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Senate Bill 529 |
Senate Author: Huffman et al. |
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Effective: 9-1-11 |
House Sponsor: Hunter et al. |
Senate Bill 529 amends provisions of the Occupations Code relating to regulating the relationship between motor vehicle franchise dealers, manufacturers, distributors, and representatives. The bill establishes criteria a manufacturer or distributor may consider in determining whether to approve an application filed by a dealer for the transfer of a franchise or a controlling interest in the dealership to another person. The bill requires a manufacturer, distributor, or representative that terminates or discontinues a franchise without adhering to certain notice and consent procedures or, regardless of adherence to such procedures, by discontinuing a line-make, ceasing to do business in Texas, or changing the distributor or method of distribution of its product in Texas to pay the dealer specified amounts of money on termination or discontinuation based on certain dealer costs and values. The bill requires a dealer who receives money under these circumstances to mitigate the damages by performing specified actions. The bill establishes that it is unreasonable for a manufacturer, distributor, or representative to require a dealer to construct a new dealership or to substantially change, alter, or remodel an existing dealership under certain conditions before the 10th anniversary of the date the construction of the dealership at that location was completed.
Senate Bill 529 prohibits a manufacturer, distributor, or representative from unreasonably limiting or impairing the ability of a dealer to use the dealership property as the dealer considers appropriate, controlling the use of the property after the franchise is terminated or discontinued, or at any time exercising exclusive control over the use of the property. The bill prohibits a manufacturer, distributor, or representative from treating dealers of the same line-make differently and from enforcing standards or guidelines applicable to its dealers in the sale of motor vehicles if, in the application of the standards or guidelines, the dealers are treated unfairly or inequitably.
Senate Bill 529 requires a manufacturer or distributor to pay a dealer's claim filed under a manufacturer or distributor incentive program not later than the 30th day after the date the claim is approved. The bill prohibits a manufacturer, distributor, or representative from requiring a franchised dealer to provide information regarding a customer, with specified exceptions. The bill sets out provisions relating to a property use agreement between a manufacturer, distributor, or representative and a dealer and the right of a dealer to protest the relocation of a dealership under certain conditions.
Senate Bill 529 expands the circumstances under which mediation requirements apply to the parties involved in an action brought against a manufacturer or distributor by a franchised dealer and expands the authority of a franchised dealer to institute an action under the Deceptive Trade Practices-Consumer Protection Act.