1Amending the act of December 18, 1987 (P.L.412, No.86), entitled
2"An act providing for the repurchase by the wholesaler,
3manufacturer or distributor, from dealers or heirs of
4dealers, of certain equipment, certain attachments and parts
5held for sale upon termination of agreement whereby the
6dealer agrees to maintain a stock of such implements,
7attachments and parts, and for the repurchase of certain
8tools," further providing for definitions, for termination of
9dealer agreement and for death or incapacitation of dealer;
10repealing provisions relating to coercion; and providing for
11unlawful acts by supplier, for remedies and enforcement and
12for waiver.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1. Section 2 of the act of December 18, 1987
16(P.L.412, No.86), known as the Pennsylvania Fair Dealership Law,
17is amended to read:

18Section 2. Definitions.

19The following words and phrases when used in this act shall
20have the meanings given to them in this section unless the
21context clearly indicates otherwise:

22"Construction equipment manufacturer." A manufacturer of
23construction, industrial, forestry, paving and mining equipment,

1repair parts or specialized repair tools that does not
2manufacture consumer or farming equipment either by itself or
3through an affiliate.

4"Consumer equipment." Machinery designed and manufactured
5primarily for household use.

6"Current net price." The price, applicable to an individual
7dealer, listed in the printed price list or catalog or invoice
8in use by the supplier on the date the dealer agreement is
9terminated or canceled or has failed to be renewed.

10"Dealer." Any person, firm or corporation engaged primarily
11in the business of retail sale or repair of equipment. The term
12includes the heir or authorized representative of a person or
13majority stockholder of a corporation operating as a dealer in
14the event such person or stockholder dies or becomes
15incapacitated. The term does not include a person, firm or 
16corporation that complies with all of the following:

17(1) Has purchased new equipment from a single
18construction equipment manufacturer, constituting no less
19than 75% of the person's, firm's or corporation's new
20equipment, calculated on the basis of net cost.

21(2) Has an annual average sales volume in excess of
22$100,000,000 over the seven-calendar-year period immediately
23preceding the applicable determination date; provided,
24however, the $100,000,000 threshold shall be increased each
25year by an amount equal to the then-current threshold
26multiplied by the percentage increase in the index from
27January of the immediately preceding calendar year to January
28of the current year.

29(3) Directly employs over 250 persons.

30(4) Has a written agreement with a construction

1equipment manufacturer that requires the construction
2equipment manufacturer to compensate the person, firm or
3corporation for warranty labor costs either as:

4(i) a discount in the pricing of the equipment to
5the person, firm or corporation; or

6(ii) a lump sum payment to the person, firm or
7corporation that is made within 90 days of the sale of
8the construction equipment manufacturer's new equipment.

9"Dealer agreement." An oral or written contract, franchise
10agreement or security agreement between a dealer and supplier
11whereby the dealer agrees to acquire from the supplier and to
12maintain an inventory of equipment, repair parts or specialized
13repair tools.

14"Dual" or "dualing." A dealership having two or more line-
15makes of equipment located in the same dealership facilities.

16"Equipment." Machines, implements of husbandry, golf, turf 
17and grounds maintenance machines, outdoor power equipment, 
18utility vehicles and machine attachments, accessories, 
19completing packages and bundles designed for or adapted and used
20for agriculture, horticulture, floriculture, construction,
21livestock raising, silviculture, landscaping and grounds
22maintenance, even though incidentally operated or used upon the
23highways, including, but not limited to, tractors, farm
24implements, loaders, backhoes, lawn mowers, rototillers, etc.,
25and any business signs purchased by requirement of the supplier
26which are less than five years old. The term shall not include[:

27(1) equipment manufactured solely for the purpose of
28industrial construction; or

29(2)] all-terrain vehicles as defined in 75 Pa.C.S. § 
307702 (relating to definitions).

1"Farming equipment." Machinery designed and used for
2agricultural operations, including farm tractors, choppers,
3balers, reapers, mowers, pickers, threshers, combines, plows,
4harrows, planters and any other vehicles or machines primarily
5designed for use as implements of husbandry or multipurpose
6agricultural vehicles.

