The following definitions apply for purposes of this chapter:

(a) “Act” means the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act.

(b) “Bulk sales law” means the Uniform Commercial Code-Bulk Sales as contained in Division 6 (commencing with Section 6101) of the Commercial Code.

(c) “Claim” means a dealer’s claim for reimbursement from a supplier for labor and materials expended by the dealer to meet the requirements of the supplier’s warranty agreement with a consumer of the supplier’s products if the dealer has complied with the supplier’s then-existing written policies and procedures for warranties and warranty claims.

(d) “Current parts price” means, with respect to current parts, the price for repair parts listed in the supplier’s price list or catalog in effect at the time the dealer contract is canceled or discontinued or, for purposes of Section 22905, the price list or catalog in effect at the time the repair parts were ordered. “Current parts price” also means, with respect to superseded repair parts, the price listed in the supplier’s price list or catalog in effect at the time the dealer contract is canceled or discontinued for the part that performs the same function and purpose as the superseded part, but is simply listed under a different part number.

(e) “Current net parts cost” means the current parts price less any trade or cash discounts typically given to the dealer with respect to that dealer’s normal, ordinary course of orders of repair parts. “Current net parts cost” also means, with respect to a warranty, the current parts price of the supplier for the equipment repaired less any trade or cash discounts typically given to the dealer with respect to that dealer’s normal, ordinary course of orders of repair parts.

(f) “Dealer” means any person primarily engaged in the retail sale of equipment as defined in subdivision (j). For the purposes of this act, “dealer” does not include a “franchisee” as defined in § 331.1 of the Vehicle Code or a “new motor vehicle dealer” as defined in § 426 of the Vehicle Code.

(g) “Dealer contract” means either an oral or written contract, agreement, or arrangement for a definite or indefinite period between a dealer and a supplier that provides for the rights and obligations of the parties with respect to the purchase or sale of equipment or repair parts.

(h) “Dealership” means the retail sale business engaged in by a dealer under a dealer contract.

(i) “Demonstrator” means equipment in a dealer’s inventory that has not been sold, but has had its usage demonstrated to potential customers, either without charge or pursuant to a short-term rental agreement, with the intent of encouraging the potential customer to purchase the equipment.

(j) (1) “Equipment” means all-terrain vehicles and other machinery, equipment, implements, or attachments used for, or in connection with, any of the following purposes:

(A) Lawn, garden, golf course, landscaping, or grounds maintenance.

(B) Planting, cultivating, irrigating, harvesting, and producing agricultural or forestry products.

(C) Raising, feeding, or tending to, or harvesting products from, livestock and any other activity in connection with those activities.

(D) Industrial, construction, maintenance, mining, or utility activities or applications, including, but not limited to, material handling equipment.

(2) Self-propelled vehicles designed primarily for the transportation of persons or property on a street or highway are specifically excluded from the definition of equipment.

(k) “Family member” means a spouse, parent, sibling, child, son-in-law, daughter-in-law, and lineal descendant, including those by adoption.

(l) “Good cause” means failure by a dealer to comply with the requirements imposed on the dealer by the dealer contract, if those requirements are not different from those requirements imposed on other similarly situated dealers in this state.

(m) “Index” means the United States Department of Labor, Bureau of Labor Statistics purchase price index for construction machinery series identification number pcu333120333120, or any successor index measuring substantially similar information.

(n) “Inventory” means equipment, repair parts, data-processing hardware or software, and specialized service or repair parts.

(o) “Major shareholder” means a shareholder with 51-percent or greater interest in a dealership.

(p) “Manufacturer created incentive program” means a program in which the dealer’s inventory has not been sold but has been used for specialized purposes, including, but not limited to, harvest rental programs, dealer purchase rentals, and short-term rentals. The warranty that is transferred to the consumer upon sale, which shall be disclosed prior to sale, is the manufacturer-provided base warranty, less hours and time used while in a manufacturer created incentive program.

(q) “Net equipment cost” means the price the dealer actually paid to the supplier for equipment, plus (1) freight, at truckload rates in effect as of the effective date of the termination of a dealer contract, if freight was paid by the dealer from the supplier’s location to the dealer’s location and (2) reimbursement for labor incurred in preparing the equipment for retail sale or rental, which labor will be reimbursed at the dealer’s standard labor rate charged by the dealer to its customers for nonwarranty repair work; provided, however, if a supplier has established a reasonable setup time, that labor will be reimbursed at an amount equal to the reasonable setup time in effect as of the date of delivery multiplied by the dealer’s standard labor rate.

(r) “Person” means an individual, corporation, partnership, limited liability company, trust, or any and all other forms of business entities, including any other entity in which a person has a majority interest or of which a person has control, as well as the individual officers, directors, and other persons in active control of the activities of each entity.

(s) “Repair parts” means all parts and products related to the service or repair of equipment, including superseded parts.

(t) “Single-line dealer” means a dealer that has (1) purchased construction, industrial, forestry, and mining equipment from a single supplier constituting 75 percent of the dealer’s new equipment, calculated on the basis of net cost; and (2) a total annual average sales volume in excess of forty million dollars ($40,000,000) for the three calendar years immediately preceding the applicable determination date; provided, however, the sales threshold shall be increased each year by an amount equal to the current sales threshold multiplied by the percentage increase in the index from January 1 of the immediately preceding year to January 1 of the current year.

(u) “Single-line supplier” means the supplier that is selling the single-line dealer construction, industrial, forestry, and mining equipment constituting 75 percent of the dealer’s new equipment.

(v) “Supplier” means any person engaged in the business of manufacturing, assembly, or wholesale distribution of equipment or repair parts. “Supplier” also includes any successor in interest to a supplier, including a purchaser of assets or stock, or a surviving corporation resulting from a merger, liquidation, or reorganization of a supplier.

(w) “Terminate” means to terminate, cancel, fail to renew, or materially change the competitive circumstances of a dealer contract.

(Amended by Stats. 2006, Ch. 538, Sec. 32. Effective January 1, 2007.)