By: Cain S.B. No. 1139
A BILL TO BE ENTITLED
AN ACT
1-1 relating to duties and responsibilities of the Motor Vehicle Board
1-2 of the Texas Department of Transportation.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.02, Texas Motor Vehicle Commission Code
1-5 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
1-6 read as follows:
1-7 Sec. 1.02. Policy and purpose. The distribution and sale of
1-8 <new> motor vehicles in this State vitally affects the general
1-9 economy of the State and the public interest and welfare of its
1-10 citizens. It is the policy of this State and the purpose of this
1-11 Act to exercise the State's police power to insure a sound system
1-12 of distributing and selling <new> motor vehicles through licensing
1-13 and regulating manufacturers, distributors, converters, and dealers
1-14 of those vehicles, and enforcing this Act as to other persons, in
1-15 order to provide for compliance with manufacturer's warranties, and
1-16 to prevent frauds, unfair practices, discriminations, impositions,
1-17 and other abuses of our citizens.
1-18 SECTION 2. Section 1.03, Texas Motor Vehicle Commission Code
1-19 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
1-20 read as follows:
1-21 Sec. 1.03. Definitions. In this Act:
1-22 (1) "Motor vehicle" means:
1-23 (A) every fully self-propelled vehicle which has
2-1 as its primary purpose the transport of a person or persons, or
2-2 property, on a public highway, and having two or more wheels;
2-3 (B) every two or more wheeled fully
2-4 self-propelled, titled vehicle which has as its primary purpose the
2-5 transport of a person or persons or property and is not
2-6 manufactured for use on public streets, roads, or highways; or
2-7 (C) an engine, transmission, or rear axle
2-8 manufactured for installation in a vehicle having as its primary
2-9 purpose the transport of a person or persons or property on a
2-10 public highway and having a gross vehicle weight rating of more
2-11 than 16,000 pounds, whether or not attached to a vehicle chassis.
2-12 (2) "New motor vehicle" means a motor vehicle which
2-13 has not been the subject of a "retail sale" without regard to the
2-14 mileage of the vehicle.
2-15 (3) "Person" means a natural person, partnership,
2-16 corporation, association, trust, estate, or any other legal entity.
2-17 (4) "Franchised Dealer" means any person who holds a
2-18 general distinguishing number issued by the Department pursuant to
2-19 the terms of Article 6686, Revised Statutes, and who is engaged in
2-20 the business of buying, selling or exchanging new motor vehicles,
2-21 and servicing or repairing motor vehicles pursuant to the terms of
2-22 a manufacturer's warranty, at an established and permanent place
2-23 of business pursuant to a franchise in effect with a manufacturer
2-24 or distributor.
2-25 (5) "Manufacturer" means any person who manufactures
3-1 or assembles new motor vehicles either within or without this
3-2 State.
3-3 (6) "Distributor" means any person who distributes
3-4 and/or sells new motor vehicles to franchised dealers and who is
3-5 not a manufacturer.
3-6 (7) "Representative" means any person who is or acts
3-7 as an agent, employee or representative of a manufacturer,
3-8 distributor, or converter who performs any duties in this State
3-9 relating to promoting the distribution and/or sale of new motor
3-10 vehicles or contacts dealers in this State on behalf of a
3-11 manufacturer, distributor, or converter.
3-12 (8) "Franchise" means one or more contracts between a
3-13 franchised dealer as franchisee, and either a manufacturer or a
3-14 distributor as franchisor under which (A) the franchisee is granted
3-15 the right to sell and service new motor vehicles manufactured or
3-16 distributed by the franchisor, or only service motor vehicles
3-17 pursuant to the terms of a manufacturer's warranty; (B) the
3-18 franchisee as an independent business is a component of
3-19 franchisor's distribution system; (C) the franchisee is
3-20 substantially associated with franchisor's trademark, tradename and
3-21 commercial symbol; (D) the franchisee's business is substantially
3-22 reliant on franchisor for a continued supply of motor vehicles,
3-23 parts, and accessories for the conduct of its business; or (E) any
3-24 right, duty, or obligation granted or imposed by this Act is
3-25 affected. The term includes a written communication from a
4-1 franchisor to a franchisee by which a duty is imposed on the
4-2 franchisee.
4-3 (9)
4-4 (10) "Broker" means a person who, for a fee,
4-5 commission, or other valuable consideration, solicits or refers
4-6 prospective buyers or arranges or offers to arrange a transaction
4-7 involving the sale, for purposes other than resale, of a new motor
4-8 vehicle, and who is not:
4-9 (A) a franchised dealer or bona fide employee of
4-10 a franchised dealer when acting on behalf of a franchised dealer;
4-11 (B) a representative or bona fide employee of a
4-12 representative when acting on behalf of a representative;
4-13 (C) a distributor or bona fide employee of a
4-14 distributor when acting on behalf of a distributor; or
4-15 (D) at any point in the transaction the bona
4-16 fide owner of the vehicle involved in the transaction.
