OK
Oklahoma House Bill HB3970

Oklahoma 2024 Regular Session

Oklahoma House Bill HB3970 Compare Versions

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1-An Act
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334 BILL NO. 3970 By: Echols of the House
435
536 and
637
738 Rader of the Senate
839
940
1041
1142
1243 An Act relating to contracts; amending 15 O.S. 2021,
1344 Section 245, which relates to the defined terms
1445 within the Fair Practices of Equipment Manufacturers,
1546 Distributors, Wholesalers and Dealers Act; modifying
1647 equipment definition to exclude fixtures and related
1748 repair parts; and providing an effective date.
1849
1950
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2152
22-SUBJECT: Contracts
23-
2453 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
25-
2654 SECTION 1. AMENDATORY 15 O.S. 2021, Section 245, is
2755 amended to read as follows:
28-
2956 Section 245. For the purposes of the Fair Practices of
3057 Equipment Manufacturers, Distributors, Wholesalers and Dealers Act:
31-
3258 1. "Current net parts price" means, with resp ect to current
3359 parts, the price for repair parts listed in the supplier's price
3460 list or catalogue in effect at the time the dealer agreement is
3561 terminated or discontinued, or fo r purposes of Section 9 of this
3662 act, the price list or catalogue in effect at t he time the repair
3763 parts were ordered. Current net parts price means, with respect to
3864 superseded repair parts, the price listed in the supplier's price
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3992 list or catalogue in effect at the time the dealer agreement is
4093 terminated or discontinued for the part that performs the same
4194 function and purpose as the superseded part, but is simply listed
4295 under a different part number;
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4496 2. "Current net parts cost" means the current net parts price
45-less any trade or cash discounts typically given to the dealer with ENR. H. B. NO. 3970 Page 2
97+less any trade or cash discounts typically given to the dealer with
4698 respect to such dealer's normal, ordinary course orders of repair
4799 parts;
48-
49100 3. "Dealer" means any person primarily engaged in the business
50101 of:
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52102 a. selling or leasing equipment or repair parts to the
53103 ultimate consumer, and
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55104 b. repairing or servicing equipment;
56-
57105 4. "Dealer agreement" means either an oral or written agreement
58106 or arrangement for a definite or indefinite period between a dealer
59107 and a supplier that provides for the rights and obligations of the
60108 parties with respect to the purchase or sale of equipment or repair
61109 parts. Notwithstanding the foregoing, if a dealer has more than one
62110 business location covered by the same dealer agreement, the
63111 requirements of the Fair Practices of Equipment Manufacturers,
64112 Distributors, Wholesalers and Dealers Act will be applie d to the
65113 repurchase of a dealer's inventory at a particular location upon the
66114 closing of such location, unless the closing of the location occurs
67115 without the permission of the s upplier;
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69143 5. "Dealership" means the retail sale business engaged in by a
70144 dealer under a dealer agreement;
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72145 6. "Demonstrator" means equipment in a dealer's inventory that
73146 has never been sold at retail, but has had its usage demonstrated to
74147 potential customers, either without charge or pursuant to a short -
75148 term rental agreement, with th e intent of encouraging the person to
76149 purchase the equipment and which has been authorized for the use by
77150 the supplier;
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79151 7. "Equipment" means:
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81152 a. all-terrain vehicles, utility t ask vehicles and
82153 recreational off-highway vehicles, in each case,
83154 regardless of how used, and
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85155 b. other machinery, equipment, implements or attachments
86156 therefor, used for or in connection with the following
87157 purposes:
88-
89158 (1) lawn, garden, golf course, landscaping or grounds
90-maintenance, ENR. H. B. NO. 3970 Page 3
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159+maintenance,
92160 (2) planting, cultivating, irrigating, harvesting,
93161 and producing of agricultural and/or forestry
94162 products,
95-
96163 (3) raising, feeding, tending to or harvesting
97164 products from livestock or any other activity in
98165 connection therewith, or
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100193 (4) industrial, construction, maintenance, mining or
101194 utility activities or appli cations.
