78th Legislative Session _ 2003

Committee: House Commerce
Thursday, February 13, 2003

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P    Bradford
P    Buckingham
P    LaRue
P    Miles
P    Nesselhuf
P    Novstrup
P    Olson (Mel)
P    Pederson (Gordon)
P    Rounds
P    Schafer
P    Solum
P    Sebert, Vice-Chair
P    Konold, Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Representative Claire B. Konold

MOTION:     TO APPROVE THE MINUTES OF 2-11-03

Moved by:    Rounds
Second by:    Pederson (Gordon)
Action:    Prevailed by voice vote.

         HB 1162: revise the membership of the governing board of the one-call notification center.

Presented By:    Brett Koenecke, Design Professionals Coalition

MOTION:     TO TABLE HB 1162

Moved by:    Pederson (Gordon)


Second by:    Olson (Mel)
Action:    Prevailed by roll call vote.(13-0-0-0)

Voting Yes:    Bradford, Buckingham, LaRue, Miles, Nesselhuf, Novstrup, Olson (Mel), Pederson (Gordon), Rounds, Schafer, Solum, Sebert, Konold

         HB 1123: clarify certain circumstances relating to the termination or discontinuance of certain dealership contracts.

Proponents:    Dave Gerdes, Equipment Manufacturers Assn
        Jerry Parkin, John Deere
        John Hoppy, Codington-Clark Equipment
        Matt Cronin, Potter County Implement
        Mike Forrester, Marshall County Equipment
        Bob Riter Jr., Farm Equip Assn. Of MN & SD
        David Owen, SD Chamber of Commerce & Industry
Opponents:    Jim Keyes, AGC of SD
        Pat Healy, Diesel Machinery (Handout A)
        Dan Healy, DMI
        Mike Sheehan, Sheehan Mack Sales & Equipment
        Mike Healy, Self

MOTION:     AMEND HB 1123

1123jb
     On the printed bill, delete everything after the enacting clause and insert:

"      Section 1. That § 37-5-1 be amended to read as follows:

     37-5-1.   It is a Class 1 misdemeanor for any manufacturer, factory, branch, distributor, or distributor-branch, or any field representative, officer, agent, or representative of any of them to coerce or attempt to coerce any dealer in motor vehicles; motorcycles; industrial and construction equipment; office furniture, equipment, and supplies; farm tractors; or farm implements ; or outdoor power equipment , to purchase or accept delivery of any motor vehicle or vehicles, parts, or accessories therefor or any other commodity which has not been ordered by such dealer or threatening to cancel or terminate any franchise, agency, arrangement, or agreement existing between such manufacturer, factory, branch, distributor, distributor-branch, or any field representative, officer, agent, or representative of any of them and such dealer or by any other unfair means or by duress of any kind.

     Section 2. That § 37-5-2 be amended to read as follows:

     37-5-2.   It is a Class 1 misdemeanor for any manufacturer, factory, branch, distributor, or distributor-branch, or any field representative, officer, agent, or representative of any of them to coerce or attempt to coerce any dealer in motor vehicles; motorcycles; industrial and construction equipment;

office furniture, equipment, and supplies; farm tractors; or farm implements ; or outdoor power equipment , to enter into any agreement with such manufacturer, factory, branch, distributor, or distributor-branch, or any field representative, officer, agent, or representative of any of them, or to assign, sell, or dispose of any contract or property in any way, or to expend any money or do any other act unfair to such dealer; by threatening to cancel or terminate any franchise, agency, arrangement, or agreement existing between such manufacturer, factory, branch, distributor, distributor-branch, or any field representative, officer, agent, or representative of any of them and such dealer or by any other unfair means or by duress of any kind.

     Section 3. That § 37-5-3 be amended to read as follows:

     37-5-3.   It is a Class 1 misdemeanor for any manufacturer, factory, branch, distributor, or distributor-branch, or any field representative, officer, agent, or representative of any of them, unfairly, without due regard to the equities of the dealer and without just provocation, to cancel , fail to renew, or substantially change the competitive circumstances of the franchise agreement of any dealer in motor vehicles; motorcycles; industrial and construction equipment; office furniture, equipment, and supplies; farm tractors; or farm implements ; or outdoor power equipment .

     Section 4. That § 37-5-4 be amended to read as follows:

     37-5-4.   Each and every Any person and corporation who or which that violates any provision of § §   37-5-1 to 37-5-3, inclusive, shall be is liable to any dealer damaged thereby for all damages caused to such dealer by such violation. However, any dealer in farm tractors, farm implements, and outdoor power equipment may also recover the actual costs of the action, including any attorney's fees.

