72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 2694
Sponsored by Representative ZAUNER (at the request of Pacific
Northwest Association)
CHAPTER ................
AN ACT
Relating to farm implement retailers; creating new provisions;
amending ORS 646.415, 646.425, 646.445, 646.447, 646.449 and
646.451; and repealing ORS 646.455.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 646.415 is amended to read:
646.415. { - For the purposes of - } { + As used in + } ORS
646.415 to 646.455:
{ + (1) 'Catalog' includes catalogs published in any medium,
including electronic catalogs.
(2) 'Change in competitive circumstances' means a material
detrimental effect on a retailer's ability to compete with
another retailer who sells the same brand of farm implements. + }
{ - (1) - } { + (3) + } 'Current model' means a model
listed in the
{ - wholesaler's, manufacturer's or distributor's - }
{ + supplier's + } current sales manual or any supplements to
the manual.
{ - (2) 'Current net price' means the price listed in the
wholesaler's, manufacturer's or distributor's price list or
catalog in effect at the time the contract is canceled or
discontinued, less any applicable trade, volume or cash
discounts. - }
{ + (4) 'Current net price' means:
(a) The price of parts or farm implements listed in the
supplier's price list or catalog in effect at the time the
contract is canceled or discontinued, less any applicable trade,
volume or cash discounts, or when the retailer made a warranty
claim.
(b) For superseded parts, the price listed in the supplier's
price list or catalog when the retailer purchased the parts.
(5) 'Current signs' means the principal outdoor signs that:
(a) The supplier requires a retailer to obtain;
(b) Identify the supplier; and
(c) Identify the retailer as representing the supplier or the
supplier's farm implements or machinery.
(6) 'Dealership' means the location from which a retailer buys,
sells, leases, trades, stores, takes on consignment or in any
other manner deals in farm implements.
(7) 'Distributor' means a person who sells or distributes new
farm implements to a retailer. + }
{ - (3) - } { + (8) + } 'Farm implements' means:
Enrolled House Bill 2694 (HB 2694-B) Page 1
(a) Any vehicle designed or adapted and used exclusively for
agricultural operations and only incidentally operated or used
upon the highways; { - and - }
{ + (b) Auxiliary items, such as trailers, used with vehicles
designed or adapted for agricultural operations; + }
{ - (b) - } { + (c) + } { - All - } Other consumer
products for agricultural purposes, including lawn and garden
equipment powered by an engine, supplied by the supplier to the
retailer pursuant to a retailer agreement { - . - } { + ;
(d) Attachments and accessories used in the planting,
cultivating, irrigating, harvesting and marketing of
agricultural, horticultural or livestock products; and
(e) Outdoor power equipment, including, but not limited to,
self-propelled equipment used to maintain lawns and gardens or
used in landscape, turf or golf course maintenance.
(9) 'F.O.B.' has the meaning given that term in ORS
72.3190. + }
{ - (4) - } { + (10) + } 'Inventory' means farm implements,
machinery { - , attachments - } and repair parts.
{ + (11) 'Manufacturer' means a person who manufactures or
assembles new or unused farm implements. + }
{ - (5) - } { + (12) + } 'Net cost' means the price the
retailer actually paid for the merchandise to the
{ - wholesaler, manufacturer or distributor - } { +
supplier + }.
{ - (6) - } { + (13) + } 'Retailer' means any person
engaged in the business of retailing farm implements, machinery
{ - , attachments - } or repair parts { - within the State of
Oregon - } { + in this state + }.
{ - (7) - } { + (14) + } 'Retailer agreement' means { - a
written contract, written sales agreement or written security
agreement of definite or indefinite duration - } { + an
agreement + } between a supplier and a retailer that provides for
the rights and obligations of the parties with respect to
purchase or sale of farm implements.
{ + (15) 'Specialized tool' means a tool that:
(a) The supplier requires a retailer to obtain; and
(b) Is unique to the diagnosis or repair of the supplier's farm
implements or machinery. + }
{ - (8) - } { + (16) + } 'Supplier' means { - the - }
{ + :
(a) A + } wholesaler, manufacturer, manufacturer's
representative or distributor { - of farm implements,
machinery, attachments or spare parts - } .
{ + (b) A successor in interest of a manufacturer,
manufacturer's representative or distributor, including, but not
limited to:
(A) A purchaser of assets or shares of stock;
(B) A corporation or entity resulting from merger, liquidation
or reorganization; or
(C) A receiver or trustee.
(c) The assignee of a supplier.
