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Am. Sub. H. B. No. 200As Reported by the Senate Agriculture Committee
As Reported by the Senate Agriculture Committee
124th General Assembly | Regular Session | 2001-2002 |
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REPRESENTATIVES Calvert, Hollister, Redfern, Allen, Brinkman, Rhine, Lendrum, Flowers, Kearns, Webster, Evans, Peterson, Schaffer, Willamowski, Hagan, Fessler, Latta, Hughes, Goodman, Coates, Setzer, Collier, Schmidt, Manning, Hartnett, Faber, Aslanides, Barrett, Cirelli, Latell, DeWine, Roman, Carmichael, Widowfield
SENATOR Mumper
A BILL
To amend sections 1353.01 and 1353.02 and to enact
section 1353.06 of the
Revised Code to include
compact tractors as a type of farm machinery in
the
law governing the
relationship between dealers
and
suppliers of farm
machinery or construction
equipment; to prohibit
a supplier
of farm
machinery
or construction
equipment, without
good
cause, from
terminating,
failing to renew, or
substantially
altering the
competitive
circumstances of certain
agreements
that
the
supplier has entered into with
a dealer
of farm
machinery or construction
equipment; and
to
require a supplier to provide
written notice to
a
dealer before
terminating or
not renewing such
an
agreement.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1353.01 and 1353.02 be amended and
section 1353.06 of
the Revised Code be enacted to read as follows:
Sec. 1353.01. As used in this chapter: (A)
"Attachments" means equipment designed to be used on
or
in conjunction with farm
implements and machinery
or
construction
equipment. (B)
"Current net price" means the price listed in the
supplier's price list or catalog in effect at the time the dealer
agreement is terminated, less all applicable discounts. (C)
"Dealer agreement" means a written or implied
contract,
sales agreement, or security agreement between a
supplier and a
dealer
which
that authorizes the dealer to engage
in the retail
sale and service of farm
implements and machinery
or
construction
equipment, or the attachments, special
service tools,
or repair
parts for such implements, machinery, or
equipment in
accordance
with methods and
procedures prescribed by
the supplier
and
includes any data processing hardware the
supplier requires
the
dealer to purchase to satisfy the minimum
requirements of the
dealer agreement. (D)
"Supplier" means a manufacturer, wholesaler, or
distributor of farm
implements and machinery
or
construction
equipment, or the attachments, special service tools, or
repair
parts for such implements, machinery, or equipment to dealers
under a dealer agreement
and who also may require the dealer to
purchase data processing hardware to satisfy the minimum
requirements of the dealer agreement. (E)
"Inventory" means farm
implements and machinery
or
construction equipment, or the attachments, or special service
tools, or repair parts for such implements, machinery, or
equipment held by a dealer for sale or
lease and also means any
data processing hardware that the supplier requires the dealer to
purchase. (F)
"Net cost" means the original invoice price that the
dealer paid for the merchandise to a supplier, less all
applicable
discounts allowed, plus freight charges incurred by
the dealer
from the supplier's location to the dealer's location. (G)
"Dealer" means a person engaged in the business of the
retail sale of farm
implements and machinery
or
construction
equipment, or the attachments, special service tools, or
repair
parts for such implements, machinery, or equipment under a dealer
agreement, which also may include a requirement to purchase data
processing hardware. (H)
"Farm machinery" means farm
implements and machinery
together with
the attachments, special service tools,
or repair
parts for such
implements and machinery.
"Farm machinery" includes
compact tractors, but
does not
include a motor vehicle as defined
in section 4501.01 of the
Revised Code. (I)
"Compact tractors" means garden and small utility
tractors and riding mowers.
"Compact tractors" are
not motor
vehicles as defined in section 4501.01
of the Revised Code. (J) "Construction equipment" means construction equipment
and the attachments, special service tools, or repair parts for
such equipment together with mobile, motorized utility maintenance
equipment used in construction or road maintenance.
"Construction equipment" does not include a
motor vehicle as
defined in section 4501.01 of the Revised Code.
Sec. 1353.02. (A) If a dealer enters into a dealer
agreement with a supplier that is evidenced by a written or
implied contract, sales agreement, or security agreement in which
the dealer agrees to maintain an inventory, and the dealer
agreement is subsequently terminated by the supplier in violation
of
section 1353.06 of the Revised Code or of the terms of the
dealer agreement or
because of the merger or
consolidation of the
supplier with or into another corporation,
the supplier shall
repurchase the inventory of the dealer in
accordance with this
chapter. The dealer may choose to keep the
inventory if the
dealer has a contractual right to do so. (B) Except as provided in division (D) of this section,
the
supplier shall repurchase inventory previously purchased from
him
the supplier and held by the dealer at the time the dealer
agreement was terminated. The supplier shall pay eighty-five per
cent of the
current net price for all used special service tools
in good
condition
and for all new, unused, and undamaged repair
parts.
The supplier shall pay the average
"as-is" value shown in
current
industry guides for each component of a rental fleet of
farm machinery or construction equipment that is owned by the
dealer or financed by
the supplier or its finance subsidiary,
provided that the component was purchased from the supplier not
more than thirty months prior to the date of termination of the
dealer agreement.