102-
103195 Equipment shall not mean trailers or self -propelled vehicles
104196 designed primarily for the transportation of persons or property on
105197 a street or highway, or items constituting fixtures or otherwise
106198 customarily intended to be permanently affixed to or incorporated
107199 into real property and improvements attached thereto, and related
108200 repair parts;
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110201 8. "Family member" means a spouse, child, son -in-law, daughter-
111202 in-law or lineal descendant;
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113203 9. "Good cause" has the meaning as set forth in Section 5 or 6
114204 of this act, as applicable;
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116205 10. "Index" means the United States Bureau of Labor Statistics
117206 Producer Price Index (industry data) for construction machinery,
118207 series identification number pcu333120333120 or any successor Index
119208 measuring substantially similar infor mation;
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121209 11. "Inventory" means equipment, repair parts, data processing
122210 hardware or software, and specialized service or repair tools;
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124211 12. "Net equipment cost" means the price the dealer actually
125212 paid to the supplier for equipment, plus:
126-
127213 a. freight, at the cost stated on the invoice, if
128214 available, and if not the truckload rates in effect as
129215 of the effective date of the termination of a dealer
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130243 agreement, if freight was paid by the dealer from the
131244 supplier's location to the dealer's location, and
132-
133245 b. reimbursement for labor incurred in preparing the
134246 equipment for retail sale or rental, also known as
135-set-up costs, which labor will be reim bursed at the ENR. H. B. NO. 3970 Page 4
247+set-up costs, which labor will be reimbursed at the
136248 dealer's standard labor rate cha rged by the dealer to
137249 its customers for nonwarranty repair work; provided,
138250 however, if a supplier has established a reasonable
139251 set-up time, such labor will be reimbursed at an
140252 amount equal to the reasonable set -up time in effect
141253 as of the date of delivery multiplied by the dealer's
142254 standard labor rate;
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144255 13. "New equipment" means, for purposes of determining whether
145256 a dealer is a single -line dealer, any equipment that could be
146257 returned to the supplier upon a termination of a dealer agreement
147258 pursuant to Sections 246 and 247 of this title;
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149259 14. "Person" means a natural person, corporati on, partnership,
150260 limited liability company, company, trust or any and all other forms
151261 of business enterprise, including any other entity in which it has a
152262 majority interest or of which it has control, as well as the
153263 individual officers, directors and other persons in active control
154264 of the activities of each entity;
155-
156265 15. "Repair parts" means all parts related to the repair of
157266 equipment, including superseded parts;
158267
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159294 16. "Single-line dealer" means a dealer that has:
160-
161295 a. purchased construction, industrial, fores try and
162296 mining equipment from a single -line supplier
163297 constituting seventy –five percent (75%) of the
164298 dealer's new equipment that is construction,
165299 industrial, forestry and mining equipment, calculated
166300 on the basis of net equipment cost, and
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168301 b. a total annual average sales volume of equipment
169302 acquired from the single -line supplier in excess of
170303 Twenty-Five Million Dollars ($25,000,000.00) for the
171304 five (5) calendar years immediately p receding the
172305 applicable determination date; provided, however, the
173306 Twenty-Five-Million-Dollar threshold will be increased
174307 each year by an amount equal to the then current
175308 threshold multiplied by the percentage increase in the
176309 Index from January of the immediately preceding year
177310 to January of the current year;
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179311 17. "Single-line dealer agreement" means a dealer agreement
180-between a single-line dealer and a single -line supplier that only ENR. H. B. NO. 3970 Page 5
312+between a single-line dealer and a single -line supplier that only
181313 provides for the rights and obligations of the parties with respect
182314 to the purchase and sales of equipment that is construction,
183315 forestry, industrial and mining equipment;
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185316 18. "Single-line supplier" means the supplier that is selling
