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SENATE FLOOR VERSION
February 20, 2025
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 377 By: Frix of the Senate
and
Bashore of the House
An Act relating to equipment contracts; amending 15
O.S. 2021, Sections 245, as amended by Section 1,
Chapter 62, O.S.L. 2024, 245A, 245A.1, and 245A.2 (15
O.S. Supp. 2024, Section 245), which relate to the
Fair Practices of Equipment Manufacturers,
Distributors, Wholesalers and Dealers Act; modifying
definitions; updating statutory references; modifying
certain prohibited actions; modifying certain consent
requirements; updating statutory language; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 15 O.S. 2021, Section 245, as
amended by Section 1, Chapter 62, O.S.L. 2024 (15 O.S. Supp. 2024,
Section 245), is amended to read as follows:
Section 245. For the purposes of the Fair Practices of
Equipment Manufacturers, Distributors, Wholesalers and Dealers Act:
1. “Current net parts price” means, with respect to current
parts, the price for repair parts listed in the supplier ’s price
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list or catalogue catalog in effect at the time the dealer agreement
is terminated or discontinued, or for purposes of Section 9 245A.5
of this act title, the price list or catalogue catalog in effect at
the time the repair parts were ordered. Current net parts price
means, with respect to superseded repair parts, the price listed in
the supplier’s price list or catalogue in effect at the time the
dealer agreement is terminated or discontinued for the part that
performs the same function and purpose as the superseded part, but
is simply listed under a different part number;
2. “Current net parts cost ” means the current net parts price
less any trade or cash discounts typically given to the dealer with
respect to such dealer ’s normal, ordinary course orders of repair
parts;
3. “Dealer” means any person primarily engaged in the business
of:
a. selling or leasing equipment or repair parts to the
ultimate consumer, and
b. repairing or servicing equipment;
4. “Dealer agreement” means either an oral or written agreement
or arrangement for a definite or indefinite period between a dealer
and a supplier that provides for the rights and obligations of the
parties with respect to the purchase or sale of equipment or repair
parts. Notwithstanding the foregoing, if a dealer has more than one
business location covered by the same dealer agreement, the
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requirements of the Fair Practices of Equipment Manufacturers ,
Distributors, Wholesalers and Dealers Act will be applied to the
repurchase of a dealer ’s inventory at a particular lo cation upon the
closing of such location, unless the closing of the location occurs
without the permission of the supplier;
5. “Dealership” means the retail sale business engaged in by a
dealer under a dealer agreement;
6. “Demonstrator” means equipment in a dealer ’s inventory that
has never been sold at retail, but has had its usage demonstrated to
potential customers, either without ch arge or pursuant to a short -
term rental agreement, with the intent of encouraging the person to
purchase the equipment a nd which has been authorized for the use by
the supplier;
7. “Equipment” means:
a. all-terrain vehicles, utility task vehicles and
recreational off-highway vehicles, in each case,
regardless of how used, and
b. other machinery, equipment, implements or attachments
therefor, used for or in connection with the following
purposes:
(1) lawn, garden, golf course, landscaping or grounds
maintenance,
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(2) planting, cultivating, irrigating, harvesting,
and producing of agricultural and/or forestry
products,
(3) raising, feeding, tending to or harvesting
products from livestock or any other activity in
connection therewith, or
(4) industrial, construction, maintenance, mining or
utility activities or applications.
Equipment shall not mean trailers or self -propelled vehicles
designed primarily for the transportation of persons or property on
a street or highway, or items constituting fixtures or other wise
customarily intended to be permanently affixed to or incorporated
into real property and improvements attached ther eto, and related
repair parts;
8. “Family member” means a spouse, child, son -in-law, daughter-
in-law or lineal descendant;
9. “Good cause” has the meaning as set forth in Section 5 or 6
245A.1 of this act title, as applicable; provided, that:
a. a change in the executive management of the dealer
shall not constitute good cause unless the supplier
can demonstrate that the change is detrim ental to the
representation of the supplier ’s products, and
b. for purposes of subsection B of Section 245A.2 of this
title, good cause means showing that such sale or
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transfer would be detrimental to the representation of
the supplier’s product;
10. “Index” means the United States Bureau of Labor Statistics
Producer Price Index (industry data) Industry Data for construction
machinery manufacturing, series identification number
pcu333120333120 or any successor Index measuring substantially
similar information;
11. “Inventory” means equipment, repair parts, data processing
hardware or software, and specialized service or re pair tools;
12. “Net equipment cost” means the price the dealer actually
paid to the supplier for equipment, plus:
a. freight, at the cost stated on the invoice, if
available, and if not the truckload rates in effect as
