Legislative Update: What the Shortline Industry Needs to Know

With the legislative session complete or winding down in most states, we want to offer a quick recap of a few of the bills most relevant to the shortline industry. This year, we have looked at more than 1,000 proposals, followed the progress of more than 100, and focused our attention on about 25.

As we reported earlier, North Dakota recently passed into law major changes in contractual relationship between manufacturers and their independent dealers. This law takes effect on Aug. 1. (Read it in the buyback section at FarmEquip.org/NDlaw.)

While our Association took a neutral position on the bill, we continue to watch to see if it provides dealers the protections needed to stock and sell shortline equipment free of corrosive pressure from their major tractor supplier. If you do business in North Dakota, let us know if you see a change in dealers’ willingness to stock shortline equipment.

We invested much time and energy recently in a bill in Oregon, where legislators proposed a rewrite of the law governing the relationship between dealers and manufacturers.

We received no advance notice of the bill. When we learned of its filing, we immediately reached out to the Western Equipment Dealers Association and expressed our desire to work with dealers and the association to find a solution that would best meet the needs of both dealers and shortline manufacturers while allowing dealers to level the playing field with their major tractor supplier.

Our leadership took time out of our Supply Summit in Little Rock to accommodate the conference call scheduled by the senator tasked with seeking a compromise. Our attorney scheduled a call with the dealer’s legal counsel and worked over the Easter weekend to respond with our proposed amendment. The bill, which ultimately failed, served as a reminder of the imperfect communication between dealers and manufacturers. We have much work to do.

Last week, we learned new legislation supported by the Northeast Equipment Dealers Association had been filed in Pennsylvania. We have again reached out to that association, seeking to learn of any specific problems caused by shortline manufacturers. We are in the process of reviewing the proposed changes and preparing to discuss a solution to problems that the bill seeks to correct.

Our friends at the Agricultural Manufacturers of Canada (AMC) recently informed us the Saskatchewan government had provided notice it was formally consulting agriculture stakeholders to “ensure that it (the Agricultural Implements Act) remains up to date and relevant, while maintaining a balance between the rights and responsibilities of producers, dealers and manufacturers.” Leah Olson, president of AMC, has done an excellent job of not only responding to the Saskatchewan government but also keeping us informed regarding AMC efforts.

We will not become directly involved in Saskatchewan but will work with AMC to provide support for the excellent positions they have already staked out and their efforts to share the stories of shortline manufacturers with elected officials.

No one works harder than shortline manufacturers to earn independent dealers’ business. The long-term success of shortline manufacturers is tied directly to the success of strong, independent dealers who are free to carry the equipment that best meets their customers’ needs and provides the margins dealers need to succeed.

I soon will ask our Association leaders to support the effort to work more closely with dealer associations to find solutions to the very real distribution problems facing shortline manufacturers. Anything that seeks to drive a wedge between independent dealers and their shortline partners does both sides a disservice. 

Vernon Schmidt – Executive Vice President