By Alexander H.B. No. 2586
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to duties and responsibilities of the Motor Vehicle Board
1-3 of the Texas Department of Transportation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1.02, 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. 1.02. Policy and purpose. The distribution and sale of
1-9 <new> motor vehicles in this State vitally affects the general
1-10 economy of the State and the public interest and welfare of its
1-11 citizens. It is the policy of this State and the purpose of this
1-12 Act to exercise the State's police power to insure a sound system
1-13 of distributing and selling <new> motor vehicles through licensing
1-14 and regulating manufacturers, distributors, converters, and dealers
1-15 of those vehicles, and enforcing this Act as to other persons, in
1-16 order to provide for compliance with manufacturer's warranties, and
1-17 to prevent frauds, unfair practices, discriminations, impositions,
1-18 and other abuses of our citizens.
1-19 SECTION 2. Section 1.03, Texas Motor Vehicle Commission Code
1-20 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
1-21 read as follows:
1-22 Sec. 1.03. Definitions. In this Act:
1-23 (1) "Motor vehicle" means:
2-1 (A) every fully self-propelled vehicle which has
2-2 as its primary purpose the transport of a person or persons, or
2-3 property, on a public highway, and having two or more wheels;
2-4 (B) every two or more wheeled fully
2-5 self-propelled, titled vehicle which has as its primary purpose the
2-6 transport of a person or persons or property and is not
2-7 manufactured for use on public streets, roads, or highways; or
2-8 (C) an engine, transmission, or rear axle
2-9 manufactured for installation in a vehicle having as its primary
2-10 purpose the transport of a person or persons or property on a
2-11 public highway and having a gross vehicle weight rating of more
2-12 than 16,000 pounds, whether or not attached to a vehicle chassis.
2-13 (2) "New motor vehicle" means a motor vehicle which
2-14 has not been the subject of a "retail sale" without regard to the
2-15 mileage of the vehicle.
2-16 (3) "Person" means a natural person, partnership,
2-17 corporation, association, trust, estate, or any other legal entity.
2-18 (4) "Franchised Dealer" means any person who holds a
2-19 general distinguishing number issued by the Department pursuant to
2-20 the terms of Article 6686, Revised Statutes, and who is engaged in
2-21 the business of buying, selling or exchanging new motor vehicles,
2-22 and servicing or repairing motor vehicles pursuant to the terms of
2-23 a manufacturer's warranty, at an established and permanent place
2-24 of business pursuant to a franchise in effect with a manufacturer
2-25 or distributor.
3-1 (5) "Manufacturer" means any person who manufactures
3-2 or assembles new motor vehicles either within or without this
3-3 State.
3-4 (6) "Distributor" means any person who distributes
3-5 and/or sells new motor vehicles to franchised dealers and who is
3-6 not a manufacturer.
3-7 (7) "Representative" means any person who is or acts
3-8 as an agent, employee or representative of a manufacturer,
3-9 distributor, or converter who performs any duties in this State
3-10 relating to promoting the distribution and/or sale of new motor
3-11 vehicles or contacts dealers in this State on behalf of a
3-12 manufacturer, distributor, or converter.
3-13 (8) "Franchise" means one or more contracts between a
3-14 franchised dealer as franchisee, and either a manufacturer or a
3-15 distributor as franchisor under which (A) the franchisee is granted
3-16 the right to sell and service new motor vehicles manufactured or
3-17 distributed by the franchisor, or only service motor vehicles
3-18 pursuant to the terms of a manufacturer's warranty; (B) the
3-19 franchisee as an independent business is a component of
3-20 franchisor's distribution system; (C) the franchisee is
3-21 substantially associated with franchisor's trademark, tradename and
3-22 commercial symbol; (D) the franchisee's business is substantially
3-23 reliant on franchisor for a continued supply of motor vehicles,
3-24 parts, and accessories for the conduct of its business; or (E) any
3-25 right, duty, or obligation granted or imposed by this Act is
4-1 affected. The term includes a written communication from a
4-2 franchisor to a franchisee by which a duty is imposed on the
4-3 franchisee.
4-4 (9)
4-5 (10) "Broker" means a person who, for a fee,
4-6 commission, or other valuable consideration, solicits or refers
4-7 prospective buyers or arranges or offers to arrange a transaction
4-8 involving the sale, for purposes other than resale, of a new motor
4-9 vehicle, and who is not:
4-10 (A) a franchised dealer or bona fide employee of
4-11 a franchised dealer when acting on behalf of a franchised dealer;
4-12 (B) a representative or bona fide employee of a
4-13 representative when acting on behalf of a representative;
4-14 (C) a distributor or bona fide employee of a
4-15 distributor when acting on behalf of a distributor; or
4-16 (D) at any point in the transaction the bona
4-17 fide owner of the vehicle involved in the transaction.
4-18 (11) "Motor home" means a motor vehicle which is
4-19 designed to provide temporary living quarters and which:
4-20 (A) is built onto as an integral part of, or is
4-21 permanently attached to, a motor vehicle chassis; and
4-22 (B) contains at least four of the following
4-23 independent life support systems if each is permanently installed
4-24 and designed to be removed only for purposes of repair or
4-25 replacement and meets the standards of the American National
5-1 Standards Institute, Standards for Recreational Vehicles:
5-2 (i) a cooking facility with an on-board
5-3 fuel source;
5-4 (ii) a gas or electric refrigerator;
5-5 (iii) a toilet with exterior evacuation;
5-6 (iv) a heating or air conditioning system
5-7 with an on-board power or fuel source separate from the vehicle
5-8 engine;
5-9 (v) a potable water supply system that
5-10 includes at least a sink, a faucet, and a water tank with an
5-11 exterior service supply connection;
5-12 (vi) a 110-125 volt electric power supply.
5-13 (12) "Conversion" means a motor vehicle, other than a
5-14 motor home, which has been substantially modified by a person other
5-15 than the manufacturer or distributor of the chassis of the motor
5-16 vehicle and which has not been the subject of a retail sale.
5-17 (13) "Motor home manufacturer" means a person other
5-18 than the manufacturer of the chassis of a motor vehicle who, prior
5-19 to the retail sale of the motor vehicle, performs modifications on
5-20 the chassis that result in the finished product being classified as
5-21 a motor home.
5-22 (14) "Chassis manufacturer" means a person who
5-23 manufactures and produces the frame upon which is mounted the body
5-24 of a motor vehicle.
5-25 (15) "Converter" means a person who prior to the
6-1 retail sale of a motor vehicle, assembles, installs, or affixes a
6-2 body, cab, or special equipment to a chassis, or who substantially
6-3 adds, subtracts from, or modifies a previously assembled or
6-4 manufactured motor vehicle.
6-5 (16) "Rule" means a statement by the Commission of
6-6 general and future applicability that implements, interprets, or
6-7 prescribes law or policy or describes the organization or
6-8 procedural practice requirements of the Commission. The term
6-9 includes the amendment or repeal of a prior rule, but does not
6-10 include statements concerning only the internal management of the
6-11 Commission which do not affect the rights of a person not connected
6-12 with the Commission.
