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A BILL TO BE ENTITLED
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AN ACT
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relating to fair allocation requirements for manufacturers, |
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distributers, or manufacturer representatives. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2301., Occupations Code is amended by adding |
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Section 2301.4672 to read as follows: |
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Sec. 2301.4672 FAIR ALLOCATION REQUIREMENTS. |
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(a) Notwithstanding the terms of any franchise agreement or |
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any other law, a manufacturer, distributor, or manufacturer |
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representative shall, on a quarterly or any three month period, for |
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each line-make, make available an allocation to each motor vehicle |
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dealer sufficient numbers of vehicles, by model, to permit each |
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motor vehicle dealer to meet any sales standards for that period |
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that are required or set by the manufacturer, distributor, or |
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manufacturer representative for such dealer, including but not |
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limited to any sales measurement or criteria authored by the |
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manufacturer and communicated to the dealer that sets a target, |
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goal, or expectation of sales to be made by the dealer in the |
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dealer's assigned geographic area or area of responsibility. |
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(b) A manufacturer, distributor, or manufacturer |
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representative may assert a defense to a claim under this section by |
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making a showing of good cause for the failure to comply. Good cause |
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is demonstrated by establishing with clear and convincing evidence |
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that the manufacturer, distributor, or manufacturer representative |
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was physically unable to make available an allocation of sufficient |
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inventory to the affected dealer due to limited supply available to |
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the manufacturer. This defense shall only apply if the |
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manufacturer, distributor, or manufacturer representative is also |
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able to demonstrate that the limited supply of inventory is borne, |
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or has been borne, equally and fairly by all dealers of said |
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manufacturer in this State as to the same line-make and model in |
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proportion to each dealer's assigned geographic area or area of |
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responsibility. |
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(c) Given the immediate economic impact on a motor vehicle |
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dealer that is not allocated fair and sufficient inventory to |
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permit the dealer to meet the manufacturer's sales expectations |
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referenced in paragraph (a), on a complaint filed by the dealer |
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alleging that a manufacturer, distributor, or manufacturer |
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representative has failed to comply with paragraph (a), the |
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Department of Motor Vehicles/SOAH shall set the matter for final |
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hearing within 60-days of the manufacturer's, distributor's, or |
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manufacturer representative's response to the complaint file by |
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the complaining dealer. |
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(d) A manufacturer's sales standard or measurement referred |
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to in subsection (a) is not relevant to the Board's determination |
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of "good cause" under §2301.453 of this Chapter. |
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(e) On a finding by the Board of a violation of § |
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2301.4672(a) or (c) by a manufacturer, the dealer may pursues all |
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remedies available and as set forth under Subchapter E, Chapter 17, |
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Business & Commerce Code §17.50 in any State Court of competent |
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jurisdiction in the county where the dealer is located. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |