By: Cain S.B. No. 921
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of certain persons engaged in the
1-2 business of motor vehicle leasing; providing civil penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.03, Texas Motor Vehicle Commission Code
1-5 (Article 4413(36), Vernon's Texas Civil Statutes), is amended by
1-6 adding Subdivisions (23), (24), (25), and (26) to read as follows:
1-7 (23) "Lease" means a transfer of the right to
1-8 possession and use of a motor vehicle for a term in excess of 180
1-9 days for consideration.
1-10 (24) "Lessor" means a person who acquires title to a
1-11 new motor vehicle for the purpose of leasing the vehicle to another
1-12 person.
1-13 (25) "Lease facilitator" means a person, other than a
1-14 dealer or a bona fide employee of a dealer or a vehicle lessor or a
1-15 bona fide employee of a vehicle lessor, who:
1-16 (A) holds himself out to any person as a "motor
1-17 vehicle leasing company" or "motor vehicle leasing agent" or uses a
1-18 similar title for the purpose of soliciting or procuring a person
1-19 to enter into a contract or agreement to become the lessee of a
1-20 vehicle that is not and will not be titled in the name of and
1-21 registered to the lease facilitator; or
1-22 (B) otherwise solicits a person to enter into a
1-23 contract or agreement to become a lessee of a vehicle that is not
2-1 and will not be titled in the name of and registered to the lease
2-2 facilitator, or who is otherwise engaged in the business of
2-3 securing lessees or prospective lessees of motor vehicles that are
2-4 not and will not be titled in the name of and registered to the
2-5 facilitator.
2-6 (26) "Manufacturer's statement of origin" means a
2-7 certificate on a form prescribed by the Department showing the
2-8 original transfer of a new motor vehicle from the manufacturer to
2-9 the original purchaser.
2-10 SECTION 2. Subsection (a), Section 3.01, Texas Motor Vehicle
2-11 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
2-12 is amended to read as follows:
2-13 (a) The Commission has <is hereby delegated and vested with,
2-14 in the exercise of the State's police power,> the general and
2-15 original power and jurisdiction to regulate all aspects of the
2-16 distribution, <and> sale, and leasing of new motor vehicles and to
2-17 do all things, whether specifically designated in this Act or
2-18 implied herein, or necessary or convenient to the exercise of this
2-19 power and jurisdiction, including the original jurisdiction to
2-20 determine questions of its own jurisdiction.
2-21 SECTION 3. Subsection (a), Section 3.02, Texas Motor Vehicle
2-22 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
2-23 is amended to read as follows:
2-24 (a) The Commission shall, in accordance with this Act,
2-25 administer the provisions of this Act, establish the qualifications
3-1 of licensees <manufacturers, distributors, converters, and
3-2 dealers>, ensure that the distribution, <and> sale, and leasing of
3-3 motor vehicles are <is> conducted as provided herein and under the
3-4 Commission's rules, provide for compliance with warranties, and
3-5 otherwise prevent fraud, unfair practices, discriminations,
3-6 impositions, and other abuses in connection with the distribution,
3-7 <and> sale, and leasing of new motor vehicles.
3-8 SECTION 4. Section 4.01, Texas Motor Vehicle Commission Code
3-9 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
3-10 read as follows:
3-11 Sec. 4.01. License Required. No person shall engage in
3-12 business as, serve in the capacity of, or act as a dealer,
3-13 manufacturer, distributor, converter, <or> representative, lessor,
3-14 or lease facilitator in this State without obtaining a license
3-15 therefor as provided in this Act and the rules of the Commission.
3-16 All new license applications shall be reviewed and, in the
3-17 discretion of the Commission, investigated to determine compliance
3-18 with the provisions of this Act. License renewals may be
3-19 administratively granted unless protested. Licenses issued by the
3-20 Commission shall expire one year from date of issuance.
3-21 Notwithstanding the effective date of any franchise agreement, all
3-22 licenses and renewals thereof are issued subject to all provisions
3-23 of this Act and rules of the Commission in effect upon the date of
3-24 issuance as well as all future provisions of this Act and rules
3-25 which may become effective during the term of the license.
4-1 SECTION 5. The Texas Motor Vehicle Commission Code (Article
4-2 4413(36), Vernon's Texas Civil Statutes), is amended by adding
4-3 Sections 4.03A and 4.03B to read as follows:
4-4 Sec. 4.03A. LESSOR APPLICATION. An application for a lessor
4-5 license shall be on a form prescribed by the Commission and shall
4-6 contain evidence of compliance with Article 6686, Revised Statutes,
4-7 if applicable, and other information prescribed by the Commission.
4-8 This Act does not require a separate license for each individual
4-9 employee of a lessor.
4-10 Sec. 4.03B. LEASE FACILITATOR APPLICATION. An application
4-11 of a lease facilitator license shall be on a form prescribed by the
4-12 Commission and shall contain the information prescribed by the
4-13 Commission. This Act does not require a separate license for each
4-14 individual employee of a lease facilitator.
4-15 SECTION 6. Subsection (a), Section 4.05, Texas Motor Vehicle
4-16 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
4-17 is amended to read as follows:
4-18 (a) The annual license fees for licenses issued hereunder
4-19 shall be as follows:
4-20 (1) For each manufacturer and distributor, $825.
4-21 (2) For each dealer who sold 200 or fewer new motor
4-22 vehicles during the preceding calendar year, $165.
4-23 (3) For each dealer who sold more than 200, but not
4-24 more than 500, new motor vehicles during the preceding calendar
4-25 year, $275.
5-1 (4) For each dealer who sold more than 500, but not
5-2 more than 1,000, new motor vehicles during the preceding calendar
5-3 year, $385.
