HP0164, LD 187, item 1, An Act To Amend the Laws Regulating Dealers of Agricultural, Light Industrial and Forestry Equipment

An Act To Amend the Laws Regulating Dealers of Agricultural, Light Industrial and Forestry Equipment

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 10 MRSA §1285, sub-§2, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

2. Dealer. "Dealer" means a person, corporation or partnership primarily engaged in the business of retail sales of farm and utility tractors, forestry equipment, light industrial equipment, farm implements, farm machinery, yard and garden equipment, attachments, accessories and repair parts. "Dealer" does not include a person, corporation or partnership primarily engaged in the business of retail sales of heavy construction, industrial and utility equipment, attachments, accessories and repair parts. "Dealer" does not include a person, corporation or partnership primarily engaged in the retail sale of all-terrain vehicles or motorcycles. "Dealer" does not include a single-line dealer as defined in subsection 5-A.

Sec. 2. 10 MRSA §1285, sub-§4, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

4. Inventory. "Inventory" means farm, forestry, utility or light industrial equipment, implements, machinery, yard and garden equipment, attachments or repair parts. These terms do not include heavy construction equipment.

Sec. 3. 10 MRSA §1285, sub-§5-A is enacted to read:

5-A. Single-line dealer. "Single-line dealer" means a person, corporation or partnership engaged in retail sales that:

A. Has purchased 75% or more of total new product inventory from a single supplier; and

B. Has a total annual average sales volume for the previous 3 years in excess of $20,000,000 for the entire territory subject to the agreement with the supplier.

Sec. 4. 10 MRSA §1287, sub-§1, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

1. Notice of termination. Notwithstanding any agreement to the contrary, prior to the termination of a dealer agreement, a supplier shall notify the dealer of the termination not less than 90 120 days prior to the effective date of the termination. The supplier may immediately terminate the agreement at any time upon the occurrence of any of the following events:

A. The filing of a petition for bankruptcy or for receivership either by or against the dealer;

B. The making by the dealer of an intentional and material misrepresentation as to the dealer's financial status;

C. Any default by the dealer under a chattel mortgage or other security agreement between the dealer and the supplier;

D. Discontinuance by the dealer of more than 50% of the dealer's business related to the handling of goods provided by the supplier;

E. The commencement of voluntary or involuntary dissolution or liquidation of the dealer if the dealer is a partnership or corporation;

F. A change in location of the dealer's principal place of business as provided in the agreement without the prior written approval of the supplier;

G. Withdrawal of an individual proprietor, partner , or major shareholder or the involuntary termination of the manager of the dealership or a substantial reduction in the interest of a partner or major shareholder without the prior written consent of the supplier; or

H. Breach by the dealer of a written obligation contained in the agreement.

Sec. 5. 10 MRSA §1287, sub-§2, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

2. Time of notice. Unless there is an agreement to the contrary, a dealer who intends to terminate a dealer agreement with a supplier shall notify the supplier of that intent not less than 90 120 days prior to the effective date of the termination.

Sec. 6. 10 MRSA §1288, sub-§1, ¶A, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is repealed.

Sec. 7. 10 MRSA §1289, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

§ 1289. Repurchase terms

1. Examination of records. Within 90 days from receipt of the written request of the dealer, a supplier under the duty to repurchase inventory pursuant to section 1288 may examine any books or records of the dealer to verify the eligibility of any item for repurchase. Except as otherwise provided in this chapter, the supplier shall repurchase from the dealer all inventory , required signs, specialized repair tools, books, supplies, data processing equipment and software previously purchased from the supplier and in the possession of the dealer on the date of termination of the dealer agreement.

2. Payment terms. The supplier shall pay the dealer:

A. One hundred percent of the net cost of all new and undamaged and complete farm, utility , forestry and light industrial equipment, implements, machinery, yard and garden equipment and attachments purchased within the past 36 months from the supplier, less a reasonable allowance for deterioration attributable to weather conditions at the dealer's location;

B. Ninety percent of the current net prices of all new and undamaged repair parts; and

C. Eighty-five percent of the current net prices of all new and undamaged superseded repair parts . ;

D. Eighty-five percent of the latest available published net price of all new and undamaged noncurrent repair parts;

E. The fair market value of, or assume the lease responsibilities for, any specific data processing equipment and software that the supplier required the dealer to purchase to satisfy the reasonable requirements of the dealer agreement, including computer systems equipment required or approved by the supplier to communicate with the supplier;

F. Seventy-five percent of the net cost of specialized repair tools, signs, books and supplies previously purchased, pursuant to requirements of the supplier and held by the dealer on the date of termination. Only specialized repair tools that are unique to the supplier product line, complete and in usable condition are required to be repurchased under this paragraph; and

G. Average as-is value shown in current industry guides for a dealer-owned rental fleet financed by the supplier or its finance subsidiary.

