SB 157 — New Motorboat Distributor Act

Section{(23) 2.{"Site-control agreement" means an agreement, however denominated and regardless of the agreement's form or of the parties to the agreement, that has the effect of:} } {(a) {controlling the use and development of the premises upon which a distributee's business operations are located;} } {(b) {requiring a distributee to establish or maintain an exclusive dealership facility on the premises upon which the distributee's business operations are located;

or} } {(c) {restricting the ability of the distributee or, if the distributee leases the dealership premises, the distributee's lessor to transfer, sell, lease, develop, redevelop, or change the use of some or all of the dealership premises, whether by sublease, lease, collateral pledge of lease, right of first refusal to purchase or lease, option to purchase or lease, or any similar arrangement.} } - 7 - SB0157 compared with SB0157S02 {(24) {"Stop-sale order" means an order the distributor issues that prohibits a distributee from selling or leasing a certain used motorboat of the distributor's line-make, which is in the distributee's inventory, due to a recall.} } {(25) {"Used motorboat" means a motorboat that has been titled and registered or has 150 engine hours or more.} } {(26) {{"Value of a used motorboat" means the average trade-in value for a used motorboat of the same year, make, and model as reported in a recognized, independent third-party used motorboat guide.} } Section 2.

- 6 - SB0157S01 compared with SB0157S02 (1) A distributee or distributor doing business in the state shall:

- 8 - SB0157 compared with SB0157S02 (3) A distributee or distributor registered under this section shall comply with this chapter and the rules the department makes to enforce this chapter.

- 7 - SB0157S01 compared with SB0157S02 (b) In addition to any other action permitted under Subsection (1), the department may file an action with a court enforcing the executive director's order and pursue the executive director's assessment of a fine in an amount not to exceed {$5,000 } $1,000 for each day a person violates the executive director's order.

(3) (a) In addition to the grounds described in Subsection 63G-4-502(1) for issuing an emergency order,order {on an emergency basis which Subsection 63G-4-502(1) lists} , the executive director may issue an - 9 - SB0157 compared with SB0157S02 order on an emergency basis if the executive director determines that irreparable damage is likely to occur immediately if the executive director takes no action.

- 8 - SB0157S01 compared with SB0157S02 (a) except as provided in Subsection (2), require a distributee to order or accept delivery of any new motorboat or other item that the distributee did not voluntarily order;order{, unless otherwise required by law} ;

(b){(b) {require a distributee to participate monetarily in an advertising campaign, or participate in a contest, or purchase promotional materials, display devices, or display decorations or materials;} } - 10 - SB0157 compared with SB0157S02 {(c) {require a distributee to change the capital structure of the distributee's dealership or the means by which the distributee finances the operation of the dealership, if the dealership at all times meets reasonable capital standards that the distributor determines and applies nondiscriminatorily;} } (d){(b)} require a distributee to refrain from {participating in the management of, investing in, or } acquiring any other line of new motorboats or products;products{, if the distributee maintains a reasonable line of credit for each make or line of boats and complies with the distributor's reasonable capital and facilities requirements} ;

(c){(e) require,{require coerce,a ordistributee attempt to coerceprospectively agree to a distributeerelease, toassignment, enternovation, intowaiver, anor agreementestoppel withthat thewould:} } {(i) {relieve a distributor orfrom doliability, anyincluding othernotice unfairand orhearing prejudicialrights actimposed toon the distributee;distributor by this chapter;

(d)or} change,} establish,{(ii) enforce,{require modify,any orcontroversy implementbetween the distributee and a plandistributor orto systembe forreferred allocating,to scheduling,a orthird deliveringparty newif motorboats,the parts,third orparty's accessoriesdecision is binding;} } {(f) {require a distributee to change the distributor'slocation distributeesof sothe thatprincipal place of business of the plandistributee's dealership or systemmake isany notsubstantial fair,alterations reasonable,to andthe equitable{,dealership includingpremises, aif planthe change or systemalterations thatwould imposesbe aunreasonable motorboator salescause objective,the goal,distributee to lose control of the premises or quotaimpose onany aother distributee,unreasonable requirement related to the facilities or thatpremises;} evaluates} {(g) {coerce or attempt to coerce a distributee'sdistributee salesto effectivenessjoin, contribute to, or overallaffiliate saleswith performance,an withoutadvertising providingassociation;} the} distributee(h){(c)} arequire, reasonablecoerce, opportunityor attempt to acquirecoerce thea necessarydistributee motorboatsto inenter ainto timelyan manneragreement fromwith the distributor onor commerciallydo reasonableany terms}other unfair or prejudicial act to the distributee{, by threatening to cancel a distributorship agreement} ;

(e)(i){(d)} increase{change} thechange, priceestablish, ofenforce, modify, or implement a plan or system for allocating, scheduling, or delivering new motorboatmotorboats, thatparts, or accessories to the distributeedistributor's hasdistributees orderedso fromthat the distributorplan ifor thesystem orderis occurrednot beforefair, reasonable, and equitable{, including a plan or system that imposes a motorboat sales objective, goal, or quota on a distributee, or that evaluates a distributee's sales effectiveness or overall sales performance, without providing the distributee receiveda anreasonable officialopportunity writtento priceacquire increasethe notification;necessary boats in a timely manner from the distributor on commercially reasonable terms} ;

(f)- engage11 in- theSB0157 distribution,compared sale,with offerSB0157S02 for(j){(e)} sale,increase orthe leaseprice of a new motorboat tothat purchasersthe whodistributee acquirehas ordered from the motorboatdistributor in{and thefor statewhich excepta throughbona fide sale to a distributeeretail locatedpurchaser inexists at the {relevanttime marketingof the order, } noticeif areathe oforder occurred before the purchaser;distributee received an official written price increase notification;

(g){(k) authorize{fail to indemnify and hold harmless the distributor's distributee against a judgment for damages or permita settlement the distributor approves in writing;} } {(l) {threaten or coerce a persondistributee to performwaive warrantyor serviceforbear repairsthe ondistributee's motorboats,right unlessto protest the repairsestablishment areor performedrelocation byof a same line-make distributee within the relevant market area of the affected distributee;} } {(m) {fail to ship monthly to a distributorshipdistributee agreementthe fornumber of new motorboats of each make, series, and model the saledistributee needs and serviceorders to achieve a percentage of total new motorboat sales of each make, series, and model equitably related to the distributor'stotal motorboatsnew withinboat production or importation being achieved nationally at the {relevanttime marketof the order by each make, series, and model the distributorship agreement covers;} } notice{(n) area{require whereor otherwise coerce a distributee to under-utilize the distributee's existing dealership isfacility located;or facilities by:} } {(i) {requiring or coercing a distributee to exclude or remove the selling or servicing of a line-make of boats for which the distributee has a distributorship agreement to utilize the facilities;

(h)or} fail} to{(ii) provide{prohibiting athe distributee withfrom locating, relocating, or occupying a line-make in an existing facility the distributee owns or occupies that includes the selling or servicing of another distributorship agreement or line-make at the facility, if the distributee gives the distributor written notice of the distributorship agreement;agreement co-location;} } {(o) {fail to include language in a distributorship agreement to the effect that:

(i)"If directlyany provision in this agreement contravenes the laws or indirectlyregulations ownof anany intereststate inor aother newjurisdiction motorboatwhere distributeethis agreement is to be performed, or dealership,provided operatefor by such laws or controlregulations, athe newprovision motorboatis distributeeconsidered to be modified to conform to such laws or dealership,regulations, actand all other terms and provisions shall remain in full force.";} } (p){(f)} engage in the capacitydistribution, sale, offer for sale, or lease of a new motorboat distributee,to orpurchasers operatewho aacquire the {boat } motorboat in the state except through a distributee {with which the distributor has established a written distributorship agreement, if the distributor's trade name, trademark, service facility;mark, or related characteristic is an integral element } located in the {transaction} notice area of the purchaser;