6-13 (17) "Party" means each person or agency named or
6-14 admitted as a party and whose legal rights, duties, or privileges
6-15 are to be determined by the Commission after an opportunity for
6-16 adjudicative hearing.
6-17 (18) "Relocation" means the transfer of an existing
6-18 dealership operation to facilities at a different location,
6-19 including a transfer which results in a consolidation or dualing of
6-20 an existing dealer's operation.
6-21 (19) "Retail sale" means the sale of a motor vehicle
6-22 except:
6-23 (A) a sale in which the purchaser acquires a
6-24 vehicle for the purpose of resale; or
6-25 (B) a sale of a vehicle that is operated under
7-1 and in accordance with Article 6686, Revised Statutes.
7-2 (20) "Warranty work" means parts, labor, and any other
7-3 expenses incurred by a franchised dealer in complying with the
7-4 terms of a manufacturer's or distributor's warranty.
7-5 (21) "Department" means the Texas Department of
7-6 Transportation.
7-7 (22) "Transportation Commission" means the Texas
7-8 Transportation Commission of the Texas Department of
7-9 Transportation.
7-10 (23) "Non-franchised dealer" means a person, other
7-11 than a franchised dealer, who holds a general distinguishing number
7-12 issued by the Department pursuant to the terms of Article 6686,
7-13 Revised Statutes.
7-14 (24) "Dealer" means a person who holds a general
7-15 distinguishing number issued by the Department pursuant to the
7-16 terms of Article 6686, Revised Statutes.
7-17 (25) "Dealership" means the physical premises and
7-18 business facilities upon which a franchised dealer operates his
7-19 business, including the sale and repair of motor vehicles. The
7-20 term includes premises or facilities at which a person engages only
7-21 in the repair of motor vehicles if repairs are performed pursuant
7-22 to the terms of a motor vehicle manufacturer's warranty.
7-23 (26) "Licensee" means a person who holds a license
7-24 issued by the Board under the terms of this Act or a general
7-25 distinguishing number issued by the Department pursuant to the
8-1 terms of Article 6686, Revised Statutes.
8-2 SECTION 3. Section 2.10(a), Texas Motor Vehicle Commission
8-3 code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
8-4 to read as follows:
8-5 (a) Notwithstanding a law to the contrary, including without
8-6 limitation the provisions of the Government Code Section
8-7 403.094(h), all <All> money paid to the Commission under this Act
8-8 shall be deposited in the State Treasury to the credit of the state
8-9 highway fund.
8-10 SECTION 4. Section 3.01, Texas Motor Vehicle Commission Code
8-11 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
8-12 read as follows:
8-13 Sec. 3.01. Jurisdiction. (a) The Commission is hereby
8-14 delegated and vested with, in the exercise of the State's police
8-15 power, the general and original power and jurisdiction to regulate
8-16 all aspects of the distribution and sale of <new> motor vehicles
8-17 and to do all things, whether specifically designated in this Act
8-18 or implied herein, or necessary or convenient to the exercise of
8-19 this power and jurisdiction, including the original jurisdiction to
8-20 determine questions of its own jurisdiction. In addition to the
8-21 other duties placed on the Commission by this code, the Commission
8-22 shall enforce and administer the terms of Article 6686, Revised
8-23 Statutes.
8-24 (b) Unless otherwise specifically provided by Texas law not
8-25 in conflict with the terms of this Act, all aspects of the
9-1 distribution and sale of <new> motor vehicles shall be governed
9-2 exclusively by the provisions of this Act.
9-3 SECTION 5. Section 3.02(a), Texas Motor Vehicle Commission
9-4 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
9-5 to read as follows:
9-6 (a) The Commission shall, in accordance with this Act,
9-7 administer the provisions of this Act, establish the qualifications
9-8 of manufacturers, distributors, converters, and dealers, ensure
9-9 that the distribution and sale of motor vehicles is conducted as
9-10 provided herein and under the Commission's rules, provide for
9-11 compliance with warranties, and otherwise prevent fraud, unfair
9-12 practices, discriminations, impositions, and other abuses in
9-13 connection with the distribution and sale of <new> motor vehicles.
9-14 SECTION 6. Section 3.03(a), Texas Motor Vehicle Commission
9-15 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
9-16 to read as follows:
9-17 (a) The Commission shall have and may, in its discretion and
9-18 notwithstanding any other provision of law that is inconsistent
9-19 with this Act, exercise the powers set forth in this Act, and shall
9-20 have all other powers necessary, incidental, or convenient to carry
9-21 out its duties and effectuate its express powers and duties. These
9-22 powers and duties include the power to initiate and conduct
9-23 proceedings, investigations, and hearings, administer oaths,
9-24 receive evidence and pleadings, issue subpoenas to compel the
9-25 attendance of any person, order the production of any tangible
10-1 property, including papers, records, and documents, make findings
10-2 of fact on all factual issues arising out of any proceeding
10-3 initiated under this Act, specify, govern, and control appearance,
10-4 practice, and procedure before the Commission, issue rules,
10-5 conclusions of law, decisions, including declaratory decisions or
10-6 orders, enter into contracts or execute instruments, retain
10-7 counsel, utilize the services of the Attorney General of the State
10-8 of Texas and thereafter institute and direct the conduct of legal
10-9 proceedings in any forum or obtain other professional services as
10-10 may be necessary and convenient, sanction for contempt, assess and
10-11 collect fees and costs including attorney's fees, issue, suspend,
10-12 and revoke licenses, prohibit and regulate acts and practices in
10-13 connection with the distribution and sale of <new> motor vehicles
10-14 and warranty performance obligations, issue cease and desist orders
10-15 in the nature of temporary and permanent injunctions, and levy
10-16 civil penalties.
10-17 SECTION 7. Section 3.08(j), Texas Motor Vehicle Commission
10-18 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
10-19 to read as follows:
10-20 (j) On motion of any party, and as provided by this section,
10-21 the Commission may, by final order, dismiss a complaint, protest or
10-22 response without holding a contested case hearing. In deciding
10-23 whether a disputed issue of material fact exists, the Commission
10-24 shall accept as true the evidence offered by the non-moving party
10-25 and shall indulge every reasonable inference, and resolve any
11-1 doubt, in favor of the non-moving party. The Commission may not
11-2 dismiss an action under this section unless the Commission
11-3 determines that:
11-4 (1) based on pleadings, affidavits, documentary
11-5 evidence and other discovery, no genuine issue of material fact
11-6 exists and the moving party is entitled to judgment as a matter of
11-7 law; or
11-8 (2) the Commission lacks jurisdiction of the parties
11-9 or the subject matter <The Commission may dismiss a complaint or
11-10 protest if it determines that the complaint or protest is frivolous
11-11 or was made for purposes of harassment>.
