2005 Legislation
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HOUSE BILL NO. 197 – Agriculture equip dealers/suppliers

HOUSE BILL NO. 197

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Bill Status



H0197aa.........................................................by BUSINESS
AGRICULTURE EQUIPMENT DEALERS/SUPPLIERS - Amends and adds to existing law
to revise certain contractual requirements between suppliers and dealers of
agricultural equipment; to provide certain prohibited practices; to provide
for arbitration in Idaho; to revise procedures regarding warranty claims;
and to provide application to certain data processing software.
                                                                        
02/14    House intro - 1st rdg - to printing
02/15    Rpt prt - to Bus
03/02    Rpt out - to Gen Ord
03/09    Rpt out amen - to engros
03/10    Rpt engros - 1st rdg - to 2nd rdg as amen
03/11    2nd rdg - to 3rd rdg as amen
03/14    3rd rdg as amen - PASSED - 68-0-2
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon,
      Chadderdon, Collins, Crow, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Jaquet, Jones, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews,
      McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini,
      Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
      Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
      Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail,
      Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Clark, Henderson
    Floor Sponsor - Block
    Title apvd - to Senate
03/15    Senate intro - 1st rdg - to Agric Aff
03/18    Rpt out - rec d/p - to 2nd rdg
03/21    2nd rdg - to 3rd rdg
03/22    3rd rdg - PASSED - 31-0-3, 1 vacancy
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Langhorst, Lodge,
      Malepeai, McGee, McKenzie, Pearce, Richardson, Schroeder, Stegner,
      Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Keough, Little, Marley, (District 21 seat
      vacant)
    Floor Sponsor - Davis
    Title apvd - to House
03/23    To enrol
03/24    Rpt enrol - Sp signed
03/25    Pres signed
03/28    To Governor
04/01    Governor signed
         Session Law Chapter 238
         Effective: 07/01/05

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 197
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO AGRICULTURAL AND FARM EQUIPMENT AND  CONTRACTS;  AMENDING  SECTION
  3        28-23-101, IDAHO CODE, TO PROVIDE FOR THE PAYMENT OR CREDIT FOR DEMONSTRA-
  4        TION  OR  RENTAL  EQUIPMENT  THAT HAS NOT BEEN RETAILED TO AN END USER, TO
  5        PROVIDE FOR REPURCHASE OF DATA PROCESSING MATERIALS AND TO MAKE  TECHNICAL
  6        CORRECTIONS;  AMENDING SECTION 28-23-102, IDAHO CODE, TO REVISE THE PROCE-
  7        DURES AND CREDITS FOR REPURCHASE OF REPAIR PARTS, REPAIR MANUALS, SPECIAL-
  8        IZED REPAIR TOOLS AND SIGNAGE AND TO MAKE TECHNICAL CORRECTIONS;  AMENDING
  9        SECTION  28-23-105, IDAHO CODE, TO PROVIDE FOR ONE HUNDRED PERCENT CURRENT
 10        NET PRICE FOR MANUALS AND REPAIR MANUALS AND REASONABLE REIMBURSEMENT  FOR
 11        SERVICES PERFORMED IN CONNECTION WITH ASSEMBLY AND PREDELIVERY INSPECTIONS
 12        OF  THE EQUIPMENT, TO PROVIDE VENUE FOR CAUSES OF ACTION AND TO MAKE TECH-
 13        NICAL CORRECTIONS; AMENDING SECTION  28-23-106,  IDAHO  CODE,  TO  PROVIDE
 14        APPLICATION TO TRANSPORTATION CHARGES WHICH HAVE BEEN PAID BY THE RETAILER
 15        OR  INVOICED TO THE RETAILER'S ACCOUNT, TO PROVIDE APPLICATION TO MULTIPLE
 16        PARTS AND TO MAKE A  TECHNICAL  CORRECTION;  AMENDING  SECTION  28-23-108,
 17        IDAHO  CODE,  TO INCREASE NOTICE PROVISIONS TO NINETY DAYS, TO PROVIDE FOR
 18        NOTICE REGARDING ACCESSORIES AND TO MAKE A TECHNICAL CORRECTION;  AMENDING
 19        SECTION  28-24-102,  IDAHO CODE, TO FURTHER DEFINE TERMS; AMENDING SECTION
 20        28-24-103, IDAHO CODE, TO REVISE UNLAWFUL  ACTS  AND  PRACTICES  REGARDING
 21        EQUIPMENT  DEALERS; AMENDING SECTION 28-24-104, IDAHO CODE, TO REVISE TIME
 22        PERIODS FOR A DEALER TO CURE A DEFICIENCY, TO PROVIDE PROCEDURES PRIOR  TO
 23        THE  TERMINATION OR NONRENEWAL OF A DEALER AGREEMENT AND TO MAKE A TECHNI-
 24        CAL CORRECTION; AMENDING PART 1, CHAPTER 24, TITLE 28, IDAHO CODE, BY  THE
 25        ADDITION  OF  NEW  SECTIONS 28-24-104A, 28-24-104B, 28-24-104C, 28-24-104D
 26        AND 28-24-104E, IDAHO CODE, TO PROVIDE THE ESTABLISHMENT OF A NEW  DEALER-
 27        SHIP AND THE SUPPLIER'S DUTIES, TO PROVIDE FOR WARRANTY CLAIMS, TO PROVIDE
 28        FOR  AUDIT  OF  WARRANTY CLAIMS, TO PROVIDE FOR ARBITRATION AND TO PROVIDE
 29        FOR SUCCESSORS IN INTEREST; AND AMENDING SECTION 28-24-105, IDAHO CODE, TO
 30        INCLUDE DATA PROCESSING SOFTWARE IN REMEDIES AND  ENFORCEMENT  PROVISIONS,
 31        TO PROVIDE VENUE FOR CAUSES OF ACTION AND TO MAKE A TECHNICAL CORRECTION.
                                                                        
 32    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 33        SECTION 1.  That Section 28-23-101, Idaho Code, be, and the same is hereby
 34    amended to read as follows:
                                                                        
 35        28-23-101.  REPURCHASE  OF FARM MACHINERY, IMPLEMENTS, ATTACHMENTS, ACCES-
 36    SORIES AND PARTS UPON TERMINATION OF CONTRACT AND  OBLIGATION  TO  REPURCHASE.
 37    Whenever  any  person, firm, or corporation engaged in the business of selling
 38    and retailing farm implements and repair parts for farm implements enters into
 39    a written or parol contract, sales agreement or security agreement whereby the
 40    retailer agrees with any wholesaler,  manufacturer,  or  distributor  of  farm
 41    implements,  machinery, attachments, accessories or repair parts to maintain a
 42    stock of parts which may include, but is not limited  to,  complete  or  whole
 43    machines, or attachments, or demonstration and rental equipment and thereafter
                                                                        
                                           2
                                                                        
  1    the written or parol contract, sales agreement or security agreement is termi-
  2    nated,  cancelled canceled or discontinued, then the wholesaler, manufacturer,
  3    or distributor shall pay to the retailer or credit to the retailer's  account,
  4    if  the  retailer has outstanding any sums owing the wholesaler, manufacturer,
  5    or distributor, unless the retailer should desire and has a contractual  right
  6    to  keep  such merchandise, a sum equal to one hundred per cent percent (100%)
  7    of the net cost of all unused complete farm implements, machinery  and  repair
  8    parts  and  stock  of parts, attachments in new condition which have been pur-
  9    chased by the retailer from the wholesaler, manufacturer or distributor within
 10    the thirty-six (36) months immediately preceding notification by either  party
 11    of  intent to cancel or discontinue the contract, including the transportation
 12    charges to the retailer. and from the retailer to the  destination  designated
 13    by  the  wholesaler, manufacturer, or distributor, which have been paid by the
 14    retailer, or invoiced to retailer's account by the wholesaler, manufacturer or
 15    distributor The payment or credit for demonstration or rental  equipment  that
 16    has  not  been retailed to an end user is a sum equal to the depreciated value
 17    of the equipment to which the supplier  and  the  retailer  have  agreed.  The
 18    wholesaler,  manufacturer,  or distributor shall pay to the retailer a reason-
 19    able reimbursement for services performed in connection with the assembly  and
 20    predelivery  inspections  of  the farm equipment and attachments. The supplier
 21    assumes ownership of farm implements, machinery and repair parts and stock FOB
 22    the dealer location.
 23        A supplier must repurchase any specific data  processing  hardware,  soft-
 24    ware,  telecommunications  equipment and computer communications hardware spe-
 25    cifically required by the supplier to meet the supplier's minimum requirements
 26    and purchased by the dealer in the prior five (5) years and held by the dealer
 27    on the date of termination. The purchase price is the original net cost to the
 28    dealer, less twenty percent (20%) per year.
                                                                        
 29        SECTION 2.  That Section 28-23-102, Idaho Code, be, and the same is hereby
 30    amended to read as follows:
                                                                        
 31        28-23-102.  REPURCHASE OF REPAIR PARTS. Whenever any person, firm, or cor-
 32    poration engaged in the business of selling and retailing farm implements  and
 33    repair  parts  for  farm  implements  enters into a written or parol contract,
 34    sales agreement or security agreement whereby the  retailer  agrees  with  any
 35    wholesaler,  manufacturer,  or  distributor  of  farm  implements,  machinery,
 36    attachments,  accessories or repair parts to maintain a stock of parts or com-
 37    plete or whole machines, or attachments, manuals and repair manuals and there-
 38    after the written or parol contract, sales agreement or security agreement  is
 39    terminated,  cancelled canceled or discontinued, then the wholesaler, manufac-
 40    turer, or distributor shall pay to the retailer or credit  to  the  retailer's
 41    account,  if the retailer has outstanding any sums owing the wholesaler, manu-
 42    facturer, or distributor, unless the retailer should desire and has a contrac-
 43    tual right to keep such merchandise, a sum equal to one hundred per cent  per-
 44    cent  (100%)  of  the current net prices, including the transportation charges
 45    from the retailer to the destination, which shall include a  mailing  address,
 46    designated  by the wholesaler, manufacturer or distributor within fifteen (15)
 47    days of said termination, cancellation or discontinuance, wholesaler, manufac-
 48    turer or distributor which have been paid by the retailer, or  invoiced  to  a
 49    retailer's  account by the wholesaler, manufacturer or distributor, on manuals
 50    and repair manuals, repair parts, including superseded or previously  included
 51    parts listed in current price lists or catalogs or electronic catalogs in use,
 52    or  previously  used  within  thirty-six (36) months prior to the latest parts
 53    price list issue date by the wholesaler, manufacturer or  distributor  on  the
                                                                        
