BILL ANALYSIS
C.S.S.B. 1139
By: Cain
State Affairs
4-13-95
Committee Report (Substituted)
BACKGROUND
The Texas Motor Vehicle Commission Code, the law that regulates
motor vehicle manufacturers and franchised dealers and provides
certain specific protection for the purchaser of a new motor
vehicle, is amended every session to keep pace with current
practices and events.
The Texas Motor Vehicle Board, currently an agency within the Texas
Department of Transportation (department), was a stand-alone
agency, previously known as the Texas Motor Vehicle Commission
until the 1991 consolidation. Even after the consolidation, its
regulatory jurisdiction over motor vehicle manufacturers,
distributors, and franchised dealers was not expanded. Therefore,
under current law, the regulation of dealers is divided among
several divisions of the department.
PURPOSE
As proposed, C.S.S.B. 1139 amends and revises the Texas Motor
Vehicle Commission Code to bring the regulatory structure provided
by current law into conformity with current business practices.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Motor Vehicle Board of the Texas Department of
Transportation in SECTION 24(c) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1.02, Article 4413(36), V.T.C.S. (Texas
Motor Vehicle Commission Code), to include all motor vehicles,
rather than specifying new motor vehicles, in the purpose of this
Act.
SECTION 2. Amends Section 1.03, Article 4413(36), V.T.C.S., to
define "franchised dealer," "non-franchised dealer," "dealer,"
"dealership," and "licensee," and to redefine "franchise,"
"broker," and "warranty work."
SECTION 3. Amends Section 2.10(a), Article 4413(36), V.T.C.S., to
require all money paid to the Texas Motor Vehicle Commission
(commission), notwithstanding a law to the contrary, including
without limitation the provisions of Section 403.094(h), Government
Code, to be deposited in the state treasury to the credit of the
state highway fund.
SECTION 4. Amends Section 3.01, Article 4413(36), V.T.C.S., to
require the commission to enforce and administer the terms of
Article 6686, V.T.C.S. Makes conforming changes.
SECTION 5. Amends Section 3.02(a), Article 4413(36), V.T.C.S., to
make conforming changes.
SECTION 6. Amends Section 3.03(a), Article 4413(36), V.T.C.S., to
make conforming changes.
SECTION 7. Amends Section 3.08(j), Article 4413(36), V.T.C.S., to
authorize the commission, by final order, to dismiss a compliant,
protest, or response without holding a contested case hearing, on
motion of any party. Deletes existing Subsection (j).
SECTION 8. Amends Section 4.01, Article 4413(36), V.T.C.S., as
follows:
Sec. 4.01. LICENSE REQUIRED. (a) Prohibits a person from
performing repair services on a motor vehicle pursuant to the
terms of a manufacturer's warranty, whether or not the person
sells motor vehicles at the same location, without obtaining
a license. Makes nonsubstantive changes.
(b) Defines "license."
SECTION 9. Amends Section 4.02(a), Article 4413(36), V.T.C.S., to
require an application for a dealer license to be on a form
including the information required by Article 6686, V.T.C.S., and
the applicant's physical facilities, without specifying the type of
physical facilities.
SECTION 10. Amends Section 4.02(c)(1), Article 4413(36),
V.T.C.S., to distinguish between dealer and a franchised dealer.
Authorizes a franchised dealer to carry on the business of a
dealership at more than one location, with provisos. Requires a
franchised dealer to obtain a new license prior to a change in a
dealer's location.
SECTION 11. Amends Sections 4.03(a)-(d), Article 4413(36),
V.T.C.S., to make conforming changes.
SECTION 12. Amends Section 4.04(b), Article 4413(36), V.T.C.S.,
to increase license fees for franchise dealers, representatives,
and converters. Varies fees for franchise dealers according to
number of new motor vehicles sold. Makes conforming changes.
SECTION 13. Amends Section 4.05(a), Article 4413(36), V.T.C.S.,
to make conforming changes.
SECTION 14. Amends Sections 4.06, Article 4413(36), V.T.C.S., to
require a franchised dealer to protest an application to relocate
another person's dealership if the person filing the protest meets
certain qualifications. Provides that the relocation of a
dealership is not subject to protest by a franchised dealer whose
dealership is not closer to the proposed location than it is to the
location from which the relocated dealership is being relocated.
