Texas 2023 - 88th Regular

Texas House Bill HB4810 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Leach H.B. No. 4810
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to transactions involving dealer agreements under the Fair
7	7	Practices of Equipment Manufacturers, Distributors, Wholesalers,
8	8	and Dealers Act
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Title 4, Chapter 57, Subchapter A, Business and
11	11	Commerce Code is amended to read as follows:
12	12	Sec. 57.001. SHORT TITLE. This chapter may be cited as the
13	13	Fair Practices of Equipment Manufacturers, Distributors,
14	14	Wholesalers, and Dealers Act.
15	15	Sec. 57.002. DEFINITIONS. In this chapter:
16	16	(1) "Current net parts cost" means an amount equal to
17	17	the current net parts price of a repair part, less any trade or cash
18	18	discount typically given to a dealer in the normal, ordinary course
19	19	of ordering a repair part.
20	20	(2) "Current net parts price" means:
21	21	(A) with respect to a repair part in current
22	22	stock, the price for the repair part listed in the supplier's price
23	23	list or catalog in effect:
24	24	(i) when a dealer agreement is terminated
25	25	or discontinued; or
26	26	(ii) for purposes of Subchapter F, when the
27	27	repair part is ordered; and
28	28	(B) with respect to a repair part that has been
29	29	superseded, the price for a repair part listed in the supplier's
30	30	price list or catalog in effect when a dealer agreement is
31	31	terminated or discontinued that:
32	32	(i) performs the same function and is for
33	33	the same purpose as the superseded part; and
34	34	(ii) is listed under a different part
35	35	number than the superseded part.
36	36	(3) "Dealer": means a person who is primarily engaged
37	37	in the business of:
38	38	(A) a person in Texas that is not a Sophisticated
39	39	Party and who is primarily engaged in the business of selling or
40	40	leasing equipment, or repair parts for equipment, to end users of
41	41	thelocated in Texas; and
42	42	(B) repairing or servicing equipmentis
43	43	authorized by a supplier to sell or lease such equipmentandor
44	44	repair parts to end users located in Texas pursuant to the terms of
45	45	a dealer agreement.
46	46	(4) "Dealer Agreement" means an oral ora signed
47	47	written agreement or arrangement, of definite or indefinite
48	48	duration between a dealer and a supplier that provides for the
49	49	rights and obligations of the parties with respect to the purchase
50	50	or sale of such equipment or repair parts.
51	51	(5) "Dealership" means the retail sale business
52	52	engaged in by a dealer under a dealer agreement.
53	53	(6) "Demonstrator" means equipment in a dealer's
54	54	inventory that:
55	55	(A) has never been sold at retail; and
56	56	(B) is or has been made available to a potential
57	57	customer, as authorized by the supplier, without charge or under a
58	58	short-term rental agreement for purposes of demonstrating its use
59	59	and with the intent of encouraging the customer to purchase the
60	60	equipment.
61	61	(7) "Equipment":
62	62	(A) means machinery; or equipment, or implements
63	63	or attachments to the machinery; or equipment, or implementsthat
64	64	are used for, or in connection with, any of the following purposes:
65	65	(i) lawn, garden, golf course, landscaping,
66	66	or grounds maintenance;
67	67	(ii) planting, cultivating, irrigating,
68	68	harvesting, or producing agricultural or forestry products;
69	69	(iii) raising, feeding, or tending to
70	70	livestock, harvesting products from livestock, or any other
71	71	activity in connection with those activities; or
72	72	(iv) industrial, construction,
73	73	maintenance, mining, or utility activities or applications; and
74	74	(B) does not mean or include:
75	75	(i) trailers or self-propelled vehicles
76	76	designed primarily for the transportation of persons or property on
77	77	a street or highway; or
78	78	(ii) off-highway vehicles; or
79	79	(iii) parts, products, piping, tubing,
80	80	structures, and anything else that is intended to be affixed to, or
81	81	that is customarily affixed to, real property or structures located
82	82	on real property.
83	83	(8) "Family member" means a child or other lineal
84	84	descendant, a son-in-law, a daughter-in-law, or the spouse of an
85	85	individual.
86	86	(9) "Index" means the producer price index for
87	87	construction machinery series identification number
88	88	pcu333120333120 published by the Bureau of Labor Statistics of the
89	89	United States Department of Labor or a successor index measuring
90	90	substantially similar information.
91	91	(10) "Inventory" means equipment, repair parts, data
92	92	processing hardware or software, or specialized service or repair
93	93	tools.
94	94	(11) "Net equipment cost" means an amount equal to the
95	95	sum of the price the dealer actually paid to the supplier for
96	96	equipment, and:
97	97	(A) any freight paid by the dealer from the
98	98	supplier's location to the dealer's location, payable at the cost
99	99	stated on the invoice, or, if there is no invoice, at the truckload
100	100	rate in effect when a dealer agreement is terminated; and
101	101	(B) the set-up cost of labor incurred in
102	102	preparing the equipment for retail sale or lease, reimbursable at
103	103	the dealer's standard labor rate charged by the dealer to its
104	104	customers for non-warranty repair work, unless a supplier has
105	105	established a reasonable set-up time to prepare the equipment for
106	106	retail sale or lease, in which case the labor will be reimbursable
107	107	at an amount equal to the reasonable set-up time in effect as of the
108	108	date of delivery multiplied by the dealer's standard labor rate.
109	109	(12) "New equipment" means, for purposes of
110	110	determining whether a dealer is a single-line dealer, equipment
111	111	that can be returned to the supplier following termination of a
112	112	dealer agreement under Subchapter H.
113	113	(13) "Person" means:
114	114	(A) an individual, corporation, partnership,
115	115	limited liability company, company, trust, or any other form of
116	116	business entity, including any other entity in which a person has a
117	117	majority interest or of which a person has control; or
118	118	(B) an officer, director, or other individual who
119	119	actively controls the activities of an entity described by
120	120	Paragraph (A).