(j)- fail12 to- {timelySB0157 compared with SB0157S02 (q){(g)} {authorize } payauthorize or permit a person to perform warranty service repairs on motorboats, unless the repairs are performed by a distributee forwith a reimbursementdistributorship agreement for anthe incentivesale orand otherservice paymentof the distributordistributor's owesinmotorboats{, or by a person or government entity that purchased a new motorboat in accordance with a writtendistributor's distributorshipfleet agreement;discount program} within the notice area where the dealership is located;

(k)(r){(h)} usefail a performance standard, incentive program, or similar method to measureprovide a distributee'sdistributee performancewith unlessa thewritten standarddistributorship oragreement; program:

{(s) } {(i) {unreasonably fail or refuse to offer all models manufactured for that line-make to the distributor's same line-make dealerships;

or} } {(ii) {unreasonably require a distributee to pay an extra fee, remodel, renovate, or recondition the distributee's existing facilities, or purchase unreasonable advertising displays or other materials as a prerequisite to receiving a model or series of motorboats;} } (t){(i)} directly or indirectly own an interest in a new motorboat distributee or dealership, operate or control a new motorboat distributee or dealership, act in the capacity of a new motorboat distributee, or operate a motorboat service facility;

(u){(j)} fail to {timely } pay a distributee for a reimbursement for an incentive or other payment the distributor {makes} owes in accordance with a written distributorship agreement;

{(v) {directly or indirectly influence or direct potential customers to a distributee in an inequitable manner, including:} } {(i) {charging a distributee a fee for a referral regarding a potential sale or lease of any of the distributee's products or services that exceeds the actual cost of the referral;} } {(ii) {giving a customer referral to a distributee on the condition that the distributee agrees to sell the boat at a price the distributor fixes;

or} } {(iii) {advising a potential customer of the amount the potential customer should pay for a particular product;} } {(w) {fail to provide comparable delivery terms to each distributee for a product of the distributor, including the time of delivery after the distributee places an order;} } {(x) {if a distributor provides personnel training for a distributee, unreasonably fail to make that training available to each distributee on proportionally equal terms;} } - 13 - SB0157 compared with SB0157S02 {(y) {condition a distributee's eligibility to participate in a sales incentive program on the requirement that a distributee use the financing services of the distributor or a subsidiary or affiliate of the distributor for inventory financing;} } {(z) {make available for public disclosure, except with the distributee's permission or under subpoena or in any administrative or judicial proceeding to which the distributee or the distributor is a party, confidential financial information regarding a distributee, including monthly financial statements, the profitability of a distributee, or the status of a distributee's inventory of products;} } (aa){(k)} use a performance standard, incentive program, or similar method to measure a distributee's performance unless the standard or program:

and - 9 - SB0157S01 compared with SB0157S02 (iii) if the distributee requests it, is disclosed and explained in writing to the distributee, including how the standard or program is designed and administered, and the types of data that will be collected and used;

(l){(bb) {other than sales to the federal government, directly or indirectly sell, lease, offer to sell, or offer to lease a new motorboat or any motorboat the distributor owns, except through ana affiliate,new takemotorboat andealership;} action} {(cc) {compel a distributee, through a finance subsidiary, to agree to unreasonable operating requirements, except that this chapterSubsection otherwise(1)(cc) prohibits;does not limit a financing subsidiary's right to engage in business practices in accordance with the usage of trade in retail and wholesale motorboat financing;} } {(dd) {condition the distributor's participation in co-op advertising for a product category on the distributee's participation in a program related to another product category or on the distributee's achievement of a level of sales in a product category other than the subject of the co-op advertising;} } {(ee) {except as provided in Subsections (5) and (6), discriminate against a distributee in the state in favor of another distributee of the same line-make in the state by:} } {(i) {selling or offering to sell a new motorboat to one distributee at a higher actual price, including transportation price, than the actual price at which the distributor similarly equips, offers, or makes available the same model to another distributee in the state during a similar time period;} } - 14 - SB0157 compared with SB0157S02 {(ii) {except as provided in Subsection (5), using a promotional program, device, incentive, payment, or other benefit, whether paid at the time of the new motorboat sale to the distributee or later, that results in the sale of or offer to sell a new motorboat to one distributee in the state at a higher price, including the price for motorboat transportation, than the price at which the distributor offers or makes available the same similarly equipped model to another distributee in the state during a similar time period;} } {(iii) {except as provided in Subsection (6), failing to provide or direct a lead in a fair, equitable, and timely manner;

(m)or} impose} a{(iv) fee,{using surcharge,or considering the performance of any of the distributor's distributees located in the state relating to the sale of the distributor's new motorboats when determining the distributee's eligibility to purchase program, certified, or other chargeused onmotorboats, athe volume, type, or model the distributee designedis eligible to recoverpurchase, the costprice the distributee is eligible to purchase them for, or the availability or amount of any discount, credit, rebate, or sales incentive the distributee is eligible to receive, if the distributee complies with any reasonable requirement concerning the sale of new motorboats;} } {(ff) } {(i) {take control over funds the distributee owns or controls based on the findings of a warranty repairaudit, sales incentive audit, or anyrecall otherrepair costaudit, unless the following conditions are satisfied:} } {(A) {the distributor fully identifies in thiswriting chapterthe basis for the distributor's claim or charge back arising from the dealershipaudit, agreementincluding fornotifying the distributee that the distributee has 20 days from the day on which the distributee receives the distributor's claim or charge back to assert a written protest identifying the basis for the protest;} } {(B) {the distributee's protest shall inform the distributor owesthat {tothe distributee shall submit the protest to a mediator in the state, and shall identify the mediator by name and address;} } {(C) {if requested under Subsection (1)(ff)(i)(B), mediation shall occur no later than 30 days after the distributor receives the distributee's protest;} } {(D) {if mediation does not resolve the protest, the parties shall set the protest for binding arbitration in the same venue as the mediation;} } {(E) {the distributor and distributee shall mutually agree upon the arbitrator and the date for binding arbitration under Subsection (1)(ff)(i)(D), but the arbitration shall be held no later than days after the distributor receives the distributee's notice of protest;} } - 15 - SB0157 compared with SB0157S02 {(F) {this Subsection (1)(ff)(i) applies exclusively to warranty audits, recall repair audits, and sales incentive audits;} } {(G) {Subsections (1)(ff)(i)(A) through (E) do not apply if the distributor reasonably believes the amount of the claim or charge back relates to a fraudulent act by the distributee;

(n)and} deny} a{(H) distributee{the thedistributor rightand tothe returndistributee anyshall orshare allthe partscosts orof accessories that are in good, resalable condition and that are listed in the currentmediator partsor catalog;arbitrator equally;

(o)or} obtain} a{(ii) waiver{require of a distributee'sdistributee rightto fromexecute a distributeewritten bywaiver threateningof tothe imposerequirements aof detrimentSubsection upon(1)(ff)(i);} the} distributee's{(gg) business,{coerce, or attempt to withholdcoerce anya entitlement,distributee benefit,to purchase or servicesell toan whichaftermarket product the distributeedistributor ismanufactures entitledor {underobtains anfor }resale infrom accordancea withthird-party supplier, where the distributorshipdistributor agreement,or contract,the statute,distributor's rule,affiliate regulation,derives ora law,financial orbenefit thatfrom the distributordistributee's hassale grantedor topurchase, moreas thana onecondition otherto distributeeobtaining ofpreferential status from the distributordistributor;} in} the(hh){(l)} state;through an affiliate, take an action that this chapter otherwise prohibits;

