in the Louisiana Register, and same Administrative Code, as3

they may be amended, modified, or repealed from time to time.4

* * *5

§1254. Application for license; requirements for licensure; contents; licenses;6

franchise filings7

A. The following persons shall be licensed by the commission in order to8

engage in business in the state of Louisiana, regardless of whether or not said person9

maintains or has a place or places of business in this state, and it is a violation of this10

Chapter to operate without first obtaining a license:11

* * *12

(6) Used motor vehicle facilities operated by new motor vehicles dealers,13

motor vehicle lessors, or specialty vehicles dealers, or recreational products14

dealers.15

* * *16

(18) Recreational products dealers.17

(19) Auto shows including promotors and nonresident exhibitors.18

B.19

* * *20

(2) The license of any recreational products dealer or any licensee who21

does not maintain a place of business in this state shall expire on December thirty-22

first of each year.23

C. General licensing and compliance requirements for all license applicants24

and holders.25

* * *26

(9) All licensees are required to furnish and keep in force required liability27

insurance coverage or liability protection provided by a liability trust fund as28

authorized by R.S. 22:46(9)(d) on vehicles in accordance with the financial29

responsibility laws of the state of Louisiana. Failure to maintain such insurance or30

SB NO. 175 ENROLLED


liability protection shall result in the immediate suspension of license, which1

suspension shall be effective as of the date of said failure to maintain said liability2

insurance coverage or liability protection until proof of the required liability3

insurance or liability protection is furnished to the commission. If no proof is4

furnished to the commission within thirty days, the license of said licensee shall be5

revoked. Recreational product dealers selling all-terrain vehicles shall not be6

required to furnish and keep in force the minimum garage liability insurance7

coverage on all-terrain vehicles offered for sale unless the vehicles are utilized8

on the streets and roadways for demonstration or any other purpose.9

* * *10

D. Additional licensing and compliance requirements for manufacturers,11

converters or secondary manufacturers, distributors or wholesalers, factory branches12

and distributor branches.13

* * *14

(4)(a) The license issued to each manufacturer, converter or secondary15

manufacturer, distributor or wholesaler, factory branch or distributor branch shall16

specify the location of the office or factory, or branch thereof, and the makes,17

models, or classifications of motor vehicles, recreational products, or specialty18

vehicles to be manufactured, distributed or converted. The license issued to any19

manufacturer, converter or secondary manufacturer, distributor or wholesaler,20

factory branch or distributor branch shall specify the location of such manufacturer's21

established place of business.22

(b) A change of location, or a change in corporate ownership or majority23

ownership, or a change in the name of a licensee, or a change by a licensee in the24

makes, models, or classifications, requiring an addendum to a franchise agreement,25

of motor vehicles, recreational products, or specialty vehicles manufactured,26

distributed or converted, or the addition of a make of motor vehicle or recreational27

product manufactured, distributed or converted shall require a new license and28

application therefor.29

* * *30

SB NO. 175 ENROLLED


(6) Applicants for and holders of manufacturer, converter or secondary1

manufacturer, distributor or wholesaler, factory branch and distributor branch2

licenses shall obtain and maintain bonds in accordance with the following3

provisions:4

* * *5

(c) The provisions of this Section shall not apply to manufacturers,6

distributors, wholesalers, factory branches, or distributor branches of7

recreational products.8

(7) Upon execution of a franchise, or addendum thereto, with a motor9

vehicle dealer, recreational products dealer, or specialty vehicle dealer, the10

manufacturer or a convertor or secondary manufacturer shall immediately file with11

the commission a copy of the franchise or addendum.12

E. Additional licensing and compliance requirements for motor vehicle and13

recreational products dealers.14

(1) The commission shall also require, in all motor vehicle and recreational15

products dealer applications or otherwise, information relating to the applicant's16

financial standing and established place of business.17

(2) All motor vehicle and recreational products dealers must provide a18

suitable office and have a permanently affixed sign in front of the establishment of19

offices which denotes that vehicles are offered for sale, lease or rent at the location20

to which the sign is affixed.21

(3) All motor vehicle and recreational products dealers must have a usable22

telephone at the place of business, the number of which should be listed on the23

application for license and in a local directory accessible to the public. The24

commission must be notified of any change in the telephone number.25

(4)(a) Applications for license as motor vehicle and recreational products26

dealer must, in addition to the foregoing, also be accompanied by the filing with the27

commission of a bona fide contract or franchise in effect between the applicant and28

a manufacturer or distributor of the new motor vehicle or vehicles or recreational29

product or products proposed to be dealt in for a specific location in the state of30