3. Return costs. The party that initiates the termination of the dealer agreement shall pay the cost of the return, handling, packing and loading of the inventory.

4. Payment date. Payment to the dealer required under this section must be made by the supplier not later than 60 45 days after receipt of the inventory by the supplier. The supplier shall pay to the dealer a penalty of 2% per day on any outstanding balance over the 45 days. The supplier is entitled to apply any payment required under this section to be made to the dealer , as a setoff against any amount owed by the dealer to the supplier.

Sec. 8. 10 MRSA §1290, sub-§1, ¶D, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is repealed.

Sec. 9. 10 MRSA §1290, sub-§1, ¶F, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

F. Any inventory ordered by the dealer after receipt of notice of termination of the dealer agreement by either the dealer or supplier; or

Sec. 10. 10 MRSA §1290, sub-§1, ¶G, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

G. Any inventory that was acquired by the dealer from a source other than the supplier ; or .

Sec. 11. 10 MRSA §1290, sub-§1, ¶H, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is repealed.

Sec. 12. 10 MRSA §1291, sub-§1, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

1. Transfer. A supplier may not unreasonably withhold or delay consent to any transfer of the dealer's business or transfer of the stock or other interest in the dealership, whenever the dealer to be substituted meets the material and reasonable qualifications and standards required of its dealers. If a supplier determines that a proposed transferee does not meet its qualifications and standards, it shall give the dealer written notice thereof, stating the specific reasons for withholding consent. A prospective transferee may not be disqualified from being a dealer because it is a publicly held corporation. A supplier has 45 90 days to consider a dealer's request to make a transfer under this subsection.

Sec. 13. 10 MRSA §1291, sub-§2, as enacted by PL 1995, c. 462, Pt. A, §22 and affected by §23, is amended to read:

2. Transfer to family member or principal owner. Notwithstanding subsection 1, no a supplier may not withhold consent to, or in any manner retain a right of prior approval of, the transfer of the dealer's business to a member or members of the family of the dealer or the principal owner of the dealer dealership. As used in this subsection, "family" means and includes the spouse, parent, siblings, children, stepchildren and lineal descendants, including those by adoption , of the dealer or principal owner of the dealer dealership.

Sec. 14. 10 MRSA §1293, sub-§1, ¶B, as enacted by PL 2005, c. 317, §1, is amended to read:

B. A dealer that performs warranty work as provided for in this section must be compensated for parts used in fulfilling such warranty work in an amount that is not less than the dealer's costs for such parts plus 15% supplier's suggested retail price for such parts, including all freight and handling charges applicable to such parts, to reimburse the dealer's reasonable costs of doing business and providing such warranty service on behalf of the supplier. If the warranty work is provided on behalf of the supplier on a product sold by a nonservicing dealer, the compensation for parts used in fulfilling such warranty work must be at an amount that is not less than the supplier's suggested list price or dealer's cost plus 30%, whichever is greater, plus freight and handling charges applicable to such parts. [PL 2005, c. 317, § 1 (NEW).]

Sec. 15. Maine Revised Statutes headnote amended; revision clause. In the Maine Revised Statutes, Title 10, chapter 208-B, in the chapter headnote, the words "farm machinery dealerships" are amended to read "farm machinery, forestry equipment and light industrial equipment dealerships" and the Revisor of Statutes shall implement this revision when updating, publishing or republishing the statutes.

summary

This bill expands the definition of “dealer” in the Maine Revised Statutes, Title 10, chapter 208-B to include persons engaged in retail sales of forestry equipment and light industrial equipment. Chapter 208-B contains provisions pertaining to agreements between suppliers and dealers of farm and utility machinery and yard and garden equipment. It contains repurchase provisions and warranty obligations.

This bill defines “single-line dealer” and excludes a single-line dealer from the protections and obligations under this chapter. It extends from 90 days to 120 days the advance notice required for a supplier or a dealer to notify the other of intent to terminate a supplier-dealer agreement. It revises the requirements for a supplier to repurchase inventory from a dealer. It reduces the period within which payment must be made from 60 to 45 days after receipt of the inventory by the supplier. It requires repurchase at 100% of net cost for all new and undamaged equipment purchased from the supplier within 36 months of an agreement termination, instead of the current 30-month period. It establishes rates for repurchase of parts and tools not covered under current law.

It extends from 45 to 90 days the time period a supplier is allowed to consider a dealer’s request to transfer a dealership. It specifies that a dealer performing work under a supplier's warranty is entitled to compensation at the suggested retail price for parts.

HP0164 LD 187	First Regular Session - 125th Maine Legislature		LR 197 Item 1
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