H.B. No. 941
1-1 AN ACT
1-2 relating to the authority and responsibility of the Texas Motor
1-3 Vehicle Board of the Texas Department of Transportation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1.03, Texas Motor Vehicle Commission Code
1-6 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
1-7 read as follows:
1-8 Sec. 1.03. Definitions. In this Act:
1-9 (1) "Motor vehicle" means:
1-10 (A) every fully self-propelled vehicle which has
1-11 as its primary purpose the transport of a person or persons, or
1-12 property, on a public highway, and having two or more wheels;
1-13 (B) every two or more wheeled fully
1-14 self-propelled, titled vehicle which has as its primary purpose the
1-15 transport of a person or persons or property and is not
1-16 manufactured for use on public streets, roads, or highways; or
1-17 (C) an engine, transmission, or rear axle
1-18 manufactured for installation in a vehicle having as its primary
1-19 purpose the transport of a person or persons or property on a
1-20 public highway and having a gross vehicle weight rating of more
1-21 than 16,000 pounds, whether or not attached to a vehicle chassis.
1-22 (2) "New motor vehicle" means a motor vehicle which
1-23 has not been the subject of a "retail sale" without regard to the
2-1 mileage of the vehicle.
2-2 (3) "Person" means a natural person, partnership,
2-3 corporation, association, trust, estate, or any other legal entity.
2-4 (4) "Dealer" means any person engaged in the business
2-5 of buying, selling or exchanging new motor vehicles at an
2-6 established and permanent place of business pursuant to a franchise
2-7 in effect with a manufacturer or distributor.
2-8 (5) "Manufacturer" means any person who manufactures
2-9 or assembles new motor vehicles either within or without this
2-10 State.
2-11 (6) "Distributor" means any person who distributes
2-12 and/or sells new motor vehicles to dealers and who is not a
2-13 manufacturer.
2-14 (7) "Representative" means any person who is or acts
2-15 as an agent, employee or representative of a manufacturer,
2-16 distributor, or converter who performs any duties in this State
2-17 relating to promoting the distribution and/or sale of new motor
2-18 vehicles or contacts dealers in this State on behalf of a
2-19 manufacturer, distributor, or converter.
2-20 (8) "Franchise" means one or more contracts between a
2-21 dealer as franchisee, and either a manufacturer or a distributor as
2-22 franchisor under which (A) the franchisee is granted the right to
2-23 sell new motor vehicles manufactured or distributed by the
2-24 franchisor; (B) the franchisee as an independent business is a
2-25 component of franchisor's distribution system; (C) the franchisee
3-1 is substantially associated with franchisor's trademark, tradename
3-2 and commercial symbol; (D) the franchisee's business is
3-3 substantially reliant on franchisor for a continued supply of motor
3-4 vehicles, parts, and accessories for the conduct of its business;
3-5 or (E) any right, duty, or obligation granted or imposed by this
3-6 Act is affected. The term includes a written communication from a
3-7 franchisor to a franchisee by which a duty is imposed on the
3-8 franchisee.
3-9 (10) "Broker" means a person who, for a fee,
3-10 commission, or other valuable consideration, arranges or offers to
3-11 arrange a transaction involving the sale, for purposes other than
3-12 resale, of a new motor vehicle, and who is not:
3-13 (A) a dealer or bona fide employee of a dealer
3-14 when acting on behalf of a dealer;
3-15 (B) a representative or bona fide employee of a
3-16 representative when acting on behalf of a representative;
3-17 (C) a distributor or bona fide employee of a
3-18 distributor when acting on behalf of a distributor; or
3-19 (D) at any point in the transaction the bona
3-20 fide owner of the vehicle involved in the transaction.
3-21 (11) "Motor home" means a motor vehicle which is
3-22 designed to provide temporary living quarters and which:
3-23 (A) is built onto as an integral part of, or is
3-24 permanently attached to, a motor vehicle chassis; and
3-25 (B) contains at least four of the following
4-1 independent life support systems if each is permanently installed
4-2 and designed to be removed only for purposes of repair or
4-3 replacement and meets the standards of the American National
4-4 Standards Institute, Standards for Recreational Vehicles:
4-5 (i) a cooking facility with an on-board
4-6 fuel source;
4-7 (ii) a gas or electric refrigerator;
4-8 (iii) a toilet with exterior evacuation;
4-9 (iv) a heating or air conditioning system
4-10 with an on-board power or fuel source separate from the vehicle
4-11 engine;
4-12 (v) a potable water supply system that
4-13 includes at least a sink, a faucet, and a water tank with an
4-14 exterior service supply connection;
4-15 (vi) a 110-125 volt electric power supply.