(17) 'Warranty claim' means a claim for payment submitted by a
retailer to a supplier for service or parts provided to a
customer under a warranty issued by the supplier. + }
SECTION 2. ORS 646.425 is amended to read:
646.425. (1) { - This section applies to a retailer and a
supplier who enter into a retailer agreement. - } If
{ - the - } { + a + } retailer agreement is terminated,
canceled or discontinued, unless the retailer elects to keep the
Enrolled House Bill 2694 (HB 2694-B) Page 2
farm implements, machinery { - , attachments - } and repair
parts under a contractual right to do so, the supplier shall pay
the retailer for the farm implements, machinery { - ,
attachments - } and repair parts { - , - } or { + , if the
retailer owes any sums to the supplier, + } credit
{ - their - } { + the + } cost { + of the farm implements,
machinery and repair parts + } to the retailer's account
{ - if the retailer has outstanding any sums owing the
supplier - } . The payment or credit shall be as follows:
(a) The payment or the credit for the unused complete farm
implements { - , - } { + and + } machinery { - and
attachments - } in new condition shall be in a sum equal to 100
percent of the net cost of all
{ - such - } complete farm implements { - , - } { + and + }
machinery { - and attachments - } that are current models and
that have been purchased by the retailer from the supplier within
the 24 months immediately preceding { - notification by either
party - } { + notice + } of intent to cancel or discontinue the
retailer agreement. The payment or credit shall include the
transportation charges to the retailer and from the retailer to
the supplier, if the charges have been paid by the retailer or
invoiced to the retailer's account by the supplier { + , and a
reasonable reimbursement for services performed in connection
with assembly or predelivery inspection of the implements or
machinery. The supplier assumes ownership of the farm implements
and machinery F.O.B. the dealership.
(b) The payment or credit for equipment used for demonstration
or rental and that is in new condition shall equal the
depreciated value of the equipment to which the supplier and
retailer have agreed + }.
{ - (b) - } { + (c)(A) + } The payment or credit for repair
parts
{ - described in this paragraph - } shall be a sum equal to
{ - 85 - } { + 95 + } percent of the current net prices of the
repair parts, including superseded parts, { - listed in current
price lists or catalogs in use by the supplier on the date of
cancellation or discontinuance of the retailer agreement, and
including - } { + plus + } the { + charges for + }
transportation { - charges - } from the retailer to the
destination designated by the supplier { - which have been paid
by - } { + that + } the retailer { + paid + } { - , - } or
{ + the supplier + } invoiced to { - a - } { + the + }
retailer's account { - by the supplier - } . { + The supplier
assumes ownership of the repair parts F.O.B. the dealership.
(B) + } This paragraph applies to parts { - which had
previously been - } purchased by the retailer from the supplier
and { - are - } held by the retailer on { + or after + } the
date of the cancellation or discontinuance of the retailer
agreement { - or thereafter are received by the retailer from
the supplier - } .
{ + (C) This paragraph does not apply to repair parts that:
(i) The supplier identified as not returnable when the retailer
ordered the parts.
(ii) The retailer purchased in a set of multiple parts, unless
the set is complete and in resalable condition.
(iii) The retailer failed to return after being offered a
reasonable opportunity to return the repair part at a price not
less than 100 percent of the net price of the repair part as
listed in the then current price list or catalog.
Enrolled House Bill 2694 (HB 2694-B) Page 3
(iv) Have a limited storage life or are otherwise subject to
deterioration, including but not limited to rubber items, gaskets
and batteries and repair parts in broken or damaged packages.
(v) Are single repair parts priced as a set of two or more
items.
(vi) Are not resalable as new parts without new packaging or
reconditioning because of their condition.
(D) + } The supplier shall { + also + } pay the retailer or
credit to the retailer's account a sum equal to five percent of
the current net price of all parts returned for the handling,
packing and loading of the parts, unless the supplier elects to
{ - catalog or - } list the inventory and perform packing and
loading of the parts itself.
{ - (2) - } { + (d) + } Upon the payment or allowance of
credit to the retailer's account of the sum under { + this + }
subsection { - (1) of this section - } , the title to the farm
implements, farm machinery { - , attachments - } or repair
parts shall pass to the supplier making the payment or allowing
the credit and the supplier shall be entitled to the possession
of the farm implements, machinery { - , attachments - } or
repair parts. { - However, this section shall not in any way
affect any security interest which the supplier may have in the
inventory of the retailer. - }
{ - (3) The provisions of this section shall apply to any
annual part return adjustment agreement made between a retailer
and a supplier. - }
{ + (2)(a) If a retailer agreement is terminated, canceled or
discontinued, the supplier shall, upon request of the retailer,
pay the retailer for:
(A) Computer and communications hardware that:
(i) The supplier required the retailer to purchase within the
preceding five years; and
(ii) The retailer possesses on the date of the agreement's
termination, cancellation or discontinuation.