11-12 SECTION 8. Section 4.01, Texas Motor Vehicle Commission Code
11-13 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
11-14 read as follows:
11-15 Sec. 4.01. License Required. (a) No person shall engage in
11-16 business as, serve in the capacity of, or act as a dealer,
11-17 manufacturer, distributor, converter, or representative in this
11-18 State, or perform or offer to perform repair services on a motor
11-19 vehicle pursuant to the terms of a motor vehicle manufacturer's
11-20 warranty, whether or not the person sells or offers to sell motor
11-21 vehicles at the same location, without obtaining a license therefor
11-22 as provided in this Act and the rules of the Commission. All new
11-23 license applications shall be reviewed and, in the discretion of
11-24 the Commission, investigated to determine compliance with the
11-25 provisions of this Act. License renewals may be administratively
12-1 granted unless protested. Licenses issued by the Commission shall
12-2 expire one year from date of issuance. All <Notwithstanding the
12-3 effective date of any franchise agreement, all> licenses and
12-4 renewals thereof are issued subject to all provisions of this Act
12-5 and rules of the Commission in effect upon the date of issuance as
12-6 well as all future provisions of this Act and rules which may
12-7 become effective during the term of the license.
12-8 (b) In the case of a non-franchised dealer, the term
12-9 "license" in this Act means a general distinguishing number issued
12-10 by the Department pursuant to the authority of Article 6686,
12-11 Revised Statutes. A non-franchised dealer may not operate as a
12-12 dealer without a valid general distinguishing number, but is not
12-13 required to obtain an additional license under the terms of this
12-14 Act. A franchised dealer shall have both a general distinguishing
12-15 number and a separate license issued under the terms of this Act.
12-16 SECTION 9. Section 4.02(a), Texas Motor Vehicle Commission
12-17 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
12-18 to read as follows:
12-19 (a) An application for a dealer license shall be on a form
12-20 prescribed by the Commission which shall include the information
12-21 required by Article 6686, Revised Statutes, and information on the
12-22 applicant's financial resources, business integrity, business
12-23 ability and experience, franchise agreement if applicable, physical
12-24 facilities, <for sales and service, parts and accessories
12-25 inventory, new> vehicle inventory and other factors the Commission
13-1 considers necessary to determine an applicant's qualifications to
13-2 adequately serve the motoring public.
13-3 SECTION 10. Section 4.02(c)(1), and (d) Texas Motor Vehicle
13-4 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
13-5 is amended to read as follows:
13-6 (c)(1) A franchised dealer may carry on the business of his
13-7 dealership at more than one location; however, a separate location
13-8 for the display and sale of new motor vehicles may not be
13-9 established and maintained by a franchised dealer unless expressly
13-10 authorized by the franchised dealer's franchise and license. An
13-11 application for a franchised dealer's license or to amend a
13-12 franchised dealer's license which proposes the establishment of a
13-13 separate display and sales location is subject to all of the
13-14 provisions of this Act. A separate license shall be required for
13-15 each separate and distinct dealership as determined by the
13-16 Commission.
13-17 (d) A dealer licensed hereunder shall promptly notify the
13-18 Commission of any proposed change in its ownership, location,
13-19 franchise, or any other matters the Commission may require by rule.
13-20 Prior to a change in a dealer's location <of a dealership>, a
13-21 dealer shall obtain a new license for that location.
13-22 SECTION 11. Section 4.03(a), (b), (c) and (d), Texas Motor
13-23 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
13-24 Statutes), is amended to read as follows:
13-25 (a) An application for a manufacturer's, distributor's,
14-1 converter's, or representative's license shall be on a form
14-2 prescribed by the Commission which form shall contain such
14-3 information as the Commission deems necessary to fully determine
14-4 the qualifications of an applicant for a license, including
14-5 financial resources, business integrity and experience, facilities
14-6 and personnel for serving franchised dealers and such other
14-7 information as the Commission considers to be pertinent to
14-8 safeguard the public interest and welfare.
14-9 (b) An applicant for a manufacturer's license shall furnish
14-10 a list of all distributors, representatives acting for applicant,
14-11 and all dealers franchised to sell the applicant's products in this
14-12 State and their respective locations. All applicants for
14-13 manufacturer's licenses and all licensed manufacturers shall
14-14 thereafter advise the Commission within 15 days of any change in
14-15 their list of distributors, representatives, and franchised
14-16 dealers. This information shall become part of the application.
14-17 (c) Each application for a manufacturer's license shall
14-18 include an instrument setting forth the terms and conditions of all
14-19 warranty agreements in force and effect on the products it sells in
14-20 this State so that the Commission may ascertain the degree of
14-21 protection afforded the retail purchasers of its products and the
14-22 obligations of its franchised dealers in connection therewith as
14-23 well as the basis for compensating its franchised dealers for
14-24 labor, parts and other expenses incurred in connection with such
14-25 manufacturer's warranty agreements. Each application shall include
15-1 a statement regarding the manufacturer's compliance with Section
15-2 5.02 of this Act. In addition, each manufacturer's license
15-3 application shall specify the delivery and preparation obligations
15-4 of its franchised dealers prior to delivery of a new motor vehicle
15-5 to a retail purchaser and the schedule of compensation to be paid
15-6 to its franchised dealers for the work and service performed by
15-7 them in connection with such delivery.
15-8 (d) An application for a distributor's license shall
15-9 disclose the manufacturer for whom the distributor will act,
15-10 whether the manufacturer is licensed in this State, the warranty
15-11 covering the vehicles to be sold, the persons in this State who
15-12 will be responsible for compliance with that warranty, and the
15-13 terms of the contract under which the distributor will act for a
15-14 manufacturer. A distributor's license application must disclose
15-15 the franchised dealers with whom the distributor will do business.
15-16 If the distributor is to have any responsibility for warranties,
15-17 the distributor shall furnish the same information pertaining
15-18 thereto as is required of a manufacturer. The Commission shall be
15-19 advised of any change in any such information within 15 days from
15-20 the date thereof and any such new information shall become part of
15-21 the application.
15-22 SECTION 12. Section 4.04(b), Texas Motor Vehicle Commission
15-23 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
15-24 to read as follows:
15-25 (b) A manufacturer whose products are offered for sale in
16-1 this State pursuant to a franchise entered into between its
16-2 distributor or representative and a franchised dealer is bound by
16-3 the terms of the franchise agreement and the provisions of this Act
16-4 as if it had executed the franchise agreement. A manufacturer that
16-5 changes its distributor or the method of distribution of its
16-6 products in this State in a manner that results in unlawful
16-7 termination or noncontinuance of a franchise may not directly or
16-8 indirectly distribute its products in this State.
16-9 SECTION 13. Section 4.05(a), Texas Motor Vehicle Commission
16-10 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-11 to read as follows:
16-12 (a) The annual license fees for licenses issued hereunder
16-13 shall be as follows:
16-14 (1) For each manufacturer and distributor, $825.
16-15 (2) For each franchised dealer who sold 200 or fewer
16-16 new motor vehicles during the preceding calendar year, $165.
16-17 (3) For each franchised dealer who sold more than 200,
16-18 but not more than 500, new motor vehicles during the preceding
16-19 calendar year, $275.
16-20 (4) For each franchised dealer who sold more than 500,
16-21 but not more than 1,000, new motor vehicles during the preceding
16-22 calendar year, $385.
16-23 (5) For each franchised dealer who sold more than
16-24 1,000 new motor vehicles during the preceding calendar year, $495.
16-25 (6) For each representative, $85.
17-1 (7) For each converter, $275.
17-2 (8) For each amendment to a dealer's license, $25.