186317 the single-line dealer construction, industrial, forestry and mining
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187345 equipment constituting seventy -five percent (75%) of the dealer's
188346 new equipment that is construction, ind ustrial, forestry and mining
189347 equipment;
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191348 19. "Specialty agricultural equipment" means equipment that is
192349 designed for and used in:
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194350 a. planting, cultivating, irrigating, harvestin g and
195351 producing of the agricultural products, or
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197352 b. raising, feeding, tending t o or harvesting products
198353 from livestock;
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200354 20. "Specialty agricultural equipment supplier" means a
201355 supplier of specialty agricultural equipment whose gross sales
202356 revenue to the dealer is less than the threshold amount and whose
203357 product line does not include farm tractors or combines and whose
204358 sales of outdoor power equipment to the dealer does not exceed ten
205359 percent (10%) of its total sales to the dealer during the one -year
206360 period ending on the last day of the calendar month immediately
207361 preceding the effecti ve date of the termination of the dealer
208362 agreement. Whether a supplier qualifies as a specialty agricultural
209363 equipment supplier is determined on a case by case basis depending
210364 on the sales of the applicable dealer and to the applicable dealer
211365 by such specialty agricultural equipment supplier;
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213366 21. "Supplier" means any person engaged in the business of
214367 manufacturing, assembly or wholesale distribution of equipment or
215368 repair parts. The term shall also include any successor in
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216396 interest, including any receive r, trustee, liquidator, assignee,
217397 purchaser of assets or stock, or a surviving corporation resulting
218398 from a merger, liquidation or reorganization of the original
219399 supplier. Purchasers of all, or substantially all, of the inventory
220400 of a supplier or a suppli er's division or product line will
221401 constitute a purchaser of all or substantially all of the supplier's
222402 assets;
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224403 22. "Terminate" or "termination" means to terminate, cancel,
225-fail to renew or substantially change the competitive circumstances ENR. H. B. NO. 3970 Page 6
404+fail to renew or substantially change the competitive circumstances
226405 of a dealer agreement. For purposes of Section 9 of this act and
227406 Sections 246 and 247 of this title, the terms shall not include the
228407 phrase "substantially change the competitive circumstances of"; and
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230408 23. "Threshold amount" means that the lesser of:
231-
232409 a. ten percent (10%) of the dealer's gross sales revenue,
233410 or
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235411 b. Three Hundred Fifty Thousand Dollars ($350,000.00), in
236412 each case based on net sales of the dealership during
237413 the one year period en ding on the last day of the
238414 calendar month immediately preceding the effective
239415 date of the termination of the dealer agreement;
240416 provided, however, the Three -Hundred-Fifty-Thousand-
241417 Dollar amount will be increased each year by an amount
242418 equal to the then current amount multiplied by the
243419 percentage increase in the Index from January of the
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244447 immediately preceding year to January of the current
245448 year.
246-
247449 SECTION 2. This act shall become effective November 1, 2024.
248- ENR. H. B. NO. 3970 Page 7
249-Passed the House of Representatives the 7th day of March, 2024.
250-
251-
252-
253-
254- Presiding Officer of the House
255- of Representatives
256-
257-
258-Passed the Senate the 16th day of April, 2024.
259-
260-
261-
262-
263- Presiding Officer of the Senate
264-
265-OFFICE OF THE GOVERNOR
266-Received by the Office of the Governor this ____________________
267-day of ___________________, 20 _______, at _______ o'clock _______ M.
268-By: _________________________________
269-Approved by the Governor of the State of Oklahoma this _____ ____
270-day of ___________________, 20_______, at _______ o'clock _______ M.
271-
272-
273- _________________________________
274- Governor of the State of Oklahoma
275-
276-OFFICE OF THE SECRETARY OF STATE
277-Received by the Office of the Secretary of State this __________
278-day of ___________________, 20_______, at _______ o'clock _______ M.
279-By: _________________________________
280-
450+COMMITTEE REPORT BY: COMMITTEE ON BU SINESS AND COMMERCE
451+April 1, 2024 - DO PASS