     Section 5. That § 37-5-13 be amended to read as follows:

     37-5-13.   Terms used in § §   37-5-13 to 37-5-15, inclusive, mean:

             (1)      "Dealer," any person who receives machinery from a manufacturer under a dealership contract and who offers and sells the machinery to the general public. The term, dealer, does not include a single-line dealer;

             (2)      "Dealership contract," a written agreement or contract between a manufacturer and dealer which fixes the legal rights and liabilities of the parties to such agreement or contract;

             (3)      "Machinery," any farm vehicle as defined by §   32-3-2.4 or any off-road vehicle as defined by subdivision 32-3-1(15) or any outdoor power equipment ;

             (4)      "Manufacturer," any person engaged in the manufacturing or distribution of machinery including any person who acts for the manufacturer;

             (5)      "Single-line dealer," any person that has purchased seventy-five percent or more of the dealer's total new product inventory from a single manufacturer under agreements with that

manufacturer and has a total annual average sales volume for the three previous years with that single manufacturer in excess of fifty million dollars for the territory for which that dealer is responsible.

     Section 6. That § 37-5-14 be amended to read as follows:

     37-5-14.   The following circumstances that are not cause for the termination or discontinuance of a dealership contract, nor for entering into a dealership contract for the establishment of an additional dealership in a community for the same line-make , include the following :

             (1)      The change of executive management or ownership of the dealer, unless the manufacturer can show that the change would be detrimental to the representation or reputation of the manufacturer's product new management or owner does not meet the reasonable financial, business ability, experience, and character requirements of the manufacturer for the dealership location. If the manufacturer can show that the new management or owner does not meet these requirements, the manufacturer shall provide the dealer or the dealer's representative with written notice of the manufacturer's specific objections. In any dispute as to whether the manufacturer has unreasonably withheld consent under this section, the manufacturer has the burden of proving a reasonable justification for such withholding of consent ;

             (2)      Refusal by the dealer to purchase or accept delivery of any machinery, parts, accessories, or any other commodity or service not ordered by the dealer unless such machinery, parts, accessories, or other commodity or service is necessary for the safe and satisfactory operation of machinery commonly sold in the dealer's area of responsibility;

             (3)      The sole fact that the manufacturer desires further penetration of the market dealer's failure to achieve any particular market penetration, unless the manufacturer has given the dealer a reasonable market penetration objective based on the manufacturer's experience in other comparable market areas, and the dealer, for reasons within the dealer's control, consistently fails to meet the manufacturer's reasonable market penetration requirements after having been given a reasonable period of time, of at least two years, to demonstrate improvement toward such requirements ;

             (4)      The fact that the dealer owns, has an investment in, participates in the management of, or holds a dealership contract for the sale of another line-make of machinery, or that the dealer has established another line-make of machinery in the same dealership facilities as those of the manufacturer, if the dealer maintains a reasonable line of credit for each line-make of machinery; or

             (5)      Refusal by the dealer to participate in any national advertising campaign or contest or purchase any promotional materials, display devices, or display decoration or materials which are at the expense of the dealer. "


Moved by:    Olson (Mel)
Second by:    LaRue
Action:    Prevailed by voice vote.

MOTION:     DO PASS HB 1123 AS AMENDED

Moved by:    Olson (Mel)
Second by:    Sebert
Action:    Failed by roll call vote.(6-7-0-0)

Voting Yes:    LaRue, Olson (Mel), Schafer, Solum, Sebert, Konold

Voting No:    Bradford, Buckingham, Miles, Nesselhuf, Novstrup, Pederson (Gordon), Rounds

MOTION:     DEFER HB 1123 TO THE 41ST LEGISLATIVE DAY

Moved by:    Buckingham
Second by:    Pederson (Gordon)
Action:    Prevailed by roll call vote.(7-6-0-0)

Voting Yes:    Bradford, Buckingham, Miles, Nesselhuf, Novstrup, Pederson (Gordon), Rounds

Voting No:    LaRue, Olson (Mel), Schafer, Solum, Sebert, Konold

         HB 1111: authorize construction management services to be employed on public improvement projects.

Presented By:    Representative Matthew Michels (Handout B)
Proponents:    Larry Zikmund, Associated General Contractors - Building Chapter
        Greg Brewers, AGC - Building Chapter
        John Mills, Associated General Contractors, Building Chapter
        Henry Kosters, Associated School Boards of SD

MOTION:     AMEND HB 1111

1111fg
     On page 4, line 13 of the printed bill, delete " construction " and insert "constructing".