The supplier shall pay the net cost for all
other new, unused,
and
undamaged inventory, except that the
supplier shall
repurchase at
its fair market value any data
processing hardware
that
he
the
supplier required the dealer to
purchase to satisfy
the minimum
requirements of the dealer
agreement or shall assume any computer
hardware lease
responsibilities of the dealer when
he
the
supplier
required the
dealer to lease the hardware from a specific
supplier. The
supplier may handle, pack, and load all new,
unused, and
undamaged
repair parts and special service tools or
pay five per
cent of the
current net price of the parts and tools
to cover the
cost of
handling, packing, and loading. The dealer
shall pay the
freight
charges for shipping repurchased inventory
to the
supplier's
nearest warehouse or to another mutually
agreeable
site. The
supplier may furnish a representative to
inspect all
parts and to
certify their acceptability when packed
for
shipment. The
supplier may set off against the repurchase
amount
debts owed by
the dealer to the supplier at the time of
repurchase, except
he
the supplier may not set off debts
disputed
by the dealer in good
faith. (C) The supplier shall tender payment of the repurchase
amount less any allowable set-off to the dealer within ninety
days
after
receipt of
the supplier receives the inventory. If
the
supplier fails to
pay the repurchase amount to the dealer within
ninety days after
receipt of the inventory,
he
the supplier shall
pay interest on
the current net price of the inventory computed at
the interest rate
established pursuant to division (A) of section
1343.03 of the
Revised Code from the ninety-first day after
receipt of the
inventory. Upon payment of the repurchase amount
to the dealer,
the title and right of possession to the
repurchased inventory
shall transfer to the supplier. (D) Division (B) of this section does not require a
supplier
to repurchase any of the following: (1) Any repair part that has a limited storage life or
shows
evidence of deterioration; (2) Any single repair part priced as, or only sold as, a
part of a set of two or more items; (3) Any repair part in such condition as not to be
resaleable as a new part, and repair parts in damaged or broken
packages; (4) Inventory for which the dealer cannot furnish
evidence,
satisfactory to the supplier, of title free and clear
of all
claims, liens, and encumbrances; (5) Inventory that the dealer chooses to keep and has a
contractual right to keep; (6) Inventory that is not in new, unused, undamaged,
complete, and saleable condition; (7) Special service tools not in good condition or not
currently available on a new basis; (8) Inventory purchased thirty or more months prior to
notice of termination of the dealer agreement; (9) Inventory ordered by the dealer on or after notice of
termination of the dealer agreement; (10) Inventory acquired by the dealer from a source other
than the supplier.
Sec. 1353.06. (A)(1) No supplier, without good cause, shall
terminate, fail to renew, or substantially alter the competitive
circumstances
of a dealer agreement that is
entered into by the
supplier and a dealer on or after the
effective date of this
section or that is a continuing contract
with no expiration date.
(2) Circumstances that constitute good cause for a supplier
to
terminate, fail to renew, or substantially alter the
competitive
circumstances of a dealer agreement include failure by
the dealer
to comply with the requirements imposed on the dealer
by a dealer
agreement if the requirements are not materially
different from
those imposed on other dealers similarly situated
in this state or
surrounding states. In addition, circumstances
that constitute
good cause include those in which the dealer
consistently does any
of the following: (a) Engages in business practices that are detrimental to
the consumer or the supplier, including engaging in misleading
advertising or failing to provide service and replacement parts or
to perform warranty obligations; (b) Fails to provide adequate sales, service, or parts
personnel
in accordance with the dealer agreement; (c) Fails to meet reasonable building and housekeeping
requirements; (d) Fails to comply with applicable licensing laws with
respect
to any of the products and services that the dealer
represents as being sold
or provided by the dealer on behalf of
the supplier; (e) Fails to meet the supplier's reasonable market
penetration
requirements based on accurate records and after
receiving notice from the
supplier of the supplier's requirements. (3) Circumstances that do not constitute
good cause for a
supplier to terminate, fail to renew, or
substantially alter the
competitive circumstances of a dealer
agreement include, without
limitation, any of the following: (a) The dealer's refusal to purchase or accept delivery from
the
supplier of any inventory or other commodity or service that
the dealer
did not order under the terms of the dealer agreement
except as required by
any applicable law or unless the inventory
is comprised of safety parts or
accessories that are required by
the supplier; (b) The sole fact that the supplier desires further
penetration
of the market unless the dealer consistently has
failed to meet the supplier's
reasonable market penetration
requirements based on accurate records and
after receiving notice
from the supplier of the supplier's requirements;
(c) Refusal by the dealer to participate at the dealer's
expense
in any national advertising campaign or contest. (B) Prior to a supplier's termination of or failure to renew
a
dealer agreement, the
supplier shall provide the dealer with not
fewer than one hundred eighty days'
prior written notice of the
intent to terminate or not renew it. The
notice shall explain the
deficiencies on the part of the dealer
that have resulted in the
supplier's intent to terminate
or not renew the dealer agreement.
The dealer shall submit to the
supplier a plan for correcting the
deficiencies. The supplier, when making
the final determination
regarding termination of the agreement, shall consider
corrective
actions taken by the dealer.
Section 2. That existing sections 1353.01 and 1353.02 of the
Revised Code are
hereby repealed.
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