                                           3
                                                                        
  1    date of cancellation or discontinuance of the contract, which parts had previ-
  2    ously  been  purchased  by  the retailer from the wholesaler, manufacturer, or
  3    distributor and are held by the retailer on the date of  the  cancellation  or
  4    discontinuance of the contract or thereafter received by the retailer from the
  5    wholesaler, manufacturer or distributor.
  6        The  wholesaler,  manufacturer, or distributor shall also pay the retailer
  7    or credit to his account a sum equal to five per cent percent (5%) of the cur-
  8    rent net price of all parts returned for the handling, packing, and loading of
  9    the parts back to the wholesaler, manufacturer,   or  distributor  unless  the
 10    wholesaler,  manufacturer or distributor elects to perform inventorying, pack-
 11    ing and loading of the parts itself themselves.
 12        Upon the payment or allowance of credit to the retailer's account  of  the
 13    sum  required  by this section and section 28-23-101, Idaho Code, the title to
 14    the farm implements, farm machinery, attachments, accessories or repair  parts
 15    shall  pass  to the manufacturer, wholesaler or distributor making the payment
 16    or allowing the credit and the manufacturer, wholesaler or  distributor  shall
 17    be  entitled to the possession of the farm implements, machinery, attachments,
 18    accessories or repair parts. Title to farm implements,  attachments,  accesso-
 19    ries  and repair parts is transferred to the supplier FOB the dealer location.
 20    The provisions of this section shall  apply  to  any  part  return  adjustment
 21    agreement  made between a dealer and a supplier. All payments or allowances of
 22    credit due retailers under this section shall be paid or credited by the manu-
 23    facturer, wholesaler, or distributor within ninety (90) days after the  return
 24    of  the  farm  implements,  farm machinery, attachments, accessories or repair
 25    parts. After the ninety (90) days all sums of credits due shall include inter-
 26    est at the rate specified in section 28-22-104(1), Idaho Code.  However,  this
 27    section  and  section  28-23-101,  Idaho Code, shall not in any way affect any
 28    security interest which the wholesaler, manufacturer or distributor  may  have
 29    in the inventory of the retailer.
 30        A  supplier  shall  repurchase at one hundred percent (100%) of net dealer
 31    cost, manuals and repair manuals purchased in the previous six (6)  years  and
 32    at  fifty percent (50%) for manuals and repair manuals purchased in the previ-
 33    ous seven (7) through twelve (12) years as required by the supplier  and  held
 34    by  the  dealer on the date of termination. Manuals and repair manuals must be
 35    unique to the supplier's product line and must be in complete and in  readable
 36    condition.
 37        A supplier must repurchase, and the dealer must sell to the supplier, spe-
 38    cialized  repair tools. As applied in this section, "specialized repair tools"
 39    is defined as those tools required by the supplier and unique to the diagnosis
 40    or repair of the supplier's products. For specialized repair tools that are in
 41    new, unused condition and are applicable to the supplier's  current  products,
 42    the  purchase  price is one hundred percent (100%) of the original net cost to
 43    the dealer. For all other specialized repair tools, in complete and  resalable
 44    condition,  the  purchase  price  is  the original net cost to the dealer less
 45    twenty percent (20%) per year depreciation, but not less  than  fifty  percent
 46    (50%) of the original purchase price.
 47        A supplier must repurchase, and the dealer must sell to the supplier, cur-
 48    rent  signage.  As used in this section, "current signage" means the principal
 49    outdoor signage required by the supplier that displays the supplier's  current
 50    logo or similar exclusive identifier, and that identifies the dealer as repre-
 51    senting  either the supplier or the supplier's products, or both. The purchase
 52    price shall be the original net cost to the dealer less twenty  percent  (20%)
 53    per  year, but may in no case be less than fifty percent (50%) of the original
 54    cost to the dealer.
                                                                        
                                           4
                                                                        
  1        SECTION 3.  That Section 28-23-105, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        28-23-105.  FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION OF CONTRACTS  --
  4    LIABILITY.  In  the event that any manufacturer, wholesaler, or distributor of
  5    farm implements, machinery, attachments, accessories and  repair  parts,  upon
  6    the  cancellation  of  a  contract  by either a retailer or such manufacturer,
  7    wholesaler or distributor, fails or refuses to make payment to the  dealer  or
  8    his heir or heirs as required by this section, the manufacturer, wholesaler or
  9    distributor shall be liable in a civil action to be brought by the retailer or
 10    his  heir or heirs for (a) one hundred per cent percent (100%) of the net cost
 11    of the farm implements, machinery, and attachments and accessories, (b) trans-
 12    portation charges required in sections 28-23-101 and  28-23-102,  Idaho  Code,
 13    which  have  been paid by the retailer, or invoiced to the retailer's account,
 14    (c) one hundred per cent percent (100%) of the current  net  price  of  repair
 15    parts,   and (d) five per cent percent (5%) for handling, packing and loading,
 16    if applicable, (e) one hundred percent (100%) of the  current  net  price  for
 17    manuals and repair manuals, and (f) reasonable reimbursement for services per-
 18    formed  in  connection with assembly and predelivery inspections of the equip-
 19    ment. A person, firm or corporation which brings an action under this  section
 20    must  commence  the action in the county in which the principal place of busi-
 21    ness of the retailer is located.
                                                                        
 22        SECTION 4.  That Section 28-23-106, Idaho Code, be, and the same is hereby
 23    amended to read as follows:
                                                                        
 24        28-23-106.  EXCEPTIONS. This act shall not require the repurchase  from  a
 25    retailer  of  a repair part where the retailer previously has failed to return
 26    the repair part to the wholesaler, manufacturer  or  distributor  after  being
 27    offered a reasonable opportunity to return the repair part at a price not less
 28    than  one  hundred per cent percent (100%) of the net price of the repair part
 29    as listed in the then  current  price  list  or  catalog,  and  transportation
 30    charges required in section 28-23-102, Idaho Code, which have been paid by the
 31    retailer,  or  invoiced  to the retailer's account. This act shall not require
 32    the repurchase from a retailer of repair parts which have  a  limited  storage
 33    life  or are otherwise subject to deterioration, such as rubber items, gaskets
 34    and batteries; repair parts in broken or damaged packages; single repair parts
 35    priced as a set of two (2) or more items; and repair the retailer purchased in
 36    a set of multiple parts, unless the set is complete and in resalable condition
 37    and parts which because of their condition are  not  resalable  as  new  parts
 38    without new packaging or reconditioning.
                                                                        
 39        SECTION 5.  That Section 28-23-108, Idaho Code, be, and the same is hereby
 40    amended to read as follows:
                                                                        
 41        28-23-108.  GUARANTY  AND  SECURITY  AGREEMENT  NOTICE  REQUIREMENTS.  All
 42    wholesalers,  manufacturers,  or  distributors  of farm implements, machinery,
 43    attachments, accessories or repair parts shall give the retailer a minimum  of
 44    sixty  ninety (690) days' notice in writing and obtain consent from the dealer
 45    before changing the time and manner of payment of  any  indebtedness  owed  by
 46    retailer  to  manufacturer,  distributor  or wholesaler, and before taking and
 47    making any changes in notes or  security  for  any  indebtedness,  and  before
 48    releasing  or  adding  additional  guarantors, and before granting renewals or
 49    extensions of such indebtedness.
                                                                        
                                           5
                                                                        
  1        SECTION 6.  That Section 28-24-102, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        28-24-102.  DEFINITIONS. As used in this chapter:
  4        (1)  "Assigned area of responsibility" means  the  geographic  region  for
  5    which  a  particular dealer is responsible for the marketing, selling, leasing
  6    or servicing of equipment pursuant to a dealer agreement as  assigned  by  the
  7    supplier.
  8        (2)  "Continuing  commercial relationship" means any relationship in which
  9    the equipment dealer has been granted the right to sell or  service  equipment
 10    manufactured by supplier.
 11        (23)  "Dealer  agreement"  means a contract or agreement, either expressed
 12    or implied, whether oral or written,  between  a  supplier  and  an  equipment
 13    dealer, by which the equipment dealer is granted the right to sell, distribute
 14    or  service  the  supplier's equipment, where there is a continuing commercial
 15    relationship between the supplier and the equipment dealer.
 16        (4)  "Demonstration and/or rental equipment" is equipment  that  has  been
 17    used but has not been sold to an end user.
 18        (35)  "Equipment"  means  machines  designed  for  or adapted and used for
 19    agriculture, horticulture, livestock and grazing and  related  industries  but
 20    not exclusive to agricultural use. Equipment also includes:
 21        (a)  "All-terrain  vehicles"  or "ATVs," including three-wheeled and four-
 22        wheeled motorized vehicles, generally characterized by large, low-pressure
 23        tires, a seat designed to be straddled by the operator, and handlebars for
 24        steering. All-terrain vehicles are intended for off-road use.
 25        (b)  "Outdoor power equipment" including equipment powered by a  two-cycle
 26        or  four-cycle  gas  or diesel engine, or electric motor, which is used to
 27        maintain commercial, public or residential lawns and gardens  or  used  in
 28        landscape, turf, golf course or plant nursery maintenance.
 29        (46)  "Equipment dealer" or "equipment dealership" means any person, part-
 30    nership,  corporation,  association or other form of business enterprise, pri-
 31    marily engaged in the retail sale and/or service of equipment in  this  state,
 32    pursuant  to any oral or written agreement for a definite or indefinite period
 33    of time in which there is a continuing commercial relationship in the  market-
 34    ing of the equipment or related services.
 35        (57)  "Good  cause"  means failure by an equipment dealer to substantially
 36    comply with essential and reasonable requirements imposed upon  the  equipment
 37    dealer  by the dealer agreement, provided, such requirements are not different
 38    from those requirements imposed on other similarly situated equipment  dealers
 39    in the state either by their terms or in the manner of their enforcement.
 40        (68)  "Supplier"  means the manufacturer, wholesaler or distributor of the
 41    equipment to be sold by the equipment dealer, or any successor in interest  to
 42    or assignee of the supplier. A successor in interest includes any purchaser of
 43    assets  or  stock, any surviving corporation resulting from merger or liquida-
 44    tion, any receiver or any trustee of the original supplier.
 45        (9)  "Warranty claim" means a claim for payment submitted by an  equipment
 46    dealer  to  a  supplier  for service or parts, or both, provided to a customer
 47    under a:
 48        (a)  Warranty issued by the supplier; or
 49        (b)  Recall or modification order issued by the supplier.
                                                                        