4-16 (12) "Conversion" means a motor vehicle, other than a
4-17 motor home, which has been substantially modified by a person other
4-18 than the manufacturer or distributor of the chassis of the motor
4-19 vehicle and which has not been the subject of a retail sale.
4-20 (13) "Motor home manufacturer" means a person other
4-21 than the manufacturer of the chassis of a motor vehicle who, prior
4-22 to the retail sale of the motor vehicle, performs modifications on
4-23 the chassis that result in the finished product being classified as
4-24 a motor home.
4-25 (14) "Chassis manufacturer" means a person who
5-1 manufactures and produces the frame upon which is mounted the body
5-2 of a motor vehicle.
5-3 (15) "Converter" means a person who prior to the
5-4 retail sale of a motor vehicle, assembles, installs, or affixes a
5-5 body, cab, or special equipment to a chassis, or who substantially
5-6 adds, subtracts from, or modifies a previously assembled or
5-7 manufactured motor vehicle.
5-8 (16) "Rule" means a statement by the Commission of
5-9 general and future applicability that implements, interprets, or
5-10 prescribes law or policy or describes the organization or
5-11 procedural practice requirements of the Commission. The term
5-12 includes the amendment or repeal of a prior rule, but does not
5-13 include statements concerning only the internal management of the
5-14 Commission which do not affect the rights of a person not connected
5-15 with the Commission.
5-16 (17) "Party" means each person or agency named or
5-17 admitted as a party and whose legal rights, duties, or privileges
5-18 are to be determined by the Commission after an opportunity for
5-19 adjudicative hearing.
5-20 (18) "Relocation" means the transfer of an existing
5-21 dealership operation to facilities at a different location,
5-22 including a transfer which results in a consolidation or dualing of
5-23 an existing dealer's operation.
5-24 (19) "Retail sale" means the sale of a motor vehicle
5-25 except:
6-1 (A) a sale in which the purchaser acquires a
6-2 vehicle for the purpose of resale; or
6-3 (B) a sale of a vehicle that is operated under
6-4 and in accordance with Article 6686, Revised Statutes.
6-5 (20) "Warranty work" means parts, labor, and any other
6-6 expenses incurred by a dealer in complying with the terms of a
6-7 manufacturer's or distributor's warranty.
6-8 (21) "Department" means the Texas Department of
6-9 Transportation.
6-10 (22) "Transportation Commission" means the Texas
6-11 Transportation Commission of the Texas Department of
6-12 Transportation.
6-13 SECTION 2. Section 1.04, Texas Motor Vehicle Commission Code
6-14 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
6-15 read as follows:
6-16 Sec. 1.04. Construction and severability. This Act shall be
6-17 liberally construed so as to effectuate its purposes. The
6-18 provisions of this Act are severable and if any phrase, clause,
6-19 sentence, or provision of this Act is declared to be contrary to
6-20 the constitution of this state, or of the United States or the
6-21 applicability thereof to any person or circumstance is held
6-22 invalid, the validity of the remainder of this Act and the
6-23 applicability thereof to any person or circumstance is not affected
6-24 thereby. An agreement to waive the terms of this Act is void and
6-25 unenforceable.
7-1 SECTION 3. Subsection (c), Section 2.01, Texas Motor Vehicle
7-2 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
7-3 is amended to read as follows:
7-4 (c) A reference in this Act to the "Executive Director" or
7-5 the Executive Director of the Texas Motor Vehicle Commission means
7-6 the Director of the Motor Vehicle Division of the Texas Department
7-7 of Transportation. A reference in other law, rule or regulation to
7-8 the Executive Director of the Texas Motor Vehicle Commission
7-9 <Board> means the Director of the Motor Vehicle Division of the
7-10 Texas Department of Transportation.
