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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 |
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REPRESENTATIVES Calvert, Hollister, Redfern, Allen, Brinkman
A BILL
| To amend sections 1353.01 and 1353.02 and to enact | 1 |
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section 1353.06 of the
Revised Code to include | 2 |
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compact tractors as a type of farm machinery in | 3 |
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the
law governing the
relationship between dealers | 4 |
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and
suppliers of farm
machinery or construction | 5 |
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equipment; to prohibit
a supplier
of farm | 6 |
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machinery or construction
equipment, without
good | 7 |
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cause, from terminating,
failing to renew, or | 8 |
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substantially
altering the
competitive | 9 |
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circumstances of certain agreements
that
the | 10 |
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supplier has entered into with a dealer
of farm | 11 |
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machinery or construction
equipment; and
to | 12 |
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require a supplier to provide written notice to
a | 13 |
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dealer before
terminating or not renewing such
an | 14 |
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1353.01 and 1353.02 be amended and | 16 |
section 1353.06 of
the Revised Code be enacted to read as follows: | 17 |
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Sec. 1353.01. As used in this chapter: | 18 |
(A)
"Attachments" means equipment designed to be used on
or | 19 |
in conjunction with farm
implements and machinery
or
construction | 20 |
equipment. | 21 |
(B)
"Current net price" means the price listed in the | 22 |
supplier's price list or catalog in effect at the time the dealer | 23 |
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 a | 26 |
dealer
which
that authorizes the dealer to engage
in the retail | 27 |
sale and service of farm
implements and machinery
or
construction | 28 |
equipment, or the attachments, special
service tools,
or repair | 29 |
parts for such implements, machinery, or
equipment in
accordance | 30 |
with methods and
procedures prescribed by
the supplier
and | 31 |
includes any data processing hardware the
supplier requires
the | 32 |
dealer to purchase to satisfy the minimum
requirements of the | 33 |
dealer agreement. | 34 |
(D)
"Supplier" means a manufacturer, wholesaler, or | 35 |
distributor of farm
implements and machinery
or
construction | 36 |
equipment, or the attachments, special service tools, or
repair | 37 |
parts for such implements, machinery, or equipment to dealers | 38 |
under a dealer agreement
and who also may require the dealer to | 39 |
purchase data processing hardware to satisfy the minimum | 40 |
requirements of the dealer agreement. | 41 |
(E)
"Inventory" means farm
implements and machinery
or | 42 |
construction equipment, or the attachments, or special service | 43 |
tools, or repair parts for such implements, machinery, or | 44 |
equipment held by a dealer for sale or
lease and also means any | 45 |
data processing hardware that the supplier requires the dealer to | 46 |
purchase. | 47 |
(F)
"Net cost" means the original invoice price that the | 48 |
dealer paid for the merchandise to a supplier, less all
applicable | 49 |
discounts allowed, plus freight charges incurred by
the dealer | 50 |
from the supplier's location to the dealer's location. | 51 |
(G)
"Dealer" means a person engaged in the business of the | 52 |
retail sale of farm
implements and machinery
or
construction | 53 |
equipment, or the attachments, special service tools, or
repair | 54 |
parts for such implements, machinery, or equipment under a dealer | 55 |
agreement, which also may include a requirement to purchase data | 56 |
processing hardware. | 57 |
(H)
"Farm machinery" means farm
implements and machinery | 58 |
together with
the attachments, special service tools,
or repair | 59 |
parts for such
implements and machinery.
"Farm machinery" includes | 60 |
compact tractors, but
does not
include a motor vehicle as defined | 61 |
in section 4501.01 of the
Revised Code. | 62 |
(I)
"Compact tractors" means garden and small utility | 63 |
tractors and riding mowers.