17-3 SECTION 14. Section 4.06(a), (c), (d), and (e), Texas Motor
17-4 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
17-5 Statutes), is amended to read as follows:
17-6 (a) The Commission may deny an application for a license,
17-7 revoke or suspend an outstanding license, or place on probation a
17-8 person whose license has been suspended, or reprimand a licensee,
17-9 for any of the following reasons:
17-10 (1) Unfitness of an applicant or licensee under
17-11 standards set out in this Act or in Commission rules.
17-12 (2) Material misrepresentation in any application or
17-13 other information filed under this Act or Commission rules.
17-14 (3) Failure to comply with this Act or any Commission
17-15 rule or order promulgated by the Commission.
17-16 (4) Failure to maintain the qualifications for a
17-17 license.
17-18 (5) Willfully defrauding any retail buyer.
17-19 (6) Violation of any law relating to the sale,
17-20 distribution, financing, or insuring of <new> motor vehicles.
17-21 (7) Any act or omission by an officer, director,
17-22 partner, trustee, or other person acting in a representative
17-23 capacity for a licensee which act or omission would be cause for
17-24 denying, revoking, or suspending a license to an individual
17-25 licensee.
18-1 (8) Failure to fulfill written agreements between the
18-2 licensee and a retail buyer of a <new> motor vehicle.
18-3 (c) The Commission may deny an <a dealer> application to
18-4 establish a dealership if, after protest, the applicant fails to
18-5 establish good cause therefor. In determining good cause, the
18-6 Commission shall consider:
18-7 (1) whether the manufacturer or distributor of the
18-8 same line-make of new motor vehicle is being adequately represented
18-9 as to sales and service;
18-10 (2) whether the protesting franchised dealer
18-11 representing the same line-make of new motor vehicle is in
18-12 substantial compliance with his franchise agreement;
18-13 (3) the desirability of a competitive marketplace;
18-14 (4) any harm to the protesting franchised dealer; and
18-15 (5) the public interest.
18-16 (d) A franchised dealer <person> shall have standing under
18-17 Subsection (c) of this section to protest an <a dealer's>
18-18 application to establish or relocate a dealership if the person
18-19 filing the protest:
18-20 (1) <it> is a franchised dealer of the same line-make
18-21 whose dealership is located in the county in which the proposed
18-22 dealership site is to be located; or
18-23 (2) <it> is a franchised dealer of the same line-make
18-24 whose dealership is located within a 15 mile radius of the proposed
18-25 dealership site.
19-1 (e) The revocation or suspension of a manufacturer's or
19-2 distributor's license may be limited to one or more municipalities
19-3 or counties or any other defined area, or may be revoked or
19-4 suspended in a defined area only as to certain aspects of its
19-5 business, or as to a specified franchised dealer or franchised
19-6 dealers.
19-7 SECTION 15. Section 4.07(a), Texas Motor Vehicle Commission
19-8 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
19-9 to read as follows:
19-10 (a) A franchised dealer licensed under this Act shall
19-11 provide notice of the complaint procedures provided by Sections
19-12 3.08(i) and 6.07 of this Act to each person to whom the franchised
19-13 dealer sells a new motor vehicle.
19-14 SECTION 16. Section 5.01. FRANCHISED DEALERS. It is <shall
19-15 be> unlawful for any franchised dealer to:
19-16 (1) Require a retail purchaser of a new motor vehicle
19-17 as a condition of sale and delivery thereof to purchase special
19-18 features, equipment, parts, or accessories not ordered or desired
19-19 by the purchaser, provided such features, equipment, parts, or
19-20 accessories are not already installed on the new motor vehicle at
19-21 the time of sale.
19-22 (2) <Use false, deceptive, or misleading advertising.>
19-23 <(3)> Fail to perform the obligations placed on the
19-24 selling franchised dealer in connection with the delivery and
19-25 preparation of a new motor vehicle for retail sale as provided in
20-1 the manufacturer's preparation and delivery agreements on file with
20-2 the Commission and applicable to such vehicle.
20-3 (3) <(4)> Fail to perform the obligations placed on
20-4 the franchised dealer in connection with the manufacturer's
20-5 warranty agreements on file with the Commission.
20-6 <(5) Operate as a dealer without a currently valid
20-7 license from the Commission or otherwise violate this Act or rules
20-8 promulgated by the Commission hereunder.>
20-9 (4) <(6)> Operate without appropriate signs readily
20-10 and easily visible to the public, identifying the franchised
20-11 dealer's place of business and the products the franchised dealer
20-12 offers for sale. In the event of a conflict with another law or
20-13 ordinance, this Subdivision prevails, and in the event of a
20-14 dispute, the Board has exclusive jurisdiction to determine whether
20-15 a sign or signs are in compliance with the terms of this
20-16 Subdivision. In the event of a dispute, the Board shall uphold
20-17 local ordinances of a home-rule city and protect franchised dealers
20-18 from retribution by manufacturers or distributors for having
20-19 complied with local ordinances.
20-20 SECTION 17. The Texas Motor Vehicle Commission Code (Article
20-21 4413(36), Vernon's Texas Civil Statutes) is amended by adding
20-22 Section 5.01A to read as follows:
20-23 Sec. 5.01A. DEALERS. No dealer may:
20-24 (1) use false, deceptive, or misleading advertising;
20-25 (2) operate as a dealer without a currently valid
21-1 license or general distinguishing number issued by the Board;
21-2 (3) violate a rule of the Board; or
21-3 (4) aid or abet a person who violates this code.
21-4 SECTION 18. Section 5.02, Texas Motor Vehicle Commission
21-5 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
21-6 to read as follows:
21-7 Sec. 5.02. Manufacturers; Distributors; Representatives.
21-8 (a) In this section "dealer" means franchised dealer.
21-9 (b) It is <shall be> unlawful for any manufacturer,
21-10 distributor, or representative to:
21-11 (1) Require or attempt to require any dealer to order,
21-12 accept delivery of or pay anything of value, directly or
21-13 indirectly, for any motor vehicle, appliance, part, accessory or
21-14 any other commodity unless voluntarily ordered or contracted for by
21-15 such dealer.
21-16 (2) Refuse or fail to deliver, in reasonable
21-17 quantities and within a reasonable time, to a dealer having a
21-18 franchise agreement for the retail sale of any motor vehicles sold
21-19 or distributed by such manufacturer, distributor, or
21-20 representative, any new motor vehicle or parts or accessories to
21-21 new motor vehicles as are covered by such franchise if such
21-22 vehicle, parts or accessories are publicly advertised as being
21-23 available for delivery or are actually being delivered; provided,
21-24 however, this provision is not violated if such failure is caused
21-25 by acts of God, work stoppage or delays due to strikes or labor
22-1 disputes, freight embargoes or other causes beyond the control of
22-2 the manufacturer, distributor, or representative.
