sb458_00

As Introduced

136th General Assembly

Regular Session S. B. No. 458

2025-2026

To enact section 1547.85 of the Revised Code regarding watercraft dealers and warranty service repair work.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 1547.85 of the Revised Code be enacted to read as follows:

Sec. 1547.85. (A) As used in this section:

(1) "Dealer agreement" means any agreement or other mechanism that allows a watercraft dealer to sell a manufacturer's product.

(2) "Manufacturer" means a person who manufactures or assembles watercraft.

(3) "Watercraft" has the same meaning as in section 1546.01 of the Revised Code and includes a trailer used to transport watercraft and a motor used to power watercraft.

(4) "Watercraft dealer" means a person that is a watercraft dealer under section 1546.01 of the Revised Code to which both of the following apply:

(a) The person has been issued a registration certificate under section 1547.543 of the Revised Code.

(b) The person has a written or verbal dealer agreement with a manufacturer that allows the watercraft dealer to buy and resell the manufacturer's product or any other means of authorizing a watercraft dealer to buy and sell the product.

(B) Each manufacturer with a dealer agreement shall fulfill warranty and recall obligations of diagnosing, repairing, and servicing watercraft, including all parts and components manufactured for installation in any watercraft.

(C) Each manufacturer with a dealer agreement shall compensate each of its watercraft dealers for labor and parts used to fulfill warranty and recall obligations of diagnostic, repair, and servicing at rates not less than the rates charged by the watercraft dealer to its retail customers for warranty-like diagnosis, labor, and parts for nonwarranty work. A watercraft dealer may establish rates of compensation for labor performed and parts used by the watercraft dealer for purposes of this section if all of the following apply:

(1) The watercraft dealer submits to the manufacturer either of the following:

(a) Ten nonwarranty service repair orders for warranty-like repairs that have been paid by a customer and closed by the time of submission;

(b) All service repair orders for warranty-like repairs that have been paid by a customer and closed by the time of submission, for a period of ninety consecutive days.

A watercraft dealer either may submit a set of repair orders for purposes of calculating both its retail labor rate and its retail parts markup percentage or may submit separate sets of repair orders for purposes of calculating its retail labor rate and its retail parts markup percentage separately. The repair orders submitted under division (C)(1)(a) or (b) of this section must be from a period occurring not more than one hundred eighty days before the submission.

(2) The watercraft dealer calculates its retail labor rate by determining the watercraft dealer's total labor sales from the service repair orders submitted under division (C)(1) of this section and dividing that amount by the total number of labor hours that generated those sales.

(3) The watercraft dealer calculates its retail parts markup percentage by determining the watercraft dealer's total parts sales from the service repair orders submitted under division (C)(1) of this section and dividing that amount by the watercraft dealer's total cost for the purchase of those parts, subtracting one from that amount, and then multiplying the amount by one hundred.

If a manufacturer with a dealer agreement determines from any set of repair orders submitted under this section that the retail labor rate or parts markup percentage calculated under division (C)(2) or (3) of this section is substantially higher or lower than the rate currently on record with the manufacturer with respect to the applicable dealer agreement for labor or parts, the manufacturer with a dealer agreement may request additional documentation for a period of either ninety days prior to or ninety days subsequent to the time period for which the repair orders were submitted for purposes of an alteration.

(4) The watercraft dealer provides notice of its retail labor rate and retail parts markup percentage calculated in accordance with this section to the manufacturer with which it has a dealer agreement.

(D) When calculating the compensation that must be provided to a watercraft dealer for labor and parts used to fulfill warranty and recall obligations under this section, all of the following apply:

(1) The manufacturer with a dealer agreement shall use time allowances for the diagnosis and performance of the warranty and recall work and service that are reasonable and adequate for the work or services to be performed by a qualified technician.

(2) The manufacturer with a dealer agreement shall include in the calculation all reasonable and necessary tasks that are incidental to warranty repairs, if submitted by the watercraft dealer on an itemized statement, including all of the following:

(a) Assisting a customer with unhooking or hooking the watercraft to a watercraft trailer or towing vehicle;

(b) Removing, installing, or uncovering a protective cover, or accessing an interior compartment to facilitate inspection or repair;

(c) Assisting a customer with retrieving the customer's watercraft from the dealership after the watercraft dealer completes the repair;

(d) Handling administrative or documentation tasks, including paperwork.

(3) A manufacturer with a dealer agreement shall include in the calculation the reasonable costs the watercraft dealer incurs in conducting an on-water performance evaluation to verify the effectiveness of a repair or to properly perform a diagnosis, including compensation for all of the following:

(a) Labor at a rate calculated in accordance with this section;

(b) Fuel or oil required for the test;

(4) The manufacturer with a dealer agreement shall use any retail labor rate and any retail parts markup percentage established in accordance with this section in calculating the compensation.

(5) If the manufacturer with a dealer agreement provided a part or component to the watercraft dealer at no cost to use in performing repairs under a recall, campaign service action, or warranty repair, the manufacturer shall provide to the watercraft dealer an amount equal to the retail parts markup for that part or component, which shall be calculated by multiplying the watercraft dealer cost for the part or component as listed in the manufacturer's price schedule by the retail parts markup percentage established in division (C)(3) of this section.

(6) A manufacturer with a dealer agreement shall not assess penalties, surcharges, or similar costs to a watercraft dealer, transfer or shift any costs to a watercraft dealer, limit allocation of watercraft or parts to a watercraft dealer, or otherwise take retaliatory action against a watercraft dealer based on any watercraft dealer's exercise of its rights under this section. It is the burden of the watercraft dealer to prove any claims under division (D)(6) of this section by a preponderance of the evidence. Nothing in this section prohibits a manufacturer with a dealer agreement from increasing the price of a vehicle or part in the normal course of business.

(E) A manufacturer with a dealer agreement shall not require a watercraft dealer to establish a retail labor rate or retail parts markup percentage using any method that is unduly burdensome or time consuming, or require the use of information that is unduly burdensome or time consuming to obtain, including part-by-part or transaction-by-transaction calculations or utilization of the watercraft dealer's financial statement. Further, no manufacturer with a dealer agreement shall unilaterally calculate a retail labor rate or retail parts markup percentage for a watercraft dealer.