5-4 (5) For each dealer who sold more than 1,000 new motor
5-5 vehicles during the preceding calendar year, $495.
5-6 (6) For each representative, $85.
5-7 (7) For each converter, $275.
5-8 (8) For each amendment to a dealer's license, $25.
5-9 (9) For each lessor, $750.
5-10 (10) For each lease facilitator, $375.
5-11 SECTION 7. Section 5.01, Texas Motor Vehicle Commission Code
5-12 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
5-13 read as follows:
5-14 Sec. 5.01. Dealers. It shall be unlawful for any dealer to:
5-15 (1) Require a retail purchaser of a new motor vehicle
5-16 as a condition of sale and delivery thereof to purchase special
5-17 features, equipment, parts, or accessories not ordered or desired
5-18 by the purchaser, provided such features, equipment, parts, or
5-19 accessories are not already installed on the new motor vehicle at
5-20 the time of sale.
5-21 (2) Use false, deceptive, or misleading advertising.
5-22 (3) Fail to perform the obligations placed on the
5-23 selling dealer in connection with the delivery and preparation of a
5-24 new motor vehicle for retail sale as provided in the manufacturer's
5-25 preparation and delivery agreements on file with the Commission and
6-1 applicable to such vehicle.
6-2 (4) Fail to perform the obligations placed on the
6-3 dealer in connection with the manufacturer's warranty agreements on
6-4 file with the Commission.
6-5 (5) Operate as a dealer without a currently valid
6-6 license from the Commission or otherwise violate this Act or rules
6-7 promulgated by the Commission hereunder.
6-8 (6) Operate without appropriate signs readily and
6-9 easily visible to the public, identifying the dealer's place of
6-10 business and the products the dealer offers for sale. In the event
6-11 of a conflict with another law or ordinance, this Subdivision
6-12 prevails, and in the event of a dispute, the Board has exclusive
6-13 jurisdiction to determine whether a sign or signs are in compliance
6-14 with the terms of this Subdivision. In the event of a dispute, the
6-15 Board shall uphold local ordinances of a home-rule city and protect
6-16 dealers from retribution by manufacturers for having complied with
6-17 local ordinances.
6-18 (7) Directly or indirectly pay a fee to a lessor or
6-19 lease facilitator.
6-20 SECTION 8. The Texas Motor Vehicle Commission Code (Article
6-21 4413(36), Vernon's Texas Civil Statutes), is amended by adding
6-22 Sections 5.03A and 5.03B to read as follows:
6-23 Sec. 5.03A. LESSORS. (a) A lessor may not directly or
6-24 indirectly accept a fee from a dealer.
6-25 (b) A lessor may not pay a fee to any person in return for
7-1 the solicitation, procurement, or production by that person of
7-2 prospective lessees of motor vehicles unless the person receiving
7-3 the fee is a lease facilitator who holds a valid license as
7-4 provided by this Act and a valid appointment from the lessor as
7-5 provided by this section.
7-6 (c) A lessor may appoint one or more lease facilitators
7-7 licensed pursuant to the terms of this Act to represent the lessor
7-8 in obtaining prospective lease customers. An appointment complies
7-9 with the requirements of this subsection if it is in writing,
7-10 discloses its terms, and otherwise complies with rules of the
7-11 Commission.
7-12 (d) In a lease contract between a lessor and a lessee
7-13 solicited, procured, or produced by a lease facilitator, the lessor
7-14 shall disclose to the lessee that a fee was paid or will be paid to
7-15 the lease facilitator for the solicitation, procurement, or
7-16 production of the lessee or the lease. The lessor shall include
7-17 the disclosure required by this subsection in a prominent position
7-18 either:
7-19 (1) on the face of the written memorandum of the lease
7-20 agreement; or
7-21 (2) on a separate instrument signed by the lessee at
7-22 the same time as the signing of the lease.
7-23 Sec. 5.03B. LEASE FACILITATORS. (a) No person may hold
7-24 himself out to any person as a "leasing company," "leasing agent,"
7-25 "lease facilitator," or similar title, directly or indirectly
8-1 engaged in the business of lease facilitator, or otherwise engage
8-2 in the solicitation or procurement of prospective lessees for motor
8-3 vehicles not titled in the name of and registered to the person
8-4 unless the person holds a valid lease facilitator license and is in
8-5 compliance with the terms of this Act.
8-6 (b) A lease facilitator may not:
8-7 (1) sell or offer to sell a new motor vehicle;
8-8 (2) accept a fee from a dealer;
8-9 (3) sign a motor vehicle manufacturer's statement of
8-10 origin to a vehicle, accept an assignment of a manufacturer's
8-11 statement of origin to a vehicle, or otherwise assume any element
8-12 of title to a new motor vehicle;
8-13 (4) procure or solicit prospective lessees for or on
8-14 behalf of any person other than a lessor; or
8-15 (5) act as or engage in the business of lease
8-16 facilitator without a valid license issued as provided by this Act
8-17 and a valid appointment from a lessor to act on behalf of the
8-18 lessor in soliciting prospective lease clients or customers as
8-19 provided by this Act.
8-20 (c) Except as provided by Subsection (b)(2) of this section,
8-21 a lease facilitator may accept a fee for procuring a vehicle lessee
8-22 or prospective vehicle lessee for or on behalf of a lessor.
8-23 (d) This section does not limit the ability of a lease
8-24 facilitator to accept an appointment from more than one lessor.
8-25 SECTION 9. The importance of this legislation and the
9-1 crowded condition of the calendars in both houses create an
9-2 emergency and an imperative public necessity that the
9-3 constitutional rule requiring bills to be read on three several
9-4 days in each house be suspended, and this rule is hereby suspended,
9-5 and that this Act take effect and be in force from and after its
9-6 passage, and it is so enacted.