7-11 SECTION 4. Section 3.03, Texas Motor Vehicle Commission Code
7-12 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
7-13 read as follows:
7-14 Sec. 3.03. General commission powers. (a) The Commission
7-15 shall have and may, in its discretion and notwithstanding any other
7-16 provision of law that is inconsistent with this Act, exercise the
7-17 powers set forth in this Act, and shall have all other powers
7-18 necessary, incidental, or convenient to carry out its duties and
7-19 effectuate its express powers and duties. These powers and duties
7-20 include the power to initiate and conduct proceedings,
7-21 investigations, and hearings, administer oaths, receive evidence
7-22 and pleadings, issue subpoenas to compel the attendance of any
7-23 person, order the production of any tangible property, including
7-24 papers, records, and documents, make findings of fact on all
7-25 factual issues arising out of any proceeding initiated under this
8-1 Act, specify, govern, and control appearance, practice, and
8-2 procedure before the Commission, issue rules, conclusions of law,
8-3 decisions, including declaratory decisions or orders, enter into
8-4 contracts or execute instruments, retain counsel, utilize the
8-5 services of the Attorney General of the State of Texas and
8-6 thereafter institute and direct the conduct of legal proceedings in
8-7 any forum or obtain other professional services as may be necessary
8-8 and convenient, sanction for contempt, assess and collect fees and
8-9 costs including attorney's fees, issue, suspend, and revoke
8-10 licenses, prohibit and regulate acts and practices in connection
8-11 with the distribution and sale of new motor vehicles and warranty
8-12 performance obligations, issue cease and desist orders in the
8-13 nature of temporary and permanent injunctions, and levy civil
8-14 penalties.
8-15 (b) The commission may conduct hearings in contested cases
8-16 brought pursuant to, and as provided by, Article 6686, Revised
8-17 Statutes. The procedures applicable to a hearing conducted under
8-18 this Subsection, and the disposition of a final order after a
8-19 hearing conducted under this Subsection, are those applicable to a
8-20 hearing conducted as provided by Section 6.07(e)(2) of this Act. A
8-21 decision or final order issued under this Subsection is final, and
8-22 no appeal may, as a matter of right, be made to the Texas
8-23 Transportation Commission. The department may adopt rules
8-24 applicable to procedures, hearings, and enforcement proceedings in
8-25 an action brought pursuant to this Subsection.
9-1 SECTION 5. Subsection (e), Section 4.05, Texas Motor Vehicle
9-2 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
9-3 is amended to read as follows:
9-4 (e) The filing fees for a contested case or protest that
9-5 involves a hearing are:
9-6 (1) for a complaint filed under Section 6.07 of this
9-7 Act, $35 <$75>; and
9-8 (2) for all other complaints or protests, $200.
9-9 SECTION 6. Section 5.01, Texas Motor Vehicle Commission Code
9-10 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
9-11 read as follows:
9-12 Sec. 5.01. Dealers. It shall be unlawful for any dealer to:
9-13 (1) Require a retail purchaser of a new motor vehicle
9-14 as a condition of sale and delivery thereof to purchase special
9-15 features, equipment, parts, or accessories not ordered or desired
9-16 by the purchaser, provided such features, equipment, parts, or
9-17 accessories are not already installed on the new motor vehicle at
9-18 the time of sale.
9-19 (2) Use false, deceptive, or misleading advertising.
9-20 (3) Fail to perform the obligations placed on the
9-21 selling dealer in connection with the delivery and preparation of a
9-22 new motor vehicle for retail sale as provided in the manufacturer's
9-23 preparation and delivery agreements on file with the Commission and
9-24 applicable to such vehicle.
9-25 (4) Fail to perform the obligations placed on the
10-1 dealer in connection with the manufacturer's warranty agreements on
10-2 file with the Commission.
10-3 (5) Operate as a dealer without a currently valid
10-4 license from the Commission or otherwise violate this Act or rules
10-5 promulgated by the Commission hereunder.