SB NO. 175 ENROLLED


Louisiana.1

* * *2

(5) The applicant must also furnish satisfactory evidence that the applicant3

maintains adequate space in the building or structure wherein the applicant's4

established business is conducted for the display of new motor vehicles or5

recreational products, together with adequate facilities for the repair and servicing6

of motor vehicles or recreational products and the storage of new parts and7

accessories for same.8

* * *9

(7) All motor vehicle or recreational products dealers shall furnish10

evidence that they currently have garage liability insurance or liability protection11

provided by a liability trust fund as authorized by R.S. 22:46(9)(d) covering their12

place of business. The required insurance policy or liability protection shall have13

limits of not less than one hundred thousand dollars for bodily injury to one person,14

three hundred thousand dollars per accident, and fifty thousand dollars for property15

damage. Said insurance or liability protection shall be maintained throughout the16

period of licensure. Failure to maintain such insurance or liability protection shall17

result in the immediate suspension of license, which suspension shall be effective as18

of the date of said failure to maintain said liability insurance coverage or liability19

protection until proof of the required garage liability insurance or liability protection20

is furnished to the commission. Should no proof of insurance or liability protection21

provided by a liability trust fund as authorized by R.S. 22:46(9)(d) be furnished to22

the commission within thirty days, the license of said licensee shall be revoked.23

Recreational products dealers selling all-terrain vehicles shall not be required24

to furnish and keep in force the minimum garage liability insurance coverage25

on all-terrain vehicles offered for sale unless the vehicles are utilized on the26

streets and roadways for demonstration or any other purpose.27

(8) In determining whether or not to issue a license to a motor vehicle or28

recreational products dealer, the commission shall also consider the financial29

standing of the motor vehicle or recreational products dealer, the adequacy of the30

SB NO. 175 ENROLLED


motor vehicle or recreational products dealer's established place of business for the1

purpose for which a license is sought, and the effect on the motor vehicle or2

recreational products sale or leasing/rental business and the consuming public in3

the state of Louisiana.4

(9)(a) The license issued to each motor vehicle or recreational products5

dealer shall specify the location of the office and the makes, models, or6

classifications of motor vehicles or specialty vehicles recreational products to be7

sold, and the name of the dealer-operator. The license issued to a motor vehicle8

dealer shall specify the licensee's established place of business.9

(b) A change of location, or a change in corporate ownership or majority10

ownership, or a change in the name of a licensee, or a change by a licensee in the11

makes, models, or classifications, requiring an addendum to a franchise agreement,12

of motor vehicles or specialty vehicles recreational products sold, or the addition13

of a make of motor vehicles or recreational products sold or a change in the14

designation of the dealer-operator shall require a new license and application15

therefor.16

(c) Notwithstanding the provisions of Subparagraph (b) of this Paragraph,17

a licensed motor vehicle or recreational products dealer shall not be required to18

submit an application for and obtain a new license if ownership interests in the19

dealership changes among existing family member owners, as long as the identity20

of the majority owner does not change, no additional persons are added as owners,21

and all changes in ownership interest are declared in the renewal application. For the22

purposes of this Subparagraph, "family member owners" shall include the majority23

owner's children, the spouses of his children, his brothers and their spouses, his24

sisters and their spouses, parents, his spouse, the parents of his spouse, and his25

grandchildren.26

(d) Notwithstanding any other provisions of law to the contrary, any motor27

vehicle or recreational products dealer holding a license hereunder shall not be28

required to obtain a license as a motor vehicle lessor, used motor vehicle dealer, or29

specialty vehicle dealer or converter, when modifying or selling those vehicles or30

SB NO. 175 ENROLLED


products he is duly franchised and licensed to sell, provided such operations are1

conducted from the location from which said motor vehicle or recreational2

products dealer is licensed to do business.3

(10)(a) Before any motor vehicle or recreational products dealer license4

is issued to an applicant under the provisions of this Chapter, a good and sufficient5

surety bond, executed by the applicant as principal and by a surety company6

qualified to do business in Louisiana as surety, in the sum of twenty thousand7

dollars, shall be delivered to the commission.8

* * *9

(11) Upon execution of a franchise, or addendum thereto, with a motor10

vehicle dealer, motor vehicle lessor, or specialty vehicle dealer, the motor vehicle or11

recreational product dealer shall immediately file with the commission a copy of12

the franchise or addendum.13

F. Additional licensing and compliance requirements for used motor vehicle14

facilities operated by new motor vehicle dealers, motor vehicle lessors and specialty15

vehicle dealers.16

* * *17

(4) All used motor vehicle facilities licensed by the commission shall furnish18

evidence that they currently have garage liability insurance or liability protection19

provided by a liability trust fund as authorized by R.S. 22:46(9)(d) covering their20

places of business. The required insurance policy or liability protection shall have21

limits of not less than one hundred thousand dollars for bodily injury to one person,22

three hundred thousand dollars per accident, and fifty thousand dollars for property23

damage. Said insurance or liability protection shall be maintained throughout the24

period of licensure. Failure to maintain such insurance or liability protection shall25

result in the immediate suspension of license, which suspension shall be effective as26

of the date of said failure to maintain said liability insurance coverage or liability27

protection until proof of the required garage liability insurance or liability protection28

is furnished to the commission. Should no proof of insurance or liability protection29

provided by a liability trust fund as authorized by R.S. 22:46(9)(d) be furnished to30