     On page 5 , line 6, delete " management " and insert "manager".

     On page 5 , line 8, after " Act " insert "and the construction manager-at-risk, for any actual construction contracted by the construction manager-at-risk to be performed on the project, provides payment and performance bonds and competitively bids the work as required by any statute governing bidding and bonding for public improvement projects".

     On page 5 , line 19, after " proposals " insert "required by subsection 7(2)(b) of this Act".

     On page 5 , line 19, after " construction " delete " managment " and insert "manager-at-risk".

     On page 5 , line 20, after " contract " insert "where the construction manager-at-risk intends to actually perform construction on the project,".

     On page 6 , line 18, delete " , and " and insert ";".

     On page 6 , delete lines 19 and 20 .

     On page 7 , after line 4, insert:
"
     Section 9. That chapter 5-18 be amended by adding thereto a NEW SECTION to read as follows:

     Each contract for a public improvement shall have a licensed design professional actively involved in the project from the start of design through final completion as required by chapter 36-18A.".

Moved by:    Sebert
Second by:    Nesselhuf
Action:    Prevailed by voice vote.

MOTION:     DO PASS HB 1111 AS AMENDED

Moved by:    Sebert
Second by:    Pederson (Gordon)
Action:    Prevailed by roll call vote.(13-0-0-0)

Voting Yes:    Bradford, Buckingham, LaRue, Miles, Nesselhuf, Novstrup, Olson (Mel), Pederson (Gordon), Rounds, Schafer, Solum, Sebert, Konold

MOTION:     PLACE HB 1111 ON CONSENT CALENDAR

Moved by:    Sebert
Second by:    Miles
Action:    Prevailed by voice vote.

         HB 1118: revise certain design-build provisions.

Presented By:    Greg Brewers, AGC - Building Chapter
Proponents:    John Mills, Associated General Contractors, Building Chapter
        John White, Bureau of Administration



MOTION:     AMEND HB 1118

1118fa
     On page 1, line 10 of the printed bill, after " chapter " overstrike " 36-18 " and insert " 36-18A ".

     On page 1 , line 12, after " chapter " delete " 36-18 " and insert " 36-18A ".

     On page 2 , line 2, after " design-builder. " insert " The minimum number of prequalified design- builders is not required for any improvement project that is complex in nature, requires close coordination of design and construction expertise, and does not require significant structural changes, additions, reconstruction, or new construction. ".

     On page 3 , line 12, after " conditions " delete " . " and insert " and any preliminary conceptual sketches necessary to illustrate the information required by subdivision 5-18-35(4). Each conceptual drawing shall contain the minimal information necessary to convey the requirements. ".

Moved by:    Bradford
Second by:    Solum
Action:    Prevailed by voice vote.

MOTION:     DO PASS HB 1118 AS AMENDED

Moved by:    Pederson (Gordon)
Second by:    Buckingham
Action:    Prevailed by roll call vote.(12-1-0-0)

Voting Yes:    Bradford, Buckingham, LaRue, Miles, Nesselhuf, Novstrup, Pederson (Gordon), Rounds, Schafer, Solum, Sebert, Konold

Voting No:    Olson (Mel)

At this time Chair Konold passed the gavel to Vice Chair Sebert.

         HB 1195: revise the definition of door to door sales.

Presented By:    Representative Claire Konold
Proponents:    Tim Dougherty, Pimco Funds Distibutors, LLC

MOTION:     AMEND HB 1195

1195ja
     On page 2, line 16 of the printed bill, after " and " insert " a ".

     On page 2 , line 17, after " services " insert " , if the buyer owns, operates, or manages an established business ".

Moved by:    Rounds
Second by:    Konold
Action:    Prevailed by voice vote.

MOTION:     DO PASS HB 1195 AS AMENDED

Moved by:    Konold
Second by:    Olson (Mel)
Action:    Prevailed by roll call vote.(11-1-1-0)

Voting Yes:    Bradford, LaRue, Miles, Nesselhuf, Olson (Mel), Pederson (Gordon), Rounds, Schafer, Solum, Sebert, Konold

Voting No:    Novstrup

Excused:    Buckingham

Vice Chair Sebert passed the gavel back to Chair Konold.

MOTION:     ADJOURN

Moved by:    Pederson (Gordon)
Second by:    Nesselhuf
Action:    Prevailed by voice vote.

Dawn Magee

____________________________

Committee Secretary
Claire B. Konold, Chair


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