(p)(ii){(m)} failimpose to provide reasonable compensation to a distributeefee, forsurcharge, assistanceor requestedother bycharge on a customerdistributee whosedesigned motorboat was subjected to anrecover over the aircost orof remotea change,warranty repair,repair or updateany toother anycost part,in system,this accessory,chapter or function by the distributordealership oragreement affiliatefor andwhich performed at the distributee'sdistributor dealership{pays to} satisfyowes the customer;distributee;

or{(jj) (q){except shipas provided by the audit provisions of this chapter, take an action designed to recover a newcost motorboatrelated to a distributeerecall, withoutincluding:} receiving} prior{(i) written{imposing confirmationa fromfee, surcharge, or other charge on a distributee;} } {(ii) {reducing the distributeecompensation authorizingthe distributor owes to a distributee;} } {(iii) {removing the shipmentdistributee offrom thatan specificincentive motorboat.program;

or} } {(iv) {reducing the amount the distributor owes to a distributee under an incentive program;} } {(kk) {directly or indirectly condition any of the following actions on the willingness of a distributee, prospective new distributee, or owner of an interest in a dealership facility to enter into a site-control agreement:} } {(i) {the awarding of a distributorship agreement to a prospective new distributee;} } {(ii) {the addition of a line-make or distributorship agreement to an existing distributee;} } {(iii) {the renewal of an existing distributee's distributorship agreement;} } {(iv) {the approval of the relocation of an existing distributee's dealership facility, unless the distributor pays, and the distributee voluntarily accepts, additional specified cash consideration to facilitate the relocation;

or} } - 16 - SB0157 compared with SB0157S02 {(v) {the approval of the sale or transfer of a distributee's ownership, unless the distributor pays, and the buyer voluntarily accepts, additional specified cash consideration to facilitate the sale or transfer;} } (ll){(n)} {subject to Subsection (8), } deny a distributee the right to return any or all parts or accessories that {the distributor required the distributee to purchase under an automated ordering system, and that } are in good, resalable condition{, } and that {the distributee received within the previous 12 months or } are listed in the current parts catalog;

(mm){(o)} {subject to Subsection (9), } obtain a waiver of a distributee's right from a distributee by threatening to impose a detriment upon the distributee's business, or to withhold any entitlement, benefit, or service to which the distributee is entitled {under an } in accordance with the distributorship agreement, contract, statute, rule, regulation, or law, or that the distributor has granted to more than one other distributee of the distributor in the state;

{(nn) {coerce a distributee to establish a price, or use an agreement, program, or incentive to require a distributee to establish a price, for selling a product or service connected with the motorboat sale if the distributor or an affiliate did not manufacture, provide, or distribute the product or provide the service;} } {(oo) {except as necessary to comply with a health or safety law, or to comply with a technology requirement necessary to sell or service a motorboat that the distributor authorizes or licenses a distributee to sell or service, coerce or require a distributee, through a penalty or other detriment to the distributee's business, to:} } {(i) {construct a new distributee facility or materially alter or remodel an existing distributee facility before the date that is 10 years after the date the construction of the new distributee facility at that location was completed, if the construction substantially complied with the distributor's brand image standards or plans the distributor provided or approved;

or} } {(ii) {materially alter or remodel an existing distributee facility before the date that is 10 years after the date the previous alteration or remodeling at that location was completed, if the previous alteration or remodeling substantially complied with the distributor's brand image standards or plans the distributor provided or approved;} } {(pp) {notwithstanding the terms of a distributorship agreement providing otherwise:} } {(i) {coerce or require a distributee, including by agreement, program, or incentive provision, to purchase a good or service relating to facility construction, alteration, or remodel, from a vendor that a distributor or the distributor's affiliate selects, identifies, or designates, without allowing the - 17 - SB0157 compared with SB0157S02 distributee, after consultation with the distributor, to obtain a like good or service of substantially similar quality from a vendor that the distributee chooses;

or} } {(ii) {coerce or require a distributee, including by agreement, program, or incentive provision, to lease a sign or other distributor image element from the distributor or an affiliate without providing the distributee the right to purchase a sign or other distributor image element of like kind and quality from a vendor that the distributee chooses;} } {(qq) {when providing a new motorboat to a distributee for offer or sale to the public, fail to provide the distributee a written disclosure that the distributee may provide to a potential buyer of the new motorboat regarding each accessory or function of the motorboat that the distributor or affiliate may initiate, update, change, or maintain through over the air or remote means, and the charge to the customer at the time of sale for such initiation, update, change, or maintenance;} } (rr){(p)} fail to provide reasonable compensation to a distributee for assistance requested by a customer whose motorboat was subjected to an over the air or remote change, repair, or update to any part, system, accessory, or function by the distributor or affiliate and performed at the distributee's dealership to satisfy the customer;

or (ss){(q)} ship a new motorboat to a distributee without receiving prior written confirmation from the distributee authorizing the shipment of that specific motorboat.

(a) new motorboat models offered for sale by the distributor as long as {such inventory and } the inventory levels are supported by market demand;

Section{(3) 7.{Subsection (1)(d) does not prevent a distributor from requiring that a distributee maintain separate sales personnel or display space.} } {(4) {Upon the written request of any distributee, a distributor shall disclose in writing to the distributee the basis on which new motorboats, parts, and accessories are allocated, scheduled, and delivered among the distributor's distributees of the same line-make.} } {(5) {Subsection (1)(ee)(ii) does not prohibit a promotional or incentive program that is functionally available to all competing distributees of the same line-make in the state on substantially comparable terms.} } {(6) {Subsection (1)(ee)(iii) may not be construed to:} } - 18 - SB0157 compared with SB0157S02 {(a) {permit provision of or access to customer information that is otherwise protected from disclosure by law or by contract between a distributor and a distributee;

or} } {(b) {require a distributor to disregard the preference volunteered by a potential customer in providing or directing a lead.} } {(7) {Subsection (1)(hh) does not limit the right of an affiliate to engage in business practices in accordance with the usage of trade in which the affiliate is engaged.} } {(8) } {(a) {Subsection (1)(ll) does not apply to parts or accessories that the distributee ordered and purchased outside of an automated parts ordering system required by the distributor.} } {(b) {In determining whether parts or accessories in a distributee's inventory were specified and sold under an automated ordering system required by the distributor, the parts and accessories in the distributee's inventory are presumed to be the most recent parts and accessories that the distributor sold to the distributee.} } {(9) } {(a) {Subsection (1)(mm) does not apply to a good faith settlement of a dispute, including a dispute relating to contract negotiations, in which the distributee gives a waiver in exchange for fair consideration in the form of a benefit conferred on the distributee.} } {(b) {Subsection (9)(a) may not be construed to defeat a distributee's claim that a waiver has been obtained in violation of Subsection (1)(mm).} } {(10) {As used in Subsection (1)(oo):} } {(a) {"Materially alter":} } {(i) {means to make a material architectural, structural, or aesthetic alteration;

and} } {(ii) {does not include routine maintenance, such as interior painting, reasonably necessary to keep a dealership facility in attractive condition.} } {(b) {"Penalty or other detriment" does not include a payment under an agreement, incentive, or program that is offered to but declined or not accepted by a distributee, even if a similar payment is made to another distributee in the state that chooses to participate in the agreement, incentive, or program.} } {(11) {Subsection (1)(oo) does not apply to:} } - 19 - SB0157 compared with SB0157S02 {(a) {a program that provides a lump sum payment to assist a distributee to make a facility improvement or to pay for a sign or a distributor image element, if the payment is not dependent on the distributee selling or purchasing a specific number of new motorboats;} } {(b) {a program that is in effect on May 6, 2026, with more than one distributee in the state or to a renewal or modification of the program;} } {(c) {a program that provides reimbursement to a distributee on reasonable, written terms for a substantial portion of the distributee's cost of making a facility improvement or installing signage or a distributor image element;

or} } {(d) {a written agreement between a distributor and distributee, in effect before May 6, 2026, under which a distributee agrees to construct a new distributee facility.} } {(12) {A distributor may comply with Subsection (1)(qq) by notifying the distributee that the information in a written disclosure described in Subsection (1)(qq) is available on a website or by other digital means.} } {(13) {The indemnification in Subsection (1)(k) includes court costs and attorney fees arising from actions or claims related to the distributor's alleged defective or negligent actions, including strict liability, negligence, misrepresentation, express or implied warranty, revocation, or rejection.} } Section 7.

(i) subject to Subsection {13-14c-305(2)(b)} 13-14c-303(2)(b);

and - 10 - SB0157S01 compared with SB0157S02 (ii) unless exempted under Subsection (2).

