BILL ANALYSIS



C.S.H.B. 1705
By: Lewis, Ron
April 28, 1995
Committee Report (Substituted)


BACKGROUND

Article 8911 of Vernons' Annotated Texas Statutes requires that
boat and boat motor manufacturers maintain written supply
agreements with the retail dealers who sell their products in
Texas.  The statute requires that the contracts address basic
supply terms and conditions and meet certain minimum standards, all
in an effort to promote fair dealings between the participants. 
Article 8911 has assisted the boating retail industry in addressing
and resolving issues pertaining to market areas, facility and
inventory requirements, capital requirements, performance
standards, warranty work reimbursement, dealer termination, and
dealer succession.  To continue its effectiveness, Article 8911
requires modification with respect to various required standards
and penalties for noncompliance.

PURPOSE

The bill amends Article 8911 to modify various required dealer
agreement standards and to provide penalties for noncompliance.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

     SECTION 1.  Amends Section 1, Chapter 479, Acts of the 72nd
Legislature, Regular Session, 1991 (Article 8911, Vernon's Texas
Civil Statutes) by adding Subdivision (10).  Defines "good cause".

     SECTION 2.  Amends Section, 2 Chapter 479, Acts of the 72nd
Legislature, Regular Session, 1991 (Article 8911, Vernon's Texas
Civil Statutes) by adding Subsection (b) providing civil penalties
for violations of dealer agreements.

     SECTION 3.  Amends Sections 3(d), (g), and (j)-(p), Chapter
479, Acts of the 72nd Legislature, Regular Session, 1991 (Article
8911, Vernon's Texas Civil Statutes) by adding: 

     (d) Requires good cause to be shown for nonrenewal of a dealer
agreement unless written notice of nonrenewal is provided by the
manufacturer at least 90 days before the date on which the dealer
agreement expires.  Deletes non-conforming language regarding good
cause, now defined in Section 1.
  
     (g) Provides for auditing of warranty work claims.

     (j) Provides for the repurchase of parts described by
Subsection (i)(2).

     (p) Provides that agreements to waive or not enforce the terms
of agreements under this Act are void.


     Reletters subsections under this Section.
     
     SECTION 4.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The major points of difference between H.B. 1705, as introduced,
and the committee substitute are as follows:
     
     Section 1.  The substitute deletes the definition of
"termination" and modifies the definition of "good cause".  Re-numbers sections accordingly.

     Section 2.  The substitute amends subsection (b) by replacing
criminal penalties with civil penalties.

     Section 3.  The substitute (d) deletes agreement termination
check lists.  Provides for a 90 day written notice of nonrenewal.
           
     Deletes subsection (e) in its entirety.

     Deletes original subsection (g) in its entirety.  Adds a new
subsection (g) and deletes a proposed provision regarding the
payment of refunds.

     (j) Sets forth requirements for the return of parts in
nonrenewal situations.
               
     Deletes subsections (o) - (s) containing provision protection
against discrimination against dealers and unreasonable
requirements concerning tools and equipment, provisions regarding
recalls, a "good" faith" and "fair dealing" requirement, and
appropriate dealer signs provision.  

     All subsections are renumbered accordingly to accommodate the
new changes.

SUMMARY OF COMMITTEE ACTION

H.B. 1705 was considered by the Committee on Business and Industry
in a public hearing on April 11, 1995.  Testifying in support of
the bill were Howard Rose, representing Boating Trades Association
of Metro Houston, Jim R. Colborn, representing Boating Trades of
Texas Association, Gene Schkade, representing Lake Nasworthy
Marina, Ken Lovell, representing Boating Trade Association of
Houston.  No one testified against or on the bill.  H.B. 1705 was
left pending before the committee.  H.B. 1705 was reconsidered in
a public hearing on April 25, 1995 and was referred to a
subcommittee consisting of Representatives Crabb, chair, Eiland,
Giddings.  H.B. 1705 was considered by the subcommittee in a formal
meeting on April 27, 1995.  The subcommittee considered a complete
committee substitute to the bill.  3 (Three) amendments were
offered to the substitute. The 3 (three) amendments were adopted
without objection.  The substitute, as amended was adopted without
objection.  The Chair directed the staff to incorporate the
amendments into the substitute.  H.B. 1705 was reported favorably,
as substituted to the full committee with the recommendation that
it do pass and be printed, by a record vote of 3 (three) ayes, 0
(zero) nays, 0 (zero) present-not-voting, 0 (zero) absent.  H.B.
1705 was considered by the full committee on subcommittee report in
a formal meeting on April 28,1995.  The full committee considered
the complete committee substitute to the bill.  One (1) committee
amendment was offered to the substitute.  The one (1) committee
amendment failed by a record vote of 3 (three) ayes, 4 (four) nays,
2 (two) present-not-voting, 0 (zero) absent.  The committee
substitute was adopted without objection.  H.B. 1705 was reported
favorably, as substituted with the recommendation that it do pass
and be printed, by a record vote of 9 (nine) ayes, 0 (zero) nays,
0 (zero) present-not-voting, 0 (zero) absent.