7"Index." The producer price index prepared by the United
8States Department of Labor, Bureau of Labor Statistics, as it
9relates to construction, mining and forestry equipment.

10"Line-make." Groups of equipment that are offered for sale,
11lease or distribution under a common name, trademark, service
12mark or brand name of the supplier of the same equipment.

13"Mining equipment." Machinery designed and used in the
14production process at a mine site, including off-highway mining
15trucks, large-wheel loaders, large track-type tractors, large-
16wheel dozers, mining motor graders, open bowl scrapers and
17underground mining trucks.

18"Net cost." The amount paid by the dealer to the supplier,
19plus the cost of freight, if any, incurred by the dealer[.], as 
20long as the manufacturer initiates the termination or 
21nonrenewal. The term does not include the cost of freight if the 
22dealer initiates the termination or nonrenewal.

23"Nonservicing dealer." A dealer that sells equipment but
24does not provide parts and service.

25"Paving equipment." Machinery designed and used for asphalt
26paving, including asphalt pavers, cold planers, asphalt
27compactors, pneumatic compactors and rotary mixers.

28"Repair parts." All parts, component parts and superseded 
29parts related to a sale and related to repair of equipment. The 
30term includes bundled parts, which means several related parts,
 

1components or accessories, bound together as one inclusive item 
2or priced as an inclusive item.

3"Site-control agreement" or "exclusive use agreement." An
4agreement that, regardless of its name, title, form or the
5parties entering into it, has the effect of:

6(1) controlling the use and development of the premises
7of a dealer's facility;

8(2) requiring a dealer to establish or maintain an
9exclusive dealership facility on the premises of a dealer's
10facility;

11(3) restricting the power or authority of the dealer or
12the lessor if the dealer leases the dealership premises to
13transfer, sell, lease, develop, redevelop or change the use
14of the dealership premises, whether by sublease, lease,
15collateral pledge of lease, right of first refusal to
16purchase or lease, option to purchase or lease or any similar
17arrangement; or

18(4) preventing the dealer from dualing a competitive
19line-make of equipment at the same facility.

20"Specialized repair tools." Tools and equipment, including
21diagnostic equipment, designed to be used or useful only in the
22maintenance and repair of equipment.

23"Supplier." [A manufacturer of equipment or repair parts or
24a wholesaler or distributor of equipment or repair parts who has
25a valid existing contract with a manufacturer of equipment or
26repair parts, including the successors or assigns of such
27manufacturer, wholesaler or distributor.] A distributor, 
28manufacturer or wholesaler of equipment, repair parts or 
29specialized repair tools who enters into a dealer agreement with 
30a dealer.

1Section 2. Section 3(a), (c) and (f) of the act are amended 
2and the section is amended by adding a subsection to read:

3Section 3. Termination of dealer agreement.

4(a) General provisions.--

5(1) A dealer may terminate a dealer agreement with good 
6cause. A dealer shall give the supplier at least 30 days' 
7prior notice via registered letter mailed to the last known 
8address of the supplier.

9(2) It shall be unlawful for a supplier to terminate,
10cancel or fail to renew a dealer agreement or substantially 
11change the competitive circumstances of a dealer agreement 
12without good cause except as provided in subsection (b) or
13(c).

14* * *

15(c) Other exceptions.--[Subject to the provisions of this
16subsection, a supplier may terminate, cancel or fail to renew a
17dealer agreement under such conditions as may be provided for in
18the dealer agreement. When a dealer agreement is terminated or
19canceled or has failed to be renewed by the supplier under a
20condition provided for in the dealer agreement, other than a
21condition set forth in subsection (b), the] The supplier, upon
22written request of the dealer, shall pay to the dealer, or
23credit to the dealer's account if the dealer has outstanding any
24sums owing the supplier:

25(1) A sum equal to 100% of the net cost of all equipment
26that the dealer purchased from the supplier and not
27previously sold and put into regular use or service preceding
28notification by either party of intent to cancel, terminate
29or fail to renew the dealer agreement.