121	121	(14) "Repair parts" means all parts related to the
122	122	repair of equipment, including superseded parts.
123	123	(15) "Single-line dealer" means a dealer that:
124	124	(A) has purchased construction, industrial,
125	125	forestry, or mining equipment from a single supplier constituting
126	126	75 percent or more of the dealer's total new equipment that is
127	127	construction, industrial, forestry, or mining equipment, computed
128	128	on the basis of net equipment cost; and
129	129	(B) has a total annual average sales volume of
130	130	equipment acquired from the single-line supplier in excess of $25
131	131	million for the five calendar years immediately preceding the
132	132	applicable determination date, provided, however, that the $25
133	133	million threshold will be increased as of September 1 of each year
134	134	by an amount equal to the threshold on the date the determination is
135	135	made multiplied by the percentage increase in the index from
136	136	January of the immediately preceding year to January of the year the
137	137	determination is made.
138	138	(16) "Single-line dealer agreement" means a dealer
139	139	agreement between a single-line dealer and a single-line supplier
140	140	that only provides for the rights and obligations of the parties
141	141	with respect to the purchase and sale of construction, forestry,
142	142	industrial, or mining equipment.
143	143	(17) "Single-line supplier" means the supplier that is
144	144	selling to a single-line dealer construction, industrial,
145	145	forestry, or mining equipment constituting 75 percent of the
146	146	single-line dealer's new equipment that consists of construction,
147	147	industrial, forestry, and mining equipment.
148	148	(18) "Sophisticated Party" means a dealer that has
149	149	either:
150	150	(A) assets with a value greater than $5,000,000;
151	151	or
152	152	(B) annual gross revenues greater than
153	153	$5,000,000 in any of the three prior years.
154	154	(18) "Specialty agricultural equipment" means
155	155	equipment that is designed for and used in:
156	156	(A) planting, cultivating, irrigating,
157	157	harvesting, and producing agricultural products; or
158	158	(B) raising, feeding, or tending to livestock or
159	159	harvesting products from livestock.
160	160	(19) "Specialty agricultural equipment supplier"
161	161	means a supplier of specialty agricultural equipment whose:
162	162	(A) gross sales revenue to the dealer is less
163	163	than the threshold amount;
164	164	(B) product line does not include farm tractors
165	165	or combines;
166	166	(C) sales of outdoor power equipment to the
167	167	dealer do not exceed 10 percent of the supplier's total sales to the
168	168	dealer during the one-year period ending on the last day of the
169	169	calendar month immediately preceding the effective date of the
170	170	termination of the dealer agreement; and
171	171	(D) qualification for that status is determined
172	172	on a case-by-case basis depending on the sales of the applicable
173	173	dealer and the sales to the applicable dealer by the specialty
174	174	agricultural equipment supplier.
175	175	(20) "Supplier" means a person engaged in the business
176	176	of the manufacture, assembly, or wholesale distribution of
177	177	equipment or repair parts. The term includes any successor in
178	178	interest of a supplier, including:
179	179	(A) a receiver, trustee, liquidator, assignee,
180	180	purchaser of assets or stock, or surviving corporation resulting
181	181	from a merger, liquidation, or reorganization of an original
182	182	supplier; and
183	183	(B) a purchaser of all or substantially all of a
184	184	supplier's assets, such as a purchaser of all or substantially all
185	185	of the inventory of the supplier or any division or product line of
186	186	the supplier.
187	187	(21) "Terminate" or "termination" means to terminate,
188	188	cancel, fail to renew, or substantiallyor materially and adversely
189	189	change the competitive circumstances of a dealer agreement.
190	190	(22) "Threshold amount" means the lesser of 10 percent
191	191	of the dealer's gross sales revenue or $350,000, in each case based
192	192	on net sales of the dealership during the one-year period ending on
193	193	the last day of the calendar month immediately preceding the
194	194	effective date of the termination of the dealer agreement,
195	195	provided, however, that the $350,000 amount must be increased each
196	196	year by an amount equal to the amount on the year in which the
197	197	determination is made multiplied by the percentage increase in the
198	198	index from January of the immediately preceding year to January of
199	199	the year in which the determination is made.
200	200	Sec. 57.003. WAIVER OF CHAPTER VOID. An attempted waiver of
201	201	a provision of this chapter or of the application of this chapter is
202	202	void.
203	203	SUBCHAPTER B. PROVISIONS REGARDING DEALER AGREEMENT OR DEALERSHIP
204	204	Sec. 57.051. CERTAIN PROVISIONS VOID. The following
205	205	provisions contained in a dealer agreement are void:
206	206	(1) any provision that purports to elect the
207	207	application of a law of another state instead of the law of this
208	208	state; and
209	209	(2) any provision that requires a dealer to pay
210	210	attorney's fees incurred by the supplier.
211	211	Sec. 57.052. CHANGE IN OWNERSHIP OR FINANCIAL STRUCTURE. A
212	212	supplier may not prevent, by contract or otherwise, a dealer from
213	213	changing its capital structure or the means by or through which the
214	214	dealer finances its operations, if:
215	215	(1) the dealer gives prior notice of the change to the
216	216	supplier; and
217	217	(2) the dealer at all times meets any reasonable
218	218	capital standards required by the supplier pursuant to a right
219	219	granted in the dealer agreement and imposed on similarly situated
220	220	dealers.
221	221	Sec. 57.053. RELEASE OF LIABILITY PROHIBITED. A supplier
222	222	may not require a dealer to assent to a release, assignment,
223	223	novation, waiver, or estoppel that would release any person from
224	224	liability imposed by this chapter unless the dealer is represented
225	225	by legal counsel in connection with such release of liability
226	226	and/or modification or exclusion of the provisions of this chapter.