 50        SECTION 7.  That Section 28-24-103, Idaho Code, be, and the same is hereby
 51    amended to read as follows:
                                                                        
 52        28-24-103.  DEALER AGREEMENTS -- UNLAWFUL ACTS AND PRACTICES. It shall  be
                                                                        
                                           6
                                                                        
  1    a violation of the provisions of this chapter for a supplier to:
  2        (1)  Require or attempt to require any equipment dealer to order or accept
  3    delivery  of  any equipment or parts or any equipment with special features or
  4    accessories not included in the base list price of such equipment as  publicly
  5    advertised  by  the  supplier  which  the equipment dealer has not voluntarily
  6    ordered;
  7        (2)  Require or attempt to require any equipment dealer to enter into  any
  8    agreement,  whether  written  or  oral,  supplementing or amending an existing
  9    dealer agreement with such supplier unless  such  amendment  or  supplementary
 10    agreement is imposed on other similarly situated dealers in the state;
 11        (3)  Refuse  to  deliver  in reasonable quantities and within a reasonable
 12    time after receipt of the equipment dealer's order, to  any  equipment  dealer
 13    having  a  dealer  agreement for the retail sale of new equipment sold or dis-
 14    tributed by such supplier, equipment covered by such dealer agreement specifi-
 15    cally advertised or represented by such supplier to be available for immediate
 16    delivery. The failure to deliver any such equipment shall not be considered  a
 17    violation of the provisions of this chapter when deliveries are based on prior
 18    retail  sales  ordering histories, the priority given to the sequence in which
 19    the orders are received or manufacturing schedules or if such failure  is  due
 20    to  prudent  and reasonable restriction on extension of credit by the supplier
 21    to the equipment dealer, an act of God, work stoppage or delay due to a strike
 22    or labor difficulty, a bona fide shortage of  materials,  freight  embargo  or
 23    other cause over which the supplier has no control;
 24        (4)  Terminate, cancel or fail to renew the dealer agreement of any equip-
 25    ment  dealer  or  substantially  change  the  competitive circumstances of the
 26    dealer agreement, attempt to terminate or cancel, or threaten not to renew the
 27    dealer agreement or attempt or threaten to substantially change  the  competi-
 28    tive circumstances of the dealer agreement without good cause. Nothing in this
 29    paragraph  shall  be interpreted to apply to a discontinuation of or change in
 30    the product line of an equipment dealer;
 31        (5)  Condition the renewal, continuation or extension of a  dealer  agree-
 32    ment  on  the  equipment  dealer's  substantial  renovation  of  the equipment
 33    dealer's place of business or on the construction,  purchase,  acquisition  or
 34    rental of a new place of business by the equipment dealer, unless:
 35        (a)  The  supplier  has  advised  the  equipment  dealer in writing of its
 36        demand for such renovation, construction, purchase, acquisition or  rental
 37        within  a reasonable time prior to the effective date of the proposed date
 38        of renewal or extension, but in no case less than one (1) year; and
 39        (b)  The supplier demonstrates the need for such change in  the  place  of
 40        business  and  the  reasonableness of the demand with respect to marketing
 41        and servicing the supplier's products and any significant economic  condi-
 42        tions  existing  at the time in the equipment dealer's trade area, and the
 43        equipment dealer does not make a good faith effort to complete  such  con-
 44        struction or renovation  plans within one (1) year.
 45        (6)  Discriminate  in  the  prices charged for equipment of like grade and
 46    quality sold by the supplier to similarly situated dealers in this state where
 47    the effect of such discrimination may be to substantially  lessen  competition
 48    or  tend  to  create  a monopoly in a line of commerce. The provisions of this
 49    subsection do not prevent the use of differentials which make only due  allow-
 50    ance for differences in the cost of manufacture, sale or delivery of equipment
 51    resulting  from the differing methods or quantities in which such equipment is
 52    sold or delivered; provided that nothing shall prevent a supplier from  offer-
 53    ing  a  lower  price in order to meet an equally low price of a competitor, or
 54    the services or facilities furnished by a competitor;
 55        (7)  Unreasonably withhold consent for an equipment dealer to  change  the
                                                                        
                                           7
                                                                        
  1    capital  structure  of  the  equipment  dealership or the means by which it is
  2    financed,  provided that the equipment dealer  meets  the  reasonable  capital
  3    requirements of the supplier;
  4        (8)  Prevent,  by contract or otherwise, any equipment dealer or any offi-
  5    cer, member, partner or stockholder of an equipment dealership  from  selling,
  6    assigning, or transferring any interest or portion thereof held by any of them
  7    in  the  equipment dealership to any other person or party; provided, however,
  8    that no equipment dealer, officer, partner, member or stockholder  shall  have
  9    the  right  to sell, transfer, or assign the equipment dealership or the power
 10    of management or control thereof without the written consent of the  supplier,
 11    except  that  such  consent  shall  not be unreasonably withheld if the buyer,
 12    transferee, or assignee meets the reasonable  financial,  business  experience
 13    and  character standards of the supplier. Should a supplier determine that the
 14    designated transferee is not acceptable, the supplier shall provide the equip-
 15    ment dealer with written notice of the supplier's objections and specific rea-
 16    sons for withholding its consent within thirty (30) calendar days  of  receipt
 17    of notice from the equipment dealer;
 18        (9)  Require an equipment dealer to assent to a release, assignment, nova-
 19    tion, waiver or estoppel which would relieve any person from liability imposed
 20    by this chapter;
 21        (10) (a)  Unreasonably  withhold consent, in the event of the death of the
 22        equipment dealer or the principal owner of the  equipment  dealership,  to
 23        the  transfer  of the equipment dealer's or the principal owner's interest
 24        in the equipment dealership to a member or members of the  family  of  the
 25        equipment  dealer  or of the principal owner or to another qualified indi-
 26        vidual, if the family member or other qualified individual meets the  rea-
 27        sonable financial, business experience and character standards of the sup-
 28        plier. A supplier shall have sixty (60) days to consider a request to make
 29        a transfer to a family member or other qualified an individual. If, within
 30        that  period, the supplier determines that the designated family member or
 31        other qualified individual does not meet the reasonable  financial,  busi-
 32        ness  experience and character standards of the supplier, it shall provide
 33        the designated family member or  other  qualified  individual  dealership,
 34        heirs  to  the dealership, or the estate of the dealer with written notice
 35        of its objection and the specific reasons for withholding its consent.  If
 36        the  family  member or other qualified individual reasonably satisfies the
 37        supplier's objections within sixty (60) days  after  notice  thereof,  the
 38        supplier  shall  approve the transfer. As used in this paragraph, "family"
 39        means and includes a spouse, parents, siblings,  children,  step-children,
 40        sons-in-law,  daughters-in-law, and lineal descendants, including those by
 41        adoption of the equipment dealer or principal owner of the equipment deal-
 42        ership. Nothing in this paragraph shall entitle a family member  or  other
 43        qualified  individual  to  continue  to operate the dealership without the
 44        consent of the supplier.
 45        (b)  Notwithstanding the provisions of paragraph (a) of  this  subsection,
 46        in  the  event  that a supplier and equipment dealer have duly executed an
 47        agreement concerning succession rights prior  to  the  equipment  dealer's
 48        death, and if such agreement has not been revoked, such agreement shall be
 49        observed.
 50        (11) Cause  the equipment dealer to refrain from participation in the man-
 51    agement, investment, acquisition or sale of any other related product or prod-
 52    uct line of equipment, parts or accessories, from the same or  separate  loca-
 53    tions;
 54        (12) Fail to compensate a dealer for preparation and delivery of equipment
 55    that  the  supplier  sells  or  leases  for use within this state and that the
                                                                        
                                           8
                                                                        
  1    dealer prepares for delivery and delivers.
                                                                        
  2        SECTION 8.  That Section 28-24-104, Idaho Code, be, and the same is hereby
  3    amended to read as follows:
                                                                        
  4        28-24-104.  TERMINATION  OF  DEALER  AGREEMENT  OR  CHANGE  OF   EQUIPMENT
  5    DEALER'S  COMPETITIVE  CIRCUMSTANCES  --  NOTICE -- GOOD CAUSE. (1) A supplier
  6    shall provide written notice to the equipment dealer of any proposed  termina-
  7    tion or nonrenewal of a dealer agreement or substantial change in the competi-
  8    tive circumstances of a dealer agreement. The notice shall state the reason(s)
  9    constituting good cause for the action proposed to be taken. Except where good
 10    cause is alleged under the provisions of paragraphs (a) through (e) of subsec-
 11    tion  (2)  of  this  section,  such  notice shall be provided to the equipment
 12    dealer not less than ninety  (90) days before the proposed action is to become
 13    effective. Except where good cause is alleged under paragraphs (a) through (d)
 14    of subsection (2) of this section, the equipment dealer shall be  given  sixty
 15    ninety  (690) days within which to cure any claimed deficiency, and the notice
 16    shall advise the dealer of his right to cure. If  the  claimed  deficiency  is
 17    rectified  within  sixty  ninety  (690) days, the notice shall be void and the
 18    proposed action shall not  become  effective.  Notwithstanding  the  equipment
 19    dealer's  failure  to  cure  the  deficiency  or deficiencies claimed, where a
 20    ninety (90) day notice is required to be given by the supplier,  the  contrac-
 21    tual  term  of  the  dealer  agreement  shall not expire, nor shall the dealer
 22    agreement be otherwise terminated or cancelled canceled, nor shall the  equip-
 23    ment  dealer's competitive circumstances be substantially changed prior to the
 24    expiration of at least ninety (90) days  following  such  notice  without  the
 25    written consent of the equipment dealer.
 26        (2)  As used in this chapter, "good cause" shall exist, but not be limited
 27    to the following circumstances when the equipment dealer has:
 28        (a)  Transferred a controlling ownership interest in the equipment dealer-
 29        ship without the supplier's consent;
 30        (b)  Made a material misrepresentation to the supplier;
 31        (c)  Filed  a  voluntary  petition in bankruptcy or has had an involuntary
 32        petition in bankruptcy filed against the equipment dealer  which  has  not
 33        been  discharged  within  sixty  ninety (690) days after the filing; is in
 34        default under the provisions of a security agreement in  effect  with  the
 35        supplier; or is insolvent or in receivership;
 36        (d)  Been  convicted of a crime, punishable for a term of imprisonment for
 37        one (1) year or more;
 38        (e)  Failed to operate in the normal course of business for ten (10)  con-
 39        secutive business days or has terminated said business;
 40        (f)  Relocated  the  equipment  dealer's  place  of  business  without the
 41        supplier's consent;
 42        (g)  Consistently engaged in business practices which are  detrimental  to
 43        the consumer or supplier by way of excessive pricing, misleading advertis-
 44        ing,  failure to provide service and replacement parts or perform warranty
 45        obligations;
 46        (h)  Inadequately represented the supplier over a one  (1)  year  of  such
 47        period  of time or length of time period specified in the dealer agreement
 48        causing lack of performance in sales, service or warranty areas and failed
 49        to achieve market penetration at levels consistent with similarly situated
 50        equipment dealerships in the state based on available  record  information
 51        or  a time mutually agreed upon between the supplier and dealer to reflect
 52        the ongoing market conditions;
 53        (ih)  Consistently failed to meet building and housekeeping  requirements,
                                                                        