(B) Computer software that:
(i) The supplier required the retailer to purchase from the
supplier; and
(ii) The retailer used exclusively to support the retailer's
dealings with the supplier.
(b) If the retailer owes any sums to the supplier, the supplier
may credit the cost of the hardware and software to the
retailer's account.
(c) The payment or credit shall be the net cost of the hardware
and software, less 20 percent per year that the retailer
possessed the hardware and software.
(d) This subsection does not apply if the retailer exercises a
contractual right to keep the hardware or software.
(3)(a) If a retailer agreement is terminated, canceled or
discontinued, the supplier shall pay the retailer for the
retailer's specialized tools.
(b) If the retailer owes any sums to the supplier, the supplier
may credit the cost of the specialized tools to the retailer's
account.
(c)(A) If a tool is new and unused and used for the supplier's
current models, the payment or credit shall be the net cost of
the tool.
(B) If a tool is not new and unused and used for the supplier's
current models, the payment or credit shall be the net cost of
the tool, less 20 percent per year that the retailer possessed
the tool.
Enrolled House Bill 2694 (HB 2694-B) Page 4
(4)(a) If a retailer agreement is terminated, canceled or
discontinued, the supplier shall pay the retailer for the
retailer's current signs.
(b) If the retailer owes any sums to the supplier, the supplier
may credit the cost of the signs to the retailer's account.
(c) The payment or credit shall be the net cost of the sign,
less 20 percent per year that the retailer possessed the sign.
(5) A supplier shall provide all payments or allowances due
under this section within 90 calendar days of the retailer's
return of the farm implements, machinery, repair parts, computer
and communications hardware, computer software, specialized tools
or current signs. A supplier who does not provide a payment or
allowance within 90 calendar days of the retailer's return of the
farm implements, machinery, repair parts, computer and
communications hardware, computer software, specialized tools or
current signs shall pay the retailer interest of 18 percent per
annum on the past due amount until paid. + }
{ - (4) - } { + (6) + } { - The provisions of - } This
section { - shall be supplemental to - } { + supplements + }
any retailer agreement between the retailer and the supplier
covering the return of farm implements, machinery,
{ - attachments and - } repair parts { + , computer and
communications hardware, computer software, specialized tools or
current signs + }. The retailer may elect to pursue either the
retailer's remedy under the retailer agreement or the remedy
provided under this section. An election by the retailer to
pursue the remedy under the retailer agreement { - shall - }
{ + does + } not bar the retailer's right to the remedy provided
under this section as to those farm implements, machinery,
{ - attachments and - } repair parts { + , computer and
communications hardware, computer software, specialized tools or
current signs + } not affected by the retailer agreement. This
section does not affect the right of a supplier to charge back to
the retailer's account amounts previously paid or credited as a
discount incident to the retailer's purchase of goods.
{ + (7) This section does not apply to farm implements,
machinery, repair parts, computer and communications hardware,
computer software, specialized tools or current signs that a
retailer acquired from a source other than the supplier. + }
SECTION 3. ORS 646.445 is amended to read:
646.445. { + (1) + } If { - a supplier described in ORS
646.425 (1) - } , upon the cancellation of a retailer agreement
by { - either a - } { + the + } retailer or the supplier,
{ + the supplier + } fails to make payment as required by ORS
646.425 or 646.435, the supplier shall be liable in a civil
action to be brought by the retailer or by the retailer's spouse,
heir or heirs for the payments required under ORS 646.425 { + or
646.435 + }.
{ + (2) A person who brings an action under this section must
commence the action in the county in which the principal place of
business of the retailer is located. + }
SECTION 4. ORS 646.447 is amended to read:
646.447. (1) A supplier { - shall - } { + may + } not:
(a) { - Except as required by any applicable law or unless
special features or accessories are safety features or
accessories required by a supplier, - } Coerce or compel any
retailer to { + :
(A) + } Order { - or accept delivery of - } any farm
implements or parts { - or any farm implements with special
features or accessories not included in the base list price of
Enrolled House Bill 2694 (HB 2694-B) Page 5
the farm implements as publicly advertised by the supplier which
the retailer has not voluntarily ordered - } .
{ + (B) Accept delivery of farm implements with special
features or accessories not included in the base list price of
the farm implements as publicly advertised by the supplier. + }
{ - (b) - } { + (C) + } { - Coerce or compel any retailer
to - } Enter into any agreement, whether written or oral,
supplementary to an existing retailer agreement with
{ - such - } { + the + } supplier, unless the supplementary
agreement or amendment to the agreement is applicable to all
other similarly situated retailers in the state.