10-6 (6) Operate without appropriate signs readily and
10-7 easily visible to the public, identifying the dealer's place of
10-8 business and the products the dealer offers for sale. In the event
10-9 of a conflict with another law or ordinance, this Subdivision
10-10 prevails, and in the event of a dispute, the Board has exclusive
10-11 jurisdiction to determine whether a sign or signs are in compliance
10-12 with the terms of this Subdivision. In the event of a dispute, the
10-13 Board shall uphold local ordinances of a home-rule city and protect
10-14 dealers from retribution by manufacturers for having complied with
10-15 local ordinances.
10-16 SECTION 7. Section 5.02, Texas Motor Vehicle Commission Code
10-17 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
10-18 read as follows:
10-19 Sec. 5.02. Manufacturers; Distributors; Representatives. It
10-20 shall be unlawful for any manufacturer, distributor, or
10-21 representative to:
10-22 (1) Require or attempt to require any dealer to order,
10-23 accept delivery of or pay anything of value, directly or
10-24 indirectly, for any motor vehicle, appliance, part, accessory or
10-25 any other commodity unless voluntarily ordered or contracted for by
11-1 such dealer.
11-2 (2) Refuse or fail to deliver, in reasonable
11-3 quantities and within a reasonable time, to <after receipt of an
11-4 order from> a dealer having a franchise agreement for the retail
11-5 sale of any motor vehicles sold or distributed by such
11-6 manufacturer, distributor, or representative, any new motor vehicle
11-7 or parts or accessories to new motor vehicles as are covered by
11-8 such franchise if such vehicle, parts or accessories are publicly
11-9 advertised as being available for delivery or are actually being
11-10 delivered; provided, however, this provision is not violated if
11-11 such failure is caused by acts of God, work stoppage or delays due
11-12 to strikes or labor disputes, freight embargoes or other causes
11-13 beyond the control of the manufacturer, distributor, or
11-14 representative.
11-15 (3) Notwithstanding the terms of any franchise
11-16 agreement:
11-17 (A) Terminate or refuse to continue any
11-18 franchise with a dealer unless all of the following conditions are
11-19 met:
11-20 (i) the dealer and the Commission have
11-21 received written notice by registered or certified mail from the
11-22 manufacturer, distributor, or representative not less than 60 days
11-23 before the effective date of termination or noncontinuance setting
11-24 forth the specific grounds for termination or noncontinuance; and
11-25 (ii) the written notice contains on the
12-1 first page thereof a conspicuous statement which reads as follows:
12-2 "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE
12-3 TEXAS MOTOR VEHICLE COMMISSION IN AUSTIN, TEXAS, AND HAVE A HEARING
12-4 IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR NONCONTINUANCE
12-5 OF YOUR FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR VEHICLE
12-6 COMMISSION CODE IF YOU OPPOSE THIS ACTION."; and
12-7 (iii) the manufacturer, distributor, or
12-8 representative has received the informed, written consent of the
12-9 affected dealer or the appropriate period for the affected dealer
12-10 to protest the proposed franchise termination or noncontinuance has
12-11 lapsed; or
12-12 (iv) if the affected dealer files a
12-13 protest with the Commission within the greater of (1) 60 days after
12-14 receiving its 60-day notice of proposed termination or
12-15 noncontinuance or (2) the time specified in such notice, the
12-16 Commission determines that the party seeking to terminate or not
12-17 continue a dealer's franchise has established by a preponderance of
12-18 the evidence, at a hearing called by the Commission, that there is
12-19 good cause for the proposed termination or noncontinuance.
12-20 (v) Notwithstanding Subdivisions (3)(A)(i)
12-21 and (3)(A)(iv) of this section, notice may be made not less than 15
12-22 days prior to the effective date of termination or noncontinuance
12-23 if a licensed dealer fails to conduct its customary sales and
12-24 service operations during its customary business hours for seven
12-25 consecutive business days unless such failure is caused by an act
13-1 of God, work stoppage or delays due to strikes or labor disputes,
13-2 an order of the Commission, or other causes beyond the control of
13-3 the dealer.
13-4 (B) Whenever a dealer files a timely protest to
13-5 a proposed franchise termination or noncontinuance, the Commission
13-6 shall notify the party seeking to terminate or to not continue the
13-7 protesting dealer's franchise that a timely protest has been filed,
13-8 that a hearing is required in accordance with this Act, and that
13-9 the party who gave the dealer notice of termination or
13-10 noncontinuance of the franchise may not terminate or refuse to
13-11 continue the franchise until the Commission issues its final
13-12 decision or order.
