HCS HB 1286 & 1175 -- MARINE DEALERS

SPONSOR:  St. Onge (Guest)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Small
Business by a vote of 15 to 0.

This substitute prohibits marine manufacturers from terminating
or renewing a dealership agreement or substantially changing the
competitive circumstances of a dealership without good cause.
The substitute spells out the circumstances that are considered
good cause.

Manufacturers will be required to provide a notice at least 90
days prior to any termination, cancellation, or nonrenewal of a
dealership agreement.  A dealer will have 90 days to cure any
claimed deficiency.  A dealer must provide notice of intent to
cure deficiencies within the 90-day period.  Termination will
take effect 60 days after the dealer's receipt of the
manufacturer's notice, unless the dealer has new inventory on
hand.  In that case, upon dealer request, it will take effect
upon the sale of the remaining inventory but no later than 90
days from the manufacturer's notice of termination.

Dealers may terminate a dealer agreement at any time by giving
written notice to the manufacturer at least 90 days prior to the
effective date of the termination.

On change of ownership, dealers must give a 90-day written notice
to the manufacturer.  Manufacturers cannot refuse a proposed
change or sale and may not disapprove or withhold approval unless
the manufacturer can show its decision is based on a reasonable
criterion such as business experience, moral character, financial
qualifications, or criminal record.  Manufacturers have 60 days
to provide written notice of rejection of a proposed change or
sale.  The transfer provisions do not apply to the transfer to a
successor in the event of a dealer's death.

The substitute provides for the repurchase of certain vessels
when the dealer agreement is terminated by the manufacturer.  It
also provides for legal action upon unlawful termination or
failure of renewal of a dealership.

FISCAL NOTE:  No impact on state funds in FY 2005, FY 2006, and
FY 2007.

PROPONENTS:  Supporters say that the bill gives marine dealers
protection in agreements made with manufacturers.  Dealers make
significant financial investments when they sign dealer
agreements, and the bill will allow them to recover some of their
costs when a manufacturer cancels an agreement.

Testifying for the bill were Representative Guest; Larry Tague;
Richard Collins; Lake of the Ozarks Marine Dealers Association;
and Dennis Maze.

OPPONENTS:  Those who oppose the bill say that manufacturers need
to have dealers in areas where they can sell boats.  The industry
is dependent on having good dealers to sell the products and
having a good product to sell.  They are concerned about the
effect of the bill on existing contracts.  They are also
concerned about legislative intrusion into the industry.

Testifying against the bill were National Marine Manufacturers
Association; and Tracker Marine.

Amy Woods, Legislative Analyst

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:15 am