SRC-SLL H.B. 533 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 533
By: Swinford (Lucio)
Jurisprudence
5-8-97
Engrossed


DIGEST 

Currently, the relationship between an off-road construction equipment
dealer and the supplier, who may be a manufacturer, wholesaler, or
distributor, is primarily determined by a franchise contractual agreement.
An equipment dealer's customer relations, finances or reputation could
suffer if a supplier were to arbitrarily and unilaterally cancel the
dealer contract.  Chapter 19 of the Business & Commerce Code sets forth
provisions related to such issues as the return of inventory, warranty
claims, and renewal or termination of certain franchises.  This bill
extends those provisions to dealers of off-road equipment. 
  
PURPOSE

As proposed, H.B. 533 provides regulations regarding certain dealer
agreements concerning off-road construction equipment. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends the heading of Chapter 19, Business & Commerce Code, as
follows: 

CHAPTER 19.  New heading: FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION, AND
OUTDOOR POWER EQUIPMENT DEALER AGREEMENTS 

SECTION 2. Amends Section 19.01, Business & Commerce Code, by amending
Subsections (5) and (8), and adding Subsection (12), to redefine "dealer"
to prohibit the term "dealer" from including a single line dealer
primarily engaged in the retail sale and service of off-road construction
and earthmoving equipment.  Redefines "equipment" to include off-road
construction equipment. Defines "single line dealer" to mean a person,
partnership, or corporation which has purchased 75 percent or more of the
dealer's total new product inventory from a single supplier under all
agreements with that supplier; and has a total annual average sales volume
for the three previous years with that single supplier in excess of $100
million for the territory for which that dealer is responsible within the
state. 

SECTION 3. Amends Section 19.43(a), Business & Commerce Code, to make a
conforming change. 

SECTION 4. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 5. Emergency clause.