SRC-DBM H.B. 965 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 965
By: Swinford (Duncan)
Economic Development
5/9/1999
Engrossed


DIGEST 

Currently, a common practice in the agricultural equipment industry is for
manufacturers to create their own franchise of dealerships, to own an
interest in the dealerships, and to enter into agreements with the
dealerships.  In such dealer agreements, the manufacturers specify the type
of equipment the  dealer is obligated to sell and define the territory
where such equipment is to be sold.  Chapter 19, Business and Commerce
Code, was created to protect agricultural equipment dealers in this state
from agreements which restricted how they operated their dealerships and to
whom they could sell their dealerships.  Under the code, the term "dealer"
does not include a person whose principal business is the sale of off-road
construction equipment.  Corporate mergers and other industry changes have
allowed off-road construction equipment manufacturers to circumvent the law
by either manufacturing agricultural equipment themselves or by merging
with companies that manufacture agricultural equipment.  H.B. 965 would
regulate certain dealer agreements concerning forestry harvesting and
off-road construction equipment. 


PURPOSE

As proposed, H.B. 965 regulates certain dealer agreements concerning
forestry harvesting and offroad 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 heading to Chapter 19, Business & Commerce Code, as
follows: 

New heading:  CHAPTER 19.  FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION,

FORESTRY, HARVESTING EQUIPMENT, AND OUTDOOR POWER

EQUIPMENT DEALER AGREEMENTS

SECTION 2.  Amends Section 19.01, Business & Commerce Code, by amending
Subdivisions (5) and (8), and adding Subdivision (12), to redefine
"dealer," and "equipment," and define "single line dealer." 

SECTION 3.  Amends Section 19.43(a), Business & Commerce Code, to require a
supplier to pay to a dealer the dealer cost of new, unsold, undamaged, and
complete farm tractors, farm implements, utility tractors, industrial
tractors, forklifts, material-handling equipment, outdoor power equipment,
forestry harvesting equipment, off-road construction equipment, and
attachments returned by the dealer under certain conditions. 

SECTION 4.Effective date: September 1, 1999.
  Makes application of this Act prospective.

SECTION 5.Emergency clause.