By: Kuempel H.B. No. 3404
A BILL TO BE ENTITLED
AN ACT
relating to the regulation and sale of certain trailers, including
cargo and livestock trailers, and cargo and livestock trailers with
living quarters.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 2301, Occupations Code, is amended by
adding Subchapter S to read as follows:
SUBCHAPTER S. MANUFACTURERS, DISTRIBUTORS, AND DEALERS OF CARGO OR
LIVESTOCK TRAILERS OR CARGO OR LIVESTOCK TRAILERS WITH LIVING
QUARTERS
Sec. 2301.901. DEFINITIONS. Notwithstanding Sections
2301.002(7) and (19), in this subchapter:
(1) "Agreement" means a written agreement between a
manufacturer or distributor and a dealer for the purchase and sale
of new cargo or livestock trailers, and cargo or livestock trailers
with living quarters.
(2) "Dealer" means a person engaged in the business of
buying, selling, selling on consignment, displaying for sale, or
exchanging at least five cargo or livestock trailers or cargo or
livestock trailers with living quarters in a calendar year.
(3) "Cargo or livestock trailer, and cargo or
livestock trailer with living quarters" means a towable
recreational vehicle that is also designed, constructed, or used to
transport animals or cargo.
(4) "Manufacturer" means a person or entity engaged in
the business of manufacturing cargo or livestock trailers and cargo
or livestock trailers with living quarters for the purpose of sale
or trade.
(5) "Territory" means:
(A) for the sale of a manufacturer's cargo or
livestock trailer and cargo or livestock trailers with living
quarters, a defined geographical area within which a dealer is
appointed by the manufacturer as the sole authorized dealer; or
(B) for the sale of all other manufacturer
products, a market area within which a dealer is appointed by the
manufacturer as an authorized dealer.
Sec. 2301.902. 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
cargo or livestock trailer or a cargo or livestock trailer with
living quarters unless the manufacturer or distributor and the
dealer enter into an agreement that complies with this subchapter.
Sec. 2301.903. TERMS OF AGREEMENT. (a) An agreement under
this subchapter must include:
(1) the dealer's defined territory and permitted
dealership locations;
(2) the length of the agreement, which may not be less
than two years;
(3) provisions for termination or nonrenewal of the
agreement;
(4) the obligations of the manufacturer, distributor,
and dealer in the preparation and delivery of and warranty service
on new cargo or livestock trailers and cargo or livestock trailers
with living quarters; and
(5) the obligations of the manufacturer, distributor,
and dealer on termination of the agreement, including with respect
to unsold inventory of new cargo or livestock trailers and cargo or
livestock trailers with living quarters.
(b) Notwithstanding Subsection (a)(2), an initial agreement
between a manufacturer or distributor and a dealer may not have a
term of less than two years. An extension or renewal of the initial
agreement or a subsequent agreement under this subchapter between
the same manufacturer or distributor and dealer must be for a term
of two or more years.
Sec. 2301.904. DEALER TERRITORY. (a) A dealer agreement
must describe a dealer's territory in terms of:
(1) a radius measured in miles from the dealer's place
of business; or
(2) identification of one or more counties in this
state.
(b) During the term of an agreement, a manufacturer may not
appoint another authorized dealer for the sale of the
manufacturer's cargo or livestock trailers and cargo or livestock
trailers with living quarters in a dealer's territory.
(c) Except for purposes of advertising without an
advertised price or with a manufacturer's suggested retail price, a
dealer may not advertise or promote the sale of the manufacturer's
cargo or livestock trailers, and cargo or livestock trailers with
living quarters outside the dealer's territory, including through
the Internet.
(d) A dealer may not use a broker or dealer in another
dealer's territory to sell a manufacturer's cargo or livestock
trailers and cargo or livestock trailer's with living quarters.
(e) This subchapter does not prohibit a dealer from selling
a cargo or livestock trailer and cargo or livestock trailers with
living quarters to a customer residing outside of the dealer's
territory who independently visits the dealership and seeks to
purchase a cargo or livestock trailer and cargo or livestock
trailer with living quarters from the dealer.
Sec. 2301.905. COMPENSATION FOR WARRANTY SERVICE. (a) A
manufacturer or distributor shall fairly compensate a dealer for
the work and services the dealer performs and for expenses the
dealer incurs to comply with a manufacturer's or distributor's
warranty.