"Compact tractors" are
not motor | 64 |
vehicles as defined in section 4501.01
of the Revised Code. | 65 |
(J) "Construction equipment" includes construction equipment | 66 |
and the attachments, special service tools, or repair parts for | 67 |
such equipment together with mobile, motorized utility maintenance | 68 |
and industrial equipment used in construction, maintenance, or | 69 |
materials handling. "Construction equipment" does not include a | 70 |
motor vehicle as defined in section 4501.01 of the Revised Code.
| 71 |
Sec. 1353.02. (A) If a dealer enters into a dealer | 72 |
agreement with a supplier that is evidenced by a written or | 73 |
implied contract, sales agreement, or security agreement in which | 74 |
the dealer agrees to maintain an inventory, and the dealer | 75 |
agreement is subsequently terminated by the supplier in violation | 76 |
of
section 1353.06 of the Revised Code or of the terms of the | 77 |
dealer agreement or
because of the merger or
consolidation of the | 78 |
supplier with or into another corporation,
the supplier shall | 79 |
repurchase the inventory of the dealer in
accordance with this | 80 |
chapter. The dealer may choose to keep the
inventory if the | 81 |
dealer has a contractual right to do so. | 82 |
(B) Except as provided in division (D) of this section,
the | 83 |
supplier shall repurchase inventory previously purchased from
him | 84 |
the supplier and held by the dealer at the time the dealer | 85 |
agreement was terminated. The supplier shall pay eighty-five per | 86 |
cent of the
current net price for all used special service tools | 87 |
in good
condition
and for all new, unused, and undamaged repair | 88 |
parts.
The supplier shall pay the average
"as-is" value shown in | 89 |
current
industry guides for each component of a rental fleet of | 90 |
farm machinery or construction equipment that is owned by the | 91 |
dealer or financed by
the supplier or its finance subsidiary, | 92 |
provided that the component was purchased from the supplier not | 93 |
more than thirty months prior to the date of termination of the | 94 |
dealer agreement.
The supplier shall pay the net cost for all | 95 |
other new, unused,
and
undamaged inventory, except that the | 96 |
supplier shall
repurchase at
its fair market value any data | 97 |
processing hardware
that
he
the
supplier required the dealer to | 98 |
purchase to satisfy
the minimum
requirements of the dealer | 99 |
agreement or shall assume any computer
hardware lease | 100 |
responsibilities of the dealer when
he
the
supplier
required the | 101 |
dealer to lease the hardware from a specific
supplier. The | 102 |
supplier may handle, pack, and load all new,
unused, and
undamaged | 103 |
repair parts and special service tools or
pay five per
cent of the | 104 |
current net price of the parts and tools
to cover the
cost of | 105 |
handling, packing, and loading. The dealer
shall pay the
freight | 106 |
charges for shipping repurchased inventory
to the
supplier's | 107 |
nearest warehouse or to another mutually
agreeable
site. The | 108 |
supplier may furnish a representative to
inspect all
parts and to | 109 |
certify their acceptability when packed
for
shipment. The | 110 |
supplier may set off against the repurchase
amount
debts owed by | 111 |
the dealer to the supplier at the time of
repurchase, except
he | 112 |
the supplier may not set off debts
disputed
by the dealer in good | 113 |
faith. | 114 |
(C) The supplier shall tender payment of the repurchase | 115 |
amount less any allowable set-off to the dealer within ninety
days | 116 |
after
receipt of
the supplier receives the inventory. If
the | 117 |
supplier fails to
pay the repurchase amount to the dealer within | 118 |
ninety days after
receipt of the inventory,
he
the supplier shall | 119 |
pay interest on
the current net price of the inventory computed at | 120 |
the interest rate
established pursuant to division (A) of section | 121 |
1343.03 of the
Revised Code from the ninety-first day after | 122 |
receipt of the
inventory. Upon payment of the repurchase amount | 123 |
to the dealer,
the title and right of possession to the | 124 |
repurchased inventory
shall transfer to the supplier. | 125 |
(D) Division (B) of this section does not require a
supplier | 126 |
to repurchase any of the following: | 127 |
(1) Any repair part that has a limited storage life or
shows | 128 |
evidence of deterioration; | 129 |
(2) Any single repair part priced as, or only sold as, a | 130 |
part of a set of two or more items; | 131 |
(3) Any repair part in such condition as not to be | 132 |
resaleable as a new part, and repair parts in damaged or broken | 133 |
packages; | 134 |
(4) Inventory for which the dealer cannot furnish
evidence, | 135 |
satisfactory to the supplier, of title free and clear
of all | 136 |
claims, liens, and encumbrances; | 137 |
(5) Inventory that the dealer chooses to keep and has a | 138 |
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 not | 142 |
currently available on a new basis; | 143 |
(8) Inventory purchased thirty or more months prior to | 144 |
notice of termination of the dealer agreement; | 145 |
(9) Inventory ordered by the dealer on or after notice of | 146 |
termination of the dealer agreement; | 147 |
(10) Inventory acquired by the dealer from a source other | 148 |
than the supplier. | 149 |
Sec. 1353.06. (A)(1) No supplier, without good cause, shall | 150 |
terminate, fail to renew, or substantially alter the competitive | 151 |
circumstances
of a dealer agreement that is
entered into by the | 152 |
supplier and a dealer on or after the
effective date of this | 153 |
section or that is a continuing contract
with no expiration date.