SB NO. 175 ENROLLED


the commission within thirty days, the license of said licensee shall be revoked.1

Recreational product dealers selling all-terrain vehicles shall not be required to2

furnish and keep in force the minimum garage liability insurance coverage on3

all-terrain vehicles offered for sale unless the vehicles are utilized on the streets4

and roadways for demonstration or any other purpose.5

* * *6

N. Any person who sells or offers to sell new motor vehicles, recreational7

products, or specialty vehicles, or leases, rents, or offers to lease or rent new motor8

vehicles, recreational products, or specialty vehicles, and which is not a licensee9

of the commission shall, nonetheless, be subject to the provisions of Chapter 6 of10

Title 32 and the rules and regulations of the commission which pertain to the11

regulation of advertising.12

§1255. Fees; penalties13

A. To defray the cost of issuing licenses and administering this Chapter, the14

commission shall fix reasonable fees to be assessed under this Chapter.15

* * *16

(2) The license for each motor vehicle dealer, specialty vehicle dealer,17

recreational products dealer, motor vehicle lessor, used motor vehicle dealer,18

factory representative, broker, distributor representative or lease facilitator shall not19

exceed three hundred dollars.20

* * *21

§1256. Auto shows22

The commission may authorize or prohibit motor vehicle or recreational23

products sales and shows at off-site locations. The commission may, in its24

discretion, allow such sales and shows provided all of the following conditions are25

met: in accordance with the rules and regulations adopted by the commission26

in accordance with the Administrative Procedure Act.27

(1) The request is received by the commission forty-five days prior to the28

opening date of the event.29

(2) Only new motor vehicle franchised licensed dealers may conduct sales30

SB NO. 175 ENROLLED


of motor vehicles at such sales and shows.1

(3) The event is conducted for not more than six days.2

(4) All local new motor vehicle dealers shall be offered the opportunity to3

participate.4

(5) A majority of new motor vehicle dealers offered the opportunity to5

participate must participate in the event.6

(6) Each respective manufacturer or distributor has granted authority to the7

respective dealers participating to conduct the sale or show of motor vehicles at the8

proposed off-site location.9

(7) Such events are limited to two times per calendar year per new car dealer.10

* * *11

§1257.1. Establishment of new recreational products dealerships or relocations;12

protests; procedure13

A.(1) Whenever the commission receives an application for a14

recreational products dealer's license which would add a new motorcycle or all-15

terrain vehicle dealership, it shall first notify the existing licensed motorcycle16

or all-terrain vehicle dealership or dealerships selling the same-line makes,17

models, or classifications if the new dealership's proposed location is within the18

existing dealer's area of responsibility. Any same-line makes, models, or19

classifications dealership whose area of responsibility includes the location of20

the proposed new motorcycle or all-terrain vehicle dealership may object to the21

granting of the license.22

(2) Whenever the commission receives an application for a recreational23

products dealer's license which would relocate an existing motorcycle or all-24

terrain vehicle dealership, it shall first notify the existing licensed motorcycle25

or all-terrain vehicle dealership or dealerships selling the same-line makes,26

models, or classifications if the dealership's proposed new location is within the27

existing dealer's area of responsibility. The existing same-line makes, models,28

or classifications dealership or dealerships shall have the right to object to the29

granting of the license only if the proposed relocation is within a radius of seven30

SB NO. 175 ENROLLED


miles of its facility. However, without regard to distance, whenever the1

commission receives an application for the relocation of a motorcycle or all-2

terrain vehicle dealership which would add an additional franchise to an3

existing same-line makes, models, or classifications dealership's area of4

responsibility, the affected dealership shall have the right to object.5

(3) The objection shall be in writing and shall be received by the6

commission within a fifteen-day period after receipt of the notice. The fifteen-7

day objection period shall be waived upon written notification to the8

commission from all licensees entitled to object that the licensees have no9

objections to the proposed change or addition for which the notice of intent was10

issued. If timely objection is lodged, and prior to the issuance of the license, the11

commission shall hold a hearing within thirty days after receipt of the objection12

and issue its decision within ninety days after date of the hearing. Notice of13

hearing and an opportunity to participate therein shall be given to the14

manufacturer or distributor, the applicant for the license as a motorcycle or all-15