4-17 (11) "Motor home" means a motor vehicle which is
4-18 designed to provide temporary living quarters and which:
4-19 (A) is built onto as an integral part of, or is
4-20 permanently attached to, a motor vehicle chassis; and
4-21 (B) contains at least four of the following
4-22 independent life support systems if each is permanently installed
4-23 and designed to be removed only for purposes of repair or
4-24 replacement and meets the standards of the American National
4-25 Standards Institute, Standards for Recreational Vehicles:
5-1 (i) a cooking facility with an on-board
5-2 fuel source;
5-3 (ii) a gas or electric refrigerator;
5-4 (iii) a toilet with exterior evacuation;
5-5 (iv) a heating or air conditioning system
5-6 with an on-board power or fuel source separate from the vehicle
5-7 engine;
5-8 (v) a potable water supply system that
5-9 includes at least a sink, a faucet, and a water tank with an
5-10 exterior service supply connection;
5-11 (vi) a 110-125 volt electric power supply.
5-12 (12) "Conversion" means a motor vehicle, other than a
5-13 motor home, which has been substantially modified by a person other
5-14 than the manufacturer or distributor of the chassis of the motor
5-15 vehicle and which has not been the subject of a retail sale.
5-16 (13) "Motor home manufacturer" means a person other
5-17 than the manufacturer of the chassis of a motor vehicle who, prior
5-18 to the retail sale of the motor vehicle, performs modifications on
5-19 the chassis that result in the finished product being classified as
5-20 a motor home.
5-21 (14) "Chassis manufacturer" means a person who
5-22 manufactures and produces the frame upon which is mounted the body
5-23 of a motor vehicle.
5-24 (15) "Converter" means a person who prior to the
5-25 retail sale of a motor vehicle, assembles, installs, or affixes a
6-1 body, cab, or special equipment to a chassis, or who substantially
6-2 adds, subtracts from, or modifies a previously assembled or
6-3 manufactured motor vehicle.
6-4 (16) "Rule" means a statement by the Commission of
6-5 general and future applicability that implements, interprets, or
6-6 prescribes law or policy or describes the organization or
6-7 procedural practice requirements of the Commission. The term
6-8 includes the amendment or repeal of a prior rule, but does not
6-9 include statements concerning only the internal management of the
6-10 Commission which do not affect the rights of a person not connected
6-11 with the Commission.
6-12 (17) "Party" means each person or agency named or
6-13 admitted as a party and whose legal rights, duties, or privileges
6-14 are to be determined by the Commission after an opportunity for
6-15 adjudicative hearing.
6-16 (18) "Relocation" means the transfer of an existing
6-17 dealership operation to facilities at a different location,
6-18 including a transfer which results in a consolidation or dualing of
6-19 an existing dealer's operation.
6-20 (19) "Retail sale" means the sale of a motor vehicle
6-21 except:
6-22 (A) a sale in which the purchaser acquires a
6-23 vehicle for the purpose of resale; or
6-24 (B) a sale of a vehicle that is operated under
6-25 and in accordance with Article 6686, Revised Statutes.
7-1 (20) "Warranty work" means parts, labor, and any other
7-2 expenses incurred by a franchised dealer in complying with the
7-3 terms of a manufacturer's or distributor's warranty.
7-4 (21) "Department" means the Texas Department of
7-5 Transportation.
7-6 (22) "Transportation Commission" means the Texas
7-7 Transportation Commission of the Texas Department of
7-8 Transportation.
7-9 (23) "Non-franchised dealer" means a person, other
7-10 than a franchised dealer, who holds a general distinguishing number
7-11 issued by the Department pursuant to the terms of Article 6686,
7-12 Revised Statutes.
7-13 (24) "Dealer" means a person who holds a general
7-14 distinguishing number issued by the Department pursuant to the
7-15 terms of Article 6686, Revised Statutes.
7-16 (25) "Dealership" means the physical premises and
7-17 business facilities upon which a franchised dealer operates his
7-18 business, including the sale and repair of motor vehicles. The
7-19 term includes premises or facilities at which a person engages only
7-20 in the repair of motor vehicles if repairs are performed pursuant
7-21 to the terms of a motor vehicle manufacturer's warranty.
7-22 (26) "Licensee" means a person who holds a license
7-23 issued by the Board under the terms of this Act or a general
7-24 distinguishing number issued by the Department pursuant to the
7-25 terms of Article 6686, Revised Statutes.
8-1 SECTION 3. Section 2.10(a), Texas Motor Vehicle Commission
8-2 code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
8-3 to read as follows:
8-4 (a) Notwithstanding a law to the contrary, including without
8-5 limitation the provisions of the Government Code Section
8-6 403.094(h), all <All> money paid to the Commission under this Act
8-7 shall be deposited in the State Treasury to the credit of the state
8-8 highway fund.
8-9 SECTION 4. Section 3.01, Texas Motor Vehicle Commission Code
8-10 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
8-11 read as follows:
8-12 Sec. 3.01. Jurisdiction. (a) The Commission is hereby
8-13 delegated and vested with, in the exercise of the State's police
8-14 power, the general and original power and jurisdiction to regulate
8-15 all aspects of the distribution and sale of <new> motor vehicles
8-16 and to do all things, whether specifically designated in this Act
8-17 or implied herein, or necessary or convenient to the exercise of
8-18 this power and jurisdiction, including the original jurisdiction to
8-19 determine questions of its own jurisdiction. In addition to the
8-20 other duties placed on the Commission by this code, the Commission
8-21 shall enforce and administer the terms of Article 6686, Revised
8-22 Statutes.
