SCS HCS HB 214 -- MOTORCYCLE FRANCHISES

This bill contains new provisions governing motorcycle
franchises.

The bill sets out procedures for filing an application with the
Administrative Hearing Commission seeking relief relating to a
dispute on a motorcycle franchise.  The procedure for a hearing
is specified in addition to the time of notice and method of
service upon parties.  The order providing the hearing date will
stop the complained-of activity until the final decision is
issued.  The decision of the Administrative Hearing Commission
may only be reviewed in appellate court.

Franchisors must give written notice of proposed acts to
terminate the franchise, prevent the franchisee from changing
its capital structure, prevent transfer of franchisee's
interest, or prevent succession of legal heirs to a franchise,
with certain exceptions.  The notice must inform the franchisee
of the right to a hearing.  The burden of proof will be on the
franchisor in proceedings where the franchisor must give notice
of proposed actions; in all other proceedings, the burden of
proof will be on the franchisee.

The bill contains language dealing with prohibited or unlawful
practices such as coercing a franchisee to accept deliveries
which were not ordered or to enter into an agreement by
threatening to cancel the franchise, imposing unreasonable
performance standards, prohibiting the right of free association
among fellow franchisees, preventing succession by any legal
heir under certain conditions, preventing a franchisee from
changing its capital structure, preventing the transfer of
interest of a franchise, preventing the changing of executive
management, failing to reasonably deliver sufficient
motorcycles, requiring a franchisee to release any person from
liability, and failing to pay reasonable compensation to a
franchisee upon termination.

When a franchise dealer or manufacturer proposes to establish or
relocate within St. Louis City, the dealer or manufacturer must
make every reasonable effort to establish or relocate a
dealership in an area of the city that improves the equitable
distribution of dealerships and is conveniently located to serve
minorities who reside in the city.  The Motor Vehicle Commission
when approving licenses for dealer franchises in any
metropolitan statistical area with a population of more than one
million inhabitants will ensure that the community of dealer
franchises reflects an adequate percentage of minority-owned
businesses.

No franchisee or franchisor can use false, deceptive, or
misleading advertising.

The remedies provided by this bill are not exclusive and a
motorcycle franchisee may also bring a civil action for damages
or injunctive relief.

HCS HB 214 -- MOTORCYCLE FRANCHISES (Thomason)

Any person who engages in purposeful contracts within the state
of Missouri in connection with new motorcycle sales will be
subject to the jurisdiction of the state's courts.

The substitute sets out procedures for filing an application
with the Administrative Hearing Commission seeking relief
relating to a dispute on a motorcycle franchise, the
commission's order of a hearing, notice of hearing, and the
issuance of a final decision order.   Final decisions of the
commission in cases arising under the provisions of the
substitute are subject to review in the court of appeals.
Decisions of the court of appeals will be final.

The substitute contains language dealing with the termination of
a motorcycle franchise, preventing the sale of a franchise,
repurchase of new motorcycles, parts, and tools , imposing
unreasonable performance standards, prohibiting the right of
free association among fellow franchisees, succession to a
franchise by family members, and coercing, threatening,
intimidating or requiring a franchisee under any condition
affecting or related to a  franchise agreement or to waive,
limit or disclaim any right of the franchisee.

When a franchise dealer or manufacturer proposes to establish or
relocate within St. Louis City, the dealer or manufacturer must
make every reasonable effort to establish or relocate a
dealership in an area of the city that improves the equitable
distribution of dealership and is conveniently located to serve
minorities who reside in the city.  The Motor Vehicle Commission
when approving licenses for dealer franchises in any
metropolitan statistical area with a population of more than one
million inhabitants will ensure that the community of dealer
franchises reflects an adequate percentage of minority-owned
businesses.

No franchisee or franchisor can use false, deceptive, or
misleading advertising.

FISCAL NOTE:  No impact on state funds.

HCS HB 214 -- MOTORCYCLE FRANCHISE PRACTICES

CO-SPONSORS:  Sheldon (Thomason)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Motor
Vehicle and Traffic Regulation by a vote of 13 to 0.

Any person who engages in purposeful contracts within the state
of Missouri in connection with new motorcycle sales will be
subject to the jurisdiction of the state's courts.

The substitute sets out procedures for filing an application
with the Administrative Hearing Commission seeking relief, the
commission's order of a hearing, notice of hearing, and the
issuance of a final decision order.   Final decisions of the
commission in cases arising under the provisions of the
substitute are subject to review in the court of appeals.
Decisions of the court of appeals will be final.

The substitute contains language dealing with the termination of
a motorcycle franchise, preventing the sale of a franchise,
repurchase of new motorcycles, parts, and tools , imposing
unreasonable performance standards, prohibiting the right of
free association among fellow franchisees, succession to a
franchise by family members, and coercing, threatening,
intimidating or requiring a franchisee under any condition
affecting or related to a  franchise agreement or to waive,
limit or disclaim any right of the franchisee.

When a franchise dealer or manufacturer proposes to establish or
relocate within St. Louis City, the dealer or manufacturer must
make every reasonable effort to establish or relocate a
dealership in an area of the city that improves the equitable
distribution of dealership and is conveniently located to serve
minorities who reside in the city.  The Motor Vehicle Commission
when approving licenses for dealer franchises in any
metropolitan statistical area with a population of more than one
million inhabitants will ensure that the community of dealer
franchises reflects an adequate percentage of minority-owned
businesses.

No franchisee or franchisor can use false, deceptive, or
misleading advertising.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that this legislation seeks to
modestly regulate franchisor conduct and promote fair practices
by all parties.

Testifying for the bill were Representative Thomason; and
Missouri Power Sport Dealer Association

OPPONENTS:  Those who oppose the bill say that the original bill
is encompassing and restrictive with contract negotiations.
Supporters say negotiations have been in process for several
years but franchisees will not fairly negotiate with franchisors.

Testifying against the bill was Motorcycle Industry Council.

Robert Triplett, Research Analyst

HB 214 -- Merchandising Practices

Sponsor:  Thomason

This bill adds motorcycles, all-terrain vehicles and their
implements, machinery, attachments and repair parts to the
statutes relating to machinery inventory and the repurchase on
termination of a dealership.  Manufacturers cannot terminate,
cancel, or fail to renew a dealership agreement or change the
competitive circumstances of a dealership without good cause.
The bill spells out what circumstances constitute good cause.
Manufacturers must give a 90 day notice of termination,
cancellation, or nonrenewal of a dealership agreement.  The
notice must also provide the dealer a 60 day period in which to
cure any claims deficiency.  The bill also establishes
manufacturer prohibitions against dealers.