terrain vehicle dealer, and to the protesting dealership or dealerships.16

(4) Whenever the commission receives an objection pursuant to the17

provisions of Paragraph (1) of this Subsection, the commission shall consider18

the following and may consider any other relevant factors in determining19

whether there is good cause to issue a license:20

(a) Whether the community or territory can support an additional21

dealership.22

(b) The financial impact on both the applicant and the existing23

dealership or dealerships.24

(c) Whether the existing motorcycle or all-terrain vehicle dealerships of25

the same-line makes, models, or classifications in the dealership's area of26

responsibility are providing adequate representation, competition, and27

convenient consumer care for the motorcycle or all-terrain vehicles of the same-28

line makes, models, or classifications located within that area.29

(d) Whether the issuance of the license would increase competition, or30

SB NO. 175 ENROLLED


be in the public interest, or both.1

B.(1) Whenever the commission receives an application for a2

recreational products dealer's license which would add a new marine3

dealership, it shall first notify the existing licensed marine dealership or4

dealerships selling the same-line makes, models, or classifications if the new5

dealership's proposed location is within the existing dealer's area of6

responsibility. Any same-line makes, models, or classifications dealership whose7

area of responsibility includes the location of the proposed new marine8

dealership may object to the granting of the license.9

(2) Whenever the commission receives an application for a recreational10

products dealer's license which would relocate an existing marine dealership,11

it shall first notify the existing licensed marine dealership or dealerships selling12

the same-line makes, models, or classifications if the dealership's proposed new13

location is within the existing dealer's area of responsibility. The existing same-14

line makes, models, or classifications dealership or dealerships shall have the15

right to object to the granting of the license only if the proposed relocation is16

within a radius of seven miles of its facility. However, without regard to17

distance, whenever the commission receives an application for the relocation of18

a marine dealership which would add an additional franchise to an existing19

same-line makes, models, or classifications dealership's area of responsibility,20

the affected dealership shall have the right to object.21

(3) The objection shall be in writing and shall be received by the22

commission within a fifteen-day period after receipt of the notice. The fifteen-23

day objection period shall be waived upon written notification to the24

commission from all licensees entitled to object that the licensees have no25

objections to the proposed change or addition for which the notice of intent was26

issued. If timely objection is lodged, and prior to the issuance of the license, the27

commission shall hold a hearing within thirty days after receipt of the objection28

and issue its decision within ninety days after date of the hearing. Notice of29

hearing and an opportunity to participate therein shall be given to the30

SB NO. 175 ENROLLED


manufacturer or distributor, the applicant for the license as a marine dealer,1

and to the protesting dealership or dealerships.2

(4) Whenever the commission receives an objection pursuant to the3

provisions of Paragraph (1) of this Subsection, or whenever the commission4

receives an objection pursuant to the assignment of the marine dealer's area of5

principal sales and service responsibility, the commission shall consider the6

following and may consider any other relevant factors in determining whether7

there is good cause to approve or reject the assignment of the marine dealer's8

area of principal sales and service responsibility, or to issue a license:9

(a) Whether the community or territory can support an additional10

dealership.11

(b) The financial impact on both the applicant and the existing12

dealership or dealerships.13

(c) Whether the existing marine dealerships of the same-line makes,14

models, or classifications in the dealership's area of responsibility are providing15

adequate representation, competition, and convenient consumer care for the16

marine products of the same-line makes, models, or classifications located17

within that area.18

(d) Whether the issuance of the license would increase competition, be19

in the public interest, or both.20

(5) In disputes between the marine dealers and marine manufacturers21

and distributors regarding the execution of an agreement that would add a new22

same-line make marine dealership or would add the same product line23

regardless of brand name within the area of responsibility of an existing marine24

product line dealer, the name brand of the boat determines whether a dealer25

may enter into a franchise or selling agreement for a particular boat package26

or boat package line. The marine motor, marine engine, boat trailer, or any27

accessory made a part of a boat package shall not be the subject of, or a28

consideration in, an area of responsibility dispute for violation involving the29

boat package.30

SB NO. 175 ENROLLED


(6) A manufacturer or distributor of a marine motor or marine engine1

may, in their discretion, enter into a warranty service agreement with a marine2

dealer of a boat package that is packaged with its particular brand marine3

motor or engine without violating the area of responsibility of any other marine4

dealer that has a franchise or selling agreement of that brand marine motor or5

engine. However, the warranty service agreement shall not be construed to6

permit the marine dealer to sell the marine motor or engine separate from the7

boat package, and the marine dealer shall not hold itself out to be a full-line or8

loose marine motor or engine dealership.9

§1258. Denial, revocation, grounds, imposition of a civil penalty, or suspension of10

license; grounds; expiration11

A. The commission may, in addition to imposing a civil penalty under the12

provisions of this Chapter, deny an application for a license, or revoke or suspend a13

license after it has been granted for any one of the following reasons:14

* * *15

(10) Whenever a marine dealer intentionally removes marine engines16

from a boat package for the purpose of selling those engines separately in17

violation of a full-line marine engine dealer's area of responsibility, except that18