(ii) contract for sale of a distributee's dealership;dealership;or (iii) transfer of full or partial ownership of a distributee's dealership by:

or (iii) transfer of full or partial ownership of a distributee's dealership by:

or (C) stock transfer.transfer{;

(2)or} A. distributor is exempted from the requirements of Subsection (1) if:

- 20 - SB0157 compared with SB0157S02 {(iv) {change in the executive management of the distributee's dealership.} } (2) A distributor is exempted from the requirements of Subsection (1) if:

or (b) the proposed sale or transfer of the business {or change of executive management } will be substantially detrimental to the distribution of the distributor's new motorboats or to competition in the {relevant market } notice area, if the distributor has given written notice to the distributee within 60 days following receipt by the distributor of the following:

(ii) a completed copy of the distributor's written application for approval of the change in ownership,ownership {or executive management} , if any, including the information customarily required by the distributor;

{(3) {For purposes of this section, the refusal by the distributor to accept a proposed transferee is presumed to be unreasonable and undertaken without good cause if the proposed distributeedistributee:} or the proposed distributee's principal owner, as applicable:} } {(a) {is of good moral character;

and} } - 11 - SB0157S01 compared with SB0157S02 {(b) {otherwise meets the written, reasonable, and uniformly applied standards or qualifications, if any, of the distributor relating to the business experience of executive management and financial capacity to operate and maintain the dealership required by the distributor of the distributor's distributees.} } (4){(3)} (a) If,If , after receipt of the written notice from the {distributor } distributee described in Subsection (2) (b),(b) the{the {distributeedistributee } , the distributor objects to {thethe distributor's{distributor's refusal to accept } the } proposed sale or transfer of the business or change of executive management, the distributee may file {ana applicationrequest for an {application for a hearing before the executive director up to } aadjudicative request- for21 an- adjudicativeSB0157 compared with SB0157S02 proceeding in accordance with Section 63G-4-201, within 60 days from the date of receipt of the distributor's objection notice.

(1) - 12 - SB0157S01 compared with SB0157S02 (a) A designated successor may succeed the distributee in the ownership and operation of the dealership under the existing distributorship agreement if the designated successor:

- 22 - SB0157 compared with SB0157S02 (b) A distributor may refuse to honor the existing distributorship agreement with the designated successor for good cause.

- 13 - SB0157S01 compared with SB0157S02 (5) (a) This section does not prevent a distributee from designating a person as the successor by written instrument filed with the distributor.

- 23 - SB0157 compared with SB0157S02 (6) (a) If a distributor serves a notice of refusal to a designated successor in accordance with Subsection {(3)} (3)(a), the designated successor may, within the 180-day period provided in Subsection (4), file with the executive director {an application for a hearing and a determination by the executive director regarding } a request for an adjudicative proceeding in accordance with Section 63G-4-201, whether good cause exists for the refusal.

Distributor's obligations {related } relating to warranty and recall service.service {-- Distributor audits -- Time limits} .

- 14 - SB0157S01 compared with SB0157S02 (b) the schedule of compensation that the distributor will pay the distributee for diagnostic work, parts, labor, and service;

(4) (a)- 24 - SB0157 compared with SB0157S02 {(a) {As used in this Subsection (4):} } (i){(a)} As used in this Subsection (4), "Qualified repair" means a repair to a motorboat that would have come within the distributor's new motorboat warranty but for {such } the motorboat having exceeded the time qualifications of {such } the warranty.

(b){(ii) Reasonable{"Qualified compensationrepair" ofdoes not include:} } {(A) {routine maintenance, including the distributeereplacement of a fluid, a tire, a wheel, a filter, a battery, a belt, a brake pad, a rotor, a nut, abolt, a fastener, or a water pump impeller;} } {(B) {a repair for partsa andgovernment serviceagency, inan insurer, or an extended warranty or recallservice contract provider;} } {(C) {a repair workthat {mayis notthe subject of a distributor special event, promotion, or service campaign, or otherwise is subject to a distributor discount;} } shall{(D) be{a {lessrepair thanof thea ratesmotorboat owned by the distributee chargesor foran partsemployee andof servicethe todistributee;} retail} customers}{(E) in{an accordanceinstallation of an accessory;} } {(F) {motorboat reconditioning;} } {(G) {a part sold at wholesale;} } {(H) {a repair or replacement with Subsectionor 13-14c-204(2).to an aftermarket part;} } {(I) {a distributor-approved goodwill or policy repair or replacement;

or} } {(J) {a repair on a motorboat of a line-make other than the distributor's line-make.} } (b) Reasonable compensation of the distributee for parts and service in warranty or recall repair work {may not } shall be {less than the rates the distributee charges for parts and service to retail customers} in accordance with Subsection 13-14c-204(2).

and - 25 - SB0157 compared with SB0157S02 (ii) retail parts markup by determining the total charges for parts in the qualified repairs submitted, dividing {such } the amount by the distributee's total cost of the purchase of {such } the parts, subtracting one, and multiplying by 100 to produce a percentage.

(e){(e) A} {(i) {A retail labor rate or retail parts markup described in Subsection (4)(c) is effective 30 days after the distributee maysubmits notthe seeknotice described in Subsection (4)(c), unless, within 30 days after receiving the distributee's submission, the distributor delivers to establishthe ordistributee:} modify} {(A) {a written objection to the distributee's:material accuracy of the retail labor rate or retail parts markup;

or} } {(B) {a written request for supplemental repair orders in accordance with Subsection (4)(e)(ii).} } {(ii) } {(A) {If a distributor determines from the distributee's set of repair orders submitted in accordance with Subsections (4)(c) and (d) that the distributee's submission for a retail labor rate or retail parts markup is substantially higher than the distributee's current warranty rate, the distributor may request, in writing, within 30 days after the distributor's receipt of the notice described in Subsection (4)(c), all repair orders closed within the period of 30 days immediately before, or 30 days immediately following, the set of repair orders submitted by the distributee.} } {(B) {All time periods under this section shall be suspended until the distributee submits the supplemental repair orders described in Subsection (4)(e)(ii)(A).} } {(iii) {If a distributor requests supplemental repair orders described in Subsection (4)(e)(ii), the distributor may, within 30 days after receiving the supplemental repair orders, calculate a proposed adjusted retail labor rate or retail parts markup, as applicable, based upon any set of the qualified repair orders submitted by the distributee, if the distributor:} } {(A) {uses the same requirements applicable to the distributee's submission described in Subsection (4) (c);} } {(B) {uses the formula to calculate the retail labor rate or retail parts markup described in Subsection (4)(d);

and} } {(C) {omits all charges in the repair orders described in Subsection (4)(a)(ii).} } (f){(e)} A distributee may not seek to establish or modify the distributee's:

and - 26 - SB0157 compared with SB0157S02 (ii) {retail parts markup } total charges for parts more frequently than once in a 12-month period.

(f)(g){(f)} - 15 - SB0157S01 compared with SB0157S02 (i) In addition to compensating a distributee for diagnostic work, labor, and parts under this section, a distributor shall compensate the distributee for {each } reasonable and necessary {task } tasks the distributee performs that {is } are incidental to warranty repairs,repairs , upon submission of an itemized statement, including:

{(B) {moving or positioning the motorboat around the dealership premises;} } (C){(B)} removing, installing, or uncovering a protective cover,cover , or accessing an interior compartment to facilitate inspection or repair;

and (E){(D)} handling administrative or documentation tasks, including paperwork.paperwork {the distributor's warranty policies require} .