30(2) A sum equal to 100% of the current net price of

1repair parts, including superseded repair parts, previously
2purchased from the supplier and 75% of the current net price
3of specialized repair tools previously purchased pursuant to
4the requirements of the supplier and held by the dealer on
5the date of termination, cancellation or failure to renew the
6dealer agreement. In addition, the supplier shall pay the
7dealer, or credit to the dealer's account if the dealer has
8outstanding any sums owing the supplier, a sum equal to 5% of
9the current net price of all repair parts, excluding incoming
10freight cost, and specialized repair tools returned to the
11supplier to compensate the dealer for the inventory, packing
12and loading of the same to the supplier, provided that the
13supplier may perform such inventory, packing and loading in
14lieu of paying 5% to the dealer. Upon the payment or
15allowance of credit to the dealer's account, as applicable,
16in the sum required by this section, all of the dealer's
17title and interest in and to the equipment, repair parts and
18specialized repair tools shall pass to the supplier, and the
19supplier shall be entitled to the possession of the same.
20Payments or allowance of credit to the dealer, as applicable,
21required by this section shall be made no later than 90 days
22after such termination, cancellation or discontinuance or 60
23days after the supplier's receipt of the equipment, repair
24parts or specialized repair tools.

25(3) In the event a dealer terminates a dealer agreement,
26the obligation of the supplier to repurchase equipment,
27repair parts and specialized repair tools shall be governed
28by the terms and conditions then in effect in the dealer
29agreement between the supplier and the dealer and not by the
30provisions of this act.

1* * *

2(f) Deficiencies may be cured.--Except for termination, 
3cancellation or discontinuance for reasons set forth in 
4subsection (b)(3) through (7), the supplier shall allow the 
5dealer no less than [60] 90 days to cure the deficiencies set 
6forth in the notice required under subsection (e). Any such time 
7provided to the dealer to cure deficiencies shall be calculated 
8from the date of receipt of notice.

9(g) Definition.--As used in this section, the term "good
10cause" means the failure by a dealer to substantially comply
11with the requirements imposed upon the dealer by the dealer
12agreement, as long as the requirements are not different from
13requirements imposed on other dealers of the same size,
14geographic region and market demographics, either by their terms
15or in the manner of their enforcement.

16Section 3. Section 5 of the act is amended to read:

17Section 5. Death or incapacitation of dealer.

18In the event of the death or incapacity of a dealer, the
19supplier shall repurchase, at the option of the heir or
20authorized representative of such person or stockholder, the
21equipment, repair parts and specialized repair tools of the
22dealer as if the supplier had terminated, canceled or failed to
23renew the contract. The heir or authorized representative shall
24have [120 days] one year from the date of the death of such
25dealer or from the date such dealer is determined to be
26incapacitated or becomes totally disabled, as applicable, to
27exercise the option under this section. Nothing in this act
28requires the repurchase of any equipment, repair parts and
29specialized repair tools if the heir and supplier enter into a
30new contract to operate the retail dealership.

1Section 4. Section 9 of the act is repealed:

2[Section 9. No coercion.

3It shall be a violation for any supplier to require, attempt
4to require, coerce or attempt to coerce any dealer in this
5Commonwealth to order or accept delivery of any equipment or
6repair parts not required by law which shall not have been
7voluntarily ordered by the dealer.]

8Section 5. The act is amended by adding sections to read:

9Section 9.1. Unlawful acts by supplier.

10(a) Unlawful coercive acts.--It shall be a violation for any
11supplier, or any representative, officer or agent whatsoever of
12such supplier to require, attempt to require, coerce or attempt
13to coerce any dealer in this Commonwealth to:

14(1) Order or accept delivery of any equipment, part or
15accessory thereof, equipment or any other commodity not
16required by law which shall not have been voluntarily ordered
17by the dealer, except that this paragraph is not intended to
18modify or supersede any terms or provisions of the dealer
19agreement requiring dealers to market a representative line
20of equipment which the supplier is publicly advertising.

21(2) Order or accept delivery of any equipment with
22special features, accessories or equipment not included in
23the list price of such equipment as publicly advertised by
24the supplier.

25(3) Participate monetarily in an advertising campaign or
26contest or to purchase unnecessary or unreasonable quantities
27of any promotional materials, training materials, showroom or
28other display decorations or materials at the expense of the
29dealer.