13-13 (C) If a franchise is terminated or not
13-14 continued, another franchise in the same line-make will be
13-15 established within a reasonable time unless it is shown to the
13-16 Commission by a preponderance of the evidence that the community or
13-17 trade area cannot reasonably support such a dealership. If this
13-18 showing is made, no dealer license shall be thereafter issued in
13-19 the same area unless a change in circumstances is established.
13-20 (4) Notwithstanding the terms of any franchise
13-21 agreement, modify or replace a franchise with a succeeding
13-22 franchise if the modification or replacement would adversely
13-23 affect, to a substantial degree, the dealer's sales, investment, or
13-24 obligations to provide service to the public, unless the
13-25 manufacturer, distributor, or representative has first given the
14-1 Commission and each affected dealer written notice by registered or
14-2 certified mail of any such action 60 days in advance of the
14-3 modification or replacement. The written notice shall contain on
14-4 the first page thereof a conspicuous statement which reads as
14-5 follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST
14-6 WITH THE TEXAS MOTOR VEHICLE COMMISSION IN AUSTIN, TEXAS, AND HAVE
14-7 A HEARING IN WHICH YOU MAY PROTEST THE PROPOSED MODIFICATION OR
14-8 REPLACEMENT OF YOUR FRANCHISE WITH A SUCCEEDING FRANCHISE UNDER THE
14-9 TERMS OF THE TEXAS MOTOR VEHICLE COMMISSION CODE IF YOU OPPOSE THIS
14-10 ACTION." Within the greater of (1) 60 days after receipt of such
14-11 notice or (2) the time specified in such notice, a dealer may file
14-12 a protest with the Commission and the modification or replacement
14-13 shall not become effective unless and until the Commission
14-14 determines that the party seeking to modify or replace a franchise
14-15 with a succeeding franchise has demonstrated by a preponderance of
14-16 the evidence that there is good cause for the modification or
14-17 replacement. The prior franchise shall continue in effect until
14-18 the protest is resolved by the Commission.
14-19 (5) Notwithstanding the terms of any franchise
14-20 agreement, in determining whether good cause has been established
14-21 for modifying, replacing, terminating, or refusing to continue a
14-22 franchise, the Commission shall consider all the existing
14-23 circumstances including, without limitation by the enumeration
14-24 herein, all the following:
14-25 (A) the dealer's sales in relation to the sales
15-1 in the market;
15-2 (B) the dealer's investment and obligations;
15-3 (C) injury to the public welfare;
15-4 (D) the adequacy of the dealer's service
15-5 facilities, equipment, parts, and personnel in relation to those of
15-6 other dealers of new motor vehicles of the same line-make;
15-7 (E) whether warranties are being honored by the
15-8 dealer;
15-9 (F) the parties' compliance with their franchise
15-10 agreement; and
15-11 (G) the enforceability of the franchise
15-12 agreement from a public policy standpoint, including, without
15-13 limitation, issues of the reasonableness of the franchise
15-14 agreement's terms, oppression, adhesion, and the relative
15-15 bargaining power of the parties.
15-16 Good cause shall not be shown solely by the desire of a
15-17 manufacturer, distributor, or representative for market
15-18 penetration.
15-19 (6) Use any false, deceptive or misleading
15-20 advertising.
15-21 (7) Notwithstanding the terms of any franchise
15-22 agreement, prevent any dealer from reasonably changing the capital
15-23 structure of his dealership or the means by or through which he
15-24 finances the operation thereof, provided that the dealer meets
15-25 reasonable capital requirements.
16-1 (8) Notwithstanding the terms of any franchise
16-2 agreement, fail to give effect to or attempt to prevent any sale or
16-3 transfer of a dealer, dealership or franchise or interest therein
16-4 or management thereof unless, after complaint or protest, it is
16-5 demonstrated to the Commission after hearing that the result of any
16-6 such sale or transfer will be detrimental to the public or the
16-7 representation of the manufacturer or distributor.