(g){(ii) If} a{(A) warranty{The repairdistributee's requiresstandard anretail on-waterlabor performancerate evaluationfor torepairs verifyand themaintenance, effectivenessas ofestablished under thisSubsection (4), shall include compensation for the repairtasks orlisted toin properlythis performSubsection a(4)(g).} diagnosis,} the{(B) {The distributor shallmay not compensate the distributeetasks listed in this Subsection (4)(g) at a rate lower than the distributee's established labor rate for {alla comparable warranty or maintenance service.} } reasonable{(h) costs{An theapproved distributeeadjusted incursretail inlabor conductingrate or retail parts markup shall be effective on the test,later including:of 30 days after a distributor receives:} } {(i) {a submission described in Subsection (4)(c);

(i)or} {hourly } labor{(ii) time{supplemental forrepair testorders operationdescribed atin {theSubsection distributee's(4)(e)(ii).} prevailing} (i){(g)} If a warranty laborrepair requires {a lake test, a water test, or } an on-water performance evaluation to verify the effectiveness of the repairor to properly perform a ratemadediagnosis, the distributor shall compensate the distributee for {all } reasonable costs the distributee incurs in accordanceconducting withthe Subsectiontest, 13-14c-204(2);including:

(i) {standard hourly } labor time for test operation at {the distributee's prevailing warranty labor rate} a rate made in accordance with Subsection 13-14c-204(2);

and - 27 - SB0157 compared with SB0157S02 (iii) {any } reasonable transportation costs to and from the testing location.location {if the distributee does not have immediate access to a water testing facility} .

{(j) {A distributor shall compensate the distributee according to the effective retail labor rate and retail parts markup rate no later than 15 days after the day on which the effective date of the rate goes into effect.} } (5) (a) For any item that a distributor sells, supplies, or otherwise provides to a distributee, including a motorboat trailer, an engine, a part, or an accessory sold or bundled with a motorboat, the distributor shall:

(ii) compensate the distributee for all warranty-related work the distributee performs at the distributee's retail{standard labor} rate and retail partslabor markup{,rate{, as established under Subsection (4), } and retail parts markup made in accordance with Subsection{the {(3);and}claims approval } Subsection 13-14c-204(2);

and {payment timelines described in Subsections (6) through (9);and} (iii) ensure that any warranty terms or conditions for these items are substantially similar to those offered by the {manufacturer } distributor in other states and disclosed to the distributee in - 16 - SB0157S01 compared with SB0157S02 writing so that the distributee may properly administer and perform the warranty obligations on behalf of the distributor.

- 28 - SB0157 compared with SB0157S02 (ii) A credit that is equal to or greater than the distributee's wholesale price for the motorboat trailer does not cause the motorboat trailer to be deemed included for warranty purposes.

{or} and (c) compensate a distributee for all reasonable diagnostic work, labor, and parts the distributor requires to perform a recall repair in accordance with Subsections (3) and (4)(4)in {within 30 days of claim submission} in accordance with the distributorship agreement.

(8){(8) A} {(a) {The distributor mayshall denypay a distributee's claim made by a distributee in accordance with this section for warrantydiagnostic compensationwork, labor, or recallparts repairwithin compensation30 if:days after the day on which the distributor approves the claim.} } {(b) {The distributor shall approve or deny a claim within 30 days after the day on which the distributor receives the claim on a form the distributor uses.

(a)} } {(c) {A claim that the distributor does not deny in writing within 30 days after the day on which the distributor receives the claim is considered to be approved and payment shall be made within 30 days.} } {(9) {A distributor may conduct a warranty service audit and recall repair audit of the distributor's distributee lacksrecords materialon documentationa reasonable basis.} } (10){(8)} A distributor may deny a distributee's claim for thewarranty claim;compensation or recall repair compensation if:

or(a) (b)the distributee lacks material documentation for the claim;or {(b) {the distributee filesfails ato claimcomply thatmaterially iswith fraudulent.specific substantive terms and conditions of the distributor's warranty compensation program or recall repair compensation program;

-or} 17} -(c){(b)} SB0157S01the compareddistributee withfiles SB0157S02a Sectionclaim 10.that is fraudulent.

- 29 - SB0157 compared with SB0157S02 {(11) } {(a) {Any charge back for a warranty part or service compensation, recall repair compensation, or service incentive is only enforceable for the six-month period immediately following the day on which the distributor makes the payment compensating the distributee for the warranty part or service, recall repair, or service incentive.} } {(b) {Except as provided in Subsection (11)(e), all charge backs levied by a distributor for sales compensation or sales incentives arising out of the sale or lease of a motorboat sold or leased by a distributee shall be compensable only if written notice of the charge back is received by the distributee within six months immediately following the sooner of:} } {(i) {the day on which the distributee reports the sale to the distributor;

or} } {(ii) {the day on which the distributor makes the payment for the sales compensation or sales incentive to the distributee.} } {(c) } {(i) {Upon an audit, the distributor shall provide the distributee automated or written notice explaining the amount of and reason for a charge back.} } {(ii) {A distributee may respond in writing within 30 days after the notice under Subsection (11)(c)(i) to:} } {(A) {explain a deficiency;

or} } {(B) {provide materials or information to correct and cure compliance with a provision that is a basis for a charge back.} } {(d) {A charge back:} } {(i) {may not be based on a nonmaterial error that is clerical in nature;

and} } {(ii) } {(A) {shall be based on one or more specific instances of material noncompliance with the distributor's warranty compensation program, sales incentive program, recall repair program, or recall compensation program;

and} } {(B) {may not be extrapolated from a sampling of warranty claims, recall repair claims, or sales incentive claims.} } {(e) {The time limitations of this Subsection (11) do not preclude charge backs for any fraudulent claim that was previously paid.} } {(12) } - 30 - SB0157 compared with SB0157S02 {(a) {If within 30 days after the day on which a distributor issues an initial notice of recall, a part or remedy is not reasonably available to perform the recall repair on a used motorboat, each calendar month thereafter the distributor shall pay the distributee an amount equal to at least 1.35% of the value of the used motorboat, if:} } {(i) {the distributee holding the used motorboat for sale is authorized to sell and service a new motorboat of the same line-make;} } {(ii) {after May 6, 2026, the distributor issues a stop-sale or do-not-operate order on the used motorboat;

and} } {(iii) } {(A) {the used motorboat is in the distributee's inventory at the time the distributor issued the order described in Subsection (12)(a)(ii);

or} } {(B) {after the distributor issues the order described in Subsection (12)(a)(ii), the distributee takes the used motorboat into the distributee's inventory at the termination of the consumer lease for the motorboat, as a consumer trade-in accompanying the purchase of a new motorboat from the distributee, or for any other reason in the ordinary course of business.} } {(b) {A distributor shall pay the compensation described in Subsection (12)(a):} } {(i) {beginning:} } {(A) {30 days after the day on which the distributee receives the stop-sale or do-not-operate order;

or} } {(B) {if a distributee obtains the used motorboat more than 30 days after the day on which the distributee receives the stop-sale or do-not-operate order, the day on which the distributee obtains the used motorboat;

and} } {(ii) {ending the earlier of the day on which:} } {(A) {the distributor makes the recall part or remedy available for order and prompt shipment to the distributee;

or} } {(B) {the distributee sells, trades, or otherwise disposes of the used motorboat.} } {(c) {A distributor shall prorate the first and last payment for a used motorboat to a distributee under this Subsection (12).} } {(d) {A distributor may direct the manner in which a distributee demonstrates the inventory status of an affected used motorboat to determine eligibility under this Subsection (12), if the manner is not unduly burdensome.} } - 31 - SB0157 compared with SB0157S02 {(13) } {(a) {A distributee that offsets recall repair compensation received from a distributor under this section against recall repair compensation the distributee receives under a state or federal recall repair compensation remedy may pursue any other available remedy against the distributor.} } {(b) {As an alternative to providing recall repair compensation under this section, a distributor may compensate a distributee for a recall repair:} } {(i) {under a national recall repair compensation program, if the compensation is equal to or greater than the compensation provided under this section;

or} } {(ii) {as the distributor and distributee otherwise agree, if the compensation is equal to or greater than the compensation provided under this section.} } {(c) {Nothing in this section requires a distributor to provide compensation to a distributee that exceeds the value of the used motorboat affected by a recall.} } {(14) {During an audit under this section, a distributor may not request a document from the distributee that originated from the distributor or a subsidiary of the distributor, unless the document required additional information from the customer.} } Section 10.

13-14c-205.

Liability for damages to motorboats in transit.

(1) (a) A distributee is solely liable for damage to a new motorboat upon acceptance of the carrier's delivery, if the damage is not documented in writing and with pictures at the time of carrier delivery.

(b) A delivery receipt, a bill of lading, or a similar document, signed by a distributee is evidence of a distributee's acceptance of a motorboat.