8-23 (b) Unless otherwise specifically provided by Texas law not
8-24 in conflict with the terms of this Act, all aspects of the
8-25 distribution and sale of <new> motor vehicles shall be governed
9-1 exclusively by the provisions of this Act.
9-2 SECTION 5. Section 3.02(a), Texas Motor Vehicle Commission
9-3 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
9-4 to read as follows:
9-5 (a) The Commission shall, in accordance with this Act,
9-6 administer the provisions of this Act, establish the qualifications
9-7 of manufacturers, distributors, converters, and dealers, ensure
9-8 that the distribution and sale of motor vehicles is conducted as
9-9 provided herein and under the Commission's rules, provide for
9-10 compliance with warranties, and otherwise prevent fraud, unfair
9-11 practices, discriminations, impositions, and other abuses in
9-12 connection with the distribution and sale of <new> motor vehicles.
9-13 SECTION 6. Section 3.03(a), Texas Motor Vehicle Commission
9-14 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
9-15 to read as follows:
9-16 (a) The Commission shall have and may, in its discretion and
9-17 notwithstanding any other provision of law that is inconsistent
9-18 with this Act, exercise the powers set forth in this Act, and shall
9-19 have all other powers necessary, incidental, or convenient to carry
9-20 out its duties and effectuate its express powers and duties. These
9-21 powers and duties include the power to initiate and conduct
9-22 proceedings, investigations, and hearings, administer oaths,
9-23 receive evidence and pleadings, issue subpoenas to compel the
9-24 attendance of any person, order the production of any tangible
9-25 property, including papers, records, and documents, make findings
10-1 of fact on all factual issues arising out of any proceeding
10-2 initiated under this Act, specify, govern, and control appearance,
10-3 practice, and procedure before the Commission, issue rules,
10-4 conclusions of law, decisions, including declaratory decisions or
10-5 orders, enter into contracts or execute instruments, retain
10-6 counsel, utilize the services of the Attorney General of the State
10-7 of Texas and thereafter institute and direct the conduct of legal
10-8 proceedings in any forum or obtain other professional services as
10-9 may be necessary and convenient, sanction for contempt, assess and
10-10 collect fees and costs including attorney's fees, issue, suspend,
10-11 and revoke licenses, prohibit and regulate acts and practices in
10-12 connection with the distribution and sale of <new> motor vehicles
10-13 and warranty performance obligations, issue cease and desist orders
10-14 in the nature of temporary and permanent injunctions, and levy
10-15 civil penalties.
10-16 SECTION 7. Section 3.08(j), Texas Motor Vehicle Commission
10-17 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
10-18 to read as follows:
10-19 (j) On motion of any party, and as provided by this section,
10-20 the Commission may, by final order, dismiss a complaint, protest or
10-21 response without holding a contested case hearing. In deciding
10-22 whether a disputed issue of material fact exists, the Commission
10-23 shall accept as true the evidence offered by the non-moving party
10-24 and shall indulge every reasonable inference, and resolve any
10-25 doubt, in favor of the non-moving party. The Commission may not
11-1 dismiss an action under this section unless the Commission
11-2 determines that:
11-3 (1) based on pleadings, affidavits, documentary
11-4 evidence and other discovery, no genuine issue of material fact
11-5 exists and the moving party is entitled to judgment as a matter of
11-6 law; or
11-7 (2) the Commission lacks jurisdiction of the parties
11-8 or the subject matter <The Commission may dismiss a complaint or
11-9 protest if it determines that the complaint or protest is frivolous
11-10 or was made for purposes of harassment>.
11-11 SECTION 8. Section 4.01, Texas Motor Vehicle Commission Code
11-12 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
11-13 read as follows:
11-14 Sec. 4.01. License Required. (a) No person shall engage in
11-15 business as, serve in the capacity of, or act as a dealer,
11-16 manufacturer, distributor, converter, or representative in this
11-17 State, or perform or offer to perform repair services on a motor
11-18 vehicle pursuant to the terms of a motor vehicle manufacturer's
11-19 warranty, whether or not the person sells or offers to sell motor
11-20 vehicles at the same location, without obtaining a license therefor
11-21 as provided in this Act and the rules of the Commission. All new
11-22 license applications shall be reviewed and, in the discretion of
11-23 the Commission, investigated to determine compliance with the
11-24 provisions of this Act. License renewals may be administratively
11-25 granted unless protested. Licenses issued by the Commission shall
12-1 expire one year from date of issuance. All <Notwithstanding the
12-2 effective date of any franchise agreement, all> licenses and
12-3 renewals thereof are issued subject to all provisions of this Act
12-4 and rules of the Commission in effect upon the date of issuance as
12-5 well as all future provisions of this Act and rules which may
12-6 become effective during the term of the license.
