Bill Text: PA HB1498 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Further providing for definitions, for termination of dealer agreement, for death or incapacitation of dealer and for repurchase of unused specialized repair tools; repealing provisions relating to coercion; and providing for violations of act, for warranty, for remedies and enforcement and for waiver.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2010-10-14 - Laid on the table [HB1498 Detail]

Download: Pennsylvania-2009-HB1498-Introduced.html

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PRINTER'S NO. 1877
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1498 Session of2009
INTRODUCED BY HANNA, CALTAGIRONE, CONKLIN, FABRIZIO, HORNAMAN, HOUGHTON, JOSEPHS, MOUL, PHILLIPS, READSHAW, SOLOBAY, SWANGER, YOUNGBLOOD, STERN AND BAKER, MAY 26, 2009
REFERRED TO COMMITTEE ON COMMERCE, MAY 26, 2009
AN ACT
Amending the act of December 18, 1987 (P.L.412, No.86), entitled
"An act providing for the repurchase by the wholesaler,
manufacturer or distributor, from dealers or heirs of
dealers, of certain equipment, certain attachments and parts
held for sale upon termination of agreement whereby the
dealer agrees to maintain a stock of such implements,
attachments and parts, and for the repurchase of certain
tools," further providing for definitions, for termination of
dealer agreement, for death or incapacitation of dealer and
for repurchase of unused specialized repair tools; repealing
provisions relating to coercion; and providing for violations
of act, for warranty, for remedies and enforcement and for
waiver.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 2, 3(a) and (f), 5 and 6 of the act of
December 18, 1987 (P.L.412, No.86), known as the Pennsylvania
Fair Dealership Law, are amended to read:
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Current net price." The price, applicable to an individual
dealer, listed in the printed price list or catalog or invoice
in use by the supplier on the date the dealer agreement is
terminated or canceled or has failed to be renewed.
"Dealer." Any person, firm or corporation engaged primarily
in the business of retail sale or repair of equipment. The term
includes the heir or authorized representative of a person or
majority stockholder of a corporation operating as a dealer in
the event such person or stockholder dies or becomes
incapacitated.
"Dealer agreement." An oral or written contract, franchise
agreement or security agreement between a dealer and supplier
whereby the dealer agrees to acquire from the supplier and to
maintain an inventory of equipment, repair parts or specialized
repair tools.
"Equipment." Machines, implements of husbandry, all-terrain
vehicles, golf, turf and grounds maintenance machines, outdoor
power equipment, power sports machines and utility vehicles and
machine attachments, accessories, completing packages and
bundles designed for or adapted and used for agriculture,
horticulture, floriculture, light construction, livestock
raising, silviculture, landscaping and grounds maintenance, even
though incidentally operated or used upon the highways,
including, but not limited to, tractors, farm implements,
loaders, backhoes, lawn mowers, rototillers, etc., and any
business signs purchased by requirement of the supplier which
are less than five years old. The term shall not include[:
(1)] equipment manufactured solely for the purpose of
industrial construction[; or
(2) all-terrain vehicles as defined in 75 Pa.C.S. § 7702
(relating to definitions)].
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"Net cost." The amount paid by the dealer to the supplier,
plus the cost of freight, if any, incurred by the dealer.
"Repair parts." All parts, component parts and superseded
parts related to a sale and related to repair of equipment. The
term includes bundled parts, which means several related parts,
components or accessories, bound together as one inclusive item
or priced as an inclusive item.
"Specialized repair tools." Tools and equipment, including
diagnostic equipment, designed to be used or useful only in the
maintenance and repair of equipment.
"Supplier." [A manufacturer of equipment or repair parts or
a wholesaler or distributor of equipment or repair parts who has
a valid existing contract with a manufacturer of equipment or
repair parts, including the successors or assigns of such
manufacturer, wholesaler or distributor.] A distributor,
manufacturer or wholesaler of equipment, repair parts or
specialized repair tools who enters into a dealer agreement with
a dealer.
Section 3. Termination of dealer agreement.
