81R17240 NC-D

By: Deshotel H.B. No. 4395

Substitute the following for H.B. No. 4395:

By: Gattis C.S.H.B. No. 4395

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of boat manufacturers, distributors, and dealers; providing a civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2352.001, Occupations Code, is amended by amending Subdivisions (1), (3), (4), and (5) and adding Subdivision (2-a) to read as follows:

(1) "Agreement" means a written agreement between a manufacturer or distributor and a dealer for the purchase and sale of new boats or new boat [outboard] motors.

(2-a) "Boat motor" means a mechanical form of propulsion for a vessel, including an inboard or outboard motor.

(3) "Dealer" means a person engaged in the business of buying, selling, selling on consignment, displaying for sale, or exchanging at least five vessels, motorboats, or boat motors during a calendar year [has the meaning assigned by Section 31.003, Parks and Wildlife Code].

(4) "Distributor" means a person who:

(A) offers for sale, sells, or distributes new boats or new boat [outboard] motors to dealers; or

(B) controls a person described by Paragraph [Subdivision] (A).

(5) "Manufacturer" means a person engaged in the business of manufacturing new and unused vessels or boat motors for the purpose of sale or trade [has the meaning assigned by Section 31.003, Parks and Wildlife Code].

SECTION 2. Section 2352.051, Occupations Code, is amended to read as follows:

Sec. 2352.051. AGREEMENT REQUIRED. A manufacturer or distributor contracting with a dealer may not sell or offer for sale, and a dealer may not purchase or offer to purchase, a new boat or a new boat [outboard] motor unless the manufacturer or distributor and the dealer enter into an agreement that complies with this chapter.

SECTION 3. Section 2352.052, Occupations Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) An agreement under this chapter must include:

(1) the dealer's location, territory, or market area;

(2) the length of the agreement;

(3) any performance or marketing standards;

(4) any working capital, inventory, facility, equipment, or tool standards;

(5) provisions for termination or nonrenewal of the agreement and the designation of a successor dealer in the event of the dealer's death or disability;

(6) the obligations of the manufacturer, distributor, and dealer in the preparation and delivery of and warranty service on new boats and new boat [outboard] motors;

(7) the obligations of the manufacturer, distributor, and dealer on termination of the agreement, including inventory of new boats and new boat [outboard] motors, parts inventory, equipment, furnishings, special tools, and required signs; and

(8) dispute resolution procedures.

(c) The agreement must provide a dealer's territory with an exclusive market area of not less than a 50-mile radius from the dealer location.

SECTION 4. Sections 2352.053(b) and (c), Occupations Code, are amended to read as follows:

(b) Good cause is [not] required for the nonrenewal of an agreement [other than an agreement having an original term of less than one year].

(c) The fact that a dealer holds an agreement involving another line, make, or brand of new boat or new boat [outboard] motor does not constitute good cause.

SECTION 5. Section 2352.101(a), Occupations Code, is amended to read as follows:

(a) A manufacturer or distributor who publicly advertises a new boat, new boat [outboard] motor, or part as available for immediate delivery shall deliver the boat, boat [outboard] motor, or part in reasonable quantities and within a reasonable time after receipt of an order from a dealer who has an agreement with the manufacturer or distributor applicable to the advertised boat, boat [outboard] motor, or part.

SECTION 6. Section 2352.103, Occupations Code, is amended to read as follows:

Sec. 2352.103. FINANCING. (a) A manufacturer or distributor may not require a dealer to finance through a particular financing source a new boat or new boat [outboard] motor sold by the dealer.

(b) A manufacturer or distributor may not require a dealer to act as the manufacturer's or distributor's agent in securing:

(1) a promissory note and security agreement in connection with the sale or purchase of a new boat or new boat [outboard] motor; or

(2) an insurance policy on the operation of a new boat or new boat [outboard] motor.

SECTION 7. Section 2352.105(b), Occupations Code, is amended to read as follows:

(b) A [Except as provided by Subsection (c), a] manufacturer or distributor may not pay a dealer a labor rate for warranty work that is less than the rate the dealer charges retail customers for nonwarranty work of the same kind by similar technicians.

SECTION 8. Sections 2352.107(a) and (b), Occupations Code, are amended to read as follows:

(a) A manufacturer or distributor who terminates an agreement shall repurchase on demand from the dealer any of the following items, purchased by the dealer from the manufacturer or distributor, that are free and clear of a lien or encumbrance:

(1) a new, unsold, retailable, undamaged, and complete boat, with accessories and packaged trailers sold with the boat, and any boat [outboard] motor that:

(A) is in the dealer's inventory; and

(B) was purchased during the two years [within one year] preceding the date of the termination; and

(2) any new, current, unsold, undamaged, and unused parts or accessories for boats or boat [outboard] motors in the original resalable merchandising package.

(b) A demand for repurchase must be made in writing not later than the 90th [30th] day after the date the manufacturer or distributor terminates the agreement. The dealer must provide the manufacturer or distributor with a complete list of the items to be repurchased. The manufacturer or distributor shall complete the repurchase within a reasonable time.

SECTION 9. Subchapter D, Chapter 2352, Occupations Code, is amended by adding Section 2352.204 to read as follows:

Sec. 2352.204. CIVIL PENALTY. (a) A person who violates this chapter is liable to this state for a civil penalty. The amount of the penalty may not exceed $500 for each violation.

(b) Each sale of, purchase of, or offer to sell or purchase a new boat or boat motor in violation of Section 2352.051 is a separate violation.

(c) The attorney general may sue to collect a civil penalty under this section. The attorney general may recover, on behalf of the state, the reasonable expenses incurred in obtaining the penalty, including investigation and court costs, reasonable attorney's fees, witness fees, and other expenses.

SECTION 10. Section 2352.105(c), Occupations Code, is repealed.

SECTION 11. The change in law made by this Act applies only to an agreement entered into or renewed under Chapter 2352, Occupations Code, on or after the effective date of this Act. An agreement entered into or renewed before the effective date of this Act is governed by the law in effect on the date the agreement was entered into or renewed, and the former law is continued in effect for that purpose.

SECTION 12. This Act takes effect September 1, 2009.