12-7 (b) In the case of a non-franchised dealer, the term
12-8 "license" in this Act means a general distinguishing number issued
12-9 by the Department pursuant to the authority of Article 6686,
12-10 Revised Statutes. A non-franchised dealer may not operate as a
12-11 dealer without a valid general distinguishing number, but is not
12-12 required to obtain an additional license under the terms of this
12-13 Act. A franchised dealer shall have both a general distinguishing
12-14 number and a separate license issued under the terms of this Act.
12-15 SECTION 9. Section 4.02(a), Texas Motor Vehicle Commission
12-16 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
12-17 to read as follows:
12-18 (a) An application for a dealer license shall be on a form
12-19 prescribed by the Commission which shall include the information
12-20 required by Article 6686, Revised Statutes, and information on the
12-21 applicant's financial resources, business integrity, business
12-22 ability and experience, franchise agreement if applicable, physical
12-23 facilities, <for sales and service, parts and accessories
12-24 inventory, new> vehicle inventory and other factors the Commission
12-25 considers necessary to determine an applicant's qualifications to
13-1 adequately serve the motoring public.
13-2 SECTION 10. Section 4.02(c)(1), and (d) Texas Motor Vehicle
13-3 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
13-4 is amended to read as follows:
13-5 (c)(1) A franchised dealer may carry on the business of his
13-6 dealership at more than one location; however, a separate location
13-7 for the display and sale of new motor vehicles may not be
13-8 established and maintained by a franchised dealer unless expressly
13-9 authorized by the franchised dealer's franchise and license. An
13-10 application for a franchised dealer's license or to amend a
13-11 franchised dealer's license which proposes the establishment of a
13-12 separate display and sales location is subject to all of the
13-13 provisions of this Act. A separate license shall be required for
13-14 each separate and distinct dealership as determined by the
13-15 Commission.
13-16 (d) A dealer licensed hereunder shall promptly notify the
13-17 Commission of any proposed change in its ownership, location,
13-18 franchise, or any other matters the Commission may require by rule.
13-19 Prior to a change in a dealer's location <of a dealership>, a
13-20 dealer shall obtain a new license for that location.
13-21 SECTION 11. Section 4.03(a), (b), (c) and (d), Texas Motor
13-22 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
13-23 Statutes), is amended to read as follows:
13-24 (a) An application for a manufacturer's, distributor's,
13-25 converter's, or representative's license shall be on a form
14-1 prescribed by the Commission which form shall contain such
14-2 information as the Commission deems necessary to fully determine
14-3 the qualifications of an applicant for a license, including
14-4 financial resources, business integrity and experience, facilities
14-5 and personnel for serving franchised dealers and such other
14-6 information as the Commission considers to be pertinent to
14-7 safeguard the public interest and welfare.
14-8 (b) An applicant for a manufacturer's license shall furnish
14-9 a list of all distributors, representatives acting for applicant,
14-10 and all dealers franchised to sell the applicant's products in this
14-11 State and their respective locations. All applicants for
14-12 manufacturer's licenses and all licensed manufacturers shall
14-13 thereafter advise the Commission within 15 days of any change in
14-14 their list of distributors, representatives, and franchised
14-15 dealers. This information shall become part of the application.
14-16 (c) Each application for a manufacturer's license shall
14-17 include an instrument setting forth the terms and conditions of all
14-18 warranty agreements in force and effect on the products it sells in
14-19 this State so that the Commission may ascertain the degree of
14-20 protection afforded the retail purchasers of its products and the
14-21 obligations of its franchised dealers in connection therewith as
14-22 well as the basis for compensating its franchised dealers for
14-23 labor, parts and other expenses incurred in connection with such
14-24 manufacturer's warranty agreements. Each application shall include
14-25 a statement regarding the manufacturer's compliance with Section
15-1 5.02 of this Act. In addition, each manufacturer's license
15-2 application shall specify the delivery and preparation obligations
15-3 of its franchised dealers prior to delivery of a new motor vehicle
15-4 to a retail purchaser and the schedule of compensation to be paid
15-5 to its franchised dealers for the work and service performed by
15-6 them in connection with such delivery.
15-7 (d) An application for a distributor's license shall
15-8 disclose the manufacturer for whom the distributor will act,
15-9 whether the manufacturer is licensed in this State, the warranty
15-10 covering the vehicles to be sold, the persons in this State who
15-11 will be responsible for compliance with that warranty, and the
15-12 terms of the contract under which the distributor will act for a
15-13 manufacturer. A distributor's license application must disclose
15-14 the franchised dealers with whom the distributor will do business.
15-15 If the distributor is to have any responsibility for warranties,
15-16 the distributor shall furnish the same information pertaining
15-17 thereto as is required of a manufacturer. The Commission shall be
15-18 advised of any change in any such information within 15 days from
15-19 the date thereof and any such new information shall become part of
15-20 the application.
15-21 SECTION 12. Section 4.04(b), Texas Motor Vehicle Commission
15-22 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
15-23 to read as follows:
15-24 (b) A manufacturer whose products are offered for sale in
15-25 this State pursuant to a franchise entered into between its
16-1 distributor or representative and a franchised dealer is bound by
16-2 the terms of the franchise agreement and the provisions of this Act
16-3 as if it had executed the franchise agreement. A manufacturer that
16-4 changes its distributor or the method of distribution of its
16-5 products in this State in a manner that results in unlawful
16-6 termination or noncontinuance of a franchise may not directly or
16-7 indirectly distribute its products in this State.