(a) General provisions.--
(1) A dealer may terminate a dealer agreement with good
cause. A dealer must give the supplier at least 30 days prior
notice via registered letter mailed to the last known address
of the supplier.
(2) It shall be unlawful for a supplier to terminate,
cancel or fail to renew a dealer agreement or substantially
change the competitive circumstances of a dealer agreement
without good cause except as provided in subsection (b) or
(c). For the purposes of this act, good cause means the
failure by a dealer to substantially comply with the
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requirements imposed upon the dealer by the dealer agreement,
provided such requirements are not different from
requirements imposed on other similarly situated dealers
either by their terms or in the manner of their enforcement.
* * *
(f) Deficiencies may be cured.--Except for termination,
cancellation or discontinuance for reasons set forth in
subsection (b)(3) through (7), the supplier shall allow the
dealer no less than [60] 90 days to cure the deficiencies set
forth in the notice required under subsection (e). Any such time
provided to the dealer to cure deficiencies shall be calculated
from the date of receipt of notice.
Section 5. Death or incapacitation of dealer.
In the event of the death or incapacity of a dealer, the
supplier shall repurchase, at the option of the heir or
authorized representative of such person or stockholder, the
equipment, repair parts and specialized repair tools of the
dealer as if the supplier had terminated, canceled or failed to
renew the contract. The heir or authorized representative shall
have [120 days] one year from the date of the death of such
dealer or from the date such dealer is determined to be
incapacitated or becomes totally disabled, as applicable, to
exercise the option under this section. Nothing in this act
requires the repurchase of any equipment, repair parts and
specialized repair tools if the heir and supplier enter into a
new contract to operate the retail dealership.
Section 6. Repurchase of [unused specialized repair tools]
specialized support products required by
manufacturer.
(a) General rule.--A supplier shall repurchase[, upon the
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written request of a dealer, any specialized repair tool
purchased by the dealer pursuant to the requirements of the
supplier which remains unused for more than a 12-month period
after the dealer receives the same. The repurchase price payable
to the dealer under this section shall be the original cost to
the dealer plus a handling charge equal to 10% of such original
cost] at fair market value any specific signage, data processing
hardware, computer equipment, communications equipment or
software the supplier required the dealer to acquire or purchase
to satisfy the requirements of the supplier. Fair market value
of property subject to repurchase pursuant to this section shall
include the acquisition cost, including any installation,
shipping, handling, and set-up fees, less straight line
depreciation of such acquisition cost over five years.
(b) Amount.--Specialized repair tools shall be repurchased
at a sum equal to 75% of the last published net cost, including
shipping, handling and set-up fees, of all specialized repair
tools previously purchased pursuant to requirements of the
supplier. The specialized repair tools must be complete and in
working condition.
Section 2. Section 9 of the act is repealed:
[Section 9. No coercion.
It shall be a violation for any supplier to require, attempt
to require, coerce or attempt to coerce any dealer in this
Commonwealth to order or accept delivery of any equipment or
repair parts not required by law which shall not have been
voluntarily ordered by the dealer.]
Section 3. The act is amended by adding sections to read:
Section 9.1. Violations of act.
It shall be a violation for any supplier:
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(1) To refuse a dealer the opportunity to represent,
purchase or sell competitive equipment.
(2) To require, mandate, coerce or attempt to coerce
verbally or otherwise a dealer to order or accept delivery of
any equipment or repair parts not required by law which shall
not have been voluntarily ordered by the dealer.
(3) To refuse a dealer from participating in the
management or investment to acquire any other business.
(4) To refuse to deliver in reasonable quantities and
within a reasonable time, after receipt of the dealer's
order, to any dealer having a dealer agreement for the retail
sale of new equipment sold or distributed by such supplier,
equipment covered by such dealer agreement specifically
advertised or represented by such supplier to be available
for immediate delivery. The failure to deliver any such
equipment shall not be considered a violation of this act if
the failure is due to prudent and reasonable restrictions on
extension of credit by the supplier to the dealer, an act of
God, work stoppage or delay due to strike or labor
difficulty, a bona fide shortage of materials, freight
embargo or other cause over which the supplier has no
control.
