North Dakota Legislation Would Change Manufacturer-Dealer Relationship

After responding to overnight requests from members, every morning our Association staff spends time reviewing dozens— some days hundreds—of news reports and alerts about federal and state legislation that could pose threat or offer opportunity to our members.

Much of the information is shared throughout the day on our Twitter account where we have just under 2,000 followers. News that could affect our members and tweets promoting our members and their products make up 99 percent of all posts.  As we approach our 10,000th tweet and see an upswing in our members use of other social media channels, we have added facebook.com/Shortliner and look forward to meeting and sharing information with members there also.   On average, around 30 percent of our social media posts will find their way to this newsletter.

During the early months of the year, when most state legislatures are in session, we track bills and post updates on the Legal & Legislative page of our website: FarmEquip.org/State.  

While most legislative proposals we track die in committee, one particular bill in North Dakota has enjoyed strong support and has advanced to the point it needs members’ attention.

Senate Bill 2289 is legislation supported by the North Dakota Implement Dealers Association and adds a number of restrictions to the relationship between a manufacturer and North Dakota equipment dealers. 

Changes to the state’s current law start with adding, “Notwithstanding the terms of any contract,” and replacing the word “Coerce” with “Require.” 

Some of the prohibited acts by a supplier include:

• Requiring dealers to maintain or stock a level of equipment, parts or accessories
• Requiring purchase of a minimum quantity of equipment as a condition of filling an order
• Requiring dealers to separate the line-makes operating within their facility without separate consideration
• Requiring a dealer to establish exclusive facilities, personnel or display space for other lines without separate consideration
• Requiring a dealer to unreasonably remodel, renovate or recondition facilities (less than 7 years old)
• Preventing a dealer from relocating within market area
• Using unreasonable, arbitrary performance standards
• Requiring legal jurisdiction other than North Dakota or to waive rights of North Dakota law.

The bill also deals in detail with the transfer of ownership of the dealership and addresses warranty, including:

• Adding time for diagnostic work
• Setting reimbursement rate not less than dealers average rate for non-warranty work
• Continuing to allow dealers to accept manufacturer’s reimbursement terms in lieu of above
• Adding transport time if work at dealership is not “mechanically or financially feasible.”

The bill passed the Senate and is scheduled for its first committee hearing in the House this week. As the bill makes its way through the legislative process, we will update members.