16-8 SECTION 13. Section 4.05(a), Texas Motor Vehicle Commission
16-9 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-10 to read as follows:
16-11 (a) The annual license fees for licenses issued hereunder
16-12 shall be as follows:
16-13 (1) For each manufacturer and distributor, $825.
16-14 (2) For each franchised dealer who sold 200 or fewer
16-15 new motor vehicles during the preceding calendar year, $165.
16-16 (3) For each franchised dealer who sold more than 200,
16-17 but not more than 500, new motor vehicles during the preceding
16-18 calendar year, $275.
16-19 (4) For each franchised dealer who sold more than 500,
16-20 but not more than 1,000, new motor vehicles during the preceding
16-21 calendar year, $385.
16-22 (5) For each franchised dealer who sold more than
16-23 1,000 new motor vehicles during the preceding calendar year, $495.
16-24 (6) For each representative, $85.
16-25 (7) For each converter, $275.
17-1 (8) For each amendment to a dealer's license, $25.
17-2 SECTION 14. Section 4.06(a), (c), (d), and (e), Texas Motor
17-3 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
17-4 Statutes), is amended to read as follows:
17-5 (a) The Commission may deny an application for a license,
17-6 revoke or suspend an outstanding license, or place on probation a
17-7 person whose license has been suspended, or reprimand a licensee,
17-8 for any of the following reasons:
17-9 (1) Unfitness of an applicant or licensee under
17-10 standards set out in this Act or in Commission rules.
17-11 (2) Material misrepresentation in any application or
17-12 other information filed under this Act or Commission rules.
17-13 (3) Failure to comply with this Act or any Commission
17-14 rule or order promulgated by the Commission.
17-15 (4) Failure to maintain the qualifications for a
17-16 license.
17-17 (5) Willfully defrauding any retail buyer.
17-18 (6) Violation of any law relating to the sale,
17-19 distribution, financing, or insuring of <new> motor vehicles.
17-20 (7) Any act or omission by an officer, director,
17-21 partner, trustee, or other person acting in a representative
17-22 capacity for a licensee which act or omission would be cause for
17-23 denying, revoking, or suspending a license to an individual
17-24 licensee.
17-25 (8) Failure to fulfill written agreements between the
18-1 licensee and a retail buyer of a <new> motor vehicle.
18-2 (c) The Commission may deny an <a dealer> application to
18-3 establish a dealership if, after protest, the applicant fails to
18-4 establish good cause therefor. In determining good cause, the
18-5 Commission shall consider:
18-6 (1) whether the manufacturer or distributor of the
18-7 same line-make of new motor vehicle is being adequately represented
18-8 as to sales and service;
18-9 (2) whether the protesting franchised dealer
18-10 representing the same line-make of new motor vehicle is in
18-11 substantial compliance with his franchise agreement;
18-12 (3) the desirability of a competitive marketplace;
18-13 (4) any harm to the protesting franchised dealer; and
18-14 (5) the public interest.
18-15 (d) A franchised dealer <person> shall have standing under
18-16 Subsection (c) of this section to protest an <a dealer's>
18-17 application to establish or relocate a dealership if the person
18-18 filing the protest:
18-19 (1) <it> is a franchised dealer of the same line-make
18-20 whose dealership is located in the county in which the proposed
18-21 dealership site is to be located; or
18-22 (2) <it> is a franchised dealer of the same line-make
18-23 whose dealership is located within a 15 mile radius of the proposed
18-24 dealership site.
18-25 (e) The revocation or suspension of a manufacturer's or
19-1 distributor's license may be limited to one or more municipalities
19-2 or counties or any other defined area, or may be revoked or
19-3 suspended in a defined area only as to certain aspects of its
19-4 business, or as to a specified franchised dealer or franchised
19-5 dealers.
19-6 SECTION 15. Section 4.07(a), Texas Motor Vehicle Commission
19-7 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
19-8 to read as follows:
19-9 (a) A franchised dealer licensed under this Act shall
19-10 provide notice of the complaint procedures provided by Sections
19-11 3.08(i) and 6.07 of this Act to each person to whom the franchised
19-12 dealer sells a new motor vehicle.
19-13 SECTION 16. Section 5.01. FRANCHISED DEALERS. It is <shall
19-14 be> unlawful for any franchised dealer to:
19-15 (1) Require a retail purchaser of a new motor vehicle
19-16 as a condition of sale and delivery thereof to purchase special
19-17 features, equipment, parts, or accessories not ordered or desired
19-18 by the purchaser, provided such features, equipment, parts, or
19-19 accessories are not already installed on the new motor vehicle at
19-20 the time of sale.
19-21 (2) <Use false, deceptive, or misleading advertising.>
19-22 <(3)> Fail to perform the obligations placed on the
19-23 selling franchised dealer in connection with the delivery and
19-24 preparation of a new motor vehicle for retail sale as provided in
19-25 the manufacturer's preparation and delivery agreements on file with
20-1 the Commission and applicable to such vehicle.