{ - (c) - } { + (b) + } Refuse to deliver in reasonable
quantities and within a reasonable time after receipt of the
retailer's order, to any retailer having a retailer agreement for
the retail sale of new equipment sold or distributed by the
supplier, equipment covered by the retailer agreement represented
by the supplier to be available for immediate delivery.
{ - However, the failure to deliver any equipment shall not be
considered a violation of ORS 646.415 to 646.455 when deliveries
are based on prior ordering histories, the priority given to the
sequence in which the orders are received or manufacturing
schedules, or if the failure is due to prudent and reasonable
restrictions on extension of credit by the supplier to the
retailer, an act of nature, a work stoppage or delay due to a
strike or labor difficulty, a bona fide shortage of materials, a
freight embargo or other cause over which the supplier has no
control. As used in this subsection, 'act of nature' means an
unanticipated grave natural disaster or other natural phenomenon
of an exceptional, inevitable and irresistible character, the
effects of which could not have been prevented or avoided by the
exercise of due care or foresight. - }
{ - (d) - } { + (c) + } Require { + :
(A) + } As a condition of renewal or extension of a retailer
agreement that the retailer complete substantial renovation of
the retailer's place of business, or acquire new or additional
space to serve as the retailer's place of business, unless the
supplier provides at least one year's written notice of the
condition which states all grounds supporting the condition.
{ - The supplier must provide a reasonable time for the retailer
to complete the renovation or acquisition. - }
{ + (B) A retailer to complete a renovation or acquisition in
less than a reasonable time.
(C) A retailer to waive a right to bring an action to enforce
the provisions of ORS 646.415 to 646.455. + }
{ - (e) - } { + (d) + } Discriminate among similarly
situated retailers in this state with respect to the prices
charged for equipment of like grade and quality sold to them by
the supplier. { - This subsection does not prohibit the use of
differentials resulting from the differing quantities in which
equipment is sold or delivered, except that nothing shall prevent
a retailer from offering a lower price in order to meet an
equally low price of a competitor or the services or facilities
furnished by a competitor. - }
{ - (f) - } { + (e) + } Unreasonably withhold consent for a
retailer to change the capital structure of the retailer's
business or the means by which { - it is financed, provided
that the retailer meets the reasonable capital requirements
imposed by the supplier or agreed to between the retailer and the
supplier and provided that the change by the retailer does not
result in a change of the controlling interest in the executive
Enrolled House Bill 2694 (HB 2694-B) Page 6
management or board of directors, or of any guarantors of the
retailer - } { + the retailer finances the business + }.
{ - (g) - } { + (f) + } Prevent or attempt to prevent
{ - by contract or other method - } any retailer or any
officer, member, partner or stockholder of any retailer from
selling or transferring any interest to any other party or
parties. { - However, no retailer, officer, member, partner or
stockholder shall have the right to sell, transfer or assign the
retailer's interest or power of management or control without the
written consent of the supplier, and such consent of the supplier
shall not be unreasonably withheld. - }
{ - (h) - } { + (g) + } Require a retailer to assent to a
release, assignment, novation, waiver or estoppel which would
relieve any person from liability imposed by ORS 646.415 to
646.455.
{ + (h) Withhold consent to a transfer of an interest in a
dealership unless the retailer's area of responsibility or trade
area does not afford sufficient sales potential to reasonably
support a retailer. + }
(i) { - (A) - } Unreasonably withhold consent { - , - }
{ + to the sale, transfer or assignment of the retailer's
interest or power of management or control in the retailer's
business.
(j) + } In the event of the death or incapacity of the retailer
or the principal owner of the retailer's business,
{ + unreasonably withhold consent + } to the transfer of the
retailer's interest in the business to a { - member or members
of the family of the retailer or the principal owner of the
business if the family member - } { + person who + } meets the
reasonable financial, business experience and character standards
of the supplier. { - If a supplier determines that the
designated family member is not acceptable, the supplier shall
provide written notice of the supplier's objection and specific
reasons for withholding consent. A supplier shall have 90 days to
consider a retailer's request to make a transfer to a family
member. As used in this subparagraph, 'family' means and includes
a spouse, parents, siblings, children, stepchildren, sons-in-law,
daughters-in-law and lineal descendants, including those by
adoption, of the retailer or principal owner of the business. - }
{ - (B) Notwithstanding subparagraph (A) of this paragraph,
in the event that a supplier and retailer have duly executed an
agreement concerning succession rights prior to the retailer's
death and the agreement has not been revoked or terminated by
either party, the agreement shall be observed. - }
{ + (2)(a) Subsection (1)(a)(A) of this section does not
apply if a law requires a retailer to order farm implements or
parts.