                                           9
                                                                        
  1        or  has  failed to provide adequate sales, service or parts personnel com-
  2        mensurate with the the dealer agreement;
  3        (ji)  Failed to comply with the applicable licensing  laws  pertaining  to
  4        the products and services being represented for and on supplier's behalf;
  5        (kj)  Materially failed to comply with the terms of the dealer agreement.
  6        (3)  Notwithstanding  the  provisions  of  subsection (2) of this section,
  7    before the termination or nonrenewal  of  a  dealer  agreement  based  upon  a
  8    supplier's  claim  that the dealer has failed to achieve market penetration at
  9    levels consistent with similarly situated dealerships in the state,  the  sup-
 10    plier  shall  provide written notice of its intention at least one (1) year in
 11    advance.
 12        (a)  After issuance of such a notice, the supplier shall provide fair  and
 13        reasonable efforts to work with the dealer to assist the dealer in gaining
 14        the  required  market  penetration  including,  but not limited to, making
 15        available to the dealer an adequate inventory of new equipment and  parts,
 16        and not withhold programs available to all dealers.
 17        (b)  Upon  the  end of the one (1) year period established in this subsec-
 18        tion (3), the supplier may terminate or elect  not  to  renew  the  dealer
 19        agreement  only upon written notice specifying the reasons for determining
 20        that the dealer failed to meet reasonable market penetration.  The  notice
 21        must  specify  that  termination  or  nonrenewal  is effective one hundred
 22        eighty (180) days from the date of the notice and that  either  party  may
 23        petition the court.
 24        (c)  A  supplier  bears  the  burden  of proving that a retailer's area of
 25        responsibility or trade area does not afford sufficient sales potential to
 26        reasonably support the retailer. The supplier's proof must be in writing.
                                                                        
 27        SECTION 9.  That Part 1, Chapter 24, Title 28, Idaho  Code,  be,  and  the
 28    same  is  hereby  amended by the addition thereto of NEW SECTIONS, to be known
 29    and designated as Sections 28-24-104A, 28-24-104B, 28-24-104C, 28-24-104D  and
 30    28-24-104E, Idaho Code, and to read as follows:
                                                                        
 31        28-24-104A.  ESTABLISHMENT  OF NEW DEALERSHIP -- SUPPLIER'S DUTIES. When a
 32    supplier enters into an agreement to establish a new dealer or  dealership  or
 33    to  relocate  a  current dealer or dealership for a particular product line or
 34    make of equipment, the supplier must give written notice of such an  agreement
 35    by  certified  mail to all existing dealers or dealerships whose assigned area
 36    of responsibility is contiguous to the new dealer or dealership  location.  If
 37    no  area of responsibility has been assigned then the supplier must give writ-
 38    ten notice of such an agreement by certified mail to the  dealers  or  dealer-
 39    ships  within  a seventy-five (75) mile radius of the new dealer location. The
 40    supplier must provide in its written notice the  following  information  about
 41    the proposed new or relocated dealer or dealership:
 42        (1)  The proposed location;
 43        (2)  The  proposed date for commencement of operation at the new location;
 44    and
 45        (3)  The identities of all existing dealers or dealerships whose  assigned
 46    area of responsibility is contiguous to the new dealer or dealership location.
 47    If  no  area  of  responsibility has been assigned then the supplier must give
 48    written notice of such an agreement by certified mail to the dealers or  deal-
 49    erships located within a seventy-five (75) mile radius of the new dealer loca-
 50    tion.
                                                                        
 51        28-24-104B.  WARRANTY  CLAIMS.  (1)  An equipment dealer may submit a war-
 52    ranty claim to a supplier if a warranty defect is  identified  and  documented
                                                                        
                                           10
                                                                        
  1    prior to the expiration of a supplier's warranty:
  2        (a)  While a dealer agreement is in effect; or
  3        (b)  After  the termination of a dealer agreement if the claim is for work
  4        performed while the dealer agreement was in effect.
  5        (2)  A supplier shall accept or reject a warranty  claim  submitted  under
  6    subsection  (1)  of this section, within thirty (30) days of the date the sup-
  7    plier received the claim. A warranty claim not  rejected  within  thirty  (30)
  8    days  of the date the supplier received the claim is considered to be accepted
  9    by the supplier.
 10        (3)  No later than thirty (30) days after the date  a  warranty  claim  is
 11    accepted or rejected under subsection (2) of this section, the supplier shall:
 12        (a)  Pay an accepted warranty claim; or
 13        (b)  Send  the  dealer written notice of the reason the warranty claim was
 14        rejected.
 15        (4)  A supplier shall compensate the dealer for the warranty claim as fol-
 16    lows:
 17        (a)  The dealer's established customer hourly retail labor rate multiplied
 18        by the reasonable and customary amount of time required to  complete  such
 19        work by similarly situated dealers, including diagnostic time, and cleanup
 20        time, expressed in hours and fractions of an hour;
 21        (b)  The dealer's current net price on repair parts reimbursed at not less
 22        than  net  plus twenty percent (20%) of the cost for warranty service per-
 23        formed on behalf of the supplier to compensate  for  reasonable  costs  of
 24        doing business; and
 25        (c)  Extraordinary  freight  and handling costs. For purposes of this sub-
 26        section (4)(c), "extraordinary freight and  handling  costs"  means  costs
 27        that  are above and beyond the normal reimbursement policy of the supplier
 28        for warranty repair work;
 29        (d)  When the repair work is for safety or mandatory modifications ordered
 30        by the supplier, the supplier shall reimburse the dealer  for  transporta-
 31        tion costs incurred by the dealer.
 32        (5)  After  payment  of  a warranty claim, a supplier may not charge back,
 33    off-set or otherwise attempt to recover from the dealer all  or  part  of  the
 34    amount of the claim unless:
 35        (a)  The warranty claim was submitted in error;
 36        (b)  The  services for which the warranty claim was made were not properly
 37        performed or were unnecessary to comply with the warranty; or
 38        (c)  The dealer did not substantiate the warranty claim according  to  the
 39        written  requirements  of the supplier that were in effect when the equip-
 40        ment was delivered to the dealer by the customer for warranty repairs.
 41        (6)  If a supplier denies a warranty claim due to  a  particular  item  or
 42    part of the claim, the denial shall only affect the items or parts in question
 43    and not the complete warranty claim.
 44        (7)  A  supplier  may  not pass the cost of covering warranty claims under
 45    this chapter on to a dealer through any means including:
 46        (a)  Surcharges;
 47        (b)  Reduction of discounts; or
 48        (c)  Certification standards.
 49        (8)  Notwithstanding the provisions of subsection (4) of this  section,  a
 50    dealer may accept the supplier's reimbursement terms and conditions in lieu of
 51    the terms and conditions set forth in subsection (4) of this section.
                                                                        
 52        28-24-104C.  AUDIT OF WARRANTY CLAIMS. A supplier may not audit a dealer's
 53    records  with  respect to any warranty claim submitted more than two (2) years
 54    before the date of the audit.
                                                                        
                                           11
                                                                        
  1        28-24-104D.  ARBITRATION. Any party to a retailer agreement  aggrieved  by
  2    the  conduct  of  the  other  party  to the agreement under sections 28-23-101
  3    through  28-23-111, Idaho Code, or under part 1, chapter 24, title  28,  Idaho
  4    Code,   may seek arbitration of the issues under sections 7-901 through 7-922,
  5    Idaho Code. Unless the parties agree to different arbitration rules, the arbi-
  6    tration shall be conducted in Idaho pursuant  to  the  commercial  arbitration
  7    rules  of  the  American  arbitration association. When the parties agree, the
  8    arbitration shall be the parties' only remedy and the findings and conclusions
  9    of the arbitrator or panel of arbitrators shall be binding upon both parties.
 10        (1)  The arbitrator or arbitrators may award the prevailing party:
 11        (a)  The costs of witness fees and other fees in the case;
 12        (b)  Reasonable attorney's fees; and
 13        (c)  Injunctive relief against unlawful  termination,  cancellation,  non-
 14        renewal or change in competitive circumstances.
 15        (2)  Any  retailer  has  a civil cause of action in district court in this
 16    state against a supplier for damages sustained by the  retailer  as  a  conse-
 17    quence  of  the  supplier's  violation  of part 1, chapter 24, title 28, Idaho
 18    Code, or sections 28-23-101 through 28-23-111, Idaho Code, together with:
 19        (a)  The actual costs of the action;
 20        (b)  Reasonable attorney's fees; and
 21        (c)  Injunctive relief against unlawful  termination,  cancellation,  non-
 22        renewal or change in competitive circumstances.
 23        (3)  No  dealer shall be required to waive his rights to judicial recourse
 24    by contractual agreements through  penalty  of  loss  of  trade  discounts  or
 25    changes  in the competitive circumstances of the dealer by the supplier deemed
 26    to be punitive in nature or effect. The remedies set forth in this section are
 27    not exclusive and are in addition to any  other  remedies  permitted  by  law,
 28    unless the parties have mutually agreed to binding arbitration under this sec-
 29    tion.
                                                                        
 30        28-24-104E.  SUCCESSORS IN INTEREST. The obligations of any supplier under
 31    this  chapter are applied to any successor in interest or assignee of the sup-
 32    plier. A successor in interest includes any purchaser of assets or stock,  any
 33    surviving  corporation  resulting from merger or liquidation, and any receiver
 34    or any trustee of the original supplier.
                                                                        
 35        SECTION 10.  That Section 28-24-105, Idaho  Code,  be,  and  the  same  is
 36    hereby amended to read as follows:
                                                                        
 37        28-24-105.  REMEDIES  AND  ENFORCEMENT.  Monetary damages may be recovered
 38    for losses sustained as a consequence of any violation of  the  provisions  of
 39    this  chapter.  Such recovery may also include a requirement that the supplier
 40    repurchase at fair market value any data  processing  hardware,  software  and
 41    specialized  repair tools and equipment previously purchased from the supplier
 42    or approved vendor of the supplier pursuant to requirements of  the  supplier.
 43    Injunctive  relief may also be granted against any actual or threatened viola-
 44    tion of the  provisions of this chapter. In  any  action  brought  under  this
 45    chapter   the  prevailing  party  shall  be  entitled  to  recover  reasonable
 46    attorney's fees and costs. The remedies set forth in this section shall not be
 47    deemed exclusive and shall be in addition to any other remedies  permitted  by
 48    law.  A  person, firm or corporation which brings an action under this section
 49    must commence the action in the county in which the principal place  of  busi-
 50    ness of the retailer is located.