16-8 (9) Notwithstanding the terms of any franchise
16-9 agreement, require or attempt to require that a dealer assign to or
16-10 act as an agent for any manufacturer, distributor or representative
16-11 in the securing of promissory notes and security agreements given
16-12 in connection with the sale or purchase of new motor vehicles or
16-13 the securing of policies of insurance on or having to do with the
16-14 operation of vehicles sold.
16-15 (10) Notwithstanding the terms of any franchise
16-16 agreement, fail or refuse, after complaint and hearing, to perform
16-17 the obligations placed on the manufacturer in connection with the
16-18 delivery, preparation and warranty of a new motor vehicle as
16-19 provided in the manufacturer's warranty, preparation, and delivery
16-20 agreements on file with the Commission.
16-21 (11) Notwithstanding the terms of any franchise
16-22 agreement, fail to compensate its dealers for the work and services
16-23 they are required to perform in connection with the dealer's
16-24 delivery and preparation obligations according to the agreements on
16-25 file with the Commission which must be found by the Commission to
17-1 be reasonable, or fail to adequately and fairly compensate its
17-2 dealers for labor, parts and other expenses incurred by such dealer
17-3 to perform under and comply with a manufacturer's or a
17-4 distributor's warranty agreement, or require, as a prerequisite to
17-5 the manufacturer's or distributor's payment of a claim for
17-6 reimbursement as required by this section, that a dealer file with
17-7 the manufacturer or distributor the actual time spent in the
17-8 performance of labor unless actual time is the basis for
17-9 reimbursement. In no event shall any manufacturer or distributor
17-10 pay its dealers an amount of money for warranty work that is less
17-11 than that charged by the dealer to the retail customers of the
17-12 dealer for nonwarranty work of like kind. All claims made by
17-13 dealers for compensation for delivery, preparation, and warranty
17-14 work shall be paid within 30 days after approval and shall be
17-15 approved or disapproved within 30 days after receipt. When any
17-16 claim is disapproved, the dealer shall be notified in writing of
17-17 the grounds for disapproval. No claim which has been approved and
17-18 paid may be charged back to the dealer unless it can be shown that
17-19 the claim was false or fraudulent, that the repairs were not
17-20 properly made or were unnecessary to correct the defective
17-21 condition, or that the dealer failed to reasonably substantiate the
17-22 claim in accordance with reasonable <the> written requirements of
17-23 the manufacturer or distributor, if the dealer has been notified of
17-24 the requirements prior to the time the claim arose, and if the
17-25 requirements were in effect at the time the claim arose. A
18-1 manufacturer or distributor may not audit a claim after the
18-2 expiration of two years following the submission of the claim
18-3 unless the manufacturer or distributor has reasonable grounds to
18-4 suspect that a claim was fraudulent. Notwithstanding the terms of
18-5 a franchise agreement or provision of law in conflict with this
18-6 section, the dealer's delivery, preparation, and warranty
18-7 obligations as filed with the Commission shall constitute the
18-8 dealer's sole responsibility for product liability as between the
18-9 dealer and manufacturer or distributor, and, except for a loss
18-10 caused by the dealer's failure to adhere to these obligations, a
18-11 loss caused by the dealer's negligence or intentional misconduct,
18-12 or a loss caused by the dealer's modification of a product without
18-13 manufacturer or distributor authorization, the manufacturer or
18-14 distributor shall reimburse the dealer for all loss incurred by the
18-15 dealer, including legal fees, court costs, and damages, as a result
18-16 of the dealer having been named a party in a product liability
18-17 action.
18-18 (12) Operate as a manufacturer, distributor, or
18-19 representative without a currently valid license from the
18-20 Commission or otherwise violate this Act or rules promulgated by
18-21 the Commission hereunder.
18-22 (13) Notwithstanding the terms of any franchise
18-23 agreement, to prevent or refuse to honor the succession to a
18-24 dealership by any legal heir or devisee under the will of a dealer
18-25 or under the laws of descent and distribution of this State unless
19-1 it is shown to the Commission, after notice and hearing, that the
19-2 result of such succession will be detrimental to the public
19-3 interest and to the representation of the manufacturer or
19-4 distributor; provided, however, nothing herein shall prevent a
19-5 dealer, during his lifetime, from designating any person as his
19-6 successor dealer, by written instrument filed with the manufacturer
19-7 or distributor.