of the effective date of the termination of a dealer
agreement, if freight was paid by the dealer from the
supplier’s location to the dealer ’s location, and
b. reimbursement for labor incurred in preparing the
equipment for retail sale or rental, also known as
set-up costs, which labor will be reimbursed at the
dealer’s standard labor rate charged by the dealer to
its customers for nonwarranty repair work; provided,
however, if a supplier has established a reasonable
set-up time, such labor will be reimbursed at an
amount equal to the reasonable set -up time in effect
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as of the date of delivery multiplied by the dealer ’s
standard labor rate;
13. “New equipment” means, for purposes of determining whether
a dealer is a single -line dealer, any equipment that could be
returned to the supplier upo n a termination of a dealer agreement
pursuant to Sections 246 and 247 of this title;
14. “Person” means a natural person, corporation, partnership,
limited liability company, company, trust or any and all other forms
of business enterprise, including any other entity in which it has a
majority interest or of which it has control, as well as the
individual officers, directors and other pe rsons in active control
of the activities of each entity;
15. “Repair parts” means all parts related to the repair of
equipment, including superseded parts;
16. “Single-line dealer” means a dealer that has:
a. purchased construction, industrial, forestry and
mining equipment from a single -line supplier
constituting seventy –five percent (75%) of the
dealer’s new equipment that is construction,
industrial, forestry and mining equipment, calculated
on the basis of net equipment cost, and
b. a total annual average sales volume of equipment
acquired from the single -line supplier in excess of
Twenty-Five Twenty-five Million Dollars
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($25,000,000.00) for the five (5) calendar years
immediately preceding the applicable determination
date; provided, however, the Twenty-Five-Million-
Dollar twenty-five-million-dollar threshold will be
increased each year by an amount equal to the then
current threshold multiplied by the percentage
increase in the Index from January of the immediately
preceding year to January of the cu rrent year;
17. “Single-line dealer agreement ” means a dealer agreement
between a single-line dealer and a single -line supplier that only
provides for the rights and obligations of the parties with respect
to the purchase and sales of equipment that is co nstruction,
forestry, industrial and mining equipment;
18. “Single-line supplier” means the supplier that is selling
the single-line dealer construction, industrial, forestry and mining
equipment constituting seventy -five percent (75%) of the dealer ’s
new equipment that is construction, industrial, forestry and mining
equipment;
19. “Specialty agricultural equipment ” means equipment that is
designed for and used in:
a. planting, cultivating, irrigating, harvesting and
producing of the agricultural product s, or
b. raising, feeding, tending to or harvesting products
from livestock;
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20. “Specialty agricultural equipment supplier ” means a
supplier of specialty agricultural equipment whose gross sales
revenue to the dealer is less than the threshold amount and whose
product line does not include farm tractors or combines and whose
sales of outdoor power equipment to the dealer does not exceed ten
percent (10%) of its total sales to the dealer during the one -year
period ending on the last day of the calendar mon th immediately
preceding the effective date of the termination of the dealer
agreement. Whether a supplier qualifies as a specialty agricultural
equipment supplier is determined on a case by case case-by-case
basis depending on the sales of the applicable dealer and to the
applicable dealer by such specialty agricultural equipment supplier;
21. “Supplier” means any person engaged in the business of
manufacturing, assembly or wholesale distribution of equipment or
repair parts. The term shall also include any successor in
interest, including any receiver, trustee, liquidator, assignee,
purchaser of assets or stock, or a surviving corporation resulting
from a merger, liquidation or reorganization of the original
supplier. Purchasers of all, or substantiall y all, of the inventory
of a supplier or a supplier ’s division or product line will
constitute a purchaser of all or sub stantially all of the supplier ’s
assets;
22. “Terminate” or “termination” means to terminate, cancel,
fail to renew or substantially ch ange the competitive circumstances
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of a dealer agreement. For purposes of Section 9 of this act and
Sections 245A.5, 246, and 247 of this title, the terms shall not
include the phrase “substantially change the competitive
circumstances of”; and
23. “Threshold amount” means that the lesser of:
a. ten percent (10%) of the dealer ’s gross sales revenue,
or
b. Three Hundred Fifty Thousand Dollars ($350,000.00), in
each case based on net sales of the dealership during
the one year one-year period ending on the last day of
the calendar month immediately preceding the effective
date of the termination of the dealer agreement;
provided, however, the Three-Hundred-Fifty-Thousand-
Dollar three-hundred-fifty-thousand-dollar amount will
be increased each year by an amou nt equal to the then
current amount multiplied by the percentage increase
in the Index from January of the immediately p receding
year to January of the current year.