(b) Subsection (1)(a)(B) of this section does not apply if:
(A) A law requires a supplier to supply farm implements with
special features;
(B) The special features or accessories are safety features; or
(C) The retailer ordered the farm implements without coercion
or compulsion.
(c)(A) As used in this paragraph, 'act of nature' means an
unanticipated grave natural disaster or other natural phenomenon
of an exceptional, inevitable and irresistible character, the
effects of which could not have been prevented or avoided by the
exercise of due care or foresight.
Enrolled House Bill 2694 (HB 2694-B) Page 7
(B) Notwithstanding subsection (1)(b) of this section, a
supplier may refuse to deliver equipment if the refusal is due
to:
(i) Prudent and reasonable restrictions on extension of credit
by the supplier to the retailer;
(ii) An act of nature;
(iii) A work stoppage or delay due to a strike or labor
difficulty;
(iv) A bona fide shortage of materials;
(v) A freight embargo; or
(vi) Any other cause over which the supplier has no control.
(C) Subparagraph (B) of this paragraph applies only if the
supplier bases delivery on ordering histories with priority given
to the sequence in which the orders are received.
(d) Subsection (1)(d) of this section does not prohibit:
(A) A supplier from using differentials resulting from the
differing quantities in which equipment is sold or delivered.
(B) A retailer from offering a lower price in order to meet an
equally low price of a competitor or the services or facilities
furnished by a competitor.
(e) Subsection (1)(e) of this section applies only if:
(A) The retailer meets the reasonable capital requirements
imposed by the supplier;
(B) The retailer agreed to the capital requirements; or
(C) The change by the retailer does not result in a change of
the controlling interest in the executive management or board of
directors, or of any guarantors of the retailer.
(f) If a supplier does not accept a sale, transfer or
assignment, the supplier shall provide written notice of the
supplier's objection and specific reasons for withholding
consent.
(g) Notwithstanding subsection (1)(f) of this section, a
retailer may not sell, transfer or assign the retailer's interest
or power of management or control without the written consent of
the supplier.
(h) Subsection (1)(j) of this section does not apply if the
retailer and supplier agreed to rights of succession. + }
{ - (2) - } { + (i) + } Notwithstanding { - the
provisions in subsection (1)(g) or (1)(i)(A) - } { + subsection
(1)(f), (h), (i) and (j) + } of this section, { - and without
precluding any other permissible bases for withholding
consent, - } a supplier may withhold consent to a transfer of
interest in a retailer if, with due regard to regional market
conditions and distribution economies, the retailer's area of
responsibility or trade does not afford sufficient sales
potential to reasonably support a retailer. { - In any dispute
between a supplier and retailer under this subsection, the
supplier shall bear the burden of proving that the retailer's
area of responsibility or trade area does not afford sufficient
sales potential to reasonably support a retailer. The proof
offered shall be in writing. - }
SECTION 5. ORS 646.449 is amended to read:
646.449. { - (1) Except where grounds for termination or
nonrenewal of a retailer agreement or a change in the competitive
circumstances of a retailer agreement exist as described in
subsection (2) of this section, a supplier shall give a retailer
90 days' written notice of the supplier's intent to terminate,
cancel or fail to renew a retailer agreement or change the
competitive circumstances of a retailer agreement. The notice
shall state all reasons constituting good cause for termination,
Enrolled House Bill 2694 (HB 2694-B) Page 8
cancellation or nonrenewal and shall provide that the retailer
has 60 days in which to cure any claimed deficiency. If the
deficiency is rectified within 60 days to the satisfaction of the
supplier, the notice shall be void. However, if the termination
of the retailer agreement is based on good cause as described in
subsection (2) of this section, then the 90-day written notice
shall not be required, nor shall the retailer have 60 days to
cure the deficiency. The contractual term of the retailer
agreement shall not expire and a change of the competitive
circumstances of a retailer agreement shall not occur without the
written consent of the retailer prior to the expiration of at
least 90 days following the notice. - }
{ + (1) As used in this section:
(a) 'Good cause' means a retailer's:
(A) Failing to comply with a term of a retail agreement that is
the same as a term in the supplier's agreements with similarly
situated retailers, including failure to meet marketing criteria;
(B) Transferring a controlling ownership interest in the
retailer's business without the supplier's consent;
(C) Making a material misrepresentation or falsification of a
record, contract, report or other document that the retailer has
submitted to the supplier;
(D) Filing a voluntary petition in bankruptcy;
(E) Being placed involuntarily in bankruptcy and not
discharging the bankruptcy within 60 days after the filing;
(F) Becoming insolvent;
(G) Being placed in a receivership;
(H) Pleading guilty to, being convicted of or being imprisoned
for a felony;
(I) Failing to operate in the normal course of business for
seven consecutive business days or terminating business;
(J) Relocating or establishing a new or additional place or
places of business without the supplier's consent;
(K) Failing to satisfy a payment obligation as it comes due and
payable to the supplier;
(L) Failing to promptly account to the supplier for any
proceeds of the sale of farm implements or otherwise failing to
hold the proceeds in trust for the benefit of the supplier;
(M) Consistently engaging in business practices that are
detrimental to the consumer or supplier, including, but not
limited to, excessive pricing, misleading advertising or failure
to provide service and replacement parts or to perform warranty
obligations;
(N) Inadequately representing the supplier, causing lack of
performance in sales, service or warranty areas, and failing to
achieve satisfactory market penetration at levels consistent with
similarly situated retailers based on available documented
information;
(O) Consistently failing to meet building and housekeeping
requirements; or
(P) Consistently failing to comply with the licensing laws that
apply to the supplier's products and services.