30(4) Enter into any agreement with the supplier or to do

1any other act prejudicial to the dealer by threatening to
2terminate or not renew a dealer agreement or any other
3contractual agreement existing between the dealer and the
4supplier, except that this paragraph is not intended to
5preclude the supplier from insisting on compliance with the
6reasonable terms or provisions of the dealer agreement or any
7other contractual agreement and notice in good faith to any
8dealer of the dealer's violation of such terms or provisions
9shall not constitute a violation of this act.

10(5) Change the capital structure of the dealer or the
11means by or through which the dealer finances the operation
12of the dealership, provided that the dealer at all times
13meets any reasonable capital standards determined by the
14supplier in accordance with uniformly applied criteria, and
15also provided that no change in the capital structure shall
16cause a change in the principal management or have the effect
17of a sale of the dealership without the consent of the
18supplier. The consent shall be granted or denied within 60
19days of receipt of a written request from the dealer.

20(6) Refrain from participation in the management of,
21investment in or the acquisition of any other line-make of
22equipment or related products. This paragraph does not apply
23unless the dealer maintains a reasonable line of credit for
24each line-make of equipment, the dealer remains in compliance
25with the reasonable terms of the dealer agreement and any
26reasonable facilities requirements of the supplier, and no
27change is made in the principal management of the dealer. The
28reasonable facilities requirements shall not include any
29requirement that a dealer establish or maintain exclusive
30facilities, personnel or display space when such requirements

1or any of them would be unreasonable in light of economic
2conditions and would not otherwise be justified by reasonable
3business considerations. Before the addition of a line-make
4to the dealership facilities, the dealer shall first request
5the consent of supplier if required by the dealer agreement.
6Any decision of the supplier with regard to dualing of two or
7more line-makes shall be rendered within 60 days of receipt
8of a written request from the dealer. Failure on the part of
9the supplier to timely respond to a dualing request shall be
10deemed an approval of the dealer's request. No supplier shall
11limit or restrict the addition of a line-make to the
12dealership facilities where the dealer maintains a reasonable
13line of credit for that supplier's like-make of equipment and
14the dealer remains in compliance with the reasonable terms of
15the dealer agreement and any reasonable facilities
16requirements of a supplier.

17(7) Prospectively assent to a release, assignment,
18novation, waiver or estoppel which would relieve any person
19from liability to be imposed by this act or to require any
20controversy between a dealer and a supplier to be referred to
21any person other than the duly constituted courts of this
22Commonwealth or the United States, if such referral would be
23binding upon the dealer. A dealer and the supplier, by
24themselves or through their respective counsel, are permitted
25to agree to execute a written agreement or to arbitrate in a
26binding or nonbinding manner after a controversy arises.

27(8) Expand, construct or significantly modify facilities
28without assurances that the supplier will provide a
29reasonable supply of equipment within a reasonable time so as
30to justify such an expansion in light of the market and

1economic conditions or require a separate facility for the
2sale or service of a line-make of equipment if the market and
3economic conditions do not clearly justify the separate
4facility.

5(b) Violations.--It shall be a violation for any supplier,
6or any representative, officer or agent whatsoever of such
7supplier under the act to:

8(1) Delay, refuse or fail to deliver equipment or parts
9or accessories in a reasonable time and in reasonable
10quantity relative to the dealer's facilities and sales
11potential after acceptance of an order from a dealer having a
12dealer agreement for the retail sale of any equipment sold or
13distributed of an order from a dealer having a dealer
14agreement for the retail sale of any equipment sold or
15distributed by the supplier as are covered by such dealer
16agreement, if such equipment, parts or accessories are
17publicly advertised as being available for immediate
18delivery. There is no violation if the failure is caused by
19acts or causes beyond the control of the supplier.

20(2) Unfairly discriminate among its dealers with respect
21to warranty, recall, service contract or any other service
22required by the supplier with regard to labor or parts
23reimbursement.

24(3) Unreasonably withhold consent to the sale, transfer
25or exchange of the dealership to a qualified buyer capable of
26being a dealer in this Commonwealth who meets the supplier's
27reasonable requirements for appointment as a dealer.

28(4) Arbitrarily and capriciously withhold consent to the
29relocation of an existing dealership.