19-8 (14) Notwithstanding the terms of any franchise
19-9 agreement, require that a dealer pay or assume, directly or
19-10 indirectly, any part of any refund, rebate, discount, or other
19-11 financial adjustment made by the manufacturer, distributor, or
19-12 representative to, or in favor of, any customer of a dealer, unless
19-13 voluntarily agreed to by such dealer.
19-14 (15) Notwithstanding the terms of any franchise
19-15 agreement, deny or withhold approval of a written application to
19-16 relocate a franchise unless (A) the applicant has received written
19-17 notice of the denial or withholding of approval within 90 days
19-18 after receipt of the application containing information reasonably
19-19 necessary to enable the manufacturer or distributor to adequately
19-20 evaluate the application, and if (B) the applicant files a protest
19-21 with the Commission and establishes by a preponderance of the
19-22 evidence at a hearing called by the Commission that the grounds
19-23 for, and distance of, the relocation are reasonable.
19-24 (16) Notwithstanding the terms of any franchise
19-25 agreement, fail to pay to a dealer or any lienholder in accordance
20-1 with their respective interest after the termination of a
20-2 franchise:
20-3 (A) the dealer cost of each new motor vehicle in
20-4 the dealer's inventory with mileage of 6,000 miles or less, reduced
20-5 by the net discount value of each, where "net discount value" is
20-6 determined according the following formula: net cost multiplied by
20-7 total mileage divided by 100,000, and where "net cost" equals the
20-8 dealer cost plus any charges by the manufacturer, distributor, or
20-9 representative for distribution, delivery, and taxes, less all
20-10 allowances paid to the dealer by the manufacturer, distributor, or
20-11 representative for new, unsold, undamaged, and complete motor
20-12 vehicles of current model year or one year prior model year in the
20-13 dealer's inventory, except that if a vehicle cannot be reduced by
20-14 the net discount value, the manufacturer or distributor shall pay
20-15 the dealer the net cost of the vehicle;
20-16 (B) the dealer cost of each new, unused,
20-17 undamaged, and unsold part or accessory if the part or accessory is
20-18 in the current parts catalogue and is still in the original,
20-19 resalable merchandising package and in unbroken lots, except that
20-20 in the case of sheet metal, a comparable substitute for the
20-21 original package may be used, and if the part or accessory was
20-22 purchased by the dealer either directly from the manufacturer or
20-23 distributor or from an outgoing authorized dealer as a part of the
20-24 dealer's initial inventory;
20-25 (C) the fair market value of each undamaged sign
21-1 owned by the dealer which bears a trademark or tradename used or
21-2 claimed by the manufacturer, distributor, or representative if the
21-3 sign was purchased from or purchased at the request of the
21-4 manufacturer, distributor, or representative;
21-5 (D) the fair market value of all special tools,
21-6 data processing equipment, and automotive service equipment owned
21-7 by the dealer which were recommended in writing and designated as
21-8 special tools and equipment and purchased from or purchased at the
21-9 request of the manufacturer, distributor, or representative, if the
21-10 tools and equipment are in usable and good condition except for
21-11 reasonable wear and tear;
21-12 (E) the cost of transporting, handling, packing,
21-13 storing, and loading of any property subject to repurchase under
21-14 this section;
21-15 (F) except as provided by this subdivision, any
21-16 sums due as provided by Paragraph (A) of this subdivision within 60
21-17 days after termination of a franchise and any sums due as provided
21-18 by Paragraphs (B) through (E) of this subdivision within 90 days
21-19 after termination of a franchise. As a condition of payment, the
21-20 dealer is to comply with reasonable requirements with respect to
21-21 the return of inventory as are set out in the terms of the
21-22 franchise agreement. A manufacturer or distributor shall reimburse
21-23 a dealer for the dealer's cost for storing any property covered by
21-24 this subdivision beginning 90 days following termination. A
21-25 manufacturer or distributor shall reimburse a dealer for the
22-1 dealer's cost of storing any property covered by this subdivision
22-2 before the expiration of 90 days from the date of termination if
22-3 the dealer notifies the manufacturer or distributor of the
22-4 commencement of storage charges within that period. On receipt of
22-5 notice of the commencement of storage charges, a manufacturer or
22-6 distributor may immediately take possession of the property in
22-7 question by repurchasing the property as provided by this
22-8 subdivision. A manufacturer, distributor, or representative who
22-9 fails to pay those sums within the prescribed time or at such time
22-10 as the dealer and lienholder, if any, proffer good title prior to
22-11 the prescribed time for payment, is liable to the dealer for:
22-12 (1) the greatest of dealer cost, fair
22-13 market value, or current price of the inventory;
22-14 (2) interest on the amount due calculated
22-15 at the rate applicable to a judgment of a court; and
22-16 (3) reasonable attorney's fees and costs.
