New law in Okla. aims to boost state's ties with aviation companies

Though it took months of revisions, the Legislature passed a bill this year designed to keep Cessna Aircraft Co. and other aviation companies interested in doing business in Oklahoma.

Senate Bill 622, as finally passed and signed by Gov. Brad Henry on May 31, removes from Oklahoma law certain provisions that had been inserted a few years ago to protect aircraft franchise owners from potential unscrupulous practices by manufacturers.

In the opinion of Cessna officials and other aviation manufacturing companies, the law had gone too far in favor of the dealer. Manufacturers were prevented from making any substantial changes in the contract without the dealer's permission or from canceling a contract with a dealer due to nonperformance.

In the event of a manufacturer-instigated contract cancellation, the law allowed the dealer to sue for recovery of the fair market value of their business, for lost profits and business opportunities, for punitive, special, exemplary damages, and for treble actual damages.

"Many of us were concerned that manufacturers like Cessna would be reluctant to do business in Oklahoma," Victor Bird, director of the Oklahoma Aeronautics Commission, told board members Thursday at the first Aeronautics Commission meeting to be held since the end of the Legislative session in May. "We were also concerned that it would affect agreements perhaps between Nordam and Cessna, because the fear was, 'When is your legislature going to come in and do something to affect that agreement?'"

Cessna had sent a letter to officials at the commission and the Department of Commerce, stating the company's intent not to enter any more franchise agreements in Oklahoma until the law was changed.

SB 622 was amended a few times throughout the legislative process, and eventually a compromise bill was crafted in a conference committee. Early versions of the bill would have prohibited manufacturers to cancel or change a contract "without good cause. "

"There were some forces on the other side that are fairly powerful," said Bird, expressing his gratitude to state Sen. Patrick Anderson, R-Enid and state Rep. Mike Jackson, R-Enid, for taking on the task of shepherding SB 622 through the legislative process.

The final version of SB 622 that was signed into law would make the dealer protection laws inapplicable to contracts entered into after July 1, 2007.

"It just repealed the act," said Bird. "It's left as a private contractual agreement, as it should have been. "

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