SECTION 2. AMENDATORY 15 O.S. 2021, Section 245A, is
amended to read as follows:
Section 245A. It shall be a violation of the Fair Practices of
Equipment Manufacturers, Distributors, Wholesalers and Dealers Act
for a supplier to take any one or more of the following actions:
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1. To coerce, compel or require any dealer to accept delivery
of any equipment or repair parts which the dealer has not
voluntarily ordered, except as required by any applicable law or
unless such equipment or repair parts are safety features required
by a supplier;
2. To require any dealer to pu rchase goods or services as a
condition to the sale by the supplier to the dealer of any
equipment, repair parts or other goods or services, provided that
nothing herein shall prohibit a supplier from requiring the dealer
to purchase all repair parts, spec ial tools and training reasonably
necessary to maintain the safe operation or quality of operation in
the field of any equipment offered for sale by the dealer;
3. To coerce any dealer into a refusal to purchase equipment
manufactured by another supplier. However, prevent a dealer from
being a party to a dealer agreement or holding an investment in a
person that is a party to such a dealer agreement, that authorizes
the dealer to sell competing product lines or makes of equipment or
prevents a dealer from performing the dealer ’s obligations under
such dealer agreement, or to require a dealer to provide separate
facilities for competing product lines or makes of equipment. If a
dealer purchased equipment from a supplier constituting eighty
percent (80%) of the dealer’s new equipment, calculated on the basis
of net equipment cost, at all retail sales facilities operated by
such dealer and the total annual sales volume of equipment acquired
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from such supplier exceeds Forty Million Dollars ($40,000,000.00),
subject to adjustment after the effective date of this act on the
same basis as calculated in subparagraph b of paragraph 16 of
Section 245 of this title for single -line dealers, at such retail
sales facilities for the five (5) calendar years immediately
preceding the applicable determination date, then it shall not be a
violation of this section to require separate facilities, financial
statements or sales staff for major competing lines so long as the
dealer is given at least three (3) years notice of such requirement
the extent the dealer is prevented from selling major competing
product lines or makes of equipment at such retail sales facilities
of the dealer authorized to sell new equipment acquired from the
supplier seeking to impose the restriction on s ales of major
competing product lines or makes of equipment ;
4. To refuse to deliver in reasonable quantities and within a
reasonable time, after receipt of the dealer ’s order, to any dealer
having a dealer agreement for the retail sale of new equipment s old
or distributed by such supplier, equipment covered by such dealer
agreement specifically advertised or represented b y such supplier to
be available for immediate delivery. The failure to deliver any
such equipment will not be considered a violation of the Fair
Practices of Equipment Manufacturers, Distributors, Wholesalers and
Dealers Act if such failure is due to prudent and reasonable
restrictions on extensions of credit by the supplier to the dealer,
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an act of nature, work stoppage or delay due to a strike or labor
difficulty, a bona fide shortage of materials, freight embargo, or
other cause over which the supplier has no control or a business
decision by the supplier to limit the production volume of the
equipment;
5. To discriminate, directly or indirectly, in filling an order
placed by a dealer for retail sale or lease of new equipment under a
dealer agreement as between dealers of the same product line;
6. To discriminate, directly or indirectly, in price between
different dealers with respect to purchases of equipment or repair
parts of like grade and quality and identical brand, where the
effect of such discri mination may be to substantially lessen
competition, tend to create a monopoly in any line of commerce, or
injure, destroy or prevent co mpetition with any dealer who either
grants or knowingly receives the benefit of such discrimination;
provided, however, different prices may be charged if:
a. such differences are due to differences in the cost of
manufacture, sale or delivery of the equi pment or
repair parts,
b. the supplier can show that its lower price was made in
good faith to meet an equally low price of a
competitor, or
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c. such differences are related to the volume of
equipment purchased by dealers or market share
obtained by dealers;
7. To prevent by contract or otherwise, any dealer from
changing its capital structure or the means by or through which the
dealer finances its operations, so long as the dealer gives prior
notice to the supplier, and provided the dealer at all times me ets
any reasonable capital standards required by the supplier pursuant
to a right granted in the dealer agreement and im posed on similarly
situated dealers; and
8. To require a dealer to assent to a release, assignment,
novation, waiver, or estoppel which would relieve any person from
liability imposed by this act the Fair Practices of Equipment
Manufacturers, Distributors, Wholesalers and Dealers Act .
SECTION 3. AMENDATORY 15 O.S. 2021, Section 245A.1, is
amended to read as follo ws:
Section 245A.1. A. The dealer must give the supplier at least
thirty (30) days days’ prior written notice of termi nation. No
supplier may terminate a dealer agreement without good cause.
