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Distribution Issues

Distribution Issues. The Small Engine Industry Manufacturing And Distribution Process. Service Distributors or Dealers. Retail Dealer. Retail and Commercial Customers. Central Distributors. OEM Distributors. Rental Centers. Engine Manufacturers. Retail Chains Mass Merchandisers. OEMs.

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Distribution Issues

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  1. Distribution Issues The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

  2. The Small EngineIndustry Manufacturing And Distribution Process ServiceDistributorsor Dealers RetailDealer Retail and Commercial Customers CentralDistributors OEMDistributors Rental Centers EngineManufacturers Retail ChainsMassMerchandisers OEMs SpecialtyRetailersCatalogers The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

  3. Regulatory Accommodations Needed for Regional Distribution Systems • Many national distribution systems have distribution centers in California that also serve other western states and overseas markets. • California-only products are actively segregated at these distribution centers. • Sophisticated coding and labeling systems developed and implemented. The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

  4. Problems with Current Regulatory Text • Intent is to prevent California retails sales to California end users. • Overbroad language arguably covers “upstream” transactions with no California retail sale event. • Failure to address engines for pre-empted products • Language must to be tailored to focus on retail sales events only. • Need a “reasonable and prudent” precaution defense for OEMs. The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

  5. OEM “Reasonable and Prudent” Precaution Defense • New CARB emission standards will be significantly more stringent than federal standards and will result in: • Reduction in equipment variety and availability. • Substantial increase in equipment cost. • Internet and contiguous state availability of non-CARB compliant equipment. • Tremendous consumer incentive to circumvent in-state sales and purchase non-CARB compliant equipment. The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

  6. OEM “Reasonable and Prudent” Precaution Defense • Limit to what OEMs can do to combat these forces. • OEMs should not be accountable for California sales of non-compliant equipment when “Reasonable and Prudent” Precautions are observed. The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

  7. OEM “Reasonable and Prudent” Precaution Defense • §2481(d): This Article does not apply to an engine or equipment manufacturer who demonstrates that it has taken reasonable and prudent precautions (such as providing notice to its direct downstream retailers identifying those models which cannot be sold in California) to try to prevent CARB non-compliant products from being offered for sale in California retail stores The Outdoor Power Equipment Institute 341 South Patrick Street • Alexandria, VA 22314 • 703-549-7600 • 703-549-7604 FAX • www.opei.org

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