By: Menéndez S.B. No. 2195
A BILL TO BE ENTITLED
AN ACT
relating to fair allocation requirements for manufacturers,
distributers, or manufacturer representatives.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2301., Occupations Code is amended by adding
Section 2301.4672 to read as follows:
Sec. 2301.4672 FAIR ALLOCATION REQUIREMENTS.
(a) Notwithstanding the terms of any franchise agreement or
any other law, a manufacturer, distributor, or manufacturer
representative shall, on a quarterly or any three month period, for
each line-make, make available an allocation to each motor vehicle
dealer sufficient numbers of vehicles, by model, to permit each
motor vehicle dealer to meet any sales standards for that period
that are required or set by the manufacturer, distributor, or
manufacturer representative for such dealer, including but not
limited to any sales measurement or criteria authored by the
manufacturer and communicated to the dealer that sets a target,
goal, or expectation of sales to be made by the dealer in the
dealer's assigned geographic area or area of responsibility.
(b) A manufacturer, distributor, or manufacturer
representative may assert a defense to a claim under this section by
making a showing of good cause for the failure to comply. Good cause
is demonstrated by establishing with clear and convincing evidence
that the manufacturer, distributor, or manufacturer representative
was physically unable to make available an allocation of sufficient
inventory to the affected dealer due to limited supply available to
the manufacturer. This defense shall only apply if the
manufacturer, distributor, or manufacturer representative is also
able to demonstrate that the limited supply of inventory is borne,
or has been borne, equally and fairly by all dealers of said
manufacturer in this State as to the same line-make and model in
proportion to each dealer's assigned geographic area or area of
responsibility.
(c) Given the immediate economic impact on a motor vehicle
dealer that is not allocated fair and sufficient inventory to
permit the dealer to meet the manufacturer's sales expectations
referenced in paragraph (a), on a complaint filed by the dealer
alleging that a manufacturer, distributor, or manufacturer
representative has failed to comply with paragraph (a), the
Department of Motor Vehicles/SOAH shall set the matter for final
hearing within 60-days of the manufacturer's, distributor's, or
manufacturer representative's response to the complaint file by
the complaining dealer.
(d) A manufacturer's sales standard or measurement referred
to in subsection (a) is not relevant to the Board's determination
of "good cause" under §2301.453 of this Chapter.
(e) On a finding by the Board of a violation of §
2301.4672(a) or (c) by a manufacturer, the dealer may pursues all
remedies available and as set forth under Subchapter E, Chapter 17,
Business & Commerce Code §17.50 in any State Court of competent
jurisdiction in the county where the dealer is located.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.