Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

      By Lewis of Orange                              H.B. No. 2037

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to discontinuing boat and outboard motor franchise

 1-3     agreements.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Amend Section 3(d), Chapter 479, Acts of the 72nd

 1-6     Legislature, Regular Session, 1991 (Article 8911, Vernon's Texas

 1-7     Civil Statutes), to read as follows:

 1-8           (d)(1)  A manufacturer or distributor may not refuse to

 1-9     continue any agreement unless all of the following conditions are

1-10     met:

1-11                             (i)  the manufacturer or distributor has

1-12     given the dealer written notice of noncontinuance setting forth the

1-13     specific grounds for the noncontinuance of the agreement;

1-14                             (ii)  the dealer has been given the

1-15     opportunity to exert good faith efforts to cure the grounds listed

1-16     in the notice for 60 days following receipt of the notice in

1-17     Subdivision (i) above;

1-18                             (iii)  the manufacturer or distributor has

1-19     negotiated with the dealer in good faith during a period of 60 days

1-20     following the period provided in Subdivision (ii) above; and

1-21                             (iv)  the manufacturer or distributor has

1-22     given the dealer and the Commission written notice that the causes

1-23     have not been cured by actions of the dealer, specifying the

1-24     remaining grounds not cured, and that the agreement will be not

 2-1     continued on a date not less than 90 days after receipt of the

 2-2     notice.  The notice must be sent by registered or certified mail

 2-3     and contain the following statement on the first page "YOU MAY BE

 2-4     ENTITLED TO PROTEST THIS ACTION TO THE TEXAS PARKS AND WILDLIFE

 2-5     COMMISSION IF YOU OPPOSE IT".

 2-6                 (2)  If the affected dealer files a protest with the

 2-7     Commission within 75 days after receiving the notice given in

 2-8     Subsection (d)(iv) above and pays a $250 fee, the Commission shall

 2-9     designate an arbitrator to determine whether the manufacturer or

2-10     distributor has established by a preponderance of the evidence at a

2-11     hearing held by the arbitrator that there is good cause for the

2-12     proposed noncontinuance.  The arbitrator shall be a resident of

2-13     this state and licensed to practice law in this state and have no

2-14     interest in the outcome of the proceeding.  The Commission shall

2-15     make the appointment within 15 days after receipt of the protest.

2-16     The arbitration shall be conducted in the following 75 days

2-17     pursuant to Section 1781.001 of Civil Practices and Remedies Code

2-18     following the rules of evidence called for in Section 2001.081 of

2-19     the Government Code.  The parties shall share equally the cost of

2-20     the arbitrator and of the proceeding.  Each party shall pay for its

2-21     own attorneys and experts.   The parties shall be bound by the

2-22     decision of the arbitrator without an appeal.  If the arbitrator

2-23     determines that there is good cause for noncontinuance, the

2-24     agreement will expire at the end of its term as extended by the

2-25     above steps.  If the arbitrator determines that there is not good

2-26     cause for the noncontinuance, the agreement shall be renewed at the

2-27     end of its term as extended by the above steps for the same term as

2-28     the prior agreement.

2-29                 (3)  In this section, "good cause" does not include the

2-30     fact that a dealer holds a dealer agreement involving another line,

 3-1     make, or brand of new boat or new outboard motor.  [Good cause is

 3-2     not required in the case of nonrenewal of a dealer agreement except

 3-3     for an agreement for which the original term of the agreement is

 3-4     for a period of less than one year.]

 3-5           SECTION 2.  The importance of this legislation and the

 3-6     crowded condition of the calendars in both houses create an

 3-7     emergency and an imperative public necessity that the

 3-8     constitutional rule requiring bills to be read on three several

 3-9     days in each house be suspended, and this rule is hereby suspended.