(b) 'Similarly situated retailer' means a retailer:
(A) In a similar geographic area;
(B) With similar sales volumes; and
(C) In a similar market for farm implements, machinery and
repair parts. + }
(2) { - No - } { + With good cause, a + } supplier,
directly or through an officer, agent or employee, may terminate,
cancel, fail to renew or substantially change the competitive
Enrolled House Bill 2694 (HB 2694-B) Page 9
circumstances of a retailer agreement { + . The termination,
cancellation, nonrenewal or change becomes effective upon notice
to the retailer. The notice shall state the reasons constituting
good cause for the termination, cancellation, nonrenewal or
change. + } { - without good cause. 'Good cause' means failure
by a retailer to comply with the requirements imposed upon the
retailer by the retailer agreement, provided that the
requirements are not different from those requirements imposed on
other similarly situated retailers in this state either by terms
or by the manner of enforcement. In addition, good cause exists
whenever the retailer has: - }
{ - (a) Transferred a controlling ownership interest in the
retailer's business without the supplier's consent; - }
{ - (b) Made a material misrepresentation or falsification of
any record, contract, report or other document which the retailer
has submitted to the supplier; - }
{ - (c) Filed a voluntary petition in bankruptcy or has had
an involuntary petition in bankruptcy filed against the retailer
which has not been discharged within 60 days after the filing, or
is insolvent or in receivership; - }
{ - (d) Pleaded guilty to, been convicted of or been
imprisoned for a felony; - }
{ - (e) Failed to operate in the normal course of business
for seven consecutive business days or has terminated
business; - }
{ - (f) Relocated or established a new or additional place or
places of business without the supplier's consent; - }
{ - (g) Failed to satisfy any payment obligation as it came
due and payable to the supplier or has failed to promptly account
to the supplier for any proceeds of the sale of farm implements
or otherwise failed to hold the proceeds in trust for the benefit
of the supplier; - }
{ - (h) Consistently engaged in business practices that are
detrimental to the consumer or supplier including but not limited
to excessive pricing, misleading advertising or failure to
provide service and replacement parts or to perform warranty
obligations; - }
{ - (i) Inadequately represented the supplier, causing lack
of performance in sales, service or warranty areas, and failed to
achieve satisfactory market penetration at levels consistent with
similarly situated retailers based on available documented
information; - }
{ - (j) Consistently failed to meet building and housekeeping
requirements or has failed to provide adequate sales, service or
parts personnel in compliance with the retailer agreement; or - }
{ - (k) Consistently failed to comply with the licensing laws
that apply to the products and services being represented for and
on behalf of the supplier. - }
{ + (3)(a) Except as provided in subsection (2) of this
section, a supplier shall give a retailer 90 calendar days'
written notice of the supplier's intent to terminate, cancel or
fail to renew a retailer agreement or change the competitive
circumstances of a retailer agreement.
(b) The notice shall:
(A) State the reasons for termination, cancellation, nonrenewal
or change; and
(B) Provide that the retailer has 60 calendar days in which to
cure a claimed deficiency.
Enrolled House Bill 2694 (HB 2694-B) Page 10
(c) If the retailer cures the deficiency within 60 calendar
days, the notice is void.
(d) If the retailer fails to cure the deficiency within 60
calendar days, the termination, cancellation, failure to renew or
change in competitive circumstances becomes effective on the date
specified in the notice.