20-2 (3) <(4)> Fail to perform the obligations placed on
20-3 the franchised dealer in connection with the manufacturer's
20-4 warranty agreements on file with the Commission.
20-5 <(5) Operate as a dealer without a currently valid
20-6 license from the Commission or otherwise violate this Act or rules
20-7 promulgated by the Commission hereunder.>
20-8 (4) <(6)> Operate without appropriate signs readily
20-9 and easily visible to the public, identifying the franchised
20-10 dealer's place of business and the products the franchised dealer
20-11 offers for sale. In the event of a conflict with another law or
20-12 ordinance, this Subdivision prevails, and in the event of a
20-13 dispute, the Board has exclusive jurisdiction to determine whether
20-14 a sign or signs are in compliance with the terms of this
20-15 Subdivision. In the event of a dispute, the Board shall uphold
20-16 local ordinances of a home-rule city and protect franchised dealers
20-17 from retribution by manufacturers or distributors for having
20-18 complied with local ordinances.
20-19 SECTION 17. The Texas Motor Vehicle Commission Code (Article
20-20 4413(36), Vernon's Texas Civil Statutes) is amended by adding
20-21 Section 5.01A to read as follows:
20-22 Sec. 5.01A. DEALERS. No dealer may:
20-23 (1) use false, deceptive, or misleading advertising;
20-24 (2) operate as a dealer without a currently valid
20-25 license or general distinguishing number issued by the Board;
21-1 (3) violate a rule of the Board; or
21-2 (4) aid or abet a person who violates this code.
21-3 SECTION 18. Section 5.02, Texas Motor Vehicle Commission
21-4 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
21-5 to read as follows:
21-6 Sec. 5.02. Manufacturers; Distributors; Representatives.
21-7 (a) In this section "dealer" means franchised dealer.
21-8 (b) It is <shall be> unlawful for any manufacturer,
21-9 distributor, or representative to:
21-10 (1) Require or attempt to require any dealer to order,
21-11 accept delivery of or pay anything of value, directly or
21-12 indirectly, for any motor vehicle, appliance, part, accessory or
21-13 any other commodity unless voluntarily ordered or contracted for by
21-14 such dealer.
21-15 (2) Refuse or fail to deliver, in reasonable
21-16 quantities and within a reasonable time, to a dealer having a
21-17 franchise agreement for the retail sale of any motor vehicles sold
21-18 or distributed by such manufacturer, distributor, or
21-19 representative, any new motor vehicle or parts or accessories to
21-20 new motor vehicles as are covered by such franchise if such
21-21 vehicle, parts or accessories are publicly advertised as being
21-22 available for delivery or are actually being delivered; provided,
21-23 however, this provision is not violated if such failure is caused
21-24 by acts of God, work stoppage or delays due to strikes or labor
21-25 disputes, freight embargoes or other causes beyond the control of
22-1 the manufacturer, distributor, or representative.
22-2 (3) Notwithstanding the terms of any franchise
22-3 agreement:
22-4 (A) Terminate or refuse to continue any
22-5 franchise with a dealer unless all of the following conditions are
22-6 met:
22-7 (i) the dealer and the Commission have
22-8 received written notice by registered or certified mail from the
22-9 manufacturer, distributor, or representative not less than 60 days
22-10 before the effective date of termination or noncontinuance setting
22-11 forth the specific grounds for termination or noncontinuance; and
22-12 (ii) the written notice contains on the
22-13 first page thereof a conspicuous statement which reads as follows:
22-14 "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE
22-15 TEXAS MOTOR VEHICLE COMMISSION IN AUSTIN, TEXAS, AND HAVE A HEARING
22-16 IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR NONCONTINUANCE
22-17 OF YOUR FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR VEHICLE
22-18 COMMISSION CODE IF YOU OPPOSE THIS ACTION."; and
22-19 (iii) the manufacturer, distributor, or
22-20 representative has received the informed, written consent of the
22-21 affected dealer or the appropriate period for the affected dealer
22-22 to protest the proposed franchise termination or noncontinuance has
22-23 lapsed; or
22-24 (iv) if the affected dealer files a
22-25 protest with the Commission within the greater of (1) 60 days after
23-1 receiving its 60-day notice of proposed termination or
23-2 noncontinuance or (2) the time specified in such notice, the
23-3 Commission determines that the party seeking to terminate or not
23-4 continue a dealer's franchise has established by a preponderance of
23-5 the evidence, at a hearing called by the Commission, that there is
23-6 good cause for the proposed termination or noncontinuance.
23-7 (v) Notwithstanding Subdivisions (3)(A)(i)
23-8 and (3)(A)(iv) of this section, notice may be made not less than 15
23-9 days prior to the effective date of termination or noncontinuance
23-10 if a licensed dealer fails to conduct its customary sales and
23-11 service operations during its customary business hours for seven
23-12 consecutive business days unless such failure is caused by an act
23-13 of God, work stoppage or delays due to strikes or labor disputes,
23-14 an order of the Commission, or other causes beyond the control of
23-15 the dealer.
