Matthew C. Larsgaard, president of the Pioneer Equipment Dealers Assn., testified before Minnesota House Commerce Committee on March 8, 2019. Below is the documentation of that testimony.

Minnesota House File 1138
Testimony before Minnesota House Commerce Committee
Friday, March 8, 2019

Matthew C. Larsgaard, MBA
President, Pioneer Equipment Dealers Association

Madame Chairman and members of the committee, my name is Matthew Larsgaard and I am appearing in OPPOSITION to House File 1138 for the benefit of the farm equipment dealers in Minnesota. On Monday of this week, the Minnesota/South Dakota Equipment Dealers Association and the North Dakota Implement Dealers Association were merged together. The new Association is named the Pioneer Equipment Dealers Association (Pioneer EDA) and represents farm equipment dealers in the states of Minnesota, North Dakota, and South Dakota. I stand before you today in my capacity as President of Pioneer EDA.

The issue contemplated within this bill is commonly labeled and misrepresented as “Right to Repair” legislation. Proponents are typically after more than just the information necessary to complete repairs. “Right to Repair” legislation is usually an attempt to gain access to otherwise unavailable software, control codes, and information that would allow them to modify computers, equipment, and more. To be clear, we are not suggesting that this is the intent of the bill’s sponsors. We are simply providing some background on this issue as this type of legislation is not unique; it has been introduced in legislatures around the nation over the last many years. In 2018 alone, similar legislation was introduced in 19 states; none of it was passed.

Right to Repair advocates have repeatedly lobbied for overly-broad laws that allow access to the software that governs on-board technology on equipment. Much of the legislation seems to require manufacturers to provide information that could create access to equipment source code. We are concerned that these characteristics are also embodied in the legislation that is before you today.

There is no question that the owners of farm equipment have the right to repair their equipment. However, neither our dealers nor our customers should be allowed to modify source code. Modifying the embedded software can create problems, such as the equipment failing to meet customer expectations, exceeding acceptable emissions levels, or possibly creating an unsafe environment for those operating the equipment and those near the equipment. Modifications also create unknown liability issues for the individuals modifying the code, dealers who take in trade modified equipment for resale, and the subsequent owners of a modified unit.

H.F. 1138 applies to all manufacturers who sell or lease, in this state, new products with digital electronics and who are engaged in the business of selling or leasing to any individual or business new digital electronic equipment manufactured by or on behalf of the original equipment manufacturer. (lines 2.1-2.3 and lines 3.17-3.19)

This bill would allow any person who claims to be involved in service and repair (lines 2.24-2.28) to have access to electronic diagnostic and service information. This unfettered access may create new and unnecessary cybersecurity risks. Those individuals may attempt to access this information through network systems that may be less secure than those of manufacturers and authorized repair providers. More widespread, and less secure, access also increases opportunities for hackers to improperly obtain — or even tamper with — such information.

Most new tractors and combines have some level of autonomous capability; some can drive themselves with limited human interaction. Providing access to the source code risks both intentional harm and accidental harm. Several years ago, a pair of expert hackers were given a federal grant to determine if they could “hack” into a modern automobile and take control of certain components like braking, acceleration, windows and more; the hackers were successful. Another group of hackers took control of a car’s computers through cellular telephone and Bluetooth connections.

Regarding farm equipment, a worst case scenario might be one of a hacker being able to take control of a 500 horsepower tractor and drive it wherever or into anything they wish. Compromised source code could also result in the unintentional movement or malfunction of equipment without any malignant human actor involved. Compromised or defective source code was one of the contributing factors in the deaths that resulted from the “unintended acceleration” of Toyota vehicles several years ago.

One other issue is within the used equipment market. Regarding some farm equipment, there is not the ability to track or create a history of modifications made to that specific equipment. For example, a person could “tune” a tractor’s engine from 400 h.p. to 475 h.p., run it for several hundred hours, tune it back to 400 h.p., and then trade it in to a dealer. That engine was operated well outside of reasonable, manufacturer specifications, and the integrity of the engine and other machine components could be severely compromised. As a result, the farmer that ends up purchasing that equipment from a dealer could have the engine “blow up” or experience a different catastrophic failure due to the unknown modification. In addition, the warranty on the engine and drivetrain components would have become void because of the modification….and the farmer who purchased that equipment may have no clue that there is no longer a warranty on that machine. That unsuspecting farmer would then be stuck with paying for a new engine that could cost up to $70,000.

We have several other questions and concerns regarding this bill:

Lines 2.4-2.7 and lines 2.18-2.20. Manufacturers must provide any manual, diagram, reporting output, service code description, schematic diagram, or similar information provided to an authorized repair provider to affect the services of diagnosis, maintenance, or repair of digital electronic equipment…including any relevant updates all “free of charge” to independent repair providers and owners of products. We do not believe it is reasonable for the government to require private businesses to provide goods or services “free of charge” to the public.

Lines 2.1-2.3 & 2.12-2.17 and lines 3.22-3.24 and lines 3.26-3.31. This language requires manufacturers to provide all digital electronic equipment and service/repair parts to equipment owners and any independent repair providers at wholesale or dealer cost! *This would include, for example, requiring John Deere to provide these same products to its competing Case IH dealerships! This concept would not only effectively erode the viability of the manufacturers’ distribution system, it would also essentially strip all dealers of their ability to make any meaningful profit on electronic equipment and service/repair parts. It would likely crush that portion of their business. This would be especially devastating during downturns in the Ag economy when there is little to no money in equipment sales. *A Case IH dealer would be defined as an “independent repair provider” when dealing with John Deere equipment.

Our Association supports customers’ right to repair their equipment and is actively working in support of our industry’s commitment to make available the tools equipment owners need to navigate onboard technology. As farm equipment becomes more sophisticated, most major manufacturers support the customer’s right to repair and either have or will build advanced diagnostic capabilities into equipment that will be available to the owner, dealers, and others. Soon, owners will have access to on-board diagnostics tools via in-cab display or wireless interface, electronic diagnostic service tools, and training on how to use both. You can learn more at: http://www.r2rsolutions.org/.

And for those customers who require even greater diagnostic capabilities, some manufacturers, like John Deere, provide subscription access to a specialized diagnostic tool (Customer Service Advisor) similar to the tools dealers use to support their customers. The fact is, manufacturers and dealers currently make available almost all of the repair information customers would need via manuals, product guides, and product service information. Thus, this legislation is wholly unnecessary for farm equipment if the goal is simply to gain access to the information and tools necessary to repair equipment.

An equipment dealer’s success is tied directly to both the manufacturer’s and the customer’s success. As I described, we believe that the unintended consequences of this bill will negatively affect manufacturers, our dealers, farmers, and ranchers.

Thank you for the opportunity to provide this testimony.

Matthew C. Larsgaard, MBA
President
Pioneer Equipment Dealers Association