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.