Amendment


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                                                     Moved by    Miller              
                                                                        
                                                     Seconded by Rydalch             
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                              HOUSE AMENDMENT TO H.B. NO. 197
                                                                        
  1                                AMENDMENT TO SECTION 6
  2        On page 5 of the printed bill, in line 25, delete "including" and  insert:
  3    "means".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                               HOUSE BILL NO. 197, As Amended
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO AGRICULTURAL AND FARM EQUIPMENT AND  CONTRACTS;  AMENDING  SECTION
  3        28-23-101, IDAHO CODE, TO PROVIDE FOR THE PAYMENT OR CREDIT FOR DEMONSTRA-
  4        TION  OR  RENTAL  EQUIPMENT  THAT HAS NOT BEEN RETAILED TO AN END USER, TO
  5        PROVIDE FOR REPURCHASE OF DATA PROCESSING MATERIALS AND TO MAKE  TECHNICAL
  6        CORRECTIONS;  AMENDING SECTION 28-23-102, IDAHO CODE, TO REVISE THE PROCE-
  7        DURES AND CREDITS FOR REPURCHASE OF REPAIR PARTS, REPAIR MANUALS, SPECIAL-
  8        IZED REPAIR TOOLS AND SIGNAGE AND TO MAKE TECHNICAL CORRECTIONS;  AMENDING
  9        SECTION  28-23-105, IDAHO CODE, TO PROVIDE FOR ONE HUNDRED PERCENT CURRENT
 10        NET PRICE FOR MANUALS AND REPAIR MANUALS AND REASONABLE REIMBURSEMENT  FOR
 11        SERVICES PERFORMED IN CONNECTION WITH ASSEMBLY AND PREDELIVERY INSPECTIONS
 12        OF  THE EQUIPMENT, TO PROVIDE VENUE FOR CAUSES OF ACTION AND TO MAKE TECH-
 13        NICAL CORRECTIONS; AMENDING SECTION  28-23-106,  IDAHO  CODE,  TO  PROVIDE
 14        APPLICATION TO TRANSPORTATION CHARGES WHICH HAVE BEEN PAID BY THE RETAILER
 15        OR  INVOICED TO THE RETAILER'S ACCOUNT, TO PROVIDE APPLICATION TO MULTIPLE
 16        PARTS AND TO MAKE A  TECHNICAL  CORRECTION;  AMENDING  SECTION  28-23-108,
 17        IDAHO  CODE,  TO INCREASE NOTICE PROVISIONS TO NINETY DAYS, TO PROVIDE FOR
 18        NOTICE REGARDING ACCESSORIES AND TO MAKE A TECHNICAL CORRECTION;  AMENDING
 19        SECTION  28-24-102,  IDAHO CODE, TO FURTHER DEFINE TERMS; AMENDING SECTION
 20        28-24-103, IDAHO CODE, TO REVISE UNLAWFUL  ACTS  AND  PRACTICES  REGARDING
 21        EQUIPMENT  DEALERS; AMENDING SECTION 28-24-104, IDAHO CODE, TO REVISE TIME
 22        PERIODS FOR A DEALER TO CURE A DEFICIENCY, TO PROVIDE PROCEDURES PRIOR  TO
 23        THE  TERMINATION OR NONRENEWAL OF A DEALER AGREEMENT AND TO MAKE A TECHNI-
 24        CAL CORRECTION; AMENDING PART 1, CHAPTER 24, TITLE 28, IDAHO CODE, BY  THE
 25        ADDITION  OF  NEW  SECTIONS 28-24-104A, 28-24-104B, 28-24-104C, 28-24-104D
 26        AND 28-24-104E, IDAHO CODE, TO PROVIDE THE ESTABLISHMENT OF A NEW  DEALER-
 27        SHIP AND THE SUPPLIER'S DUTIES, TO PROVIDE FOR WARRANTY CLAIMS, TO PROVIDE
 28        FOR  AUDIT  OF  WARRANTY CLAIMS, TO PROVIDE FOR ARBITRATION AND TO PROVIDE
 29        FOR SUCCESSORS IN INTEREST; AND AMENDING SECTION 28-24-105, IDAHO CODE, TO
 30        INCLUDE DATA PROCESSING SOFTWARE IN REMEDIES AND  ENFORCEMENT  PROVISIONS,
 31        TO PROVIDE VENUE FOR CAUSES OF ACTION AND TO MAKE A TECHNICAL CORRECTION.
                                                                        
 32    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 33        SECTION 1.  That Section 28-23-101, Idaho Code, be, and the same is hereby
 34    amended to read as follows:
                                                                        
 35        28-23-101.  REPURCHASE  OF FARM MACHINERY, IMPLEMENTS, ATTACHMENTS, ACCES-
 36    SORIES AND PARTS UPON TERMINATION OF CONTRACT AND  OBLIGATION  TO  REPURCHASE.
 37    Whenever  any  person, firm, or corporation engaged in the business of selling
 38    and retailing farm implements and repair parts for farm implements enters into
 39    a written or parol contract, sales agreement or security agreement whereby the
 40    retailer agrees with any wholesaler,  manufacturer,  or  distributor  of  farm
 41    implements,  machinery, attachments, accessories or repair parts to maintain a
 42    stock of parts which may include, but is not limited  to,  complete  or  whole
 43    machines, or attachments, or demonstration and rental equipment and thereafter
                                                                        
                                           2
                                                                        
  1    the written or parol contract, sales agreement or security agreement is termi-
  2    nated,  cancelled canceled or discontinued, then the wholesaler, manufacturer,
  3    or distributor shall pay to the retailer or credit to the retailer's  account,
  4    if  the  retailer has outstanding any sums owing the wholesaler, manufacturer,
  5    or distributor, unless the retailer should desire and has a contractual  right
  6    to  keep  such merchandise, a sum equal to one hundred per cent percent (100%)
  7    of the net cost of all unused complete farm implements, machinery  and  repair
  8    parts  and  stock  of parts, attachments in new condition which have been pur-
  9    chased by the retailer from the wholesaler, manufacturer or distributor within
 10    the thirty-six (36) months immediately preceding notification by either  party
 11    of  intent to cancel or discontinue the contract, including the transportation
 12    charges to the retailer. and from the retailer to the  destination  designated
 13    by  the  wholesaler, manufacturer, or distributor, which have been paid by the
 14    retailer, or invoiced to retailer's account by the wholesaler, manufacturer or
 15    distributor The payment or credit for demonstration or rental  equipment  that
 16    has  not  been retailed to an end user is a sum equal to the depreciated value
 17    of the equipment to which the supplier  and  the  retailer  have  agreed.  The
 18    wholesaler,  manufacturer,  or distributor shall pay to the retailer a reason-
 19    able reimbursement for services performed in connection with the assembly  and
 20    predelivery  inspections  of  the farm equipment and attachments. The supplier
 21    assumes ownership of farm implements, machinery and repair parts and stock FOB
 22    the dealer location.
 23        A supplier must repurchase any specific data  processing  hardware,  soft-
 24    ware,  telecommunications  equipment and computer communications hardware spe-
 25    cifically required by the supplier to meet the supplier's minimum requirements
 26    and purchased by the dealer in the prior five (5) years and held by the dealer
 27    on the date of termination. The purchase price is the original net cost to the
 28    dealer, less twenty percent (20%) per year.
                                                                        
 29        SECTION 2.  That Section 28-23-102, Idaho Code, be, and the same is hereby
 30    amended to read as follows:
                                                                        
 31        28-23-102.  REPURCHASE OF REPAIR PARTS. Whenever any person, firm, or cor-
 32    poration engaged in the business of selling and retailing farm implements  and
 33    repair  parts  for  farm  implements  enters into a written or parol contract,
 34    sales agreement or security agreement whereby the  retailer  agrees  with  any
 35    wholesaler,  manufacturer,  or  distributor  of  farm  implements,  machinery,
 36    attachments,  accessories or repair parts to maintain a stock of parts or com-
 37    plete or whole machines, or attachments, manuals and repair manuals and there-
 38    after the written or parol contract, sales agreement or security agreement  is
 39    terminated,  cancelled canceled or discontinued, then the wholesaler, manufac-
 40    turer, or distributor shall pay to the retailer or credit  to  the  retailer's
 41    account,  if the retailer has outstanding any sums owing the wholesaler, manu-
 42    facturer, or distributor, unless the retailer should desire and has a contrac-
 43    tual right to keep such merchandise, a sum equal to one hundred per cent  per-
 44    cent  (100%)  of  the current net prices, including the transportation charges
 45    from the retailer to the destination, which shall include a  mailing  address,
 46    designated  by the wholesaler, manufacturer or distributor within fifteen (15)
 47    days of said termination, cancellation or discontinuance, wholesaler, manufac-
 48    turer or distributor which have been paid by the retailer, or  invoiced  to  a
 49    retailer's  account by the wholesaler, manufacturer or distributor, on manuals
 50    and repair manuals, repair parts, including superseded or previously  included
 51    parts listed in current price lists or catalogs or electronic catalogs in use,
 52    or  previously  used  within  thirty-six (36) months prior to the latest parts
 53    price list issue date by the wholesaler, manufacturer or  distributor  on  the
                                                                        