which may be done by a full-line dealer of that particular engine as it may be19

permitted under his full-line franchise agreement.20

* * *21

§1261. Unauthorized acts22

It shall be a violation of this Chapter:23

(1) For a manufacturer, a distributor, a wholesaler, distributor branch, factory24

branch, converter or officer, agent, or other representative thereof:25

(a) To induce or coerce, or attempt to induce or coerce, any motor vehicle26

dealer licensee or specialty vehicle dealer:27

* * *28

(iv) To assent to a release, assignment, novation, waiver, or estoppel which29

would relieve any person from liability to be imposed by law, unless done in30

SB NO. 175 ENROLLED


connection with a settlement agreement to resolve a matter pending a commission1

hearing or pending litigation between a manufacturer, distributor, wholesaler,2

distributor branch or factory branch, or officer, agent, or other representative thereof.3

, or to require any controversy between a dealer and a manufacturer to be referred to4

any person or entity other than the commission, or duly constituted courts of this5

state or the United States, if such referral would be binding upon the dealer.6

(v) To enter into a franchise with a licensee or during the franchise term, use7

any written instrument, agreement, release, assignment, novation, estoppel, or8

waiver, to attempt to nullify or modify any provision of this Chapter, or to require9

any controversy between a dealer and a manufacturer to be referred to any10

person or entity other than the commission, or duly constituted courts of this11

state or the United States, if such referral would be binding upon the dealer. or12

prevent a new motor vehicle dealer from bringing an action in a particular forum13

otherwise available under law. Such instruments, agreements, and waivers are null14

and void, unless done in connection with a settlement agreement to resolve a matter15

pending a commission hearing or pending litigation.16

* * *17

(o) To fail or refuse to sell or offer to sell to all motor vehicle franchisees in18

a line make, every motor vehicle sold or offered for sale under a franchise to any19

motor vehicle franchisee of the same-line make, or to unreasonably require a motor20

vehicle dealer to pay an extra fee, purchase unreasonable advertising displays or any21

other materials, or to remodel, renovate, or recondition its existing facilities as a22

prerequisite to receiving a certain model or series of vehicles. However, the failure23

to deliver any such motor vehicle shall not be considered a violation of this Section24

if the failure is due to a lack of manufacturing capacity or to a strike or labor25

difficulty, a shortage of materials, a freight embargo or other cause of which the26

franchisor has no control. This Subparagraph shall not apply to recreational27

product manufacturers.28

* * *29

(q) To terminate, cancel, or refuse to continue any franchise agreement based30

SB NO. 175 ENROLLED


upon the fact that the motor vehicle dealer owns, has an investment in, participates1

in the management, or holds a franchise agreement for the sale or service of another2

make or line of new motor vehicles at a different dealership location, or intends to3

or has established prior to May 1, 1999, another make or line of new motor vehicles4

in the same dealership facilities of the manufacturer or distributor.5

* * *6

(t) To operate a satellite warranty and repair center, to authorize a person to7

perform warranty repairs who is not a motor vehicle dealer, or to authorize a motor8

vehicle dealer to operate a satellite warranty and repair center within the community9

or territory of a same-line or make motor vehicle dealer. This Subparagraph shall10

not apply to recreational product manufacturers.11

* * *12

(6) For any person or other licensee:13

(a) To modify a franchise during the term of the agreement or upon its14

renewal if the modification substantially and adversely affects the franchisee's rights,15

obligations, investment, or return on investment without giving sixty-day written16

notice of the proposed modification to the licensee and the commission unless the17

modifications are required by law, court order, or the commission. Within the sixty-18

day notice period the licensee may file with the commission a complaint for a19

determination whether there is good cause for permitting the proposed modification.20

The party seeking to modify or replace an agreement must demonstrate by a21

preponderance of the evidence that there is good cause for the modification or22

replacement. The commission shall schedule a hearing within sixty days to decide23

the matter. Multiple complaints pertaining to the same proposed modifications shall24

be consolidated for hearing. The proposed modification may not take effect pending25

the determination of the matter.26

* * *27

(7) For any employee of a motor vehicle dealer, specialty vehicle dealer,28

or used motor vehicle dealer licensed by the commission, while acting in the29

scope of his employment, to accept any payment, commission, fee, or30

SB NO. 175 ENROLLED


compensation of any kind from any person other than the employing dealer,1

unless said payment is fully disclosed to and approved by the employing dealer.2

§1261.1. Indemnification of franchised dealers3

Notwithstanding the terms of any franchise agreement, each4

manufacturer or converter shall indemnify and hold harmless its franchised5

dealers against any judgment for damages, including but not limited to court6

costs and reasonable attorney fees of the dealer, arising out of complaints,7

claims, or lawsuits including but not limited to strict liability, negligence,8

misrepresentation, express or implied warranty, or rescission of sale to the9

extent that the judgment arises out of alleged defective or negligent10

manufacture, assembly, or design of motor vehicles, parts, or accessories, or11

other functions by the manufacturer of converter, which are beyond the control12

of the dealer.13

§1261.2. Payment to dealers; penalties14

It shall be a violation of this Chapter for a motor vehicle manufacturer,15

distributor, wholesaler, distributor branch, factory branch, officer, agent or16

other representative thereof, to fail to pay a dealer all monies due the dealer,17