(b) 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.
(c) A manufacturer or distributor who has a warranty program
shall reimburses a dealer at 100 percent of the dealer's retail
labor rate if the dealer complies with reasonable and objective
criteria
(d) A manufacturer or distributor shall approve or deny a
dealer's written claim for warranty work not later than the second
business day after the date of receipt of the claim. If the claim is
approved, the manufacturer or distributor shall pay the claim not
later than the 30th day after the date of receipt of the dealer's
written invoice or written proof of completion of the warranty
work. If the claim is denied, the manufacturer or distributor shall
notify the dealer of the grounds for denial.
(e) A manufacturer or distributor may not audit a claim
filed for warranty work after the first anniversary of the date the
claim is submitted.
(f) A manufacturer shall act as the single source of contact
for the dealer for the manufacturer's component part product
warranties, other than engine-related product warranties.
Sec. 2301.906. REPURCHASE BY MANUFACTURER OR DISTRIBUTOR.
(a) A manufacturer or distributor who terminates or non renews 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
notwithstanding floorplans:
(1) a new, unsold, and complete cargo or livestock
trailer and cargo or livestock trailer with living quarters, with
accessories and packaged trailers sold with the trailer, that:
(A) is in the dealer's inventory; and
(B) was purchased during the two years preceding
the date of the termination; and
(2) any new, current, unsold, and undamaged parts or
accessories purchased from the manufacturer in the original,
resalable package.
(b) A demand for repurchase must be made in writing not
later than the 90th day after the date the manufacturer or
distributor terminates the agreement. The dealer shall provide the
manufacturer or distributor with a complete list of the items to be
repurchased. The manufacturer or distributor shall complete the
repurchase not later than the 30th day after the date the dealer
demands the repurchase.
(c) The manufacturer or distributor shall:
(1) repurchase an item described by Subsection (a)(1)
at the dealer's invoiced cost plus freight, less any allowance paid
to the dealer;
(2) repurchase an item described by Subsection (a) (2)
at the dealer's invoiced cost; and
(3) it shall be the responsibility of the manufacturer
or distributor to remove the trailers from the dealership and to pay
the cost incurred to remove all products from the dealership and to
transport an item described by Subsection (a) to the
manufacturer
or distributor.
Sec. 2301.907. CIVIL LIABILITY. A person who violates this
subchapter or an agreement regulated by this subchapter is liable
to an injured party for:
(1) the actual damages caused by the violation; and
(2) reasonable legal fees and court costs if
litigation is commenced in connection with the violation.
Sec. 2301.908. VENUE FOR DISPUTE. Venue for a dispute under
an agreement is in the county of the dealer's principal place of
business as stated in the agreement.
SECTION 2. Section 501.002(17), Transportation Code, is
amended to read as follows:
(17) "Motor vehicle" means:
(A) any motor driven or propelled vehicle
required to be registered under the laws of this state;
(B) a trailer or semitrailer, other than
manufactured housing [, that has a gross vehicle weight that
exceeds 4,000 pounds];
(C) a travel trailer;
(D) an all-terrain vehicle or a recreational
off-highway vehicle, as those terms are defined by Section 502.001,
designed by the manufacturer for off-highway use that is not
required to be registered under the laws of this state; or
(E) a motorcycle, motor-driven cycle, or moped
that is not required to be registered under the laws of this state.
SECTION 3. Section 501.004(b), Transportation Code, is
amended to read as follows:
(b) This chapter does not apply to:
(1) a [trailer or] semitrailer used only for the
transportation of farm products if the products are not transported
for hire;
(2) the filing or recording of a lien that is created
only on an automobile accessory, including a tire, radio, or
heater;
(3) a motor vehicle while it is owned or operated by
the United States; or
(4) a new motor vehicle on loan to a political
subdivision of the state for use only in a driver education course
conducted by an entity exempt from licensure under Section
1001.002, Education Code.
SECTION 4. Section 501.037, Transportation Code, is
repealed.
SECTION 5. Subchapter S, Chapter 2301, Occupations Code, as
added by this Act, applies only to an agreement, as defined by
Section 2301.901, Occupations Code, as added by this Act, entered
into on or after the effective date of this Act. An agreement
entered into before the effective date of this Act is governed by
the law in effect on the date the agreement was entered into, and
the former law is continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2017.