                                           3
                                                                        
  1    date of cancellation or discontinuance of the contract, which parts had previ-
  2    ously  been  purchased  by  the retailer from the wholesaler, manufacturer, or
  3    distributor and are held by the retailer on the date of  the  cancellation  or
  4    discontinuance of the contract or thereafter received by the retailer from the
  5    wholesaler, manufacturer or distributor.
  6        The  wholesaler,  manufacturer, or distributor shall also pay the retailer
  7    or credit to his account a sum equal to five per cent percent (5%) of the cur-
  8    rent net price of all parts returned for the handling, packing, and loading of
  9    the parts back to the wholesaler, manufacturer,   or  distributor  unless  the
 10    wholesaler,  manufacturer or distributor elects to perform inventorying, pack-
 11    ing and loading of the parts itself themselves.
 12        Upon the payment or allowance of credit to the retailer's account  of  the
 13    sum  required  by this section and section 28-23-101, Idaho Code, the title to
 14    the farm implements, farm machinery, attachments, accessories or repair  parts
 15    shall  pass  to the manufacturer, wholesaler or distributor making the payment
 16    or allowing the credit and the manufacturer, wholesaler or  distributor  shall
 17    be  entitled to the possession of the farm implements, machinery, attachments,
 18    accessories or repair parts. Title to farm implements,  attachments,  accesso-
 19    ries  and repair parts is transferred to the supplier FOB the dealer location.
 20    The provisions of this section shall  apply  to  any  part  return  adjustment
 21    agreement  made between a dealer and a supplier. All payments or allowances of
 22    credit due retailers under this section shall be paid or credited by the manu-
 23    facturer, wholesaler, or distributor within ninety (90) days after the  return
 24    of  the  farm  implements,  farm machinery, attachments, accessories or repair
 25    parts. After the ninety (90) days all sums of credits due shall include inter-
 26    est at the rate specified in section 28-22-104(1), Idaho Code.  However,  this
 27    section  and  section  28-23-101,  Idaho Code, shall not in any way affect any
 28    security interest which the wholesaler, manufacturer or distributor  may  have
 29    in the inventory of the retailer.
 30        A  supplier  shall  repurchase at one hundred percent (100%) of net dealer
 31    cost, manuals and repair manuals purchased in the previous six (6)  years  and
 32    at  fifty percent (50%) for manuals and repair manuals purchased in the previ-
 33    ous seven (7) through twelve (12) years as required by the supplier  and  held
 34    by  the  dealer on the date of termination. Manuals and repair manuals must be
 35    unique to the supplier's product line and must be in complete and in  readable
 36    condition.
 37        A supplier must repurchase, and the dealer must sell to the supplier, spe-
 38    cialized  repair tools. As applied in this section, "specialized repair tools"
 39    is defined as those tools required by the supplier and unique to the diagnosis
 40    or repair of the supplier's products. For specialized repair tools that are in
 41    new, unused condition and are applicable to the supplier's  current  products,
 42    the  purchase  price is one hundred percent (100%) of the original net cost to
 43    the dealer. For all other specialized repair tools, in complete and  resalable
 44    condition,  the  purchase  price  is  the original net cost to the dealer less
 45    twenty percent (20%) per year depreciation, but not less  than  fifty  percent
 46    (50%) of the original purchase price.
 47        A supplier must repurchase, and the dealer must sell to the supplier, cur-
 48    rent  signage.  As used in this section, "current signage" means the principal
 49    outdoor signage required by the supplier that displays the supplier's  current
 50    logo or similar exclusive identifier, and that identifies the dealer as repre-
 51    senting  either the supplier or the supplier's products, or both. The purchase
 52    price shall be the original net cost to the dealer less twenty  percent  (20%)
 53    per  year, but may in no case be less than fifty percent (50%) of the original
 54    cost to the dealer.
                                                                        
                                           4
                                                                        
  1        SECTION 3.  That Section 28-23-105, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        28-23-105.  FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION OF CONTRACTS  --
  4    LIABILITY.  In  the event that any manufacturer, wholesaler, or distributor of
  5    farm implements, machinery, attachments, accessories and  repair  parts,  upon
  6    the  cancellation  of  a  contract  by either a retailer or such manufacturer,
  7    wholesaler or distributor, fails or refuses to make payment to the  dealer  or
  8    his heir or heirs as required by this section, the manufacturer, wholesaler or
  9    distributor shall be liable in a civil action to be brought by the retailer or
 10    his  heir or heirs for (a) one hundred per cent percent (100%) of the net cost
 11    of the farm implements, machinery, and attachments and accessories, (b) trans-
 12    portation charges required in sections 28-23-101 and  28-23-102,  Idaho  Code,
 13    which  have  been paid by the retailer, or invoiced to the retailer's account,
 14    (c) one hundred per cent percent (100%) of the current  net  price  of  repair
 15    parts,   and (d) five per cent percent (5%) for handling, packing and loading,
 16    if applicable, (e) one hundred percent (100%) of the  current  net  price  for
 17    manuals and repair manuals, and (f) reasonable reimbursement for services per-
 18    formed  in  connection with assembly and predelivery inspections of the equip-
 19    ment. A person, firm or corporation which brings an action under this  section
 20    must  commence  the action in the county in which the principal place of busi-
 21    ness of the retailer is located.
                                                                        
 22        SECTION 4.  That Section 28-23-106, Idaho Code, be, and the same is hereby
 23    amended to read as follows:
                                                                        
 24        28-23-106.  EXCEPTIONS. This act shall not require the repurchase  from  a
 25    retailer  of  a repair part where the retailer previously has failed to return
 26    the repair part to the wholesaler, manufacturer  or  distributor  after  being
 27    offered a reasonable opportunity to return the repair part at a price not less
 28    than  one  hundred per cent percent (100%) of the net price of the repair part
 29    as listed in the then  current  price  list  or  catalog,  and  transportation
 30    charges required in section 28-23-102, Idaho Code, which have been paid by the
 31    retailer,  or  invoiced  to the retailer's account. This act shall not require
 32    the repurchase from a retailer of repair parts which have  a  limited  storage
 33    life  or are otherwise subject to deterioration, such as rubber items, gaskets
 34    and batteries; repair parts in broken or damaged packages; single repair parts
 35    priced as a set of two (2) or more items; and repair the retailer purchased in
 36    a set of multiple parts, unless the set is complete and in resalable condition
 37    and parts which because of their condition are  not  resalable  as  new  parts
 38    without new packaging or reconditioning.
                                                                        
 39        SECTION 5.  That Section 28-23-108, Idaho Code, be, and the same is hereby
 40    amended to read as follows:
                                                                        
 41        28-23-108.  GUARANTY  AND  SECURITY  AGREEMENT  NOTICE  REQUIREMENTS.  All
 42    wholesalers,  manufacturers,  or  distributors  of farm implements, machinery,
 43    attachments, accessories or repair parts shall give the retailer a minimum  of
 44    sixty  ninety (690) days' notice in writing and obtain consent from the dealer
 45    before changing the time and manner of payment of  any  indebtedness  owed  by
 46    retailer  to  manufacturer,  distributor  or wholesaler, and before taking and
 47    making any changes in notes or  security  for  any  indebtedness,  and  before
 48    releasing  or  adding  additional  guarantors, and before granting renewals or
 49    extensions of such indebtedness.
                                                                        
                                           5
                                                                        
  1        SECTION 6.  That Section 28-24-102, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        28-24-102.  DEFINITIONS. As used in this chapter:
  4        (1)  "Assigned area of responsibility" means  the  geographic  region  for
  5    which  a  particular dealer is responsible for the marketing, selling, leasing
  6    or servicing of equipment pursuant to a dealer agreement as  assigned  by  the
  7    supplier.
  8        (2)  "Continuing  commercial relationship" means any relationship in which
  9    the equipment dealer has been granted the right to sell or  service  equipment
 10    manufactured by supplier.
 11        (23)  "Dealer  agreement"  means a contract or agreement, either expressed
 12    or implied, whether oral or written,  between  a  supplier  and  an  equipment
 13    dealer, by which the equipment dealer is granted the right to sell, distribute
 14    or  service  the  supplier's equipment, where there is a continuing commercial
 15    relationship between the supplier and the equipment dealer.
 16        (4)  "Demonstration and/or rental equipment" is equipment  that  has  been
 17    used but has not been sold to an end user.
 18        (35)  "Equipment"  means  machines  designed  for  or adapted and used for
 19    agriculture, horticulture, livestock and grazing and  related  industries  but
 20    not exclusive to agricultural use. Equipment also includes:
 21        (a)  "All-terrain  vehicles"  or "ATVs," including three-wheeled and four-
 22        wheeled motorized vehicles, generally characterized by large, low-pressure
 23        tires, a seat designed to be straddled by the operator, and handlebars for
 24        steering. All-terrain vehicles are intended for off-road use.
 25        (b)  "Outdoor power equipment" means equipment powered by a  two-cycle  or
 26        four-cycle gas or diesel engine, or electric motor, which is used to main-
 27        tain  commercial, public or residential lawns and gardens or used in land-
 28        scape, turf, golf course or plant nursery maintenance.
 29        (46)  "Equipment dealer" or "equipment dealership" means any person, part-
 30    nership, corporation, association or other form of business  enterprise,  pri-
 31    marily  engaged  in the retail sale and/or service of equipment in this state,
 32    pursuant to any oral or written agreement for a definite or indefinite  period
 33    of  time in which there is a continuing commercial relationship in the market-
 34    ing of the equipment or related services.
 35        (57)  "Good cause" means failure by an equipment dealer  to  substantially
 36    comply  with  essential and reasonable requirements imposed upon the equipment
 37    dealer by the dealer agreement, provided, such requirements are not  different
 38    from  those requirements imposed on other similarly situated equipment dealers
 39    in the state either by their terms or in the manner of their enforcement.
 40        (68)  "Supplier" means the manufacturer, wholesaler or distributor of  the
 41    equipment  to be sold by the equipment dealer, or any successor in interest to
 42    or assignee of the supplier. A successor in interest includes any purchaser of
 43    assets or stock, any surviving corporation resulting from merger  or  liquida-
 44    tion, any receiver or any trustee of the original supplier.
 45        (9)  "Warranty  claim" means a claim for payment submitted by an equipment
 46    dealer to a supplier for service or parts, or both,  provided  to  a  customer
 47    under a:
 48        (a)  Warranty issued by the supplier; or
 49        (b)  Recall or modification order issued by the supplier.
                                                                        