(2) A distributor is liable for all damage to a motorboat before delivery to and acceptance by the distributee, including damage that occurs during the time that the boat is in the control of a carrier or transporter.

(3) Notwithstanding Subsections (1) and (2), the distributee is liable for damage to a new motorboat after delivery to the carrier or transporter if the distributee selected:

(a) the method and mode of transportation;

and (b) the carrier or transporter.

Section 11.

Section 11 is enacted to read:

13-14c-206.

Site-control agreements.

- 32 - SB0157 compared with SB0157S02 (1) (a) Subject to Subsection (2), a distributee may voluntarily terminate a site-control agreement entered into on or after May 6, 2026.

(b) A site-control agreement entered into on or after May 6, 2026, terminates immediately upon:

(i) a distributor's sale, assignment, or other transfer of the right to manufacture or distribute the line- make of motorboats the distributee's distributorship agreement covers;

(ii) a distributor's ceasing to manufacture or distribute the line-make of motorboats the distributee's distributorship agreement covers;

(iii) a distributor's termination of a distributee's distributorship agreement without cause and against the distributee's will;

or (iv) the failure of the distributor or its affiliate to exercise a right of first refusal to purchase the assets or ownership of the distributee's dealership when given the opportunity to do so under the distributorship agreement or other agreement, subject to the repayment requirements of Subsection (2) if the right of first refusal arises because of the voluntary action of the distributee.

(2) (a) If a distributee voluntarily terminates a site-control agreement after the distributor has paid and the distributee or other recipient has accepted additional specified cash consideration, the site-control agreement remains valid only until the distributee or other recipient satisfies the repayment terms specified in Subsection (2)(b).

(b) (i) If the distributor's additional specified cash consideration was used for the construction of a building or improvement on the property that is the subject of the site-control agreement, the amount of the repayment under Subsection (2)(a):

(A) is based on any repayment terms specified in the site-control agreement, if the parties to the site-control agreement have willingly agreed to the terms;

and (B) may not exceed the market value of the portion of the building or improvement constructed with the additional specified cash consideration paid by the distributor, after allowing for depreciation based on a market-based depreciation schedule, as determined by an independent appraiser at the request of the distributee or other recipient.

(ii) If the distributor's additional specified cash consideration was not used for construction of a building or improvement on the property that is the subject of the site-control agreement, the amount - 33 - SB0157 compared with SB0157S02 of the repayment under Subsection (2)(a) is an equitable portion of the cash consideration, as determined under any terms specified in the site-control agreement for the equitable repayment following a distributee's voluntary termination of the agreement.

(c) Immediately upon the repayment under Subsection (2)(b):

(i) the site-control agreement is terminated;

and (ii) the distributor or other party that is the beneficiary under the site-control agreement shall prepare and deliver to the distributee a recordable notice of termination of:

(A) the site-control agreement;

and (B) any lien or encumbrance arising because of the site-control agreement and previously recorded against the property that is the subject of the site-control agreement.

Section 10.

Section 10 is enacted to read:

and (c) the distributor is willing and able to comply with Section {13-14c-307} 13-14c-304.

(3) - 34 - SB0157 compared with SB0157S02 (a) At any time before the effective date of termination or discontinuance of the distributorship agreement, the distributee may {apply to the executive director } request an adjudicative proceeding in accordance with Section 63G-4-201, for a hearing on the merits, and following notice to all parties concerned, the hearing shall be {promptly } heldwithinheld {as provided in Section 13-14c-304} within 30 days after the day on which the executive director receives the request for an adjudicative proceeding.

- 18 - SB0157S01 compared with SB0157S02 (4) A distributee may voluntarily terminate the distributee's distributorship agreement if the distributee provides written notice to the distributor at least {30 } 60 days before the termination.

and - 35 - SB0157 compared with SB0157S02 (iii) be delivered by registered or certified mail or by any form of reliable delivery through which receipt is verifiable.

(i) - 19 - SB0157S01 compared with SB0157S02 (A) any aggregate economic data and all existing reports, analyses, or opinions based on the aggregate economic data that were relied on by the distributor in reaching the decision to proceed with the action described in the notice;

(ii) written documentation that the distributor has in the distributor's possession that the distributor intends to rely on in establishing good cause;cause {under Section 13-14c-306 relating to the notice} ;

- 36 - SB0157 compared with SB0157S02 (iv) the documents are correspondence between the distributor and existing distributees in that line- make in the {relevant market } notice area;

(5) - 20 - SB0157S01 compared with SB0157S02 (a) Within 30 days of receiving notice required by Subsection (3), any distributee that is required to receive notice under Subsection (3) may {protest } request an adjudicative proceeding in accordance with Section 63G-4-201 to {the executive director } review the appropriateness of the establishment or relocation of the dealership.

(7) Subsections (1) through {(6) } (5) do not apply to a relocation of an existing or successor distributee to a location that is:

(a) within the same county and less than {two } five miles from the existing location of the existing or successor distributee's dealership;

(8) - 37 - SB0157 compared with SB0157S02 (a) Relocation of an existing distributee's dealership in excess of 15 miles from the dealership's existing location is considered the establishment of an additional distributee in the line-make of the relocating distributee.

(b) The reopening in a {relevant market } notice area of a dealership that has not been in operation {for one year or more } is considered the establishment of an additional motorboat {dealership} distributee.

{Effect of terminating a distributorship} Evidence to be considered in determining cause to terminate or discontinue.

- 21 - SB0157S01 compared with SB0157S02 (a) the amount of business transacted by the distributee, as compared to business available to the distributee;

(d) whether the termination or discontinuance {is injurious } would injure or {beneficial to } benefit the public welfare or public interest {for } by disrupting the distributee's businessbusiness; {of the distributee to be disrupted} ;

(g){If under Section 13-14c-301 } failure by the distributee to {substantially } comply with those requirements of the distributorship agreement that are determined by the executive director {permits a distributor } to {terminate or } be:

- 38 - SB0157 compared with SB0157S02 (h) evidence of bad faith by the distributee in complying with those terms of the distributorship agreement that are determined by the executive director to be:

(i){not continue a } transfer of any ownership or interest in the distributorship agreement {and prohibits } without first obtaining approval from the distributor {from entering into a } or the executive director;

{and}{distributorship agreement for the sale of new motorboats of a line-make in a relevant market area, the distributor may not enter into a distributorship agreement for the sale of a new } (j) fraud;

and -{motorboat 22of -that SB0157S01line-make comparedin withthe SB0157S02specified (j){(n)}relevant market area unless } any other factor the executive director considers relevant.

(2){determines that there has been a change of circumstances so that the relevant market area at the } {time of } Notwithstanding any distributorship agreement, the {establishment of the new } following do not constitute good cause, as used in this chapter for the termination or discontinuance of a distributorship agreement:agreement {can reasonably be expected to } :

{support the new distributee.} (a) the sole fact that the distributor desires greater market penetration or more sales or leases of new motorboats;

- 39 - SB0157 compared with SB0157S02 Section 13.

{Hearing regarding } Distributor's obligations upon terminationtermination{, relocation, } or {establishment } discontinuance of {distributorships} distributorship agreement or line-make.

(1){(1) } (a){(1)} {Within 10 days after the day on which the executive director receives an application from a distributee under Subsection 13-14c-301(3) challenging a distributor's right to terminate } Upon the termination or {not continue } discontinuance of a distributorship agreementagreement{, } or {an application under Section 13-14c-302 challenging the establishment or relocation of } a {distributorship agreement} line-make, the distributor{executive shalldirector pay} distributor shallpay the distributee:

(A)(i){(A)} {enter an order designating } are in the {time and place for } distributee's inventory from the {hearing} distributor's line-make;

and {(ii) {send a copy of the order by certified or registered mail, with return receipt requested, or by any form of reliable delivery through which receipt is verifiable to:} } {(A) {the applicant;} } (B) represent the current model year plus the {two } immediately preceding model {years } year which the distributor continues to sell immediately before the time of termination or discontinuance;

{and}(B){(iv)} (iv) subtracting all allowances paid or credited to the distributee by the distributor;anddistributor; (v) subtracting reasonable depreciation, use, wear and tear, and other diminution in value in the distributee's inventory caused by the distributee.

and (v) subtracting reasonable depreciation, use, wear and tear, and other diminution in value in the distributee's inventory caused by the distributee.