except manufacturer hold-back amounts, within thirty days of the date of18

completion of the transactions or submissions of the claims giving rise to the19

payments to the dealers. Failure to make payments shall subject the20

manufacturer, distributor, wholesaler, distribution branch, factory branch,21

officer, agent, or other representative thereof, to a penalty of the one and one-22

half percent interest per month, or fraction thereof, until sums due the dealer23

are fully paid.24

§1262. Warranty; compensation; audits or of dealer records25

A.26

* * *27

(5) The obligations in this Subsection as they relate to recreational28

products may be modified by contract.29

* * *30

SB NO. 175 ENROLLED


§1265. Sale of water-damaged vehicles1

A. No person shall sell, transfer, or convey any new or used motor vehicle2

or recreational product to any person without notifying the buyer or receiver of the3

motor vehicle or recreational product in writing of the extent of any water damage4

from flooding which occurred to the motor vehicle or recreational product prior5

to the transaction.6

B. If a sale, transfer, or conveyance of a new or used motor vehicle or7

recreational product occurs in violation of Subsection A of this Section, the person8

receiving ownership and title to the motor vehicle or recreational product who is9

not otherwise aware of the damage at the time of the transaction may bring an action10

to set aside the transaction within one year from the date of the transaction and11

receive all monies or other property given as consideration for the vehicle less a12

reasonable assessment for miles driven.13

C. For the purposes of this Section, a "water-damaged vehicle" means any14

motor vehicle or recreational product whose power train, computer, or electrical15

system has been damaged by flooding.16

* * *17

§1268. Requirements upon termination; penalty; indemnity18

A.(1) In the event the licensee ceases to engage in the business of being a19

motor vehicle or specialty vehicle dealer, or ceases to sell a particular make of motor20

vehicle or specialty vehicle and after notice to the manufacturer, converter,21

distributor, or representative by registered or certified mail or commercial delivery22

service with verification of receipt, within thirty days of the receipt of the notice23

by the manufacturer, converter, distributor, or representative, the manufacturer,24

converter, distributor, or representative shall repurchase:25

(a) All new motor and specialty vehicles of the current and last prior model26

year delivered to the licensee and parts on hand that have not been damaged or27

substantially altered to the prejudice of the manufacturer while in the possession of28

the licensee. The motor and specialty vehicles and parts shall be repurchased at the29

cost to the licensee which shall include without limitation freight and advertising30

SB NO. 175 ENROLLED


costs, less all allowances paid to the dealer, except that new automobiles shall be1

purchased on the following schedule as follows:2

(i) Vehicles with 0 - 1,000 miles at the cost to the licensee.3

(ii) Vehicles with 1,001 - 6,000 miles at the cost to the licensee reduced by4

the net discount value of each mile in excess of 1,000 miles, where "net discount5

value" is determined according to the following formula: cost to the licensee6

multiplied by total mileage in excess of 1,000 miles divided by 100,000, and where7

"net cost" equals the dealer cost plus any charges by the manufacturer, distributor,8

or representative for distribution, delivery, advertising, and taxes, less all allowances9

paid to the dealer by the manufacturer, distributor, or representative for new, unsold,10

undamaged, and complete motor vehicles.11

(iii) Vehicles with 6,001 miles or over - no obligation to repurchase.12

(iv) Any mileage recorded by a manufacturer in distributing a motor vehicle13

to a motor vehicle dealer shall not be included in this the calculation as provided in14

this Subparagraph.15

(b) At fair market value, each undamaged sign owned by the dealer which16

bears a trademark or trade name used or claimed by the manufacturer, converter,17

distributor, or representative if the sign was purchased from or purchased at the18

request of the manufacturer, distributor, or representative. Fair market value shall19

be no less than cost of acquisition of the sign by the dealer.20

(c) At fair market value, all special tools and automotive service equipment21

owned by the dealer which were recommended in writing and designated as special22

tools and equipment and purchased from or purchased at the request of the23

manufacturer, converter, distributor, or representative, if the tools and equipment are24

in usable and good condition except for reasonable wear and tear. Fair market value25

shall be no less than cost of acquisition of special tools and automotive service26

equipment by the dealer.27

(d) The manufacturer, converter, distributor, or representative shall pay to the28

