130th Ohio General Assembly
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Sub. H. B. No. 200  As Reported by the House Agriculture and Natural Resources Committee
As Reported by the House Agriculture and Natural Resources Committee

124th General Assembly
Regular Session
2001-2002
Sub. H. B. No. 200


REPRESENTATIVES Calvert, Hollister, Redfern, Allen, Brinkman



A BILL
To amend sections 1353.01 and 1353.02 and to enact1
section 1353.06 of the Revised Code to include2
compact tractors as a type of farm machinery in3
the law governing the relationship between dealers4
and suppliers of farm machinery or construction5
equipment; to prohibit a supplier of farm6
machinery or construction equipment, without good7
cause, from terminating, failing to renew, or8
substantially altering the competitive9
circumstances of certain agreements that the10
supplier has entered into with a dealer of farm11
machinery or construction equipment; and to12
require a supplier to provide written notice to a13
dealer before terminating or not renewing such an14
agreement.15


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

       Section 1.  That sections 1353.01 and 1353.02 be amended and16
section 1353.06 of the Revised Code be enacted to read as follows:17

       Sec. 1353.01.  As used in this chapter:18

       (A) "Attachments" means equipment designed to be used on or19
in conjunction with farm implements and machinery or construction20
equipment.21

       (B) "Current net price" means the price listed in the22
supplier's price list or catalog in effect at the time the dealer23
agreement is terminated, less all applicable discounts.24

       (C) "Dealer agreement" means a written or implied contract,25
sales agreement, or security agreement between a supplier and a26
dealer which that authorizes the dealer to engage in the retail27
sale and service of farm implements and machinery or construction28
equipment, or the attachments, special service tools, or repair29
parts for such implements, machinery, or equipment in accordance30
with methods and procedures prescribed by the supplier and31
includes any data processing hardware the supplier requires the32
dealer to purchase to satisfy the minimum requirements of the33
dealer agreement.34

       (D) "Supplier" means a manufacturer, wholesaler, or35
distributor of farm implements and machinery or construction36
equipment, or the attachments, special service tools, or repair37
parts for such implements, machinery, or equipment to dealers38
under a dealer agreement and who also may require the dealer to39
purchase data processing hardware to satisfy the minimum40
requirements of the dealer agreement.41

       (E) "Inventory" means farm implements and machinery or42
construction equipment, or the attachments, or special service43
tools, or repair parts for such implements, machinery, or44
equipment held by a dealer for sale or lease and also means any45
data processing hardware that the supplier requires the dealer to46
purchase.47

       (F) "Net cost" means the original invoice price that the48
dealer paid for the merchandise to a supplier, less all applicable49
discounts allowed, plus freight charges incurred by the dealer50
from the supplier's location to the dealer's location.51

       (G) "Dealer" means a person engaged in the business of the52
retail sale of farm implements and machinery or construction53
equipment, or the attachments, special service tools, or repair54
parts for such implements, machinery, or equipment under a dealer55
agreement, which also may include a requirement to purchase data56
processing hardware.57

       (H) "Farm machinery" means farm implements and machinery58
together with the attachments, special service tools, or repair59
parts for such implements and machinery. "Farm machinery" includes60
compact tractors, but does not include a motor vehicle as defined61
in section 4501.01 of the Revised Code.62

       (I) "Compact tractors" means garden and small utility63
tractors and riding mowers. "Compact tractors" are not motor64
vehicles as defined in section 4501.01 of the Revised Code.65

       (J) "Construction equipment" includes construction equipment66
and the attachments, special service tools, or repair parts for67
such equipment together with mobile, motorized utility maintenance68
and industrial equipment used in construction, maintenance, or69
materials handling. "Construction equipment" does not include a70
motor vehicle as defined in section 4501.01 of the Revised Code. 71

       Sec. 1353.02.  (A) If a dealer enters into a dealer72
agreement with a supplier that is evidenced by a written or73
implied contract, sales agreement, or security agreement in which74
the dealer agrees to maintain an inventory, and the dealer75
agreement is subsequently terminated by the supplier in violation76
of section 1353.06 of the Revised Code or of the terms of the77
dealer agreement or because of the merger or consolidation of the78
supplier with or into another corporation, the supplier shall79
repurchase the inventory of the dealer in accordance with this80
chapter. The dealer may choose to keep the inventory if the81
dealer has a contractual right to do so.82

       (B) Except as provided in division (D) of this section, the83
supplier shall repurchase inventory previously purchased from him84
the supplier and held by the dealer at the time the dealer85
agreement was terminated. The supplier shall pay eighty-five per86
cent of the current net price for all used special service tools87
in good condition and for all new, unused, and undamaged repair88
parts. The supplier shall pay the average "as-is" value shown in89
current industry guides for each component of a rental fleet of90
farm machinery or construction equipment that is owned by the91
dealer or financed by the supplier or its finance subsidiary,92
provided that the component was purchased from the supplier not93
more than thirty months prior to the date of termination of the94
dealer agreement. The supplier shall pay the net cost for all95
other new, unused, and undamaged inventory, except that the96
supplier shall repurchase at its fair market value any data97
processing hardware that he the supplier required the dealer to98
purchase to satisfy the minimum requirements of the dealer99
agreement or shall assume any computer hardware lease100
responsibilities of the dealer when he the supplier required the101
dealer to lease the hardware from a specific supplier. The102
supplier may handle, pack, and load all new, unused, and undamaged103
repair parts and special service tools or pay five per cent of the104
current net price of the parts and tools to cover the cost of105
handling, packing, and loading. The dealer shall pay the freight106
charges for shipping repurchased inventory to the supplier's107
nearest warehouse or to another mutually agreeable site. The108
supplier may furnish a representative to inspect all parts and to109
certify their acceptability when packed for shipment. The110
supplier may set off against the repurchase amount debts owed by111
the dealer to the supplier at the time of repurchase, except he112
the supplier may not set off debts disputed by the dealer in good113
faith.114