(4)(a) Notwithstanding subsection (3) of this section, a
supplier shall give a retailer one year's written notice of the
retailer's failure to meet reasonable marketing criteria.
(b) The notice shall:
(A) State the reasonable marketing criteria that the retailer
has failed to meet; and
(B) Provide the retailer one year in which to meet the
criteria.
(c)(A) If the retailer fails to meet the criteria within the
year, the supplier may give notice of the termination,
cancellation, failure to renew the retail agreement or change to
the retail agreement.
(B) A termination, cancellation, failure to renew or change
under this paragraph is effective 180 calendar days after the
supplier gives notice. + }
SECTION 6. ORS 646.451 is amended to read:
646.451. (1) { + (a) + } Any party to a retailer agreement
aggrieved by the conduct of the other party to the agreement
{ - with respect to the provisions of - } { + under + } ORS
646.447 or 646.449 { + or section 8, 9, 10 or 11 of this 2003
Act + } may seek arbitration of the issues
{ - involved in the decision of the other party pursuant to the
provisions of - } { + under + } ORS 36.300 to 36.365.
{ + Unless the parties agree to different arbitration rules, + }
the arbitration shall { - also - } be { + conducted + }
pursuant to the commercial arbitration rules of the American
Arbitration Association. { + If the parties agree, + } the { +
arbitration shall be the parties' only remedy and the + }
findings and conclusions of the arbitrator or panel of
arbitrators shall be binding upon both parties. { - Upon demand
for arbitration by one party, it shall be presumed for purposes
of the provisions of ORS 36.300 to 36.365 that the parties have
consented to arbitration, that - }
{ + (b) The arbitrator or arbitrators may award the
prevailing party:
(A) + } The costs of witness fees and other fees in the case
{ - , together with - } { + ;
(B) + } Reasonable attorney fees { - , shall be paid by the
losing party - } { + ; and
(C) Injunctive relief against unlawful termination,
cancellation, nonrenewal or change in competitive
circumstances + }.
(2) Notwithstanding subsection (1) of this section, any
retailer has a { + civil + } cause of action { + in circuit
court + } against a supplier for damages sustained by the
retailer as a consequence of the supplier's violation of
{ - any provisions of - } ORS 646.447 or 646.449 { + or
section 8, 9, 10 or 11 of this 2003 Act + }, together with { + :
(a) + } The actual costs of { - such - } { + the + } action
{ - , including - } { + ;
(b) + } Reasonable attorney fees { + ; and
(c) Injunctive relief against unlawful termination,
cancellation, nonrenewal or change in competitive
circumstances + }.
Enrolled House Bill 2694 (HB 2694-B) Page 11
{ - (3) The retailer may also be granted injunctive relief
against unlawful termination, cancellation, nonrenewal or change
in competitive circumstances as determined under subsection (1)
of this section or by a court. - }
{ + (3) A supplier bears the burden of proving that a
retailer's area of responsibility or trade area does not afford
sufficient sales potential to reasonably support the retailer.
The supplier's proof must be in writing. + }
(4) The remedies set forth in this { - subsection shall not
be considered - } { + section are not + } exclusive and
{ - shall be - } { + are + } in addition to any other remedies
permitted by law, unless the parties have chosen binding
arbitration under subsection (1) of this section.
SECTION 7. { + Sections 8 to 11 of this 2003 Act are added to
and made a part of ORS 646.415 to 646.455. + }
SECTION 8. { + (1) If a supplier enters into an agreement to
establish a new retailer or dealership or to relocate a retailer
or dealership, and the agreement assigns an area of
responsibility, the supplier must give written notice of the
agreement by certified mail to any retailer or dealership within
an assigned area of responsibility that is within or contiguous
to the area of the new or relocated retailer or dealership.
(2) If a supplier enters into an agreement to establish a new
retailer or dealership or to relocate a retailer or dealership,
and the agreement does not assign an area of responsibility, the
supplier must give written notice of the agreement by certified
mail to any retailer or dealership within a 75-mile radius of the
new or relocated retailer or dealership.
(3) A notice required by this section shall contain:
(a) The new location of the retailer or dealership;
(b) The date that the retailer or dealership will commence
business at the new location; and
(c)(A) If the agreement assigns an area of responsibility, the
name and address of retailers and dealerships with assigned areas
of responsibility that are within or contiguous to the area of
the new or relocated retailer or dealership; or
(B) If the agreement does not assign an area of responsibility,
the name and address of retailers and dealerships within a
75-mile radius of the new or relocated retailer or
dealership. + }
SECTION 9. { + (1) A supplier shall approve or disapprove a
warranty claim in writing within 30 calendar days of the
supplier's receipt of the claim.