227	227	SUBCHAPTER C. SALE, TRANSFER, OR OWNERSHIP OF DEALERSHIP
228	228	Sec. 57.101. TRANSFER OF INTEREST IN DEALERSHIP BY
229	229	SUCCESSION; SINGLE-LINE DEALER AGREEMENTS. (a) This section
230	230	applies only to single-line dealer agreements.
231	231	(b) If a dealer dies, a supplier has 90 days in which to
232	232	consider and make a determination on a request by a family member to
233	233	enter into a new dealer agreement to operate the dealership. If the
234	234	supplier determines that the requesting family member is not
235	235	acceptable, the supplier shall provide the family member with a
236	236	written notice of its determination with the stated reasons for
237	237	nonacceptance. This section does not entitle an heir, personal
238	238	representative, or family member of the dealer to operate a
239	239	dealership without the specific written consent of the supplier.
240	240	(c) Notwithstanding Subsection (b), if a supplier and
241	241	dealer have previously executed an agreement concerning succession
242	242	rights before the dealer's death, and if that agreement is still in
243	243	effect, the agreement shall be observed even if it designates
244	244	someone other than the surviving spouse or an heir of the decedent
245	245	as the successor.
246	246	Sec. 57.102. APPROVAL OF SALE OR TRANSFER OF BUSINESS AT
247	247	DEALER'S REQUEST. (a) This section applies only to a dealer
248	248	agreement that is not a single-line dealer agreement.
249	249	(b) If a supplier has contractual authority to approve or
250	250	deny a request for the sale or transfer of a dealer's business or an
251	251	equity ownership interest in the dealer's business, a dealer may
252	252	request that the supplier approve or deny a request for the sale or
253	253	transfer of a dealer's business or an equity ownership interest in
254	254	the dealer's business to a proposed buyer or transferee. The
255	255	dealer's request must be in writing and must include character
256	256	references and reasonable financial, personal background, and work
257	257	history information with respect to the proposed buyer or
258	258	transferee.
259	259	(c) Not later than the 60th day after receipt of a request
260	260	under Subsection (b), the supplier shall either approve the sale or
261	261	transfer or send a written response to the dealer stating the
262	262	supplier's denial of the request and the specific reasons for the
263	263	denial. The request is considered approved if the supplier does not
264	264	approve or deny the request by the deadline.
265	265	(d) A supplier may deny a request made under this section
266	266	only if the proposed buyer or transferee fails to meet the
267	267	reasonable requirements consistently imposed by the supplier for
268	268	purposes of determining whether to approve a new dealer or a request
269	269	for approval of a sale or transfer of a dealer's business or equity
270	270	ownership in the dealer's business.
271	271	Sec. 57.103. APPROVAL OF SALE OR TRANSFER OF BUSINESS AT
272	272	REQUEST OF PERSONAL REPRESENTATIVE. (a) This section applies only
273	273	to a dealer agreement that is not a single-line dealer agreement.
274	274	(b) If a dealer dies and the supplier has contractual
275	275	authority to approve or deny a request for the sale or transfer of a
276	276	dealer's business or an equity ownership interest in the dealer's
277	277	business, the personal representative of the dealer's estate, or
278	278	any other person with authority to transfer the dealer's assets,
279	279	must submit to the supplier a written request for approval of the
280	280	sale or transfer of the business or ownership interest not later
281	281	than the 180th day after the date of the dealer's death.
282	282	(c) If a timely request for approval of a sale or transfer is
283	283	made as provided by Subsection (b), the supplier must approve or
284	284	deny the request in accordance with the procedures prescribed by
285	285	Sections 57.102(c) and (d) for a supplier's approval or denial of a
286	286	request for a sale or transfer made under Section 57.102.
287	287	(d) Notwithstanding any other provision of this chapter to
288	288	the contrary, any attempt by the supplier to terminate the dealer
289	289	agreement as a result of the death of a dealer will be delayed until
290	290	there has been compliance with the terms of this section or the
291	291	180-day period has expired, as applicable.
292	292	SUBCHAPTER D. TERMINATION OF AGREEMENTS OTHER THAN SINGLE-LINE
293	293	DEALER AGREEMENTS
294	294	Sec. 57.151. APPLICABILITY OF SUBCHAPTER. This subchapter
295	295	applies only to a dealer agreement that is not a single-line dealer
296	296	agreement.
297	297	Sec. 57.152. TERMINATION BY DEALER; WRITTEN NOTICE. A
298	298	dealer must give the supplier at least 30 days' prior written notice
299	299	of termination.
300	300	Sec. 57.153. TERMINATION BY SUPPLIER:GOOD CAUSE REQUIRED.
301	301	A supplier may not terminate a dealer agreement without good cause
302	302	(a) A supplier may terminate a dealer agreement at any time
303	303	for good cause.
304	304	(b) A supplier may terminate a dealer agreement after 180
305	305	days' written notice to the dealer in the absence of good cause
306	306	(without any cause).