23-16 (B) Whenever a dealer files a timely protest to
23-17 a proposed franchise termination or noncontinuance, the Commission
23-18 shall notify the party seeking to terminate or to not continue the
23-19 protesting dealer's franchise that a timely protest has been
23-20 filed, that a hearing is required in accordance with this Act, and
23-21 that the party who gave the dealer notice of termination or
23-22 noncontinuance of the franchise may not terminate or refuse to
23-23 continue the franchise until the Commission issues its final
23-24 decision or order.
23-25 (C) If a franchise is terminated or not
24-1 continued, another franchise in the same line-make will be
24-2 established within a reasonable time unless it is shown to the
24-3 Commission by a preponderance of the evidence that the community or
24-4 trade area cannot reasonably support such a dealership. If this
24-5 showing is made, no dealer license shall be thereafter issued in
24-6 the same area unless a change in circumstances is established.
24-7 (4) Notwithstanding the terms of any franchise
24-8 agreement, modify or replace a franchise with a succeeding
24-9 franchise if the modification or replacement would adversely
24-10 affect, to a substantial degree, the dealer's sales, investment, or
24-11 obligations to provide service to the public, unless the
24-12 manufacturer, distributor, or representative has first given the
24-13 Commission and each affected dealer written notice by registered
24-14 or certified mail of any such action 60 days in advance of the
24-15 modification or replacement. The written notice shall contain on
24-16 the first page thereof a conspicuous statement which reads as
24-17 follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST
24-18 WITH THE TEXAS MOTOR VEHICLE COMMISSION IN AUSTIN, TEXAS, AND HAVE
24-19 A HEARING IN WHICH YOU MAY PROTEST THE PROPOSED MODIFICATION OR
24-20 REPLACEMENT OF YOUR FRANCHISE WITH A SUCCEEDING FRANCHISE UNDER THE
24-21 TERMS OF THE TEXAS MOTOR VEHICLE COMMISSION CODE IF YOU OPPOSE THIS
24-22 ACTION." Within the greater of (1) 60 days after receipt of such
24-23 notice or (2) the time specified in such notice, a dealer may file
24-24 a protest with the Commission and the modification or replacement
24-25 shall not become effective unless and until the Commission
25-1 determines that the party seeking to modify or replace a franchise
25-2 with a succeeding franchise has demonstrated by a preponderance of
25-3 the evidence that there is good cause for the modification or
25-4 replacement. The prior franchise shall continue in effect until
25-5 the protest is resolved by the Commission.
25-6 (5) Notwithstanding the terms of any franchise
25-7 agreement, in determining whether good cause has been established
25-8 for modifying, replacing, terminating, or refusing to continue a
25-9 franchise, the Commission shall consider all the existing
25-10 circumstances including, without limitation by the enumeration
25-11 herein, all the following:
25-12 (A) the dealer's sales in relation to the sales
25-13 in the market;
25-14 (B) the dealer's investment and obligations;
25-15 (C) injury to the public welfare;
25-16 (D) the adequacy of the dealer's service
25-17 facilities, equipment, parts, and personnel in relation to those of
25-18 other dealers of new motor vehicles of the same line-make;
25-19 (E) whether warranties are being honored by the
25-20 dealer;
25-21 (F) the parties' compliance with their franchise
25-22 agreement; and
25-23 (G) the enforceability of the franchise
25-24 agreement from a public policy standpoint, including, without
25-25 limitation, issues of the reasonableness of the franchise
26-1 agreement's terms, oppression, adhesion, and the relative
26-2 bargaining power of the parties.
26-3 Good cause shall not be shown solely by the desire of a
26-4 manufacturer, distributor, or representative for market
26-5 penetration.
26-6 (6) Use any false, deceptive or misleading
26-7 advertising.
26-8 (7) Notwithstanding the terms of any franchise
26-9 agreement, prevent any dealer from reasonably changing the capital
26-10 structure of his dealership or the means by or through which he
26-11 finances the operation thereof, provided that the dealer meets
26-12 reasonable capital requirements.
26-13 (8) Notwithstanding the terms of any franchise
26-14 agreement, deny or withhold approval of a <fail to give effect to
26-15 or attempt to prevent any> sale or transfer of a dealer, dealership
26-16 or franchise or interest therein or management thereof unless,
26-17 within 60 days after receipt by the manufacturer or distributor
26-18 from the dealer of the dealer's notice of intent to sell or
26-19 transfer, the dealer receives from the manufacturer or distributor,
26-20 written notice of the denial or withholding of approval of the
26-21 transfer. The dealer or another party to the transaction may
26-22 protest a denial or withholding of approval in the manner provided
26-23 by this code. <after complaint or protest,> The Commission may
26-24 approve the denial or withholding if it is demonstrated to the
26-25 Commission after hearing that the result of any such sale or
27-1 transfer will be detrimental to the public or the representation of
27-2 the manufacturer or distributor.
27-3 (9) Notwithstanding the terms of any franchise
27-4 agreement, require or attempt to require that a dealer assign to or
27-5 act as an agent for any manufacturer, distributor or representative
27-6 in the securing of promissory notes and security agreements given
27-7 in connection with the sale or purchase of new motor vehicles or
27-8 the securing of policies of insurance on or having to do with the
27-9 operation of vehicles sold.