(2) If a supplier does not approve or disapprove a warranty
claim in writing within 30 calendar days of the supplier's
receipt of the claim, the supplier shall pay the claim within 60
calendar days of receipt of the claim.
(3) A supplier that approves a warranty claim shall pay the
claim within 30 calendar days of the claim's approval.
(4) A supplier that disapproves a warranty claim shall, in the
writing required by subsection (1) of this section, notify the
retailer of the reasons for the disapproval.
(5) If a supplier disapproves a warranty claim because the
retailer failed to comply with procedures for submitting the
claim prescribed by the retailer agreement, the retailer may
resubmit the claim within 30 calendar days of the retailer's
receipt of the supplier's disapproval.
(6) A supplier may not disapprove a warranty claim as untimely
if the claim covers service or parts provided while a retailer
agreement was in effect.
Enrolled House Bill 2694 (HB 2694-B) Page 12
(7)(a) For one year after payment of a warranty claim, the
supplier may audit records that support the claim.
(b) A supplier may not audit a record that supports a claim
more than one year after paying the claim unless an audit has
disclosed that the retailer submitted a false claim.
(c) A supplier may:
(A) Adjust a claim paid in error;
(B) Require a retailer to return payment made on a false claim;
and
(C) If the retailer owes an amount to the supplier, credit the
amount of a claim to the retailer's account. + }
SECTION 10. { + Unless otherwise agreed:
(1) On a warranty claim, a supplier shall provide reasonable
compensation for the retailer's costs, including but not limited
to:
(a) Diagnostic services;
(b) Repair services;
(c) Repair parts; and
(d) Labor.
(2) For labor on warranty service, a supplier may not pay a
retailer an hourly rate that is less than rate that the retailer
charges for nonwarranty service.
(3) For repair parts on warranty service, a supplier may not
pay a retailer less than the amount that the retailer paid for
the parts plus a reasonable allowance for the shipping and
handling of the parts.
(4) A supplier must allow a reasonable time for a retailer to
complete warranty service. + }
SECTION 11. { + Unless otherwise agreed:
(1) If a supplier requires a retailer to improve the safety of
farm implements or machinery, the supplier shall reimburse the
retailer for the costs of parts, labor and transportation that
the retailer incurred to make the improvement.
(2) If a supplier requires a retailer to improve farm
implements or machinery for reasons other than safety, the
supplier shall reimburse the retailer for the costs of parts and
labor that the retailer incurred to make the improvement.
(3) For labor to improve farm implements or machinery, a
supplier may not pay a retailer an hourly rate that is less than
rate that the retailer charges for like services.
(4) For parts to improve farm implements or machinery, a
supplier may not pay a retailer less than the amount that the
retailer paid for the parts plus a reasonable allowance for the
shipping and handling of the parts. + }
SECTION 12. { + ORS 646.455 is repealed. + }
SECTION 13. { + (1) The amendments to ORS 646.425 by section 2
of this 2003 Act apply to retail agreements that:
(a) Are entered into on or after the effective date of this
2003 Act.
(b) Are entered into before the effective date of this 2003 Act
and:
(A) Do not state a date for termination, cancellation or
discontinuation; and
(B) Are terminated, canceled or discontinued after the
effective date of this 2003 Act.
(2) The amendments to ORS 646.445 by section 3 of this 2003 Act
apply to payments due and claims arising on or after the
effective date of this 2003 Act.
Enrolled House Bill 2694 (HB 2694-B) Page 13
(3) The amendments to ORS 646.447 by section 4 of this 2003 Act
apply to conduct occurring on or after the effective date of this
2003 Act.
(4) The amendments to ORS 646.449 by section 5 of this 2003 Act
apply to terminations, cancellations, nonrenewals or changes
occurring on or after the effective date of this 2003 Act.
(5) The amendments to ORS 646.451 by section 6 of this 2003 Act
apply to claims arising on or after the effective date of this
2003 Act.
(6) Section 8 of this 2003 Act applies to agreements entered
into on or after the effective date of this 2003 Act.
(7) Sections 9 and 10 of this 2003 Act apply to warranty
services performed on or after the effective date of this 2003
Act.
(8) Section 11 of this 2003 Act applies to improvements made on
or after the effective date of this 2003 Act. + }
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Passed by House April 30, 2003
Repassed by House June 10, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 6, 2003
...........................................................
President of Senate
Enrolled House Bill 2694 (HB 2694-B) Page 14
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 2694 (HB 2694-B) Page 15