       (C) The supplier shall tender payment of the repurchase115
amount less any allowable set-off to the dealer within ninety days116
after receipt of the supplier receives the inventory. If the117
supplier fails to pay the repurchase amount to the dealer within118
ninety days after receipt of the inventory, he the supplier shall119
pay interest on the current net price of the inventory computed at120
the interest rate established pursuant to division (A) of section121
1343.03 of the Revised Code from the ninety-first day after122
receipt of the inventory. Upon payment of the repurchase amount123
to the dealer, the title and right of possession to the124
repurchased inventory shall transfer to the supplier.125

       (D) Division (B) of this section does not require a supplier126
to repurchase any of the following:127

       (1) Any repair part that has a limited storage life or shows128
evidence of deterioration;129

       (2) Any single repair part priced as, or only sold as, a130
part of a set of two or more items;131

       (3) Any repair part in such condition as not to be132
resaleable as a new part, and repair parts in damaged or broken133
packages;134

       (4) Inventory for which the dealer cannot furnish evidence,135
satisfactory to the supplier, of title free and clear of all136
claims, liens, and encumbrances;137

       (5) Inventory that the dealer chooses to keep and has a138
contractual right to keep;139

       (6) Inventory that is not in new, unused, undamaged,140
complete, and saleable condition;141

       (7) Special service tools not in good condition or not142
currently available on a new basis;143

       (8) Inventory purchased thirty or more months prior to144
notice of termination of the dealer agreement;145

       (9) Inventory ordered by the dealer on or after notice of146
termination of the dealer agreement;147

       (10) Inventory acquired by the dealer from a source other148
than the supplier.149

       Sec. 1353.06.  (A)(1) No supplier, without good cause, shall150
terminate, fail to renew, or substantially alter the competitive151
circumstances of a dealer agreement that is entered into by the152
supplier and a dealer on or after the effective date of this153
section or that is a continuing contract with no expiration date. 154

       (2) Circumstances that constitute good cause for a supplier155
to terminate, fail to renew, or substantially alter the156
competitive circumstances of a dealer agreement include failure by157
the dealer to comply with the requirements imposed on the dealer158
by a dealer agreement if the requirements are not materially159
different from those imposed on other dealers similarly situated160
in this state or surrounding states. In addition, circumstances161
that constitute good cause include those in which the dealer162
consistently does any of the following:163

       (a) Engages in business practices that are detrimental to164
the consumer or the supplier, including engaging in misleading165
advertising or failing to provide service and replacement parts or166
to perform warranty obligations;167

       (b) Fails to provide adequate sales, service, or parts168
personnel in accordance with the dealer agreement;169

       (c) Fails to meet reasonable building and housekeeping170
requirements;171

       (d) Fails to comply with applicable licensing laws with172
respect to any of the products and services that the dealer173
represents as being sold or provided by the dealer on behalf of174
the supplier;175

       (e) Fails to meet the supplier's reasonable market176
penetration requirements based on accurate records and after177
receiving notice from the supplier of the supplier's requirements.178

       (3) Circumstances that do not constitute good cause for a179
supplier to terminate, fail to renew, or substantially alter the180
competitive circumstances of a dealer agreement include, without181
limitation, any of the following:182

       (a) The dealer's refusal to purchase or accept delivery from183
the supplier of any inventory or other commodity or service that184
the dealer did not order under the terms of the dealer agreement185
except as required by any applicable law or unless the inventory186
is comprised of safety parts or accessories that are required by187
the supplier;188

       (b) The sole fact that the supplier desires further189
penetration of the market unless the dealer consistently has190
failed to meet the supplier's reasonable market penetration191
requirements based on accurate records and after receiving notice192
from the supplier of the supplier's requirements; 193

       (c) Refusal by the dealer to participate at the dealer's194
expense in any national advertising campaign or contest.195

       (B) Prior to a supplier's termination of or failure to renew196
a dealer agreement, the supplier shall provide the dealer with not197
fewer than one hundred eighty days' prior written notice of the198
intent to terminate or not renew it. The notice shall explain the199
deficiencies on the part of the dealer that have resulted in the200
supplier's intent to terminate or not renew the dealer agreement.201
The dealer shall submit to the supplier a plan for correcting the202
deficiencies. The supplier, when making the final determination203
regarding termination of the agreement, shall consider corrective204
actions taken by the dealer.205

       Section 2.  That existing sections 1353.01 and 1353.02 of the206
Revised Code are hereby repealed.207

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