The passage of this legislation would not have been possible without our sponsors, Senator Dean G. Skelos and Assemblyman Paul Tonko, and the hard work of their fine staffs. The ESMTA extends its appreciation and gratitude to Senator Skelos and Assemblyman Tonko for their invaluable assistance in securing the enactment of this law. We also wish to thank Governor Pataki for giving his approval to our bill.

In receiving the Legislator of the Year Award from the Marine Retailers Association of America, Assemblyman Tonko stated: “I am pleased to have worked with the Empire State Marine Trades Association and boat dealers across New York State to help create a fair marketplace in New York State. This new law is a victory for business and consumer alike!” Senator Skelos also received the award and commented: “The new law is a reasonable approach to providing protections in agreements between the dealers and manufacturers which will not unduly burden either side yet allow for fair industry practices where marinas in New York State will be able to remain competitive thereby ensuring consumer satisfaction. Vessel dealers sorely needed this legislation to protect a lifetime of effort and equity and to promote the future profitability of their marine business.”

In New York State, boat dealers were effectively unable to negotiate the terms of dealer agreements with manufacturers who have all the leverage. Present day dealer/manufacturer agreements provide no stability when they don’t contain the necessary language to protect the boat dealer’s investment or contain a clause allowing for cancellation or non-renewal without cause or method to correct. Dealer agreements should protect and further the objectives and goals of both parties.

This law establishes equilibrium of bargaining between the boat manufacturer and the boat dealer; provides basic protections to boat dealers from unfair actions by manufacturers; and enhances customer service and satisfaction industry wide. Chapter 686 amends the general business law by adding a new Article 38, Vessel Dealer Agreements and provides for the following rights and protections:

• Termination/Cancellation/Non-Renewal: A manufacturer or distributor shall not terminate, cancel or non-renew a dealer without cause, until 90 days after written notice stating the specific grounds of such intention has been sent to the dealer (section 812, sub. 2). This bill does not in any way prevent a manufacturer or distributor from terminating, canceling or non-renewing a dealer agreement.
• Repurchase of Product: If a manufacturer or distributor does terminate a dealer agreement for any reason other than for cause, the manufacturer or distributor shall repurchase the dealer’s inventory within 30 days of the termination of the dealer agreement (section 812, subs. 3 & 4). The repurchase of inventory is done in accordance with the provisions of section 811, subdivisions 1, 2, 3 & 4:
• new current & previous model year vessels & motors in the dealer’s inventory which were purchased from the manufacturer or distributor, within twelve months of the delivery date for each vessel and motor (sub. 1)
• unused parts which were required from the manufacturer and are on the current parts price sheet available to the dealer (sub.2)
• equipment and furnishings required from the manufacturer or distributor (sub. 3)
• special tools that are only usable on the specific brand of vessel or engine offered by the manufacturer or distributor (sub. 4)
• Transfer/Designation of Successor: This bill contains provisions that allow the dealer to transfer or assign that agreement to an immediate family successor with the written consent of the manufacturer (section 812, sub. 6, paragraph (a), subparagraphs (i), (ii), (iii), & (iv). That consent cannot be unreasonably withheld or delayed by the manufacturer without written documentation. In addition, a manufacturer or distributor shall not refuse a transfer, sale or exchange of a dealer agreement between a dealer and another person if certain requirements are met (section 812, sub. 6, paragraph (b).
• Warranty Obligations/Reimbursements: The bill requires that, for existing dealer agreements, the reimbursement rate for labor warranty work will not be less than 75% of the retail labor rate customarily charged and posted. For the next year of the dealer agreement, the rate shall be not less than 90%. For the third year and those years following the rate shall be 100%. The warranty work will be reimbursed in accordance with manufacturer’s or distributor’s generally accepted standards as outlined in their repair manuals that detail standard labor time and parts required for a specific repair. Such standards shall reflect the labor time and parts standards used by the manufacturer on a national level.

For agreements entered into after the effective date of this act, the labor rate will be at least 75% of the dealer posted rate for year one, 90% for year two and 100% for the third year and for every subsequent year. The purpose of this section is to clarify that dealer agreements shall be construed to be continuous, and shall not be construed as a “new” agreement each year.

Chapter 686 (Article 38 of the General Business Law) became effective on January 4, 2005, and applies to all contracts and renewals made after that date. It is essential that our members let us know if they experience any problems with new contracts issued by the manufacturers after the effective date of this legislation. The sponsors of the bill have made it clear that they expect boat dealers and boat manufacturers to comply with this law, and want to be apprised of any issues arising from its implementation.

One of the best ways to advance our legislative goals is through our Annual Advocacy Day where ESMTA members meet their legislators and let them know their concerns and needs. This event has become a great success and a wonderful experience for ESMTA members and Legislators alike.

The 2005 ESMTA Advocacy Day is scheduled for Tuesday, March 22nd in Albany and we want to make this bigger and better than last year. It is very important for legislators to meet with ESMTA members from their district and confer about the issues facing the boating industry in the state of New York. Plan ahead and mark your calendar to attend the 2005 ESMTA Advocacy Day.