 50        SECTION 7.  That Section 28-24-103, Idaho Code, be, and the same is hereby
 51    amended to read as follows:
                                                                        
 52        28-24-103.  DEALER  AGREEMENTS -- UNLAWFUL ACTS AND PRACTICES. It shall be
                                                                        
                                           6
                                                                        
  1    a violation of the provisions of this chapter for a supplier to:
  2        (1)  Require or attempt to require any equipment dealer to order or accept
  3    delivery of any equipment or parts or any equipment with special  features  or
  4    accessories  not included in the base list price of such equipment as publicly
  5    advertised by the supplier which the  equipment  dealer  has  not  voluntarily
  6    ordered;
  7        (2)  Require  or attempt to require any equipment dealer to enter into any
  8    agreement, whether written or oral,  supplementing  or  amending  an  existing
  9    dealer  agreement  with  such  supplier unless such amendment or supplementary
 10    agreement is imposed on other similarly situated dealers in the state;
 11        (3)  Refuse to deliver in reasonable quantities and  within  a  reasonable
 12    time  after  receipt  of the equipment dealer's order, to any equipment dealer
 13    having a dealer agreement for the retail sale of new equipment  sold  or  dis-
 14    tributed by such supplier, equipment covered by such dealer agreement specifi-
 15    cally advertised or represented by such supplier to be available for immediate
 16    delivery.  The failure to deliver any such equipment shall not be considered a
 17    violation of the provisions of this chapter when deliveries are based on prior
 18    retail sales ordering histories, the priority given to the sequence  in  which
 19    the  orders  are received or manufacturing schedules or if such failure is due
 20    to prudent and reasonable restriction on extension of credit by  the  supplier
 21    to the equipment dealer, an act of God, work stoppage or delay due to a strike
 22    or  labor  difficulty,  a  bona fide shortage of materials, freight embargo or
 23    other cause over which the supplier has no control;
 24        (4)  Terminate, cancel or fail to renew the dealer agreement of any equip-
 25    ment dealer or substantially  change  the  competitive  circumstances  of  the
 26    dealer agreement, attempt to terminate or cancel, or threaten not to renew the
 27    dealer  agreement  or attempt or threaten to substantially change the competi-
 28    tive circumstances of the dealer agreement without good cause. Nothing in this
 29    paragraph shall be interpreted to apply to a discontinuation of or  change  in
 30    the product line of an equipment dealer;
 31        (5)  Condition  the  renewal, continuation or extension of a dealer agree-
 32    ment on  the  equipment  dealer's  substantial  renovation  of  the  equipment
 33    dealer's  place  of  business or on the construction, purchase, acquisition or
 34    rental of a new place of business by the equipment dealer, unless:
 35        (a)  The supplier has advised the  equipment  dealer  in  writing  of  its
 36        demand  for such renovation, construction, purchase, acquisition or rental
 37        within a reasonable time prior to the effective date of the proposed  date
 38        of renewal or extension, but in no case less than one (1) year; and
 39        (b)  The  supplier  demonstrates  the need for such change in the place of
 40        business and the reasonableness of the demand with  respect  to  marketing
 41        and  servicing the supplier's products and any significant economic condi-
 42        tions existing at the time in the equipment dealer's trade area,  and  the
 43        equipment  dealer  does not make a good faith effort to complete such con-
 44        struction or renovation  plans within one (1) year.
 45        (6)  Discriminate in the prices charged for equipment of  like  grade  and
 46    quality sold by the supplier to similarly situated dealers in this state where
 47    the  effect  of such discrimination may be to substantially lessen competition
 48    or tend to create a monopoly in a line of commerce.  The  provisions  of  this
 49    subsection  do not prevent the use of differentials which make only due allow-
 50    ance for differences in the cost of manufacture, sale or delivery of equipment
 51    resulting from the differing methods or quantities in which such equipment  is
 52    sold  or delivered; provided that nothing shall prevent a supplier from offer-
 53    ing a lower price in order to meet an equally low price of  a  competitor,  or
 54    the services or facilities furnished by a competitor;
 55        (7)  Unreasonably  withhold  consent for an equipment dealer to change the
                                                                        
                                           7
                                                                        
  1    capital structure of the equipment dealership or the  means  by  which  it  is
  2    financed,    provided  that  the equipment dealer meets the reasonable capital
  3    requirements of the supplier;
  4        (8)  Prevent, by contract or otherwise, any equipment dealer or any  offi-
  5    cer,  member,  partner or stockholder of an equipment dealership from selling,
  6    assigning, or transferring any interest or portion thereof held by any of them
  7    in the equipment dealership to any other person or party;  provided,  however,
  8    that  no  equipment dealer, officer, partner, member or stockholder shall have
  9    the right to sell, transfer, or assign the equipment dealership or  the  power
 10    of  management or control thereof without the written consent of the supplier,
 11    except that such consent shall not be  unreasonably  withheld  if  the  buyer,
 12    transferee,  or  assignee  meets the reasonable financial, business experience
 13    and character standards of the supplier. Should a supplier determine that  the
 14    designated transferee is not acceptable, the supplier shall provide the equip-
 15    ment dealer with written notice of the supplier's objections and specific rea-
 16    sons  for  withholding its consent within thirty (30) calendar days of receipt
 17    of notice from the equipment dealer;
 18        (9)  Require an equipment dealer to assent to a release, assignment, nova-
 19    tion, waiver or estoppel which would relieve any person from liability imposed
 20    by this chapter;
 21        (10) (a)  Unreasonably withhold consent, in the event of the death of  the
 22        equipment  dealer  or  the principal owner of the equipment dealership, to
 23        the transfer of the equipment dealer's or the principal  owner's  interest
 24        in  the  equipment  dealership to a member or members of the family of the
 25        equipment dealer or of the principal owner or to another  qualified  indi-
 26        vidual,  if the family member or other qualified individual meets the rea-
 27        sonable financial, business experience and character standards of the sup-
 28        plier. A supplier shall have sixty (60) days to consider a request to make
 29        a transfer to a family member or other qualified an individual. If, within
 30        that period, the supplier determines that the designated family member  or
 31        other  qualified  individual does not meet the reasonable financial, busi-
 32        ness experience and character standards of the supplier, it shall  provide
 33        the  designated  family  member  or other qualified individual dealership,
 34        heirs to the dealership, or the estate of the dealer with  written  notice
 35        of  its objection and the specific reasons for withholding its consent. If
 36        the family member or other qualified individual reasonably  satisfies  the
 37        supplier's  objections  within  sixty  (60) days after notice thereof, the
 38        supplier shall approve the transfer. As used in this  paragraph,  "family"
 39        means  and  includes a spouse, parents, siblings, children, step-children,
 40        sons-in-law, daughters-in-law, and lineal descendants, including those  by
 41        adoption of the equipment dealer or principal owner of the equipment deal-
 42        ership.  Nothing  in this paragraph shall entitle a family member or other
 43        qualified individual to continue to operate  the  dealership  without  the
 44        consent of the supplier.
 45        (b)  Notwithstanding  the  provisions of paragraph (a) of this subsection,
 46        in the event that a supplier and equipment dealer have  duly  executed  an
 47        agreement  concerning  succession  rights  prior to the equipment dealer's
 48        death, and if such agreement has not been revoked, such agreement shall be
 49        observed.
 50        (11) Cause the equipment dealer to refrain from participation in the  man-
 51    agement, investment, acquisition or sale of any other related product or prod-
 52    uct  line  of equipment, parts or accessories, from the same or separate loca-
 53    tions;
 54        (12) Fail to compensate a dealer for preparation and delivery of equipment
 55    that the supplier sells or leases for use  within  this  state  and  that  the
                                                                        
                                           8
                                                                        
  1    dealer prepares for delivery and delivers.
                                                                        
  2        SECTION 8.  That Section 28-24-104, Idaho Code, be, and the same is hereby
  3    amended to read as follows:
                                                                        
  4        28-24-104.  TERMINATION   OF  DEALER  AGREEMENT  OR  CHANGE  OF  EQUIPMENT
  5    DEALER'S COMPETITIVE CIRCUMSTANCES -- NOTICE -- GOOD  CAUSE.  (1)  A  supplier
  6    shall  provide written notice to the equipment dealer of any proposed termina-
  7    tion or nonrenewal of a dealer agreement or substantial change in the competi-
  8    tive circumstances of a dealer agreement. The notice shall state the reason(s)
  9    constituting good cause for the action proposed to be taken. Except where good
 10    cause is alleged under the provisions of paragraphs (a) through (e) of subsec-
 11    tion (2) of this section, such notice  shall  be  provided  to  the  equipment
 12    dealer not less than ninety  (90) days before the proposed action is to become
 13    effective. Except where good cause is alleged under paragraphs (a) through (d)
 14    of  subsection  (2) of this section, the equipment dealer shall be given sixty
 15    ninety (690) days within which to cure any claimed deficiency, and the  notice
 16    shall  advise  the  dealer  of his right to cure. If the claimed deficiency is
 17    rectified within sixty ninety (690) days, the notice shall  be  void  and  the
 18    proposed  action  shall  not  become  effective. Notwithstanding the equipment
 19    dealer's failure to cure the  deficiency  or  deficiencies  claimed,  where  a
 20    ninety  (90)  day notice is required to be given by the supplier, the contrac-
 21    tual term of the dealer agreement shall  not  expire,  nor  shall  the  dealer
 22    agreement  be otherwise terminated or cancelled canceled, nor shall the equip-
 23    ment dealer's competitive circumstances be substantially changed prior to  the
 24    expiration  of  at  least  ninety  (90) days following such notice without the
 25    written consent of the equipment dealer.
 26        (2)  As used in this chapter, "good cause" shall exist, but not be limited
 27    to the following circumstances when the equipment dealer has:
 28        (a)  Transferred a controlling ownership interest in the equipment dealer-
 29        ship without the supplier's consent;
 30        (b)  Made a material misrepresentation to the supplier;
 31        (c)  Filed a voluntary petition in bankruptcy or has  had  an  involuntary
 32        petition  in  bankruptcy  filed against the equipment dealer which has not
 33        been discharged within sixty ninety (690) days after  the  filing;  is  in
 34        default  under  the  provisions of a security agreement in effect with the
 35        supplier; or is insolvent or in receivership;
 36        (d)  Been convicted of a crime, punishable for a term of imprisonment  for
 37        one (1) year or more;
 38        (e)  Failed  to operate in the normal course of business for ten (10) con-
 39        secutive business days or has terminated said business;
 40        (f)  Relocated the  equipment  dealer's  place  of  business  without  the
 41        supplier's consent;
 42        (g)  Consistently  engaged  in business practices which are detrimental to
 43        the consumer or supplier by way of excessive pricing, misleading advertis-
 44        ing, failure to provide service and replacement parts or perform  warranty
 45        obligations;
 46        (h)  Inadequately  represented  the  supplier  over a one (1) year of such
 47        period of time or length of time period specified in the dealer  agreement
 48        causing lack of performance in sales, service or warranty areas and failed
 49        to achieve market penetration at levels consistent with similarly situated
 50        equipment  dealerships  in the state based on available record information
 51        or a time mutually agreed upon between the supplier and dealer to  reflect
 52        the ongoing market conditions;
 53        (ih)  Consistently  failed to meet building and housekeeping requirements,
                                                                        
                                           9
                                                                        
  1        or has failed to provide adequate sales, service or parts  personnel  com-
  2        mensurate with the the dealer agreement;
  3        (ji)  Failed  to  comply  with the applicable licensing laws pertaining to
  4        the products and services being represented for and on supplier's behalf;
  5        (kj)  Materially failed to comply with the terms of the dealer agreement.
  6        (3)  Notwithstanding the provisions of subsection  (2)  of  this  section,
  7    before  the  termination  or  nonrenewal  of  a  dealer agreement based upon a
  8    supplier's claim that the dealer has failed to achieve market  penetration  at
  9    levels  consistent  with similarly situated dealerships in the state, the sup-
 10    plier shall provide written notice of its intention at least one (1)  year  in
 11    advance.
 12        (a)  After  issuance of such a notice, the supplier shall provide fair and
 13        reasonable efforts to work with the dealer to assist the dealer in gaining
 14        the required market penetration including,  but  not  limited  to,  making
 15        available  to the dealer an adequate inventory of new equipment and parts,
 16        and not withhold programs available to all dealers.
 17        (b)  Upon the end of the one (1) year period established in  this  subsec-
 18        tion  (3),  the  supplier  may  terminate or elect not to renew the dealer
 19        agreement only upon written notice specifying the reasons for  determining
 20        that  the  dealer failed to meet reasonable market penetration. The notice
 21        must specify that termination  or  nonrenewal  is  effective  one  hundred
 22        eighty  (180)  days  from the date of the notice and that either party may
 23        petition the court.
 24        (c)  A supplier bears the burden of proving  that  a  retailer's  area  of
 25        responsibility or trade area does not afford sufficient sales potential to
 26        reasonably support the retailer. The supplier's proof must be in writing.
                                                                        