307	307	Sec. 57.154. GOOD CAUSE DETERMINATION. (a) Except as
308	308	specifically provided otherwise by this chapter, good cause for
309	309	termination of a dealer agreement exists for purposes of this
310	310	subchapter if:
311	311	(1) the dealer fails to substantially comply with
312	312	essential and reasonable requirements imposed on the dealer under
313	313	the terms of the dealer agreement, provided that such requirements
314	314	are not different from requirements imposed on other similarly
315	315	situated dealers either by their terms or by the manner in which
316	316	they are enforced;
317	317	(2) the dealer or dealership has transferred a
318	318	controlling ownership interest in its business without the
319	319	supplier's consent;
320	320	(3) the dealer has filed a voluntary petition in
321	321	bankruptcy or an involuntary petition in bankruptcy has been filed
322	322	against the dealer and has not been discharged earlier than the 31st
323	323	day after the date the petition was filed;
324	324	(4) there has been a sale or other closeout of a
325	325	substantial part of the dealer's assets related to the business;
326	326	(5) there has been commencement of an action or
327	327	proceeding for the dissolution or liquidation of the dealership;
328	328	(6) there has been a change in dealer or dealership
329	329	locations without the prior written approval of the supplier;
330	330	(7) the dealer has defaulted under the terms of any
331	331	chattel mortgage or other security agreement between the dealer and
332	332	the supplier;
333	333	(8) there has been a revocation of any guarantee of the
334	334	dealer's present or future obligations to the supplier, except as
335	335	provided by Subsection (b);
336	336	(9) the dealer has failed to operate in the normal
337	337	course of business for seven consecutive days or has otherwise
338	338	abandoned the dealer's business;
339	339	(10) the dealer has been convicted of or pleaded nolo
340	340	contendere to a felony affecting the relationship between the
341	341	dealer and supplier;
342	342	(11) the dealer has engaged in conduct that is
343	343	injurious or otherwise detrimental to:
344	344	(A) the dealer's customers;
345	345	(B) the public welfare; or
346	346	(C) the representation or reputation of the
347	347	supplier's product; or
348	348	(12) the dealer has consistently failed to meet and
349	349	maintain the supplier's requirements for reasonable standards and
350	350	performance objectives, so long as the supplier has provided the
351	351	dealer with reasonable standards and performance objectives based
352	352	on the supplier's experience in other comparable market areas.
353	353	(b) Good cause is not considered to exist for purposes of
354	354	Subsection (a)(8) if:
355	355	(1) a person revokes any guarantee of the dealer's
356	356	obligations to the supplier in connection with or following the
357	357	transfer of the person's entire ownership interest in the
358	358	dealership; and
359	359	(2) the supplier does not require the person to
360	360	execute a new guarantee of the dealer's present or future
361	361	obligations to the supplier in connection with the transfer of the
362	362	person's ownership interest in the dealership.
363	363	Sec. 57.155. NOTICE OF TERMINATION; CORRECTION OF
364	364	DEFICIENCY. (a) Except as otherwise provided by this section, a
365	365	supplier must provide a dealer written FOR GOOD CAUSE. A notice of
366	366	termination of a dealer agreement at least 180 days before the
367	367	effective date of termination. The noticefor good cause must state
368	368	all reasons constituting good cause for the termination and that
369	369	the dealer has 60 days in which to cure any claimed deficiency if
370	370	the deficiency is cured within 60 days, the notice will be void.
371	371	(b) A supplier, other than a specialty agricultural
372	372	equipment supplier, may not terminate a dealer agreement for the
373	373	reason stated in Section 57.154(a)(12) unless the supplier gives
374	374	the dealer notice of the action at least two years before the
375	375	effective date of the termination. If the dealer achieves the
376	376	supplier's requirements for reasonable standards or performance
377	377	objectives before the expiration of the two year notice period, the
378	378	notice will be void and the dealer agreement will continue in
379	379	effect.
380	380	(c) The notice and right to cure provisions in this section
381	381	do not apply if the reason for termination is for any reason stated
382	382	in Sections 57.154(a)(2)(11).
383	383	SUBCHAPTER E. TERMINATION OF SINGLE-LINE DEALER AGREEMENTS
384	384	Sec. 57.201. APPLICABILITY OF SUBCHAPTER. This subchapter
385	385	applies only to a single-line dealer agreement.
386	386	Sec. 57.202. TERMINATION BY SUPPLIER; GOOD CAUSE REQUIRED.
387	387	No
388	388	(a) A supplier may terminate a dealer agreement withoutat
389	389	any time for good cause.
390	390	(b) A supplier may terminate a dealer agreement after 360
391	391	days' written notice to the dealer in the absence of good cause
392	392	(without any cause).
393	393	Sec. 57.203. GOOD CAUSE DETERMINATION. (a) For purposes of
394	394	this subchapter, "good cause" means failure by a dealer to comply
395	395	with requirements imposed on the dealer by the dealer agreement if
396	396	the requirements are not different from those requirements imposed
397	397	on other similarly situated dealers.
398	398	(b) In addition to the good cause reason for termination
399	399	stated in Subsection (a), good cause for termination of a dealer
400	400	agreement exists when:
401	401	(1) there has been a closeout or sale of a substantial
402	402	part of the dealer's assets related to the equipment business;
403	403	(2) there has been commencement of a dissolution or
404	404	liquidation of the dealer;
405	405	(3) the dealer has changed its principal place of
406	406	business or has added additional locations without the supplier's
407	407	prior approval, which shall not be unreasonably withheld;
408	408	(4) the dealer has substantially defaulted under a
409	409	chattel mortgage or other security agreement between the dealer and
410	410	the supplier or there has been a revocation or discontinuance of a
411	411	guarantee of a present or future obligation of the dealer to the
412	412	supplier;
413	413	(5) the dealer has failed to operate in the normal
414	414	course of business for seven consecutive days or has otherwise
415	415	abandoned its business;
416	416	(6) the dealer has been convicted of or pleaded guilty
417	417	to a felony affecting the relationship between the dealer and
418	418	supplier; or
419	419	(7) the dealer transfers an interest in the dealership
420	420	or a person with a substantial interest in the ownership or control
421	421	of the dealership, including an individual proprietor, partner, or
422	422	major shareholder, withdraws from the dealership or dies, or a
423	423	substantial reduction occurs in the interest of a partner or major
424	424	shareholder in the dealership, provided, however, good cause does
425	425	not exist if the supplier consents to an action described by this
426	426	subdivision.
427	427	Sec. 57.204. NOTICE OF TERMINATION; CORRECTION FO
428	428	DEFICIENCY. (a) Except as provided by Subsection (b) and Section
429	429	57.205, a supplier shall provide a dealer with at least 90 days'
430	430	writtenFOR GOOD CAUSE. A notice of termination. The noticefor good
431	431	cause must state all reasons constituting good cause for the
432	432	termination and state that the dealer has 60 days in which to cure
433	433	any claimed deficiency. If the deficiency is cured within 60 says,
434	434	the notice will be void.