22-3 (3) Notwithstanding the terms of any franchise
22-4 agreement:
22-5 (A) Terminate or refuse to continue any
22-6 franchise with a dealer unless all of the following conditions are
22-7 met:
22-8 (i) the dealer and the Commission have
22-9 received written notice by registered or certified mail from the
22-10 manufacturer, distributor, or representative not less than 60 days
22-11 before the effective date of termination or noncontinuance setting
22-12 forth the specific grounds for termination or noncontinuance; and
22-13 (ii) the written notice contains on the
22-14 first page thereof a conspicuous statement which reads as follows:
22-15 "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE
22-16 TEXAS MOTOR VEHICLE COMMISSION IN AUSTIN, TEXAS, AND HAVE A HEARING
22-17 IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR NONCONTINUANCE
22-18 OF YOUR FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR VEHICLE
22-19 COMMISSION CODE IF YOU OPPOSE THIS ACTION."; and
22-20 (iii) the manufacturer, distributor, or
22-21 representative has received the informed, written consent of the
22-22 affected dealer or the appropriate period for the affected dealer
22-23 to protest the proposed franchise termination or noncontinuance has
22-24 lapsed; or
22-25 (iv) if the affected dealer files a
23-1 protest with the Commission within the greater of (1) 60 days after
23-2 receiving its 60-day notice of proposed termination or
23-3 noncontinuance or (2) the time specified in such notice, the
23-4 Commission determines that the party seeking to terminate or not
23-5 continue a dealer's franchise has established by a preponderance of
23-6 the evidence, at a hearing called by the Commission, that there is
23-7 good cause for the proposed termination or noncontinuance.
23-8 (v) Notwithstanding Subdivisions (3)(A)(i)
23-9 and (3)(A)(iv) of this section, notice may be made not less than 15
23-10 days prior to the effective date of termination or noncontinuance
23-11 if a licensed dealer fails to conduct its customary sales and
23-12 service operations during its customary business hours for seven
23-13 consecutive business days unless such failure is caused by an act
23-14 of God, work stoppage or delays due to strikes or labor disputes,
23-15 an order of the Commission, or other causes beyond the control of
23-16 the dealer.
23-17 (B) Whenever a dealer files a timely protest to
23-18 a proposed franchise termination or noncontinuance, the Commission
23-19 shall notify the party seeking to terminate or to not continue the
23-20 protesting dealer's franchise that a timely protest has been
23-21 filed, that a hearing is required in accordance with this Act, and
23-22 that the party who gave the dealer notice of termination or
23-23 noncontinuance of the franchise may not terminate or refuse to
23-24 continue the franchise until the Commission issues its final
23-25 decision or order.
24-1 (C) If a franchise is terminated or not
24-2 continued, another franchise in the same line-make will be
24-3 established within a reasonable time unless it is shown to the
24-4 Commission by a preponderance of the evidence that the community or
24-5 trade area cannot reasonably support such a dealership. If this
24-6 showing is made, no dealer license shall be thereafter issued in
24-7 the same area unless a change in circumstances is established.
24-8 (4) Notwithstanding the terms of any franchise
24-9 agreement, modify or replace a franchise with a succeeding
24-10 franchise if the modification or replacement would adversely
24-11 affect, to a substantial degree, the dealer's sales, investment, or
24-12 obligations to provide service to the public, unless the
24-13 manufacturer, distributor, or representative has first given the
24-14 Commission and each affected dealer written notice by registered
24-15 or certified mail of any such action 60 days in advance of the
24-16 modification or replacement. The written notice shall contain on
24-17 the first page thereof a conspicuous statement which reads as
24-18 follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST
24-19 WITH THE TEXAS MOTOR VEHICLE COMMISSION IN AUSTIN, TEXAS, AND HAVE
24-20 A HEARING IN WHICH YOU MAY PROTEST THE PROPOSED MODIFICATION OR
24-21 REPLACEMENT OF YOUR FRANCHISE WITH A SUCCEEDING FRANCHISE UNDER THE
24-22 TERMS OF THE TEXAS MOTOR VEHICLE COMMISSION CODE IF YOU OPPOSE THIS
24-23 ACTION." Within the greater of (1) 60 days after receipt of such
24-24 notice or (2) the time specified in such notice, a dealer may file
24-25 a protest with the Commission and the modification or replacement
25-1 shall not become effective unless and until the Commission
25-2 determines that the party seeking to modify or replace a franchise
25-3 with a succeeding franchise has demonstrated by a preponderance of
25-4 the evidence that there is good cause for the modification or
25-5 replacement. The prior franchise shall continue in effect until
25-6 the protest is resolved by the Commission.
25-7 (5) Notwithstanding the terms of any franchise
25-8 agreement, in determining whether good cause has been established
25-9 for modifying, replacing, terminating, or refusing to continue a
25-10 franchise, the Commission shall consider all the existing
25-11 circumstances including, without limitation by the enumeration
25-12 herein, all the following:
25-13 (A) the dealer's sales in relation to the sales
25-14 in the market;
25-15 (B) the dealer's investment and obligations;
25-16 (C) injury to the public welfare;
25-17 (D) the adequacy of the dealer's service
25-18 facilities, equipment, parts, and personnel in relation to those of
25-19 other dealers of new motor vehicles of the same line-make;
25-20 (E) whether warranties are being honored by the
25-21 dealer;
25-22 (F) the parties' compliance with their franchise
25-23 agreement; and
25-24 (G) the enforceability of the franchise
25-25 agreement from a public policy standpoint, including, without
26-1 limitation, issues of the reasonableness of the franchise
26-2 agreement's terms, oppression, adhesion, and the relative
26-3 bargaining power of the parties.
26-4 Good cause shall not be shown solely by the desire of a
26-5 manufacturer, distributor, or representative for market
26-6 penetration.
26-7 (6) Use any false, deceptive or misleading
26-8 advertising.
26-9 (7) Notwithstanding the terms of any franchise
26-10 agreement, prevent any dealer from reasonably changing the capital
26-11 structure of his dealership or the means by or through which he
26-12 finances the operation thereof, provided that the dealer meets
26-13 reasonable capital requirements.
26-14 (8) Notwithstanding the terms of any franchise
26-15 agreement, deny or withhold approval of a <fail to give effect to
26-16 or attempt to prevent any> sale or transfer of a dealer, dealership
26-17 or franchise or interest therein or management thereof unless,
26-18 within 60 days after receipt by the manufacturer or distributor
26-19 from the dealer of the dealer's notice of intent to sell or
26-20 transfer, the dealer receives from the manufacturer or distributor,
26-21 written notice of the denial or withholding of approval of the
26-22 transfer. The dealer or another party to the transaction may
26-23 protest a denial or withholding of approval in the manner provided
26-24 by this code. <after complaint or protest,> The Commission may
26-25 approve the denial or withholding if it is demonstrated to the
27-1 Commission after hearing that the result of any such sale or
27-2 transfer will be detrimental to the public or the representation of
27-3 the manufacturer or distributor.
27-4 (9) Notwithstanding the terms of any franchise
27-5 agreement, require or attempt to require that a dealer assign to or
27-6 act as an agent for any manufacturer, distributor or representative
27-7 in the securing of promissory notes and security agreements given
27-8 in connection with the sale or purchase of new motor vehicles or
27-9 the securing of policies of insurance on or having to do with the
27-10 operation of vehicles sold.
27-11 (10) Notwithstanding the terms of any franchise
27-12 agreement, fail or refuse, after complaint and hearing, to perform
27-13 the obligations placed on the manufacturer in connection with the
27-14 delivery, preparation and warranty of a new motor vehicle as
27-15 provided in the manufacturer's warranty, preparation, and delivery
27-16 agreements on file with the Commission.