- 23 - SB0157S01 compared with SB0157S02 (c) the fair market value, but not less than the distributee's depreciated acquisition cost of each undamaged sign owned by the distributee that bears a common name, trade name, or trademark of the distributor;

- 40 - SB0157 compared with SB0157S02 (d) the fair market value, but not less than the distributee's depreciated acquisition cost, of all special tools, equipment, and furnishings acquired from the distributor or sources approved by the distributor that are in good and usable condition;

(2) The distributor shall pay directly to lines of credit, mortgagesmortgages, , or other lien holders, and then pay the remaining amounts {the disributor owes } owed to the distributee{,distributee the amounts } as specified in Subsection (1) within 60 days after the tender of the property to the distributor if the distributee{:}distributee has clear title to the property.

{(a)(3) {has(C){(a)} clear{if titlethe application involves the establishment } This section does not apply to a distributee's voluntary termination, termination of a {new } distributee's distributorship agreement for cause, or {the relocation } discontinuance of {an existing } a distributee's distributorship agreement{, each affected municipality and each distributee in } that occurs as a result of the property;{relevant market area engaged in } distributee's sale of the {business of offering to sell or lease } distributee's business entity to a third party if the distributor contemporaneously grants a distributorship agreement to the third party on terms and conditions that are comparable to those of the termination or discontinuance of the {same line-make} distributorship agreement.

and} } {(b) {is{A incopy aof positionan toorder conveymailed titleunder toSubsection the(1)(a) distributor.}shall }be (3)addressed (a)to Thisthe sectiondistributee doesat notthe applyplace towhere athe distributee's voluntarybusiness terminationis ,conducted.} termination} of{(2) a{An distributee'saffected distributorshipmunicipality agreementand forany cause,other orperson discontinuancewho ofcan aestablish distributee'san distributorshipinterest agreementin thatthe occursapplication may intervene as a resultparty ofto the distributee'shearing, salewhether ofor thenot distributee'sthat businessperson entityreceives tonotice.} a} third(3){(b)} party{Any ifperson, theincluding distributoran contemporaneouslyaffected grantsmunicipality, a} distributorshipSubsection agreement(3)(a) tomay the{appear thirdand partytestify on termsthe andquestion conditions} thatnot arebe comparableconstrued to thoseimpair a contractual right of {the public interest in the } a termination or {the } a discontinuance of {a } the distributorship agreement.agreement or {in the establishment of an additional distributorship } a related agreementwith a distributor or a distributor's affiliate, including a right to return unsold parts.

(b){(4) } {(a) } {(i) {Any hearing ordered under Subsection (3)(a)(1) mayshall notbe conducted no later than 90 days after the day on which the application for thehearing is filed.} } - 41 - SB0157 compared with SB0157S02 {(ii) {A final decision on the challenge shall be construedmade by the executive director no later than 20 days after the day on which the hearing ends.} } {(b) {Failure to impaircomply awith contractualthe righttime requirements of Subsection (4)(a) is considered a terminationdetermination orthat the distributor acted with good cause or, in the case of a discontinuanceprotest of thea distributorshipproposed agreementestablishment or relocation of a relateddistributee, agreementthat withgood acause distributorexists for permitting the proposed additional or arelocated distributor'snew affiliate,motorboat includingdistributee, aunless:} right} to{(i) return{the unsolddelay parts.is caused by acts of the distributor or the additional or relocating distributee;

Sectionor} 14.} {(ii) {the delay is waived by the parties.} } {(5) {The distributor has the burden of proof to establish by a preponderance of the evidence that under the provisions of this chapter the distributor should be granted permission to:} } {(a) {terminate or not continue the distributorship agreement;} } {(b) {enter into a distributorship agreement establishing an additional distributorship agreement;

or} } {(c) {relocate the dealership of an existing distributee.} } {(6) {Any party to the hearing may appeal the executive director's final decision in accordance with Title 63G, Chapter 4, Administrative Procedures Act, including the distributor, an existing distributee of the same line-make whose relevant market area includes the site of the proposed dealership, or an affected municipality.} } Section 14.

{Private{Evidence rightto ofbe action}considered } Change in {determining cause to terminate or discontinue} distribution plan.

{A(1) distributee{In hasdetermining awhether privateor rightnot of action for actual damages and reasonable attorney {fees against a distributor for a violation of this chapter that results in damage to the distributee, } {includingIf thethere costis or losses incurred following termination or discontinuance from selling or } {repurposing a dealership{distributor location,has unexpiredestablished leasegood obligations, and lost line-make profits and } blue sky value.} - 24 - SB0157S01 compared with SB0157S02 (1) If there is a change in the plan of distribution of a line-make that continues the line-make, a distributor may not directly or indirectly cause {for the } a termination,termination {or the discontinuance } , a cancellation, or a nonrenewal of a distributee's distributorship agreement.agreement{, the executive director shall consider:} .

(2){(a) {the amount of business transacted by the distributee, as compared to business available to the distributee;} } {(b) {the investment necessarily made and obligations incurred by the distributee in the performance of the distributee's part of the distributorship agreement;} } {(c) {the permanency of the investment;} } {(d) {whether or not the termination or discontinuance is injurious or beneficial to the public welfare or public interest for the business of the distributee to be disrupted;} } - 42 - SB0157 compared with SB0157S02 {(e) {whether or not the distributee has adequate motorboat sales and service facilities, equipment, motorboat parts, and qualified service personnel to reasonably provide for the needs of the consumer for the new motorboats handled by the distributee and has been and is rendering adequate services to the public;} } (f){(2)} {whether or } Subsection (1) does not {the distributee refuses to honor warranties of } apply if the distributor {under which } offers the {warranty service work } distributee a new distributorship agreement that is substantially similar to {be performed in accordance with } the distributee's distributorship agreementagreement{, if } at the {distributor reimburses } time the {distributee for } distributor changed the {warranty service work;} plan of distribution.

Section{(g) 15.{failure by the distributee to substantially comply with those requirements of the distributorship agreement that are determined by the executive director to be:} } {(i) {reasonable;} } {(ii) {material;

and} } {(iii) {not in violation of this chapter;} } {(h) {evidence of bad faith by the distributee in complying with those terms of the distributorship agreement that are determined by the executive director to be:} } {(i) {reasonable;} } {(ii) {material;

and} } {(iii) {not in violation of this chapter;} } {(i) {prior misrepresentation by the distributee in applying for the distributorship agreement;} } {(j) {transfer of any ownership or interest in the distributorship agreement without first obtaining approval from the distributor or the executive director;

and} } {(k) {any other factor the executive director considers relevant.} } {(2) {Notwithstanding any distributorship agreement, the following do not constitute good cause, as used in this chapter for the termination or the discontinuance of a distributorship agreement:} } {(a) {the sole fact that the distributor desires greater market penetration or more sales or leases of new motorboats;} } {(b) {the change of ownership of the distributee or the change of executive management of the distributee unless the distributor proves that the change of ownership or executive management will be substantially detrimental to the distribution of the distributor's motorboats;

or} } - 43 - SB0157 compared with SB0157S02 {(c) {the fact that the distributee has justifiably refused or declined to participate in any conduct covered by Section 13-14c-201.} } {(3) {For purposes of Subsection (2), "substantially detrimental" includes the failure of any proposed transferee to meet the objective criteria applied by the distributor in qualifying distributees at the time of application.} } Section 15.

{Change{Evidence to be considered in distributiondetermining plan}cause to relocate or establish } Recognition and rights of a {new distributorship agreement} sub-distributee.