435	435	(b) Notwithstanding Subsection (a), if the good cause
436	436	reason for termination is due to the dealer's failure to meet or
437	437	maintain the supplier's requirements for market penetration, a
438	438	reasonable period of time has existed where the supplier has worked
439	439	with the dealer to gain the desired market share.
440	440	Section 57.205 NOTICE OF TERMINATION NOT REQUIRED UNDER
441	441	CERTAIN CIRCUMSTANCES. The notice and right to cure provisions
442	442	under Section 57.204 do not apply if the reason for the termination
443	443	is contained in Sections 57.203(b)(1)(7).
444	444	SUBCHAPTER F. WARRANTY CLAIMS
445	445	Sec. 57.251. DEFINITION OF TERMINATE AND TERMINATION. For
446	446	purposes of this subchapter, "terminate" and "termination" do not
447	447	include the phrase substantially change the competitive
448	448	circumstances of a dealer agreement.
449	449	Sec. 57.252. APPLICABILITY OF SUBCHAPTER; CONFLICT WITH
450	450	SUBCHAPTER. (a) Sections 57.253, 57.254, and 57.255 apply to a
451	451	warranty claim submitted by a dealer who has complied with the
452	452	supplier's reasonable policies and procedures for reimbursement of
453	453	the warranty claim and the claim is a warranted claim under the
454	454	supplier's warranty policy.
455	455	(b) A supplier's warranty reimbursement policies and
456	456	procedures are considered unreasonable to the extent of any
457	457	conflict with this subchapter.
458	458	Sec. 57.253. WARRANTY CLAIM. (a) This section applies to a
459	459	warranty claim submitted by a dealer to the supplier:
460	460	(1) while the dealer agreement is in effect; or
461	461	(2) not later than the 60th day after the termination
462	462	or expiration date of the dealer agreement, if the claim is for work
463	463	performed before the effective date of the termination or
464	464	expiration.
465	465	(b) Not later than the 45th day after the date a supplier
466	466	receives a warranty claim from a dealer, the supplier shall accept
467	467	or reject the claim by providing written notice to the dealer. A
468	468	claim not rejected before that deadline is considered accepted.
469	469	(c) If the warranty claim is accepted, the supplier shall
470	470	pay or credit to the dealer's account all amounts owed to the dealer
471	471	with respect to the accepted claim not later than the 30th day after
472	472	the date the claim is accepted.
473	473	(d) If the supplier rejects the warranty claim, the supplier
474	474	shall give the dealer written or electronic notice of the grounds
475	475	for rejection of a rejected claim, which must be consistent with the
476	476	supplier's grounds for rejection of warranty claims of other
477	477	dealers, both in the terms and manner of enforcement.
478	478	(e) If no grounds for rejection of a rejected claim are
479	479	given to the dealer, the claim is considered accepted.
480	480	Sec. 57.254. RESUBMISSION OF WARRANTY CLAIM. If a warranty
481	481	claim was rejected on the ground that the dealer failed to properly
482	482	follow the procedural or technical requirements for submission of a
483	483	warranty claim, the dealer may resubmit the claim in proper form not
484	484	later than the 30th day after the date the dealer receives notice of
485	485	the claim's rejection.
486	486	Sec. 57.255. PAYMENT OF WARRANTY CLAIM. Warranty work
487	487	performed by the dealer shall be compensated in accordance with the
488	488	reasonable and customary amount of time required to complete the
489	489	work, expressed in hours and fractions of hours, multiplied by the
490	490	dealer's established customer hourly retail labor rate for
491	491	non-warranty repair work, which must have previously been made
492	492	known to the supplier. Parts used in warranty repair work shall be
493	493	reimbursed at the current net parts cost plus 15 percent.
494	494	Sec. 57.256. WARRANTY CLAIM FOR CERTAIN REPAIR WORK OR
495	495	INSTALLATION OF REPLACEMENT PARTS. Any repair work or installation
496	496	of replacement parts performed with respect to inventory equipment
497	497	of a dealer or with respect to equipment of a dealer's customers, at
498	498	the request of a supplier, including work performed under a product
499	499	improvement program, constitutes a warranty claim for which the
500	500	dealer must be paid under this subchapter.
501	501	Sec. 57.257. AUDIT OF WARRANTY CLAIMS. (a) Except as
502	502	provided by Subsection (b), a supplier may audit a warranty claim
503	503	submitted by a dealer until the first anniversary of the date the
504	504	claim was paid and may charge back the amount of any claim that is
505	505	shown by audit to have been misrepresented.
506	506	(b) If an audit conducted under this section shows that a
507	507	warranty claim has been misrepresented, the supplier may audit any
508	508	other warranty claims submitted by the affected dealer within the
509	509	three-year period ending on a date a claim is shown by audit to be
510	510	misrepresented.
511	511	Sec. 57.258. ALTERNATE REIMBURSEMENT TERMS ENFORCEABLE.
512	512	(a) Sections 57.253, 57.254, and 57.255 do not apply if the terms
513	513	of a written dealer agreement between the parties require the
514	514	supplier to compensate the dealer for warranty labor costs either
515	515	as:
516	516	(1) a discount in the price of the equipment to the
517	517	dealer, subject to Subsection (b); or
518	518	(2) a lump-sum payment made to the dealer not later
519	519	than the 90th day after the date the supplier's new equipment is
520	520	sold to the dealer, subject to Subsection (b).
521	521	(b) The discount or lump-sum payment under Subsection (a)
522	522	must be or result in an amount that is not less than five percent of
523	523	the suggested retail price of the equipment.