Make conforming changes.
SECTION 15. Amends Section 4.07(a), Article 4413(36), V.T.C.S.,
to make conforming changes.
SECTION 16. Amends Section 5.01, Article 4413(36), V.T.C.S., as
follows:
Sec. 5.01. New heading: FRANCHISED DEALERS. Deletes from
the list of unlawful activities of franchised dealers using
false, deceptive, or misleading advertising, and operating as
a dealer without a currently valid license from the commission
or otherwise violating this Act or rules promulgated by the
commission. Requires the Motor Vehicle Board of the Texas
Department of Transportation (board) to protect franchised
dealers from retribution by distributors, in addition to
manufacturers, for having complied with local ordinances.
SECTION 17. Amends Article 4413(36), V.T.C.S., by adding Section
5.01A, as follows:
Sec. 5.01A. DEALERS. Sets forth prohibited activities for
dealers.
SECTION 18. Amends Section 5.02, Article 4413(36), V.T.C.S., to
define "dealer." Provides that it is unlawful for any
manufacturer, distributor, or representative to terminate or refuse
to continue any franchise with a dealer or directly or indirectly
force or attempt to force a dealer to discontinue a line-make or
parts or products related to that line-make unless certain
conditions are met. Provides that it is unlawful for any
manufacturer, distributor, or representative to operate as a
dealer, except on a temporary basis that meets certain
requirements. Provides that it is unlawful for any manufacturer,
distributor, or representative to deny or withhold approval of a
dealer's application to add a line-make or related part or products
unless, the manufacturer or distributor gives the dealer written
notice of the denial or withholding of approval within a certain
time period. Authorizes the dealer to file a protest with the
commission. Authorizes the commission to uphold the manufacturer's
or distributor's decision to deny or withhold approval of the
addition of the line-make only if the manufacturer or distributor
proves by a preponderance of the evidence that the decision is
reasonable. Sets forth circumstances the commission is required to
consider in determining whether or not the manufacturer or
distributor has met its burden of proof. Makes conforming changes.
SECTION 19. Amends Section 5.04(a), Article 4413(36), V.T.C.S.,
to make conforming changes.
SECTION 20. Amends Section 6.01(a), Article 4413(36), V.T.C.S.,
to make conforming changes.
SECTION 21. Amends Section 6.06, Article 4413(36), V.T.C.S., by
amending Subsection (a) and adding Subsection (f), as follows:
(a) Authorizes a person, including a licensee, who has
sustained actual damages as a result of a violation of
Sections 5.01 or 5.01A of this code, or a franchised dealer
who has sustained actual damages as a result of a violation of
Section 5.02, or a violation of Chapter 17E, Business and
Commerce Code, to maintain an action pursuant to the terms of
Chapter 17E or any successor statute and requires the person
to be entitled to all procedures and remedies provided for
therein, notwithstanding any other provision of law, including
the terms of Chapter 17E.
(f) Provides that a reference in law to a dealer licensed by
the commission or by the board means a franchised dealer.
SECTION 22. Amends Sections 6.07(b), (d), (g), and (j), Article
4413(36), V.T.C.S., to provide that information regarding the
disclosure issued by a manufacturer, distributor, or converter
stating that the vehicle was repurchased or replaced that is filed
with the board is not a public record and is not subject to release
until the complaint is finally resolved by order of the board.
Makes conforming changes.
SECTION 24. CONSTRUCTION; TRANSITION. (a) Provides that this
Act prevails over Article 6686, V.T.C.S., in the event of conflict.
(b) Requires the executive director of the board to oversee
the transition of duties and responsibilities provided by this
Act.
(c) Provides that all general distinguishing numbers (numbers)
expire one year from the date of issuance. Requires the board
to adopt a rule by which the numbers expire on various dates
during the year. Authorizes a number to be issued for a term
less than one year for the year in which the expiration date
is changed. Requires the fee payable on the date of issuance
to be prorated on a monthly basis so that the licensee shall
pay only that portion of the license fee which is allocable to
the months during which the license is valid if a number is
issued for a term less than one year. Provides that the total
fee is payable and the number is valid for a term of one year
on renewal of the general number on the new expiration date.
SECTION 25. Effective date: January 1, 1996.
SECTION 26. Emergency clause.