HB 1055 - This act governs the business practices of motorcycle franchisors. It provides an administrative remedy for the franchisees. It is very similar to 1997 HB 214.

PROHIBITED PRACTICES - It shall be unlawful for a motorcycle franchisor to commit the following practices (Section 4):

(1) Capricious, bad faith conduct which causes damage to a franchisee or the public; (2) Coercing a motorcycle franchisee to accept deliveries which were not ordered; (3) Failure to reasonably deliver sufficient motorcycles; (4) Coercing a franchisee to enter into an agreement by threatening to cancel the franchise; (5) Terminating or nonrenewing the franchise, with exceptions; (6) Preventing a franchisee from changing its capital structure; (7) Preventing transfer of the franchisee's interest in the franchise; (8) Preventing the changing of executive management; (9) Imposing unreasonable standards of performance; (10) Require any release from liability imposed by this act; (11) Prohibiting free association among franchisees; (12) Violating this act in any lease condition; (13) Failing to pay reasonable compensation upon termination; (14) Preventing succession by legal heirs; (15) Coercing a franchisee to waive a right under this act; or (16) Threatening to discontinue representation at the time of a franchisee change.

NOTICE OF PROPOSED ACT - Franchisors shall give 60 days' notice to the franchisee of proposed acts to terminate the franchise, prevent the franchisee from changing its capital structure, prevent transfer of a franchisee's interest, or to prevent succession of legal heirs to a franchise, with certain exceptions. The notice shall inform the franchisee of the right to a hearing. The burden of proving good cause shall be on the franchisor in proceedings where the franchisor must give notice of proposed actions; in all other proceedings, the burden of proof shall be on the franchisee. (Section 3)

HEARINGS - An aggrieved party may file an application for hearing before the Administrative Hearing Commission (AHC). The procedure for such hearings is specified, including time of notice and method of service upon parties. The order providing the hearing date shall stop the complained-of activity until the final decision is issued. The decision of the AHC may only be reviewed in appellate court. (Section 3)

URBAN EQUITY - When establishing or relocating a dealership in St. Louis City, a dealer shall make reasonable efforts to improve the equitable distribution of dealerships and to serve minorities. The Motor Vehicle Commission shall, in approving licenses, assure an adequate percentage of minority-owned motorcycle dealers in the St. Louis and Kansas City areas. (Sections 5 & 6)

FRANCHISOR DEFENSE - It will be a defense for a franchisor if it is shown that the franchisee substantially failed to comply with the franchise requirements; if a franchisee or it officers have been convicted of a felony involving business honesty or practices; if a franchisee abandoned its business, is insolvent, or there has been a levy under an attachment process; or if the franchisor acted in good faith as a seller or holder of a security interest. (Section 7)

DECEPTION - No franchisee or franchisor shall use any false or misleading advertising.

CIVIL ACTIONS - The remedies provided by this act are not exclusive, and a motorcycle franchisee may also bring a civil action for damages or injunctive relief.

This bill is similar to SCS/SB 498.
MICHAEL HOEFERKAMP

SA 1 - TECHNICAL AMENDMENT