27-17 (11) Notwithstanding the terms of any franchise
27-18 agreement, fail to compensate its dealers for the work and services
27-19 they are required to perform in connection with the dealer's
27-20 delivery and preparation obligations according to the agreements on
27-21 file with the Commission which must be found by the Commission to
27-22 be reasonable, or fail to adequately and fairly compensate its
27-23 dealers for labor, parts and other expenses incurred by such dealer
27-24 to perform under and comply with a manufacturer's or a
27-25 distributor's warranty agreement, or require, as a prerequisite to
28-1 the manufacturer's or distributor's payment of a claim for
28-2 reimbursement as required by this section, that a dealer file with
28-3 the manufacturer or distributor the actual time spent in the
28-4 performance of labor unless actual time is the basis for
28-5 reimbursement. In no event shall any manufacturer or distributor
28-6 pay its dealers an amount of money for warranty work that is less
28-7 than that charged by the dealer to the retail customers of the
28-8 dealer for nonwarranty work of like kind. All claims made by
28-9 dealers for compensation for delivery, preparation, and warranty
28-10 work shall be paid within 30 days after approval and shall be
28-11 approved or disapproved within 30 days after receipt. When any
28-12 claim is disapproved, the dealer shall be notified in writing of
28-13 the grounds for disapproval. No claim which has been approved and
28-14 paid may be charged back to the dealer unless it can be shown that
28-15 the claim was false or fraudulent, that the repairs were not
28-16 properly made or were unnecessary to correct the defective
28-17 condition, or that the dealer failed to reasonably substantiate the
28-18 claim in accordance with reasonable written requirements of the
28-19 manufacturer or distributor, if the dealer has been notified of the
28-20 requirements prior to the time the claim arose, and if the
28-21 requirements were in effect at the time the claim arose. A
28-22 manufacturer or distributor may not audit a claim after the
28-23 expiration of two years following the submission of the claim
28-24 unless the manufacturer or distributor has reasonable grounds to
28-25 suspect that a claim was fraudulent. Notwithstanding the terms of
29-1 a franchise agreement or provision of law in conflict with this
29-2 section, the dealer's delivery, preparation, and warranty
29-3 obligations as filed with the Commission shall constitute the
29-4 dealer's sole responsibility for product liability as between the
29-5 dealer and manufacturer or distributor, and, except for a loss
29-6 caused by the dealer's failure to adhere to these obligations, a
29-7 loss caused by the dealer's negligence or intentional misconduct,
29-8 or a loss caused by the dealer's modification of a product without
29-9 manufacturer or distributor authorization, the manufacturer or
29-10 distributor shall reimburse the dealer for all loss incurred by the
29-11 dealer, including legal fees, court costs, and damages, as a result
29-12 of the dealer having been named a party in a product liability
29-13 action.
29-14 (12) Operate as a manufacturer, distributor, or
29-15 representative without a currently valid license from the
29-16 Commission or otherwise violate this Act or rules promulgated by
29-17 the Commission hereunder.
29-18 (13) Notwithstanding the terms of any franchise
29-19 agreement, to prevent or refuse to honor the succession to a
29-20 dealership by any legal heir or devisee under the will of a dealer
29-21 or under the laws of descent and distribution of this State unless
29-22 it is shown to the Commission, after notice and hearing, that the
29-23 result of such succession will be detrimental to the public
29-24 interest and to the representation of the manufacturer or
29-25 distributor; provided, however, nothing herein shall prevent a
30-1 dealer, during his lifetime, from designating any person as his
30-2 successor dealer, by written instrument filed with the manufacturer
30-3 or distributor.
30-4 (14) Notwithstanding the terms of any franchise
30-5 agreement, require that a dealer pay or assume, directly or
30-6 indirectly, any part of any refund, rebate, discount, or other
30-7 financial adjustment made by the manufacturer, distributor, or
30-8 representative to, or in favor of, any customer of a dealer, unless
30-9 voluntarily agreed to by such dealer.
30-10 (15) Notwithstanding the terms of any franchise
30-11 agreement, deny or withhold approval of a written application to
30-12 relocate a franchise unless (A) the applicant has received written
30-13 notice of the denial or withholding of approval within 90 days
30-14 after receipt of the application containing information reasonably
30-15 necessary to enable the manufacturer or distributor to adequately
30-16 evaluate the application, and if (B) the applicant files a protest
30-17 with the Commission and establishes by a preponderance of the
30-18 evidence at a hearing called by the Commission that the grounds
30-19 for, and distance of, the relocation are reasonable.
30-20 (16) Notwithstanding the terms of any franchise
30-21 agreement, fail to pay to a dealer or any lienholder in accordance
30-22 with their respective interest after the termination of a
30-23 franchise:
30-24 (A) the dealer cost of each new motor vehicle in
30-25 the dealer's inventory with mileage of 6,000 miles or less, reduced
31-1 by the net discount value of each, where "net discount value" is
31-2 determined according the following formula: net cost multiplied by
31-3 total mileage divided by 100,000, and where "net cost" equals the
31-4 dealer cost plus any charges by the manufacturer, distributor, or
31-5 representative for distribution, delivery, and taxes, less all
31-6 allowances paid to the dealer by the manufacturer, distributor, or
31-7 representative for new, unsold, undamaged, and complete motor
31-8 vehicles of current model year or one year prior model year in the
31-9 dealer's inventory, except that if a vehicle cannot be reduced by
31-10 the net discount value, the manufacturer or distributor shall pay
31-11 the dealer the net cost of the vehicle;
31-12 (B) the dealer cost of each new, unused,
31-13 undamaged, and unsold part or accessory if the part or accessory is
31-14 in the current parts catalogue and is still in the original,
31-15 resalable merchandising package and in unbroken lots, except that
31-16 in the case of sheet metal, a comparable substitute for the
31-17 original package may be used, and if the part or accessory was
31-18 purchased by the dealer either directly from the manufacturer or
31-19 distributor or from an outgoing authorized dealer as a part of the
31-20 dealer's initial inventory;
31-21 (C) the fair market value of each undamaged sign
31-22 owned by the dealer which bears a trademark or tradename used or
31-23 claimed by the manufacturer, distributor, or representative if the
31-24 sign was purchased from or purchased at the request of the
31-25 manufacturer, distributor, or representative;
32-1 (D) the fair market value of all special tools,
32-2 data processing equipment, and automotive service equipment owned
32-3 by the dealer which were recommended in writing and designated as
32-4 special tools and equipment and purchased from or purchased at the
32-5 request of the manufacturer, distributor, or representative, if the
32-6 tools and equipment are in usable and good condition except for
32-7 reasonable wear and tear;
32-8 (E) the cost of transporting, handling, packing,
32-9 storing, and loading of any property subject to repurchase under
32-10 this section;
32-11 (F) except as provided by this subdivision, any
32-12 sums due as provided by Paragraph (A) of this subdivision within 60
32-13 days after termination of a franchise and any sums due as provided
32-14 by Paragraphs (B) through (E) of this subdivision within 90 days
32-15 after termination of a franchise. As a condition of payment, the
32-16 dealer is to comply with reasonable requirements with respect to
32-17 the return of inventory as are set out in the terms of the
32-18 franchise agreement. A manufacturer or distributor shall
32-19 reimburse a dealer for the dealer's cost for storing any property
32-20 covered by this subdivision beginning 90 days following
32-21 termination. A manufacturer or distributor shall reimburse a
32-22 dealer for the dealer's cost of storing any property covered by
32-23 this subdivision before the expiration of 90 days from the date of
32-24 termination if the dealer notifies the manufacturer or distributor
32-25 of the commencement of storage charges within that period. On
33-1 receipt of notice of the commencement of storage charges, a
33-2 manufacturer or distributor may immediately take possession of the
33-3 property in question by repurchasing the property as provided by
33-4 this subdivision. A manufacturer, distributor, or representative
33-5 who fails to pay those sums within the prescribed time or at such
33-6 time as the dealer and lienholder, if any, proffer good title prior
33-7 to the prescribed time for payment, is liable to the dealer for:
33-8 (i) <(1)> the greatest of dealer cost,
33-9 fair market value, or current price of the inventory;
33-10 (ii) <(2)> interest on the amount due
33-11 calculated at the rate applicable to a judgment of a court; and
33-12 (iii) <(3)> reasonable attorney's fees and
33-13 costs.