524	524	(c) The alternate reimbursement terms of a dealer agreement
525	525	that comply with Subsections (a) and (b) are enforceable.
526	526	(d) This section does not affect the supplier's obligation
527	527	to reimburse the dealer for parts in accordance with Section
528	528	57.255.
529	529	SUBCHAPTER G. DELIVERY, SALE, AND RETURN OF EQUIPMENT
530	530	Sec. 57.301. COERCED ORDERS, DELIVERIES, OR REFUSALS TO
531	531	PURCHASE. (a) A supplier may not coerce, compel, or require a dealer
532	532	to accept delivery of equipment or a repair part that has not been
533	533	voluntarily ordered by the dealer, unless:
534	534	(1) the equipment or repair part is a safety feature
535	535	required by the supplier or applicable law; or
536	536	(2) the dealer is otherwise required by applicable law
537	537	to accept the delivery.
538	538	(b) A supplier may not coerce a dealer to refuse purchase of
539	539	equipment manufactured by another supplier
540	540	(c) It shall not be considered a violation of this section
541	541	if the supplier requires a dealer to have or provide separate
542	542	facilities, financial statements, or sales staff for major
543	543	competing product lines if the supplies gives the dealer at least
544	544	three years' notice of such a requirement.
545	545	Sec. 57.302. CONDITIONAL PURCHASES OF GOODS AND SERVICES.
546	546	(a) A supplier may not condition the sale of equipment, repair
547	547	parts, or goods or services to a dealer on the purchase of other
548	548	goods or services.
549	549	(b) This section does not prohibit a supplier from requiring
550	550	a dealer to purchase all repair parts, special tools, or training
551	551	reasonably necessary to maintain the safe operation or quality of
552	552	operation in the field of any equipment offered for sale by the
553	553	dealer.
554	554	Sec. 57.303. EQUIPMENT REPRESENTED AS AVAILABLE FOR
555	555	IMMEDIATE DELIVERY. A supplier may not refuse to deliver, in
556	556	reasonable quantities and within a reasonable time after receipt of
557	557	a dealer's order, to any dealer having a dealer agreement for the
558	558	retail sale of new equipment sold or distributed by the supplier,
559	559	equipment covered by the dealer agreement and specifically
560	560	advertised or represented by the supplier as available for
561	561	immediate delivery, unless the refusal is due to:
562	562	(1) the supplier's prudent and reasonable restrictions
563	563	on extensions of credit to the dealer;
564	564	(2) a business decision by the supplier to limit the
565	565	production volume of the equipment; or
566	566	(3) an act of nature, work stoppage or delay due to a
567	567	strike or labor difficulty, a bona fide shortage of materials,
568	568	freight embargo, or other cause over which the supplier has no
569	569	control.
570	570	Sec. 57.304. DISCRIMINATION IN ORDERS. A supplier may not
571	571	discriminate, directly or indirectly, in filling an order placed by
572	572	a dealer for retail sale or lease of new equipment under a dealer
573	573	agreement as between dealers of the same product line.
574	574	Sec. 57.305. DISCRIMINATION IN PRICES OF NEW EQUIPMENT.
575	575	(a) Except as provided by Subsection (b), a supplier may not
576	576	discriminate, directly or indirectly, in the price among different
577	577	dealers with respect to a purchase of equipment or a repair part of
578	578	like grade and quality and identical brand, where the effect of such
579	579	discrimination may be to:
580	580	(1) substantially lessen competition;
581	581	(2) tend to create a monopoly in any line of commerce;
582	582	or
583	583	(3) injure, destroy, or prevent competition with any
584	584	dealer who either grants or knowingly receives the benefit of such
585	585	discrimination.
586	586	(b) A supplier may charge a different price among dealers
587	587	for purchases described by Subsection (a) if:
588	588	(1) the price difference is due to differences in the
589	589	cost of manufacture, sale, or delivery of the equipment or repair
590	590	part;
591	591	(2) the supplier can show that the lower price was made
592	592	in good faith to meet an equally low price of a competitor; or
593	593	(3) the price difference is related to the volume of
594	594	equipment purchased by dealers or market share obtained by dealers.
595	595	SUBCHAPTER H. REPURCHASE OR OTHER OBLIGATIONS FOLLOWING
596	596	CANCELLATION OR NONRENEWAL OF AGREEMENT
597	597	Sec. 57.351. DEFINITION OF TERMINATE AND TERMINATION. For
598	598	purposes of this subchapter, "terminate" and "termination" do not
599	599	include the phrase substantially change the competitive
600	600	circumstances of a dealer agreement.
601	601	Sec. 57.352. APPLICABILITY OF SUBCHAPTER TO SEVERAL
602	602	BUSINESS LOCATIONS COVERED BY SAME AGREEMENT. If a dealer has more
603	603	than one of its business locations covered by the same dealer
604	604	agreement, this subchapter applies to the repurchase of the
605	605	dealer's inventory at the particular business location being closed
606	606	unless the closing occurs without the permission of the supplier.