{In determining whether or not a distributor has established good cause for relocating an } (1) As used in this section:

(1){(b)}(b) {If there is a change in the plan of distribution } The existence of {a line-make that continues the line-make} any direct communication, {a manufacturer or distributor may not directly } transaction, ordering process, warranty or {indirectly cause a termination} recall submission, {a - 25 - SB0157S01 compared with SB0157S02 cancellation} incentive submission, or similar administrative interaction between a {nonrenewaldistributor ofand }- distributor44 and- aSB0157 {distributee'scompared }with SB0157S02 a sub-distributee does not create a distributorship agreementbetweenagreement between the distributor and the sub-distributee.sub- distributee.

{(2) {Subsection (1) does not apply if the distributor offers the distributee a new distributorship agreement that is substantially similar to the distributee's distributorship agreement at the time the manufacturer or distributor changed the plan of distribution.} } (5) (a) After May 6, 2026, a distributee may not enter into, establish, or authorize a sub-distributee agreement other than an existing sub-distributee agreement as defined in Subsection (1)(a).

(a){existing distributee or establishing } is not a {new } distributee for {the same line-make in a given relevant } purposes of this chapter;

and (b){market isarea, notthe entitledexecutive director shall consider:} {(1) {the amount of business transacted by other distributees of the same line-make in that relevant market area, as compared to business available to the rights,distributees;} protections,} remedies,{(2) {the investment other distributees of the same line-make in the relevant market area make;} } {(3) {the permanency of the existing and proposed investment;} } {(4) {whether or proceduresnot providedan additional distributorship agreement is injurious or beneficial to athe public welfare or public interest, including:} } {(a) {the impact on any affected municipality;} } {(b) {population growth trends in any affected municipality;} } {(c) {the number of distributees in the primary market area of the new or relocated distributee undercompared thisto chapter.the number of distributees in each primary market area adjacent to the new or relocated distributee's primary market area;

and} } {(d) {how the new or relocated distributee would impact the distance and time that an individual in the new or relocated distributee's primary market area would have to travel to access a distributee in the same line-make as the new or relocated distributee;} } {(5) {whether or not the distributees of the same line-make in that relevant market area are providing adequate service to consumers for the motorboats of same the line-make, which shall include the adequacy of:} } - 45 - SB0157 compared with SB0157S02 {(a) {the motorboat sale and service facilities;} } {(b) {equipment;} } {(c) {supply of motorboat parts;

and} } {(d) {qualified service personnel;

and} } (6){(b)} {whether or } is not entitled to the {relocation } rights, protections, remedies, or {establishment would cause any material negative economic effect on } procedures provided to a distributee {of the same line-make in the relevant market area} under this chapter.

Section 16.18.

Section 1618 is enacted to read:

Distributor's obligations upon termination or discontinuance of distributorship agreement or line-make.

(1) Upon the termination or the discontinuance of a distributorship agreement or a line-make, the distributor shall pay the distributee:

(a) an amount calculated by:

(i) including the distributee's cost of unsold motorboats that:

(A) are in the distributee's inventory;

(B) were acquired:

(I) from the distributor;

or (II) in the ordinary course of business from another distributee of the same line-make;

(C) are new, undamaged, and, except for distributor accessories, unaltered;

or - 46 - SB0157 compared with SB0157S02 (D) represent the current model year at the time of termination or discontinuance, or the two model years immediately before the time of termination or discontinuance;

(ii) reducing the amount in Subsection (1)(a)(i) by a prorated 1% for each 20 engine hours over five engine hours registered on a new motorboat's engine;

(iii) adding any charges made by the distributor, for distribution, delivery, or taxes;

(iv) adding the distributee's cost of any distributor accessories added on the motorboat;

and (v) subtracting all allowances paid or credited to the distributee by the distributor;

(b) the distributee's cost of new and undamaged motorboats in the distributee's inventory of demonstrator motorboats, reduced by a prorated 1% for each 20 engine hours over five engine hours registered on a new motorboat's engine:

(i) plus any charges made by the distributor for distribution, delivery, or taxes;

(ii) plus the distributee's cost of any accessories added on the motorboats;

and (iii) less all allowances paid or credited to the distributee by the distributor;

(c) the cost of all new, undamaged, and unsold supplies, parts, and accessories as set forth in the distributor's catalog at the time of termination or discontinuance for the supplies, parts, and accessories, less all allowances paid or credited to the distributee by the distributor;

(d) the fair market value, but not less than the distributee's depreciated acquisition cost of each undamaged sign owned by the distributee that bears a common name, trade name, or trademark of the distributor if acquisition of the sign was recommended or required by the distributor;

(e) the fair market value, but not less than the distributee's depreciated acquisition cost, of all special tools, equipment, and furnishings acquired from the distributor or sources approved by the distributor that were required by the distributor and are in good and usable condition;

(f) the cost of transporting, handling, packing, and loading motorboats, supplies, parts, accessories, signs, special tools, equipment, and furnishings;

(g) subject to Subsection (5), reasonable compensation to the distributee for any cost incurred pertaining to the unexpired term of a lease agreement for the distributee's existing location;

(h) the negotiated fair market value of the distributee's premises, based on the fair market value of the real property, if the distributee opts to sell the distributee's premises;

and (i) compensation for the distributee's blue sky or goodwill, as determined in accordance with the applicable industry standards taking into consideration the effect that the timing of the - 47 - SB0157 compared with SB0157S02 manufacturer's announcement of discontinuance of a line-make has or will have on the distributee's future profitability.

(2) Subsections (1)(g), (h), and (i) do not apply if a distributorship agreement is terminated:

(a) by the distributor for cause as defined in Subsections 13-14c-301(1)(b) and 13-14c-301(2)(a);

(b) upon mutual written agreement of the distributor and distributee as provided in Subsection 13-14c-301(2)(b);

or (c) upon voluntary termination by the distributee as provided in Subsection 13-14c-301(4).

(3) The distributor shall pay the distributee the amounts specified in Subsection (1) within 90 days after the tender of the property to the distributor if the distributee:

(a) has clear title to the property;

and (b) is in a position to convey title to the distributor.

(4) If repurchased inventory, equipment, or demonstrator motorboats are subject to a security interest, the distributor may make payment jointly to the distributee and to the holder of the security interest.

(5) Subsection (1)(g) does not relieve the distributee or the distributee's lessor from an obligation under a lease agreement to mitigate damages.

(6) (a) This section does not apply to a distributee's voluntary termination or discontinuance of a distributee's distributorship agreement that occurs as a result of the distributee's sale of the distributee's business entity to a third party if the distributor contemporaneously grants a distributorship agreement to the third party on terms and conditions that are comparable to those of the termination or the discontinuance of the distributorship agreement.

(b) Subsection (6)(a) may not be construed to impair a contractual right of a termination or a discontinuance of the distributorship agreement or a related agreement with a distributor or a distributor's affiliate, including a right to return unsold parts.

Section 19.

Section 19 is enacted to read:

13-14c-308.

Private right of action.

A distributee has a private right of action for actual damages and reasonable attorney fees against a distributor for a violation of this chapter that results in damage to the distributee.

Section 20.

Section 20 is enacted to read:

13-14c-309.

Change in distribution plan.

- 48 - SB0157 compared with SB0157S02 (1) If there is a change in the plan of distribution of a line-make that continues the line-make, a manufacturer or distributor may not directly or indirectly cause a termination, a cancellation, or a nonrenewal of a distributee's distributorship agreement.

(2) Subsection (1) does not apply if the distributor offers the distributee a new distributorship agreement that is substantially similar to the distributee's distributorship agreement at the time the manufacturer or distributor changed the plan of distribution.

Section 21.

Section 21 is enacted to read:

13-14c-310.

- 26 - SB0157S01 compared with SB0157S02 (1) As used in this section:

(2) (a) An existing sub-distributee agreement may continue according to theits agreement's terms.

(b) The existence of any direct communication, transaction, ordering process, warranty or recall submission, incentive submission, or similar administrative interaction between a distributor and - 49 - SB0157 compared with SB0157S02 a sub-distributee does not create a distributorship agreement between the distributor and the sub- distributee.

- 27 - SB0157S01 compared with SB0157S02 (6) A sub-distributee may not independently file a complaint, request for agency action, protest, or application for hearing under this chapter, and may not be a party entitled to relief in an administrative proceeding under this chapter.

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