30(5) Fail to respond in writing to a request for consent

1as specified in paragraphs (3) and (4) within 60 days of
2receipt of a written request on the forms, if any, generally
3utilized by a supplier for such purposes and containing the
4information required. The failure to respond shall be deemed
5to be approval of the request. A supplier shall acknowledge
6in writing to the applicant the receipt of the forms, and, if
7the supplier requires additional information to complete its
8review, the supplier shall notify the applicant within 15
9days of the receipt of the forms. If the supplier fails to
10request additional information from the applicant within 15
11days after receipt of the initial forms, the 60-day time
12period for approval shall be deemed to run from the initial
13receipt date, otherwise, the 60-day time period for approval
14shall run from receipt of the supplemental requested
15information. In no event shall the total time period for
16approval exceed 75 days from the date of the receipt of the
17initial forms.

18(6) Prevent or attempt to prevent by contract or
19otherwise any dealer from changing the executive management
20control of the dealer unless the supplier, having the burden
21of proof, can show that such change of executive management
22will result in executive management or control by a person or
23persons who are not of good moral character or who do not
24meet reasonable, preexisting, and, with consideration given
25to the volume of sales and service of the dealership,
26uniformly applied minimum business experience standards.
27Where the supplier rejects a proposed change in executive
28management control, the supplier shall give written notice of
29its reasons to the dealer within 60 days of notice to the
30supplier by the dealer of the proposed change, otherwise, the

1change in the executive management of the dealer shall be
2presumptively deemed approved.

3(7) Offer in connection with a sale of equipment to the
4Federal Government, the Commonwealth or any political
5subdivision thereof any discounts, refunds or any other type
6of inducement to any dealer without making the same offer or
7offers available to all other of its dealers within this
8Commonwealth. This paragraph shall not be construed to
9prevent the offering of incentive programs or other discounts
10if the discounts are equally available to all dealers in this
11Commonwealth on a proportionally equal basis.

12(8) Fail to indemnify its dealers, notwithstanding the
13terms of any dealer agreement, against any judgment for
14damages or settlement approved in writing by the supplier,
15including, but not limited to, court costs and reasonable
16attorney fees of the dealer, arising out of complaints,
17claims or lawsuits, including, but not limited to, strict
18liability, negligence, misrepresentation, express or implied
19warranty or rescission of the sale as defined in 13 Pa.C.S. §
202608 (relating to revocation of acceptance in whole or in
21part) to the extent that the judgment or settlement relates
22solely to the alleged defective or negligent functions by the
23supplier beyond the control of the dealer.

24(9) Sell or exchange with a second or final stage
25supplier, retail consumer or end user except through a
26licensed dealer. This paragraph shall not apply to supplier
27sales of equipment to the Federal Government, charitable
28organizations and employees of the supplier.

29(10) Modify a dealer agreement during the term of the
30dealer agreement or upon its renewal if the modification

1substantially and adversely affects the dealer's rights,
2obligations, investment or return on investment without
3giving 60 days' written notice of the proposed modification
4to the dealer unless the modification is required by law or
5court order. The supplier shall provide in the written notice
6the good cause and relevant factors of the proposed dealer
7agreement modification, including, but not limited to:

8(i) The reasons for the proposed modification.

9(ii) Whether the proposed modification is applied to
10or affects all dealers in a nondiscriminatory manner.

11(iii) Whether the proposed modification will have a
12substantial and adverse effect upon the dealer's
13investment or return on investment.

14(iv) Whether the proposed modification is in the
15public interest.

16(v) Whether the proposed modification is necessary
17to the orderly and profitable distribution of products by
18the supplier.

19(vi) Whether the proposed modification is offset by
20other modifications beneficial to the dealer.

21(11) Fail or refuse to offer to its dealers all new
22model equipment manufactured for that line-make or require
23any of its dealers to pay an unreasonable fee, unreasonably
24remodel or renovate the dealer's existing facilities,
25unreasonably purchase or construct a new facility,
26unreasonably purchase parts, supplies, tools, equipment,
27operational services, other merchandise or unreasonably
28participate in training programs in order to receive any
29equipment, parts or accessories. It shall not be a violation
30of this paragraph if the supplier fails to supply dealers

1with equipment, parts or accessories due to circumstances
2beyond the control of the supplier, including, but not
3limited to, strike or labor difficulty, shortage of
4materials, freight embargo or temporary lack of capacity.