Except as otherwise specifically provided in the Fair Practic es of
Equipment Manufacturers, Distributors, Wholesalers and Dealers Act,
“good cause” means the failure by a dealer to substantially comply
with essential and reasonable requirements imposed upon the dealer
by the dealer agreement, provided such requireme nts are not
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different from those requirements imposed on other similarly
situated dealers either by their terms or in th e manner of their
enforcement. In addition, good cause shall exist whenever:
1. The dealer or dealership has transferred a controlling
ownership interest in its business without the supplier ’s consent
unless the supplier does not have the right to withhold consent
under either the dealer agreement or under the terms of this act ;
2. The dealer has filed a voluntary petition in bankruptcy or
has had an involuntary petition in bankruptcy filed against it which
has not been discharged within thirty (30) days after the filing, or
there has been a closeout or sale of a substantial part of the
dealer’s assets related to the business, or there h as been a
commencement of dissolution or liquidation of the dealer;
3. There has been a deletion, addition or change in dealer or
dealership locations without the prior written approval of the
supplier;
4. The dealer has defaulted under any chattel mortg age or other
security agreement between the dealer and the supplier, or there has
been a revocation of any guarantee of the dealer’s present or future
obligations to the supplier; provided, however, good cause will not
exist if a person revokes any guarant ee in connection with or
following the transfer of such person ’s entire ownership interest in
the dealer unless the supplier requires the person to execute a new
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guarantee of the dealer ’s present or future obligations in
connection with the transfer of own ership interest;
5. The dealer has failed to operate in the normal course of
business for seven (7) consecutive days or has otherwise abandoned
its business;
6. The dealer has pleaded guilty to or has been convicted of a
felony affecting the relationship between the dealer and supplier;
7. The dealer has engaged in conduct which is injurious or
detrimental to the dealer ’s customers or to the public welfare or
the representation or reputation of the supplier ’s product; or
8. The dealer has consistently f ailed to meet and maintain the
supplier’s requirements for reasonable standards and performance
objectives, so long as t he supplier has given the dealer reasonable
standards and performance objectives that are based on the
manufacturer’s experience in othe r comparable market areas.
B. The provisions of this section will not apply to single -line
dealer agreements.
SECTION 4. AMENDATORY 15 O.S. 2021, Section 245A.2, is
amended to read as follows:
Section 245A.2. A. Except as other wise provided in this
section, a supplier must provide a dealer at least one hundred
eighty (180) days days’ prior written notice of termination of a
dealer agreement. The notice must state all reasons constituting
good cause for such termination and must state that the dealer has
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sixty (60) days in which to cure any claimed deficiency. If the
deficiency is rectified within sixty (60) days, the notice will be
void. A supplier, other than a specialty agricultural equipment
supplier, may not terminate a de aler agreement for the reason set
forth in paragraph 8 of subsection A of Section 5 245A.1 of this act
title unless the supplier gives the dealer notice of such action at
least two (2) years before the effective date of the action. If the
dealer achieves the supplier’s requirements for reasonable standards
or performance objectives before the expiration of the two -year
notice period, the notice will be void and the dealer agreement will
continue in full force and effect. The notice and right to cure
provisions under this section shall not apply if the reason for
termination is for any reason set forth in paragraphs 1 throu gh 7 of
subsection A of Section 5 245A.1 of this act title.
B. If a supplier has contractual authority to approve or deny a
request for a sale or transfer of a dealer ’s business or an equity
ownership interest therein, the supplier shall approve or deny such
a request within sixty (60) days after receiving a written request
from the dealer. If the supplier has neither approved nor denied
the request within the sixty -day period, the request will be deemed
approved. The dealer ’s request shall include reaso nable financial,
personal background, character references and work history
information for the acquiring persons. If a supplier denies a
request made pursuant to this subsection, the supplier must provide
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the dealer with a written notice of the denial that states the
reasons for the denial. A supplier may only deny not unreasonably
withhold consent to a request based on the failure of t he proposed
transferees to meet the reasonable requirements consistently imposed
by the supplier in determining approval of the transfer and/or
approvals of new dealers for a sale or transfer of a dealer ’s
business or an equity ownership interest in such b usiness, and such
consent may only be withheld for good cause. The supplier shall
have the burden to prove that the denial of the request for sale or
transfer complied with the requirements of this subsection .
C. If a dealer dies and the supplier has con tractual authority
to approve or deny a request for a sale or transfer of the dealer ’s
business or equity ownership inte rest therein, the dealer ’s estate,
or such other person with authority to transfer assets of the
dealer, will have one hundred eighty (1 80) days to submit to the
supplier a written request for a sale or transfer of the business or
equity ownership interest. If the request is timely submitted, the
supplier shall approve or deny the request in accordance with
subsection B of this section. Notwithstanding anything to the
contrary contained in the Fair Practices of Equipment Manufacturers,
Distributors, Wholesalers and Dealers Act, any attempt by the
supplier to terminate the dealer or the dealership as a result of
the death of a dealer will be delayed until there has been
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compliance with the terms of this section or the one -hundred-eighty-
day period has expired, as applicable.
D. The provisions of this section shall not apply to single -
line dealer agreements.
SECTION 5. This act shall become effective November 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND INSURANCE
February 20, 2025 - DO PASS AS AMENDED BY CS