(5) To discriminate, directly or indirectly, in filling
an order placed by a dealer for retail sale or lease of new
equipment under a dealer agreement as between dealers of the
same product line.
(6) To discriminate, directly or indirectly, in price
between different dealers with respect to purchases of
equipment or repair parts of like quality, where the effect
of the discrimination may be to substantially lessen
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competition, tend to create a monopoly in any line of
commerce or injure, destroy or prevent competition with any
dealer who either grants or knowingly receives the benefit of
the discrimination. However, different prices may be charged
if:
(i) the differences are due to the cost of
manufacture, sale or delivery of the equipment or repair
parts; or
(ii) the supplier can show that its lower price was
made in good faith to meet an equally low price of a
competitor.
(7) To require a dealer to assent to a release,
assignment, novation, waiver or estoppel which would relieve
any person from liability imposed by this act.
Section 9.2. Warranty.
(a) General rule.--Warranty obligations include product
improvement programs, product upgrade programs, recalls and
warranty work. Warranty compensation shall include compensation
for diagnostic time, repair service time, parts and a dealer's
transportation costs of equipment to the dealership for needed
warranty repairs and the return of the equipment to the
customer. Compensation and labor rate shall be at the publicly
posted shop labor rate.
(b) Payment of warranty claim.--Whenever a supplier and a
dealer enter into an agreement providing the dealer's customer
warranties, the supplier shall pay any warranty claim made by
the dealer for warranty parts or service within 30 days after
its receipt and approval. The supplier shall approve or
disapprove a warranty claim within 30 days after its receipt. If
a claim is not specifically disapproved in writing within 30
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days after its receipt, it is deemed to be approved and payment
must be made by the supplier within 30 days. The following
apply:
(1) A dealer that performs warranty work as provided for
in this section must be compensated for the dealer's labor in
an amount that is not less than the reasonable and customary
amount of time required to complete the work, expressed in
hours and fraction of hours, multiplied by the dealer's
posted hourly labor rate.
(2) A dealer that performs warranty work as provided for
in this section must be compensated for parts used in
fulfilling the warranty work in an amount that is not less
than the dealer's costs for such parts plus 20%, including
all freight and handling charges applicable to such parts, to
reimburse the dealer's reasonable costs of doing business and
providing the warranty service on behalf of the supplier. If
the warranty work is provided on behalf of the supplier on a
product sold by a nonservicing dealer, the compensation for
parts used in fulfilling the warranty work must be at an
amount that is not less than the supplier's suggested list
price or dealer's cost plus a minimum of 30%, whichever is
greater, plus freight and handling charges applicable to such
parts.
(c) Indemnity.--Whenever a supplier and a dealer enter into
a dealer agreement, the supplier shall indemnify and hold
harmless the dealer against any judgment for damages arising
from breach of warranty or rescission of the sale by the
supplier.
Section 9.3. Remedies and enforcement.
The dealer may elect to pursue a contract remedy or the
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remedy provided by State law in the enforcement of this act. If
a supplier violates any provision of this act, a dealer may
bring an action against the supplier in a court of competent
jurisdiction for damages sustained by the dealer as a
consequence of the supplier's violation, including, but not
limited to, consequential damages and damages for lost profits,
together with the actual cost of the action, including the
dealer's attorney, paralegal and expert witness fees and costs
of arbitrators, and the dealer also may be granted injunctive
relief against unlawful termination, cancellation, nonrenewal or
substantial change of competitive circumstances. The remedies
set forth in this section shall be deemed exclusive and shall be
in addition to any other remedies permitted by law.
Section 9.4. Waiver.
(a) Waiver of act void.--An attempted waiver of a provision
of this act shall be void. Any provision in a dealer agreement
that purports to elect the application of the law of a state
other than Pennsylvania shall be void. Any provision in a dealer
agreement that requires a dealer to pay attorney fees incurred
by a supplier shall be void.
(b) Waiver of right to trial by jury.--No supplier may
require a dealer to waive the right to a trial by jury as a
remedy to a supplier and dealer contract or agreement dispute.
Section 4. This act shall take effect immediately.
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