5(12) Operate a system for the allocation of equipment
6which is not reasonable or fair to a dealer. Upon the written
7request of any of its dealers, a supplier shall disclose to
8the dealer the method on which the equipment is allocated
9among the dealers of the same line-make. The supplier has the
10burden of establishing the fairness of its allocation.

11(13) Own, operate or control, either directly or
12indirectly, any equipment warranty facility. Nothing is this
13subsection shall prohibit any supplier from owning, operating
14or controlling any warranty facility for warranty repairs on
15equipment owned or operated by the supplier.

16(14) Compel a dealer through a finance subsidiary of the
17supplier to agree to unreasonable operating requirements or
18to directly or indirectly terminate a dealer through the
19actions of a finance subsidiary of the supplier. This
20paragraph shall not limit the right of a financing entity to
21engage in business practices in accordance with the trade of
22retail or wholesale equipment financing.

23(15) Use any subsidiary corporation, affiliated
24corporation or any other controlled corporation, partnership,
25association, entity or person to accomplish what would
26otherwise be illegal conduct under this act on the part of
27the supplier.

28(16) Vary the price charged to any of its dealers, which
29has the effect of causing a difference in the price of any
30similarly equipped equipment to its dealers or to the

1ultimate purchaser. This paragraph shall not be construed to
2prevent the offering of incentive programs or other discounts
3if the incentive or discounts are available to all competing
4dealers of the same line-make in this Commonwealth on a
5proportionately equal basis.

6(17) (i) Directly or indirectly condition any of the
7following actions on a dealer, prospective dealer or
8owner of an interest in a dealership or facility to enter
9into a site-control agreement or exclusive use agreement:

10(A) awarding of a dealership to a prospective
11dealer;

12(B) adding of a line-make or dealership to an
13existing dealer's facility;

14(C) renewal of an existing dealer's dealer
15agreement;

16(D) approving of the relocation of an existing
17dealer's facility; or

18(E) approving of the sale or transfer of a
19dealer's ownership of a dealership or facility.

20(ii) Nothing in this paragraph prohibits a dealer,
21prospective dealer or owner of an interest in a
22dealership or facility from voluntarily entering into
23such an agreement for other consideration. However, a
24provision contained in an agreement which is not
25voluntarily entered into by a dealer, prospective dealer
26or owner of an interest in a dealership or facility on or
27after the effective date of this paragraph that is
28inconsistent with the provisions of this section shall be
29a violation of this act.

30Section 9.2. Remedies and enforcement.

1The provisions of this act shall be supplemental to any 
2dealer agreement between the dealer and the supplier which 
3provides the dealer with greater protection. The dealer may 
4elect to pursue its contract remedy or the remedy provided by 
5State law, or both; and an election by the dealer to pursue such 
6remedies shall not bar its right to exercise any other remedies 
7that may be granted at law or in equity. If a supplier violates 
8this act, a dealer may bring an action against the supplier in a 
9court of competent jurisdiction for damages sustained by the 
10dealer as a consequence of the supplier's violation, including 
11consequential damages and incidental damages, court costs, 
12attorney fees and costs of arbitrators. The dealer also may be 
13granted injunctive relief against unlawful termination, 
14cancellation, nonrenewal or substantial change of competitive 
15circumstances. The remedies set forth in this section shall not 
16be deemed exclusive and shall be in addition to any other 
17remedies permitted by law.

18Section 9.3. Waiver.

19(a) Waiver of act void.--An attempted waiver of a provision
20of this act shall be void. Any provision in a dealer agreement
21that purports to elect the application of the law of a state
22other than Pennsylvania shall be void. Any provision in a dealer
23agreement that requires a dealer to pay attorney fees incurred
24by a supplier shall be void.

25(b) Waiver of right to trial by jury.--No supplier may
26require a dealer to waive the right to a trial by jury as a
27remedy to a supplier and dealer contract or agreement dispute.

28Section 6. This act shall take effect immediately.