| 154 |
(2) Circumstances that constitute good cause for a supplier | 155 |
to
terminate, fail to renew, or substantially alter the | 156 |
competitive
circumstances of a dealer agreement include failure by | 157 |
the dealer
to comply with the requirements imposed on the dealer | 158 |
by a dealer
agreement if the requirements are not materially | 159 |
different from
those imposed on other dealers similarly situated | 160 |
in this state or
surrounding states. In addition, circumstances | 161 |
that constitute
good cause include those in which the dealer | 162 |
consistently does any
of the following: | 163 |
(a) Engages in business practices that are detrimental to | 164 |
the consumer or the supplier, including engaging in misleading | 165 |
advertising or failing to provide service and replacement parts or | 166 |
to perform warranty obligations; | 167 |
(b) Fails to provide adequate sales, service, or parts | 168 |
personnel
in accordance with the dealer agreement; | 169 |
(c) Fails to meet reasonable building and housekeeping | 170 |
requirements; | 171 |
(d) Fails to comply with applicable licensing laws with | 172 |
respect
to any of the products and services that the dealer | 173 |
represents as being sold
or provided by the dealer on behalf of | 174 |
the supplier; | 175 |
(e) Fails to meet the supplier's reasonable market | 176 |
penetration
requirements based on accurate records and after | 177 |
receiving notice from the
supplier of the supplier's requirements. | 178 |
(3) Circumstances that do not constitute
good cause for a | 179 |
supplier to terminate, fail to renew, or
substantially alter the | 180 |
competitive circumstances of a dealer
agreement include, without | 181 |
limitation, any of the following: | 182 |
(a) The dealer's refusal to purchase or accept delivery from | 183 |
the
supplier of any inventory or other commodity or service that | 184 |
the dealer
did not order under the terms of the dealer agreement | 185 |
except as required by
any applicable law or unless the inventory | 186 |
is comprised of safety parts or
accessories that are required by | 187 |
the supplier; | 188 |
(b) The sole fact that the supplier desires further | 189 |
penetration
of the market unless the dealer consistently has | 190 |
failed to meet the supplier's
reasonable market penetration | 191 |
requirements based on accurate records and
after receiving notice | 192 |
from the supplier of the supplier's requirements;
| 193 |
(c) Refusal by the dealer to participate at the dealer's | 194 |
expense
in any national advertising campaign or contest. | 195 |
(B) Prior to a supplier's termination of or failure to renew | 196 |
a
dealer agreement, the
supplier shall provide the dealer with not | 197 |
fewer than one hundred eighty days'
prior written notice of the | 198 |
intent to terminate or not renew it. The
notice shall explain the | 199 |
deficiencies on the part of the dealer
that have resulted in the | 200 |
supplier's intent to terminate
or not renew the dealer agreement. | 201 |
The dealer shall submit to the
supplier a plan for correcting the | 202 |
deficiencies. The supplier, when making
the final determination | 203 |
regarding termination of the agreement, shall consider
corrective | 204 |
actions taken by the dealer. | 205 |
Section 2. That existing sections 1353.01 and 1353.02 of the | 206 |
Revised Code are
hereby repealed. | 207 |
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