22-17 (17) Notwithstanding the terms of any franchise
22-18 agreement, change its distributor, its method of distribution of
22-19 its products in this state, or its business structure or ownership
22-20 in a manner that results in the termination or noncontinuance of a
22-21 franchise without good cause. The manufacturer, distributor, or
22-22 representative shall issue the same notice to the dealer and to the
22-23 Commission as is provided in Subdivisions (3)(A) and (B) of this
22-24 section and said same procedures shall apply to the parties.
22-25 (18) Notwithstanding the terms of any franchise
23-1 agreement, require a dealer to submit to arbitration on any issue
23-2 unless the dealer and the manufacturer, distributor, or
23-3 representative and their respective counsel agree to arbitrate
23-4 after a controversy arises. The arbitrator shall apply the
23-5 provisions of this Act in resolving the pertinent controversy.
23-6 Either party may appeal to the Commission a decision of an
23-7 arbitrator on the ground that the arbitrator failed to apply this
23-8 Act.
23-9 (19) Notwithstanding the terms of any franchise
23-10 agreement, require that a dealer join, contribute to, or affiliate
23-11 with, directly or indirectly, any advertising association.
23-12 (20) Notwithstanding the terms of a franchise
23-13 agreement:<,>
23-14 (A) require adherence to unreasonable sales or
23-15 service standards;
23-16 (B) directly or indirectly, discriminate against
23-17 a dealer or otherwise treat dealers differently as a result of a
23-18 formula or other calculation or process intended to gauge the
23-19 performance of a dealership, except a sales contest or other
23-20 recognition program based on reasonable sales and service criteria;
23-21 (C) unreasonably require that a dealer purchase
23-22 special tools or equipment; or
23-23 (D) fail to compensate a dealer for all costs
23-24 incurred by the dealer as required by the manufacturer in complying
23-25 with the terms of a product recall by the manufacturer or
24-1 distributor, including the costs, if any, incurred by the dealer in
24-2 notifying vehicle owners of the existence of the recall.
24-3 (21) Discriminate unreasonably between or among
24-4 franchisees in the sale of a motor vehicle owned by the
24-5 manufacturer or distributor.
24-6 (22) Directly or indirectly, or through a subsidiary
24-7 or agent, require, as a condition for obtaining financing for a
24-8 motor vehicle, the purchaser of a vehicle to purchase any product
24-9 other than the motor vehicle from the manufacturer or distributor,
24-10 or from an entity owned or controlled by the manufacturer or
24-11 distributor.
24-12 (23) Directly or indirectly, or through a subsidiary
24-13 or agent, require, as a condition of its or its subsidiary's
24-14 agreement to provide financing for a motor vehicle, that any
24-15 insurance policy or service contract purchased by the motor vehicle
24-16 purchaser be purchased from a specific source.
24-17 (24) Compel a dealer through a financing subsidiary of
24-18 the manufacturer or distributor to agree to unreasonable operating
24-19 requirements or directly or indirectly to terminate a dealer
24-20 through the actions of a financing subsidiary of the manufacturer
24-21 or distributor. This subdivision does not limit the right of a
24-22 financing entity to engage in business practices in accordance with
24-23 the usage of trade in retail and wholesale motor vehicle financing.
24-24 SECTION 8. The importance of this legislation and the
24-25 crowded condition of the calendars in both houses create an
25-1 emergency and an imperative public necessity that the
25-2 constitutional rule requiring bills to be read on three several
25-3 days in each house be suspended, and this rule is hereby suspended,
25-4 and that this Act take effect and be in force from and after its
25-5 passage, and it is so enacted.