607	607	Sec. 57.353. PAYMENTS OR CREDITS. (a) When a supplier or
608	608	dealer terminates or otherwise discontinues the a dealer agreement,
609	609	entered into between the two partiesupon written request the
610	610	supplier shall pay to the dealermust repurchase from a dealer that
611	611	is not a Sophisticated Party all equipment, repair parts or other
612	612	products purchased from such supplier within one year of the
613	613	termination, or credit to the dealer's account. if the dealer has
614	614	outstandingowes any sums owingamount to the supplier, as follows:
615	615	(1) an amount equal to 100 percent of the net equipment
616	616	cost of all new, unsold, and undamaged equipment, less a downward
617	617	adjustment for new, unsold, and undamaged equipment between 24 and
618	618	36 months old to reflect a reasonable allowance for refurbishment
619	619	andamount paid by the price another dealer will pay forif the
620	620	equipment or other products are not used and are in substantially
621	621	the same condition as when purchased from the supplier;
622	622	(2) an amount equal to 100 percentthe fair market
623	623	value of the netany equipment cost of all unsold, undamaged
624	624	demonstrators, less a downward adjustment to reflect a reasonable
625	625	allowance for refurbishmentor other products that have been used
626	626	and that are in substantially the price another dealer will pay for
627	627	same condition as when purchased from the equipment supplier;
628	628	(3) an amount equal to 90 percent of the current net
629	629	parts cost of new, unsold, and undamagedamount paid by the dealer
630	630	of any repair parts that are in substantially the same condition as
631	631	when purchased from the supplier;
632	632	(4) an amount equal to 5 percent of the amount paid by
633	633	the dealer of all equipment, repair parts previously purchased from
634	634	the supplier and held by the dealer on the date that the dealer
635	635	agreement is terminated or expires or other products returned to
636	636	the supplier to compensate the dealer for the handling, packing,
637	637	and loading of those repair parts for return to the supplier, unless
638	638	the supplier elects to perform the handling, packing, and loading
639	639	of the repair parts itself;
640	640	(5) an amount equal to the fair market value of any
641	641	specific data processing hardware or software that the supplier
642	642	required the dealer to acquire or purchase to satisfy the
643	643	requirements of the supplier, including computer equipment
644	644	required and approved by the supplier to communicate with the
645	645	supplier; and
646	646	(6) an amount equal to 75 percent of the net cost,
647	647	including shipping, handling, and set-up fees, of all specialized
648	648	service or repair tools that:
649	649	(A) were previously purchased pursuant to the
650	650	requirements of the supplier within 15 years before the date of the
651	651	applicable notification of termination of the dealer agreement; and
652	652	(B) are unique to the supplier's product line and
653	653	are complete and in good operating condition.
654	654	(b) Fair market value of property subject to repurchase
655	655	under Subsection (a)(5) is considered to be the acquisition cost of
656	656	the property, including any shipping, handling, and set-up fees,
657	657	less straight-line depreciation of the acquisition cost over a
658	658	three-year period. If the dealer purchased data processing hardware
659	659	or software that exceeded the supplier's minimum requirements, the
660	660	acquisition cost of the data processing hardware or software for
661	661	purposes of this section is considered to be the acquisition cost of
662	662	hardware or software of similar quality that did not exceed the
663	663	minimum requirements of the supplier.
664	664	(c) Notwithstanding any other provision of this chapter,
665	665	with respect to machines with hour meters, demonstrators with less
666	666	than 50 hours of use will be considered new, unsold, undamaged
667	667	equipment subject to repurchase under this section.
668	668	(d) On payment of the amount due under this section or on
669	669	credit to the dealer's account of the amount required by this
670	670	section, title to all inventory or other items repurchased under
671	671	this subchapter is transferred to the supplier, and the supplier is
672	672	entitled to possession of the inventory same.
673	673	Sec. 57.354. LATE PAYMENT OR CREDIT. (a) All payments or
674	674	allowances of credit due to a dealer shall be paid or credited
675	675	within 90 days after receipt by the supplier of property required to
676	676	be repurchased under this subchapter.
677	677	(b) Any payment or allowance of credit due a dealer that is
678	678	not paid within the 90-day period will accrue interest at the
679	679	maximum rate allowed by law.
680	680	(c) The supplier may withhold payments due under this
681	681	subchapter during the period in which the dealer fails to comply
682	682	with its contractual obligation to remove any signage indicating
683	683	that the dealer is an authorized dealer of the supplier.
684	684	Sec. 57.355. LIABILITY. (a) A supplier who refuses to
685	685	repurchase any inventory covered under this chapter after
686	686	termination or discontinuation of the dealer agreement is liable to
687	687	the dealer for:
688	688	(1) 110 percent of the amount that would have been due
689	689	for the inventory had the supplier timely complied with the
690	690	requirements of this chapter;
691	691	(2) any freight charges paid by the dealer;
692	692	(3) any accrued interest; and
693	693	(4) the actual costs of any court or arbitration
694	694	proceeding incurred by the dealer, including attorney's fees or,
695	695	arbitrator fees, expenses, and interest pre and post judgment
696	696	and/or award.
697	697	(b) The supplier and dealer will each pay 50 percent of the
698	698	costs of freight, at truckload rates, to ship any equipment or
699	699	repair parts returned to the supplier pursuant to this chapter.
700	700	(c) Notwithstanding any provision to the contrary in the
701	701	Uniform Commercial Code, the dealer retains title to and has a first
702	702	and prior lien against all inventory returned by the dealer to the
703	703	supplier under this chapter until the dealer is paid all amounts
704	704	owed by the supplier under this subchapter for the repurchase of the
705	705	inventory required under this chapter, and the supplier must hold
706	706	the proceeds of the inventory in trust for the dealer's benefit.
707	707	Sec. 57.356. CONSTRUCTION OF SUBCHAPTER; CREDITOR'S
708	708	CLAIMS. This subchapter may not be construed to affect any security
709	709	interest the supplier may have in the inventory of the dealer, and
710	710	any repurchase of the dealer's inventory under this subchapter may
711	711	not be subject to the claims of any secured or unsecured creditor of
712	712	the supplier or any assignee of the supplier until the dealer has
713	713	received full payment or credit, as applicable, under this
714	714	subchapter.