dealer the costs of transporting, handling, packing, and loading of motor vehicle29

vehicles or parts, signs, tools, and equipment subject to repurchase.30

SB NO. 175 ENROLLED


(2) The manufacturer or converter shall make the required repurchase after1

the dealer terminates his franchise and within thirty days of the submission to it, by2

registered or certified mail, return receipt requested, or commercial delivery service3

with verification of receipt, of a final inventory of motor vehicles and parts on4

hand.5

B. Failure to make said repurchase without just cause shall subject the6

manufacturer or converter to a penalty of one and one-half percent per month, or7

fraction thereof, of the inventory value or returnable motor vehicles and parts, signs,8

special tools, and automotive service equipment, payable to the dealer, as long as9

said repurchase is not made.10

C. Notwithstanding the terms of any franchise agreement, each manufacturer11

or converter shall indemnify and hold harmless its franchised dealers against any12

judgment for damages, including but not limited to court costs and reasonable13

attorney fees of the dealer, arising out of complaints, claims, or lawsuits including14

but not limited to strict liability, negligence, misrepresentation, express or implied15

warranty or rescission of sale to the extent that the judgment arises out of alleged16

defective or negligent manufacture, assembly, or design of motor vehicles, parts, or17

accessories or other functions by the manufacturer or converter, which are beyond18

the control of the dealer.19

D. C.(1) Upon the involuntary termination, nonrenewal, or cancellation of20

any franchise by the manufacturer or converter, except for termination, nonrenewal,21

or cancellation resulting from a felony conviction, notwithstanding the terms of any22

franchise, whether entered into before or after the enactment of this Chapter or any23

of its provisions, the new motor vehicle or specialty vehicle dealer shall be allowed24

fair and reasonable compensation by the manufacturer or converter as agreed by the25

parties, or lacking agreement, as determined by the commission, for the following:26

(1) The the dealership facilities if the facilities were required to be purchased27

or constructed as a precondition to obtaining the franchise or to its renewal; provided28

that if such facilities were leased and the lease were required as a precondition to29

obtaining the franchise or to its renewal, then the manufacturer or converter shall be30

SB NO. 175 ENROLLED


liable for one year's payment of the rent or the remainder of the term of the lease,1

whichever is less.2

(2) Payment under this Section shall entitle the manufacturers, converters, or3

distributors to possession and use of the facility.4

(3) As used in this Section, "manufacturer" shall include a manufacturer, a5

converter, a distributor, a factory branch, distributor branch, or other subsidiary6

thereof.7

(4) The obligation of the manufacturer or converter to purchase a8

dealership facility, pursuant to this Section, is equally applicable if an entity or9

person affiliated with the dealer is the owner or lessor of the facility.10

§1268.1. Manufacturer mandatory repurchase; motorcycle or all-terrain11

vehicle dealer; marine dealer; recreational or travel trailer12

dealer; utility trailer dealer13

A.(1) In the event that a dealer ceases to engage in the business of being14

a motorcycle or all-terrain vehicle dealer, or ceases to sell a particular make of15

motorcycle or all-terrain vehicle, and after notice thereof to the manufacturer16

or distributor by registered or certified mail, return receipt requested within17

thirty days thereafter, the manufacturer or distributor, at a minimum, shall18

repurchase all new and unused motorcycles and all-terrain vehicles of the19

current and immediate prior model year and all parts on hand that are20

currently listed in the manufacturer's price book that have not been damaged21

or substantially altered to the prejudice of the manufacturer while in the22

possession of the dealer and all required demonstrators.23

(2) The manufacturer shall make the required repurchase after the24

dealer terminates his franchise, selling, or other contractual agreement and25

within sixty days of the submission by the dealer to the manufacturer, by26

registered or certified mail, return receipt requested, of a final inventory of27

motorcycles and all-terrain vehicles, and parts on hand.28

B.(1) In the event that a dealer ceases to engage in the business of being29

a marine dealer, or ceases to sell a particular make of marine product, and after30

SB NO. 175 ENROLLED


notice thereof to the manufacturer or distributor by registered or certified mail1

return receipt requested within thirty days thereafter, the manufacturer or2

distributor, at a minimum, shall repurchase all new and unused marine3

products of the current and immediate prior model year and all parts on hand4

that are currently listed in the manufacturer's price book that have not been5

damaged or substantially altered to the prejudice of the manufacturer while in6

the possession of the dealer and all required demonstrators. However, whenever7

the marine dealer gives notice of termination of the contract, franchise, or8

selling agreement, the manufacturer or distributor shall have the right to9

appoint an Independent Marine Surveyor to inspect the marine dealer's10

inventory to determine whether or not the inventory has been substantially11

altered or damaged to the prejudice of the manufacturer, through neglect or12

otherwise, while in the possession of the marine dealer and shall determine a13

fair diminution of value caused by such alteration, damage, or neglect. If the14

Independent Marine Surveyor finds that the inventory of marine products has15

been so altered, damaged, or neglected, the value assessment of the inventory16

of marine products established by him shall be considered by the commission17

in determining the market value of the inventory.18




registered or certified mail return receipt requested, of a final inventory of22

marine products and parts on hand.23

(3)(a) Notwithstanding the provisions of Paragraphs (1) and (2) of this24

Subsection, in the event that a dealer in marine products ceases to engage in the25