 27        SECTION  9.  That  Part  1,  Chapter 24, Title 28, Idaho Code, be, and the
 28    same is hereby amended by the addition thereto of NEW SECTIONS,  to  be  known
 29    and  designated as Sections 28-24-104A, 28-24-104B, 28-24-104C, 28-24-104D and
 30    28-24-104E, Idaho Code, and to read as follows:
                                                                        
 31        28-24-104A.  ESTABLISHMENT OF NEW DEALERSHIP -- SUPPLIER'S DUTIES. When  a
 32    supplier  enters  into an agreement to establish a new dealer or dealership or
 33    to relocate a current dealer or dealership for a particular  product  line  or
 34    make  of equipment, the supplier must give written notice of such an agreement
 35    by certified mail to all existing dealers or dealerships whose  assigned  area
 36    of  responsibility  is contiguous to the new dealer or dealership location. If
 37    no area of responsibility has been assigned then the supplier must give  writ-
 38    ten  notice  of  such an agreement by certified mail to the dealers or dealer-
 39    ships within a seventy-five (75) mile radius of the new dealer  location.  The
 40    supplier  must  provide  in its written notice the following information about
 41    the proposed new or relocated dealer or dealership:
 42        (1)  The proposed location;
 43        (2)  The proposed date for commencement of operation at the new  location;
 44    and
 45        (3)  The  identities of all existing dealers or dealerships whose assigned
 46    area of responsibility is contiguous to the new dealer or dealership location.
 47    If no area of responsibility has been assigned then  the  supplier  must  give
 48    written  notice of such an agreement by certified mail to the dealers or deal-
 49    erships located within a seventy-five (75) mile radius of the new dealer loca-
 50    tion.
                                                                        
 51        28-24-104B.  WARRANTY CLAIMS. (1) An equipment dealer may  submit  a  war-
 52    ranty  claim  to  a supplier if a warranty defect is identified and documented
                                                                        
                                           10
                                                                        
  1    prior to the expiration of a supplier's warranty:
  2        (a)  While a dealer agreement is in effect; or
  3        (b)  After the termination of a dealer agreement if the claim is for  work
  4        performed while the dealer agreement was in effect.
  5        (2)  A  supplier  shall  accept or reject a warranty claim submitted under
  6    subsection (1) of this section, within thirty (30) days of the date  the  sup-
  7    plier  received  the  claim.  A warranty claim not rejected within thirty (30)
  8    days of the date the supplier received the claim is considered to be  accepted
  9    by the supplier.
 10        (3)  No  later  than  thirty  (30) days after the date a warranty claim is
 11    accepted or rejected under subsection (2) of this section, the supplier shall:
 12        (a)  Pay an accepted warranty claim; or
 13        (b)  Send the dealer written notice of the reason the warranty  claim  was
 14        rejected.
 15        (4)  A supplier shall compensate the dealer for the warranty claim as fol-
 16    lows:
 17        (a)  The dealer's established customer hourly retail labor rate multiplied
 18        by  the  reasonable and customary amount of time required to complete such
 19        work by similarly situated dealers, including diagnostic time, and cleanup
 20        time, expressed in hours and fractions of an hour;
 21        (b)  The dealer's current net price on repair parts reimbursed at not less
 22        than net plus twenty percent (20%) of the cost for warranty  service  per-
 23        formed  on  behalf  of  the supplier to compensate for reasonable costs of
 24        doing business; and
 25        (c)  Extraordinary freight and handling costs. For purposes of  this  sub-
 26        section  (4)(c),  "extraordinary  freight  and handling costs" means costs
 27        that are above and beyond the normal reimbursement policy of the  supplier
 28        for warranty repair work;
 29        (d)  When the repair work is for safety or mandatory modifications ordered
 30        by  the  supplier, the supplier shall reimburse the dealer for transporta-
 31        tion costs incurred by the dealer.
 32        (5)  After payment of a warranty claim, a supplier may  not  charge  back,
 33    off-set  or  otherwise  attempt  to recover from the dealer all or part of the
 34    amount of the claim unless:
 35        (a)  The warranty claim was submitted in error;
 36        (b)  The services for which the warranty claim was made were not  properly
 37        performed or were unnecessary to comply with the warranty; or
 38        (c)  The  dealer  did not substantiate the warranty claim according to the
 39        written requirements of the supplier that were in effect when  the  equip-
 40        ment was delivered to the dealer by the customer for warranty repairs.
 41        (6)  If  a  supplier  denies  a warranty claim due to a particular item or
 42    part of the claim, the denial shall only affect the items or parts in question
 43    and not the complete warranty claim.
 44        (7)  A supplier may not pass the cost of covering  warranty  claims  under
 45    this chapter on to a dealer through any means including:
 46        (a)  Surcharges;
 47        (b)  Reduction of discounts; or
 48        (c)  Certification standards.
 49        (8)  Notwithstanding  the  provisions of subsection (4) of this section, a
 50    dealer may accept the supplier's reimbursement terms and conditions in lieu of
 51    the terms and conditions set forth in subsection (4) of this section.
                                                                        
 52        28-24-104C.  AUDIT OF WARRANTY CLAIMS. A supplier may not audit a dealer's
 53    records with respect to any warranty claim submitted more than two  (2)  years
 54    before the date of the audit.
                                                                        
                                           11
                                                                        
  1        28-24-104D.  ARBITRATION.  Any  party to a retailer agreement aggrieved by
  2    the conduct of the other party  to  the  agreement  under  sections  28-23-101
  3    through   28-23-111,  Idaho Code, or under part 1, chapter 24, title 28, Idaho
  4    Code,  may seek arbitration of the issues under sections 7-901 through  7-922,
  5    Idaho Code. Unless the parties agree to different arbitration rules, the arbi-
  6    tration  shall  be  conducted  in Idaho pursuant to the commercial arbitration
  7    rules of the American arbitration association. When  the  parties  agree,  the
  8    arbitration shall be the parties' only remedy and the findings and conclusions
  9    of the arbitrator or panel of arbitrators shall be binding upon both parties.
 10        (1)  The arbitrator or arbitrators may award the prevailing party:
 11        (a)  The costs of witness fees and other fees in the case;
 12        (b)  Reasonable attorney's fees; and
 13        (c)  Injunctive  relief  against  unlawful termination, cancellation, non-
 14        renewal or change in competitive circumstances.
 15        (2)  Any retailer has a civil cause of action in district  court  in  this
 16    state  against  a  supplier  for damages sustained by the retailer as a conse-
 17    quence of the supplier's violation of part 1,  chapter  24,  title  28,  Idaho
 18    Code, or sections 28-23-101 through 28-23-111, Idaho Code, together with:
 19        (a)  The actual costs of the action;
 20        (b)  Reasonable attorney's fees; and
 21        (c)  Injunctive  relief  against  unlawful termination, cancellation, non-
 22        renewal or change in competitive circumstances.
 23        (3)  No dealer shall be required to waive his rights to judicial  recourse
 24    by  contractual  agreements  through  penalty  of  loss  of trade discounts or
 25    changes in the competitive circumstances of the dealer by the supplier  deemed
 26    to be punitive in nature or effect. The remedies set forth in this section are
 27    not  exclusive  and  are  in  addition to any other remedies permitted by law,
 28    unless the parties have mutually agreed to binding arbitration under this sec-
 29    tion.
                                                                        
 30        28-24-104E.  SUCCESSORS IN INTEREST. The obligations of any supplier under
 31    this chapter are applied to any successor in interest or assignee of the  sup-
 32    plier.  A successor in interest includes any purchaser of assets or stock, any
 33    surviving corporation resulting from merger or liquidation, and  any  receiver
 34    or any trustee of the original supplier.
                                                                        
 35        SECTION  10.  That  Section  28-24-105,  Idaho  Code,  be, and the same is
 36    hereby amended to read as follows:
                                                                        
 37        28-24-105.  REMEDIES AND ENFORCEMENT. Monetary damages  may  be  recovered
 38    for  losses  sustained  as a consequence of any violation of the provisions of
 39    this chapter. Such recovery may also include a requirement that  the  supplier
 40    repurchase  at  fair  market  value any data processing hardware, software and
 41    specialized repair tools and equipment previously purchased from the  supplier
 42    or  approved  vendor of the supplier pursuant to requirements of the supplier.
 43    Injunctive relief may also be granted against any actual or threatened  viola-
 44    tion  of  the    provisions  of this chapter. In any action brought under this
 45    chapter  the  prevailing  party  shall  be  entitled  to  recover   reasonable
 46    attorney's fees and costs. The remedies set forth in this section shall not be
 47    deemed  exclusive  and shall be in addition to any other remedies permitted by
 48    law. A person, firm or corporation which brings an action under  this  section
 49    must  commence  the action in the county in which the principal place of busi-
 50    ness of the retailer is located.

Statement of Purpose / Fiscal Impact


                     STATEMENT  OF  PURPOSE

                            RS 14390

This legislation updates the statutory requirements defining the
business relations between the independent equipment dealer and the
manufacturers, wholesalers, and suppliers.  It updates the "buy-
back" statutes to require the manufacturer/suppliers to repurchase
their required data processing, telecommunications, and computer
equipment, signage, special tools, repair manuals, and rental and
demonstration equipment.  It also updates the protection statutes
to include provisions concernign transfer of ownership; selling of
"other" product lines; dealer compensation; soliciting of
customers; notice requirements; and warranty compensation.
The purpose of this legislation is to update the current Idaho
dealer statutes to a level at least equal to their counterparts in
the surrounding areas.

                                
                           FISCAL NOTE

There is no fiscal impact to the state general fund.


CONTACT   Rep. Sharon Block
          Rep. John A. "Bert" Stevenson
          Sen. Bart M. Davis
          (208) 332-1000
          Doug Burks, Burks Tractor, Twin Falls, ID
          (208) 733-5543
          Ed Schlofman, Schlofman Tractor & Implement Co.
          (208) 376-3333
          Ken Roberts


STATEMENT OF PURPOSE/FISCAL NOTE                   H 197