33-14 (17) Notwithstanding the terms of any franchise
33-15 agreement, change its distributor, its method of distribution of
33-16 its products in this state, or its business structure or ownership
33-17 in a manner that results in the termination or noncontinuance of a
33-18 franchise without good cause. The manufacturer, distributor, or
33-19 representative shall issue the same notice to the dealer and to the
33-20 Commission as is provided in Subdivisions (3)(A) and (B) of this
33-21 section and said same procedures shall apply to the parties.
33-22 (18) Notwithstanding the terms of any franchise
33-23 agreement, require a dealer to submit to arbitration on any issue
33-24 unless the dealer and the manufacturer, distributor, or
33-25 representative and their respective counsel agree to arbitrate
34-1 after a controversy arises. The arbitrator shall apply the
34-2 provisions of this Act in resolving the pertinent controversy.
34-3 Either party may appeal to the Commission a decision of an
34-4 arbitrator on the ground that the arbitrator failed to apply this
34-5 Act.
34-6 (19) Notwithstanding the terms of any franchise
34-7 agreement, require that a dealer join, contribute to, or affiliate
34-8 with, directly or indirectly, any advertising association.
34-9 (20) Notwithstanding the terms of a franchise
34-10 agreement:
34-11 (A) require adherence to unreasonable sales or
34-12 service standards;
34-13 (B) directly or indirectly, discriminate against
34-14 a dealer or otherwise treat dealers differently as a result of a
34-15 formula or other calculation or process intended to gauge the
34-16 performance of a dealership, except a sales contest or other
34-17 recognition program based on reasonable sales and service criteria;
34-18 (C) unreasonably require that a dealer purchase
34-19 special tools or equipment; or
34-20 (D) fail to compensate a dealer for all costs
34-21 incurred by the dealer as required by the manufacturer in complying
34-22 with the terms of a product recall by the manufacturer or
34-23 distributor, including the costs, if any, incurred by the dealer in
34-24 notifying vehicle owners of the existence of the recall.
34-25 (21) Discriminate unreasonably between or among
35-1 franchisees in the sale of a motor vehicle owned by the
35-2 manufacturer or distributor.
35-3 (22) Directly or indirectly, or through a subsidiary
35-4 or agent, require, as a condition for obtaining financing for a
35-5 motor vehicle, the purchaser of a vehicle to purchase any product
35-6 other than the motor vehicle from the manufacturer or distributor,
35-7 or from an entity owned or controlled by the manufacturer or
35-8 distributor.
35-9 (23) Directly or indirectly, or through a subsidiary
35-10 or agent, require, as a condition of its or its subsidiary's
35-11 agreement to provide financing for a motor vehicle, that any
35-12 insurance policy or service contract purchased by the motor vehicle
35-13 purchaser be purchased from a specific source.
35-14 (24) Compel a dealer through a financing subsidiary of
35-15 the manufacturer or distributor to agree to unreasonable operating
35-16 requirements or directly or indirectly to terminate a dealer
35-17 through the actions of a financing subsidiary of the manufacturer
35-18 or distributor. This subdivision does not limit the right of a
35-19 financing entity to engage in business practices in accordance with
35-20 the usage of trade in retail and wholesale motor vehicle financing.
35-21 (25) Operate as a dealer except on a temporary basis
35-22 and only if:
35-23 (A) the dealership was previously owned by a
35-24 franchised dealer and is currently for sale at a reasonable price;
35-25 or
36-1 (B) the manufacturer, distributor or
36-2 representative operates the dealership in a bona fide relationship
36-3 with a franchised dealer who has made a significant investment in
36-4 the dealership, subject to loss, and who reasonably expects to
36-5 acquire full ownership of the dealership under reasonable terms and
36-6 conditions.
36-7 (26) Prevent a dealer from selling and servicing new
36-8 motor vehicles of any line-make, or parts or products related to
36-9 those vehicles at a dealership approved for the sale and service of
36-10 new motor vehicles by any other manufacturer or distributor
36-11 licensed pursuant to the terms of this Act, if the dealership is
36-12 sufficient to enable competitive selling and servicing of all new
36-13 motor vehicles, parts, and other products sold and serviced at that
36-14 dealership.
36-15 SECTION 19. Section 5.04(a), Texas Motor Vehicle Commission
36-16 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
36-17 to read as follows:
36-18 (a) No person may engage in the business of buying, selling,
36-19 or exchanging new motor vehicles unless that person:
36-20 (1) holds a valid franchised dealer's license issued
36-21 by the Commission for the make or makes of new motor vehicles being
36-22 bought, sold, or exchanged; or
36-23 (2) is acting as a bona fide employee of the licensee.
36-24 SECTION 20. Section 6.01(a), Texas Motor Vehicle Commission
36-25 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
37-1 to read as follows:
37-2 (a) In the event the Commission determines, after a
37-3 proceeding conducted in accordance with this Act and the rules of
37-4 the Commission, that any person is violating or has violated any
37-5 provision of this Act or any rule or order of the Commission issued
37-6 pursuant to this Act, the Commission may levy a civil penalty not
37-7 to exceed $10,000.00 for each day of violation and for each act of
37-8 violation. Notwithstanding a law to the contrary, including
37-9 without limitation the provisions of Government Code Section
37-10 403.094(h), all <All> civil penalties recovered under this Act
37-11 shall be deposited in the State Treasury to the credit of the State
37-12 Highway Fund <paid to the General Revenue Fund of the State of
37-13 Texas>.
