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.