business of being a marine dealer of a specified brand of boats, boat packages,26

or marine motors, and the dealer has an area of responsibility that is not shared27

with another marine dealer, the manufacturer or distributor may appeal the28

repurchasing requirements of Paragraph (1) of this Subsection and the penalties29

imposed pursuant to Paragraph (2) of this Subsection, to the commission to30

SB NO. 175 ENROLLED


determine whether or not the requirements of these Paragraphs are fair and1

equitable under the circumstances.2

(b) Any appeal under the provisions of this Section shall be filed with the3

commission within fifteen days of receipt of notice from the marine dealer that4

the franchise, sales and service, or similar agreement has been terminated.5

(c) The commission shall consider all relevant evidence and render a6

decision within thirty days of the day the appeal was filed. Either party may7

appeal the decision of the commission provided that a commercial surety bond8

is posted to compensate the prevailing party for compliance with the9

commission's decision.10

C.(1) In the event that a dealer ceases to engage in the business of being11

a recreational vehicle or travel trailer dealer, or ceases to sell a particular make12

of recreational vehicle or travel trailer, and after notice thereof to the13

manufacturer or distributor by registered or certified mail return receipt14

requested within thirty days thereafter, the manufacturer or distributor, at a15

minimum, shall repurchase all new and recreational vehicles and travel trailers16

of the current and immediate prior model year and all parts on hand that are17

currently listed in the manufacturer's price book that have not been damaged18

or substantially altered to the prejudice of the manufacturer while in the19

possession of the dealer and all required demonstrators.20





recreational vehicles and travel trailers and parts on hand.25

D.(1) In the event that a dealer ceases to engage in the business of being26

a utility trailer dealer, or ceases to sell a particular make of utility trailer, and27

after notice thereof to the manufacturer or distributor by registered or certified28

mail return receipt requested within thirty days thereafter, the manufacturer29

or distributor, at a minimum, shall repurchase all utility trailers of the current30

SB NO. 175 ENROLLED


and immediate prior model year and all parts on hand that are currently listed1

in the manufacturer's price book that have not been damaged or substantially2

altered to the prejudice of the manufacturer while in the possession of the3

dealer and all required demonstrators.4





utility trailers and parts on hand.9

E. Failure to make said repurchase without just cause shall subject the10

manufacturer to a penalty of one and one-half percent per month or fraction11

thereof of the inventory value of returnable marine products and parts, utility12

trailers and parts, recreational vehicles and travel trailers and parts, or13

motorcycles and all-terrain vehicles and parts, payable to the dealer,14

commencing on the sixty-first day following the date of receipt of the final15

inventory and continuing until such time as said repurchase is made.16

§1268.2. Manufacturer termination of line-make; manufacturer bankruptcy;17

license18

Notwithstanding the terms of any franchise or other provision of law, if19

the termination, cancellation, or nonrenewal of a licensee’s franchise is the20

result of the termination, elimination, or cessation of a line-make by the21

manufacturer, distributor, or factory branch, whether by bankruptcy or22

otherwise, the license issued by the commission may remain in effect at the23

discretion of the commission pursuant to its rules.24

Section 2. R.S. 32:781(1) through (4), (9) through (18), (22) through (25), and (28),25

783(F)(7) and (10), 784(A)(5) through (8), and Part IV of Chapter 4-C of Title 32 of the26

Louisiana Revised Statutes of 1950, comprised of R.S. 32:811 through 822 are hereby27

repealed in their entirety.28

Section 3. If any provision or item of this Act, or the application thereof, is held29

invalid, such invalidity shall not affect other provisions, items, or applications of the act30

SB NO. 175 ENROLLED


which can be given effect without the invalid provision, item, or application and to this end1

the provisions of this Act are hereby declared severable.2

Section 4. This Act shall become effective upon signature by the governor or, if not3

signed by the governor, upon expiration of the time for bills to become law without signature4

by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If5

vetoed by the governor and subsequently approved by the legislature, this Act shall become6

effective on the day following such approval.7

PRESIDENT OF THE SENATE

SPEAKER OF THE HOUSE OF REPRESENTATIVES

GOVERNOR OF THE STATE OF LOUISIANA

APPROVED:

regular session, 2009 enrolled

Documents