715	715	Sec. 57.357. AGREEMENT TERMINATED BY DEALER;
716	716	INAPPLICABILITY OF SUBCHAPTER TO CERTAIN SPECIALTY SUPPLIERS. (a)
717	717	This subchapter does not apply to a specialty agricultural
718	718	equipment supplier if the dealer terminates the dealer agreement
719	719	without good reason. A dealer has good reason to terminate the
720	720	dealer agreement for any of the following reasons:
721	721	(1) the death or disability of a majority owner of the
722	722	dealership;
723	723	(2) the dealership terminates the dealer agreement
724	724	and:
725	725	(A) substantially all of the dealership assets or
726	726	all shares of stock of the dealership are sold to a new owner; and
727	727	(B) no owner of the terminated dealership
728	728	continues to own an interest in the continuing dealership;
729	729	(3) the filing of bankruptcy by or against the
730	730	dealership that has not been discharged within 30 days after the
731	731	date of the filing, the appointment of a receiver, or an assignment
732	732	for the benefit of creditors; or
733	733	(4) the specialty agricultural equipment supplier:
734	734	(A) abandons the market or withdraws from the
735	735	market by no longer selling to the dealer a type of equipment
736	736	previously sold to the dealer that constituted a material part of
737	737	the specialty agricultural equipment sold by the supplier;
738	738	(B) consistently sells products to the dealer
739	739	that are defective or breach the implied warranty of
740	740	merchantability;
741	741	(C) consistently fails to:
742	742	(i) provide adequate product support for
743	743	the type and use of the product, including technical assistance,
744	744	operator and repair manuals, and part lists and diagrams;
745	745	(ii) provide adequate training required by
746	746	the supplier for maintenance, repair, or use of the supplier's
747	747	products; or
748	748	(iii) provide marketing and marketing
749	749	support for the supplier's product if marketing is a requirement of
750	750	the dealer agreement;
751	751	(D) consistently fails to meet the supplier's
752	752	warranty obligations to the dealer as required by contract or law,
753	753	including obligations under this chapter;
754	754	(E) has engaged in conduct that is injurious or
755	755	detrimental to the dealer's customers, the public welfare, or the
756	756	dealer's reputation;
757	757	(F) has made material misrepresentations to the
758	758	dealer or has falsified a record;
759	759	(G) has breached the dealer agreement; or
760	760	(H) has violated this chapter.
761	761	(b) This subchapter may not be construed to limit a
762	762	specialty agricultural equipment supplier's obligation to
763	763	repurchase a dealer's inventory as provided by this section if the
764	764	supplier terminates or otherwise discontinues the dealer
765	765	agreement.
766	766	Sec. 57.358. EXCEPTIONS. (a) A supplier is not required to
767	767	repurchase from a dealer:
768	768	(1) a repair part that, except as provided by
769	769	Subsection (b), is in a broken or damaged package;
770	770	(2) a repair part that because of its condition cannot
771	771	be resold as a new part without repackaging or reconditioning;
772	772	(3) any inventory for which the dealer is unable to
773	773	furnish evidence, satisfactory to the supplier, of clear title,
774	774	free and clear of all claims, liens, and encumbrances unless the
775	775	inventory will be free and clear of all claims, liens, and
776	776	encumbrances immediately on payment by the supplier of amounts due
777	777	in this subchapter to the lienholders;
778	778	(4) any inventory that the dealer wants to keep,
779	779	provided the dealer has a contractual right to keep the inventory;
780	780	(5) equipment delivered to the dealer before the
781	781	beginning of the 36-month period preceding the date of notification
782	782	of termination; and
783	783	(6) equipment or a repair part that:
784	784	(A) is ordered by the dealer on or after the date
785	785	of notification of termination;
786	786	(B) is acquired by the dealer from a source other
787	787	than the supplier, unless the equipment or repair part was ordered
788	788	from, or invoiced to the dealer by, the supplier;
789	789	(C) is not in new, unsold, undamaged, or complete
790	790	condition, subject to the provisions of this chapter relating to
791	791	demonstrators; and
792	792	(D) is not returned to the supplier before the
793	793	90th day after the later of:
794	794	(i) the effective date of termination of a
795	795	dealer agreement; or
796	796	(ii) the date the dealer receives from the
797	797	supplier all information, including documents or supporting
798	798	materials, required by the supplier to comply with the supplier's
799	799	return policy.
800	800	(b) The supplier will be required to repurchase a repair
801	801	part in a broken or damaged package for a repurchase price that is
802	802	equal to 85 percent of the current net parts cost for the repair
803	803	part if the aggregate current net parts cost for the entire package
804	804	of repair parts is $75 or more.
805	805	(c) Subsection (a)(6)(D) does not apply to a dealer if the
806	806	supplier did not give the dealer notice of the 90-day deadline at
807	807	the time the applicable notice of termination was sent to the
808	808	dealer.
809	809	SUBCHAPTER I. ACTIONS AND REMEDIES
810	810	Sec. 57.401. CIVIL ACTION; INJUNCTIVE RELIEF. (a) If a
811	811	supplier violates any provision of this chapter, a dealer may bring
812	812	an action against the supplier in a court of competent jurisdiction
813	813	for damages sustainedout-of-pocket expenses incurred by the dealer
814	814	as a consequence of the supplier's violation including damagesand
815	815	for lost profits proximately caused by a violation of this Act for a
816	816	period,together withnot to exceed one year from the actualdate of
817	817	termination, and may also recover reasonable costs of the action,
818	818	including the dealer's,expenses, attorney's fees and, paralegal
819	819	fees and the costs of arbitratorsarbitrator fees. The dealer may
820	820	also be granted injunctive relief for unlawful termination.
821	821	(b) A remedy provided by this section is not exclusive and
822	822	is in addition to any other remedy permitted by law.
823	823	Sec. 57.402. CHOICE OF REMEDIES. The provisions of this
824	824	chapter are supplemental to any dealer agreement between the dealer
825	825	and the supplier that provides the dealer with greater protection.
826	826	A dealer may elect to pursue its contract remedy or the remedy
827	827	provided by state law, or both. An election by the dealer to pursue
828	828	those remedies does not bar the dealer's right to exercise any other
829	829	remedies that may be granted at law or in equity.
830	830	SECTION 2. This Act takes effect September 1, 2023.