37-14 SECTION 21. Section 6.06, Texas Motor Vehicle Commission
37-15 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
37-16 by amending Subsection (a) and adding Subsection (f) to read as
37-17 follows:
37-18 (a) Notwithstanding any other provision of law, including
37-19 the terms of Subchapter E, Chapter 17, Business and Commerce Code,
37-20 in addition to the other remedies provided by this subchapter, a
37-21 person including a licensee, who has sustained actual damages as a
37-22 result of a violation of Section 5.01, Section 5.01A or Section
37-23 5.02 of this Act, or a violation of Subchapter E, Chapter 17,
37-24 Business and Commerce Code, may maintain an action pursuant to the
37-25 terms of Subchapter E, Chapter 17, Business and Commerce Code or
38-1 any successor statute thereto and shall be entitled to all
38-2 procedures and remedies provided for therein. In any action
38-3 brought under this section, and in the interest of judicial economy
38-4 and efficiency, a judgment rendered pursuant to this section shall
38-5 pay due deference to the findings of fact and conclusions of law of
38-6 the Commission contained in a final order which forms the basis of
38-7 the action.
38-8 (f) A reference in other law to a dealer licensed by the
38-9 Texas Motor Vehicle Commission or a dealer licensed by the Motor
38-10 Vehicle Board of the Texas Department of Transportation means a
38-11 franchised dealer.
38-12 SECTION 22. Section 6.07(b), (d), (g), and (j), Texas Motor
38-13 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
38-14 Statutes), is amended to read as follows:
38-15 (b) If a new motor vehicle does not conform to all
38-16 applicable manufacturer's, converter's, or distributor's express
38-17 warranties, the manufacturer, converter, or distributor shall make
38-18 the repairs necessary to conform the vehicle to the applicable
38-19 express warranties, notwithstanding that the repairs are made after
38-20 the expiration of the warranties, if: (1) the owner or the owner's
38-21 designated agent reported the nonconformity to the manufacturer,
38-22 converter, or distributor, its agent, or its franchised
38-23 <authorized> dealer during the term of such express warranties; or
38-24 (2) a rebuttable presumption relating to the vehicle was created
38-25 under Subsection (d) of this section. This section does not in any
39-1 way limit the remedies available to an owner under a new motor
39-2 vehicle warranty that extends beyond the provisions of this
39-3 section.
39-4 (d) There is a rebuttable presumption that a reasonable
39-5 number of attempts have been undertaken to conform a motor vehicle
39-6 to the applicable express warranties if (1) the same nonconformity
39-7 has been subject to repair four or more times by the manufacturer,
39-8 converter, or distributor, its agent, or its franchised
39-9 <authorized> dealer and two of the repair attempts have been made
39-10 within a period of 12 months following the date of original
39-11 delivery to an owner, or 12,000 miles, whichever occurs first, and
39-12 the other two repair attempts occur within the 12 months or 12,000
39-13 miles immediately following the date of the second repair attempt,
39-14 whichever occurs first, but such nonconformity continues to exist;
39-15 (2) the same nonconformity creates a serious safety hazard and has
39-16 caused the vehicle to have been subject to repair two or more times
39-17 by the manufacturer, converter, or distributor, or an authorized
39-18 agent or franchised dealer, and at least one attempt to repair the
39-19 nonconformity was made in the period of 12 months or 12,000 miles,
39-20 whichever occurs first, and at least one other attempt made in the
39-21 period of 12 months or 12,000 miles after the first repair attempt,
39-22 whichever occurs first, but the nonconformity continues to exist;
39-23 or (3) the vehicle is out of service for repair for a cumulative
39-24 total of 30 or more days in the 24 months or 24,000 miles,
39-25 whichever occurs first, and at least two repair attempts were made
40-1 in the first 12 months or 12,000 miles immediately following the
40-2 date of original delivery to an owner and a nonconformity still
40-3 exists that substantially impairs the vehicle's use or market
40-4 value. The initial 12-month period or 12,000 mile limit, the
40-5 subsequent 12-month period or 12,000 mile limit, and the 30-day
40-6 period shall be extended by any period of time during which repair
40-7 services are not available to the owner because of a war, invasion,
40-8 strike or fire, flood, or other natural disaster. During any
40-9 period of time that the manufacturer or distributor lends a
40-10 comparable motor vehicle to the owner during the time the vehicle
40-11 is being repaired by a <an> franchised <authorized> dealer, the
40-12 30-day period provided for in this subsection is tolled.
40-13 (g) In a hearing under this section, the Executive Director
40-14 shall make its order with respect to responsibility for payment of
40-15 the cost of any refund or replacement and no manufacturer,
40-16 converter, or distributor may cause any franchised dealer to pay
40-17 directly or indirectly any sum not specifically so ordered by the
40-18 Executive Director. If the Executive Director orders a
40-19 manufacturer, converter, or distributor to refund or replace a
40-20 motor vehicle because it meets the criteria set forth in this
40-21 section, the Executive Director may order the franchised dealer to
40-22 reimburse the owner, lienholder, manufacturer, converter, or
40-23 distributor only for items or options added to the vehicle by the
40-24 franchised dealer and only to the extent that one or more of such
40-25 items or options contributed to the defect that served as the basis
41-1 for the Executive Director's order of refund or replacement. In a
41-2 case involving a leased vehicle, the Executive Director may
41-3 terminate the lease and apportion the allowance for use and other
41-4 allowances or refunds between the lessee and lessor of the vehicle.
41-5 (j)(1) A manufacturer, distributor, or converter that has
41-6 been ordered to repurchase or replace a vehicle shall, through its
41-7 franchised <representative> dealer, issue a disclosure statement
41-8 stating that the vehicle was repurchased or replaced by the
41-9 manufacturer, distributor, or converter under this section. The
41-10 disclosure statement must accompany the vehicle through the first
41-11 retail purchase. The manufacturer, distributor, or converter must
41-12 restore the cause of the repurchase or replacement to factory
41-13 specifications and issue a new 12-month, 12,000-mile warranty on
41-14 the vehicle. The disclosure statement must include a toll-free
41-15 telephone number of the Commission that will enable a purchaser of
41-16 a repurchased or replaced vehicle to obtain information about the
41-17 condition or defect that was the basis of the order for repurchase
41-18 or replacement. The Commission shall adopt rules for the
41-19 enforcement of this subdivision.
41-20 (2) The Commission shall provide a toll-free telephone
41-21 number for providing information to persons who request information
41-22 about a condition or defect that was the basis for repurchase or
41-23 replacement by an order of the Executive Director. The Commission
41-24 shall maintain an effective method of providing information to
41-25 persons who make the requests.
42-1 (l) Information filed with the Board under this section is
42-2 not a public record and is not subject to release under Chapter
42-3 552, Government Code.
42-4 SECTION 24. CONSTRUCTION; TRANSITION. (a) In the event of
42-5 a conflict between the terms of this Act and Article 6686, Revised
42-6 Statutes, the terms of this Act prevail.
42-7 (b) The Executive Director of the Motor Vehicle Board of the
42-8 Texas Department of Transportation shall oversee the transition of
42-9 duties and responsibilities provided by this Act.
42-10 SECTION 25. EFFECTIVE DATE: This Act takes effect January
42-11 1, 1996.
42-12 SECTION 26. The importance of this legislation and the
42-13 crowded condition of the calendars in both houses create an
42-14 emergency and an imperative public necessity that the
42-15 constitutional rule requiring bills to be read on three several
42-16 days in each house be suspended, and this rule is hereby suspended,
42-17 and that this Act take effect and be in force according to its
42-18 terms, and it is so enacted.