Friday was the bill introduction deadline for the Texas legislature. On Friday, Representative Leach (R-District 67) introduced House Bill 4810. The bill relates to agreements between equipment dealers and manufacturers.
The bill would drastically change existing law by excluding nearly all equipment dealers from coverage under the existing statute. For those dealers remaining, the bill undermines core provisions of the dealer statute including termination procedures, good cause requirements, inventory ordering requirements and buyback provisions.
HB 4810 introduces a new definition for dealers that would exclude nearly all our members from coverage under the statute. The bill removes from the definition of dealer any business that is a “Sophisticated Party” defined as a dealer with assets valued at greater than $5 million or annual gross revenues greater than $5 million in any of the previous three years. For dealers exceeding those thresholds, the statute would no longer be applicable to them, essentially gutting all protections.
NEADA reached out to the bill sponsors office this morning and is waiting to hear back. The intent behind the bill is not known at this time. It would be a serious departure from normal relations and a breach of good faith if this bill were introduced on behalf of any manufacturer. The current Texas dealer statute was adopted over a decade ago in collaboration with manufacturers and without their objection. It has stood as a model for other state statutes since then.
The bill has not been referred to a committee yet, although it will be under house rules. Typically bills introduced at the last minute do not move, however, given the nature of the bill it’s imperative that we kill it with an overwhelming show of opposition.
Call to Action: We are requesting that ALL dealers place a call to Representative Leach’s office this week to state their opposition to the bill and send an email doing the same. His staff will likely answer calls and take a message, but it is critical he hears from us immediately. His capitol office number is: 512-463-0544. his legislative email is: jeff.leach@house.texas.gov
Here are several talking points:
- Introduce yourself and your business, including how many employees you have
- HB 4810 jeopardizes your entire investment and your employee’s jobs by allowing a manufacturer to terminate your dealership at any time for any reason.
- There is no reason for changing the current statute. It was adopted in collaboration with major manufacturers over a decade ago. And dealer statutes have been in place in Texas for decades.
- HB 4810 would create immediate risk for every Texas equipment dealer for the benefit of companies outside of Texas.
- Request he contact your association representatives to discuss the bill (NAEDA)
We will keep you informed about any updates to the bill or any information we gather about what is behind this bill.