BILL ANALYSIS C.S.S.B. 1446 By: Brown Finance 4-9-95 Committee Report (Substituted) BACKGROUND It has always been the duty of the Texas Department of Transportation, by law, to license certain sellers of transportation-related property. The law also establishes certain categories of vehicle dealers. However, certain categories are too broad and not responsive to modern business practices. Also, the license fees are not sufficient to cover the cost of providing the services and changes in other laws affecting licenses are not reflected in the enforcement provisions of this law. PURPOSE As proposed, C.S.S.B. 1446 clarifies problems relating to the regulation of certain motor vehicle dealers and to the sale, titling, and registration of certain motor vehicles. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 6686(a)(1-A)(ii), V.T.C.S., to amend the definition of "dealer" to include franchised motor vehicle dealer, independent motor vehicle dealer, and wholesale motor vehicle dealer.. SECTION 2. Amends Article 6686(a)(1-A), V.T.C.S., by adding Subdivisions (iii), (iv), (v), and (vi) and by redesignating all subsequent subdivisions, as follows: (iii)-(v) Define "franchised motor vehicle dealer," "independent motor vehicle dealer," "wholesale motor vehicle dealer," and "franchise." SECTION 3. Amends Article 6686(a)(1-A)(iii), V.T.C.S., to provide that no person may engage in business as a dealer, either directly or indirectly or by consignment, unless that person has a currently valid general distinguishing number assigned by the Motor Vehicle Board of the Texas Department of Transportation (department). Deletes a dealer in motor vehicles, motorcycles, home trailers and trailers or semitrailers from the types of business in which no person may engage. SECTION 4. Amends Section (a)(1-a)(v), Article 6686, V.T.C.S., to provide that no person may reassign basic evidence of ownership until the person has been issued a general distinguishing number hereunder in one of the six categories provided by this subdivision. Requires an applicant to specify whether the applicant proposes to be a franchised motor vehicle dealer, independent motor dealer, wholesale motor vehicle dealer, motorcycle dealer, house trailer dealer, or trailer or semitrailer dealer. Authorizes a dealer to reassign a manufacturer's certificate if the dealer is licensed by the department. Makes conforming changes. SECTION 5. Amends Section (a)(1-A)(vi), Article 6686, V.T.C.S., to make conforming changes. SECTION 6. Amends Article 6686, V.T.C.S., by adding Section (2-B), as follows: Sec. (2-B) MOTOR VEHICLE DEALERS. (i) Authorizes the holder of a franchised motor vehicle dealer's general distinguishing number to buy, sell, or exchange new or used motor vehicles, and reassign a manufacturer's certificate of origin, certificate of title, or other basic evidence of ownership of any type of vehicle owned by the holder if the holder is not otherwise prohibited by law from selling or offering the vehicle for sale. (ii) Authorizes the holder of an independent motor vehicle dealer's general distinguishing number to reassign a certificate of title or other basic evidence of ownership of any type of vehicle owned by the dealer which the dealer is not otherwise prohibited by law from selling or offering for sale. (iii) Authorizes the holder of a wholesale motor vehicle dealer's general distinguishing number to sell or offer to sell motor vehicles to no person except a dealer holding a general distinguishing number, or a foreign dealer otherwise authorized by Texas law or interstate reciprocity agreement to purchase a vehicle in Texas without remitting the motor vehicle sales tax. SECTION 7. Amends Article 6686(5-A), V.T.C.S., to authorize the department to cancel a general distinguishing number if the dealer has failed to demonstrate compliance with the provisions of Articles 23.12, 23.12A, and 23.12B, Tax Code. Redesignates existing Subdivision (H) as Subsection (I). SECTION 8. Amends Article 6686(a)(7), V.T.C.S., to require each applicant for an original general distinguishing number to pay to the department a fee of $500, rather than $250; requires each applicant for renewal of a general distinguishing number to pay to the department an annual fee of $200, rather than $100; requires each applicant for a dealer's plate or plates to pay a fee of $20, rather than $10, for each metal dealer's plate desired; and requires each applicant for a manufacturer's plate or plates to pay a fee of $40, rather than $20, for each plate. Requires each general distinguishing number and dealer's and manufacturer's license plate to expire on March 31 of each year, unless otherwise provided by law or rule of the Motor Vehicle Board of the department. SECTION 9. Emergency clause. Effective date: upon passage.