27-10 (10) Notwithstanding the terms of any franchise
27-11 agreement, fail or refuse, after complaint and hearing, to perform
27-12 the obligations placed on the manufacturer in connection with the
27-13 delivery, preparation and warranty of a new motor vehicle as
27-14 provided in the manufacturer's warranty, preparation, and delivery
27-15 agreements on file with the Commission.
27-16 (11) Notwithstanding the terms of any franchise
27-17 agreement, fail to compensate its dealers for the work and services
27-18 they are required to perform in connection with the dealer's
27-19 delivery and preparation obligations according to the agreements on
27-20 file with the Commission which must be found by the Commission to
27-21 be reasonable, or fail to adequately and fairly compensate its
27-22 dealers for labor, parts and other expenses incurred by such dealer
27-23 to perform under and comply with a manufacturer's or a
27-24 distributor's warranty agreement, or require, as a prerequisite to
27-25 the manufacturer's or distributor's payment of a claim for
28-1 reimbursement as required by this section, that a dealer file with
28-2 the manufacturer or distributor the actual time spent in the
28-3 performance of labor unless actual time is the basis for
28-4 reimbursement. In no event shall any manufacturer or distributor
28-5 pay its dealers an amount of money for warranty work that is less
28-6 than that charged by the dealer to the retail customers of the
28-7 dealer for nonwarranty work of like kind. All claims made by
28-8 dealers for compensation for delivery, preparation, and warranty
28-9 work shall be paid within 30 days after approval and shall be
28-10 approved or disapproved within 30 days after receipt. When any
28-11 claim is disapproved, the dealer shall be notified in writing of
28-12 the grounds for disapproval. No claim which has been approved and
28-13 paid may be charged back to the dealer unless it can be shown that
28-14 the claim was false or fraudulent, that the repairs were not
28-15 properly made or were unnecessary to correct the defective
28-16 condition, or that the dealer failed to reasonably substantiate the
28-17 claim in accordance with reasonable written requirements of the
28-18 manufacturer or distributor, if the dealer has been notified of the
28-19 requirements prior to the time the claim arose, and if the
28-20 requirements were in effect at the time the claim arose. A
28-21 manufacturer or distributor may not audit a claim after the
28-22 expiration of two years following the submission of the claim
28-23 unless the manufacturer or distributor has reasonable grounds to
28-24 suspect that a claim was fraudulent. Notwithstanding the terms of
28-25 a franchise agreement or provision of law in conflict with this
29-1 section, the dealer's delivery, preparation, and warranty
29-2 obligations as filed with the Commission shall constitute the
29-3 dealer's sole responsibility for product liability as between the
29-4 dealer and manufacturer or distributor, and, except for a loss
29-5 caused by the dealer's failure to adhere to these obligations, a
29-6 loss caused by the dealer's negligence or intentional misconduct,
29-7 or a loss caused by the dealer's modification of a product without
29-8 manufacturer or distributor authorization, the manufacturer or
29-9 distributor shall reimburse the dealer for all loss incurred by the
29-10 dealer, including legal fees, court costs, and damages, as a result
29-11 of the dealer having been named a party in a product liability
29-12 action.
29-13 (12) Operate as a manufacturer, distributor, or
29-14 representative without a currently valid license from the
29-15 Commission or otherwise violate this Act or rules promulgated by
29-16 the Commission hereunder.
29-17 (13) Notwithstanding the terms of any franchise
29-18 agreement, to prevent or refuse to honor the succession to a
29-19 dealership by any legal heir or devisee under the will of a dealer
29-20 or under the laws of descent and distribution of this State unless
29-21 it is shown to the Commission, after notice and hearing, that the
29-22 result of such succession will be detrimental to the public
29-23 interest and to the representation of the manufacturer or
29-24 distributor; provided, however, nothing herein shall prevent a
29-25 dealer, during his lifetime, from designating any person as his
30-1 successor dealer, by written instrument filed with the manufacturer
30-2 or distributor.
30-3 (14) Notwithstanding the terms of any franchise
30-4 agreement, require that a dealer pay or assume, directly or
30-5 indirectly, any part of any refund, rebate, discount, or other
30-6 financial adjustment made by the manufacturer, distributor, or
30-7 representative to, or in favor of, any customer of a dealer, unless
30-8 voluntarily agreed to by such dealer.
30-9 (15) Notwithstanding the terms of any franchise
30-10 agreement, deny or withhold approval of a written application to
30-11 relocate a franchise unless (A) the applicant has received written
30-12 notice of the denial or withholding of approval within 90 days
30-13 after receipt of the application containing information reasonably
30-14 necessary to enable the manufacturer or distributor to adequately
30-15 evaluate the application, and if (B) the applicant files a protest
30-16 with the Commission and establishes by a preponderance of the
30-17 evidence at a hearing called by the Commission that the grounds
30-18 for, and distance of, the relocation are reasonable.
30-19 (16) Notwithstanding the terms of any franchise
30-20 agreement, fail to pay to a dealer or any lienholder in accordance
30-21 with their respective interest after the termination of a
30-22 franchise:
30-23 (A) the dealer cost of each new motor vehicle in
30-24 the dealer's inventory with mileage of 6,000 miles or less, reduced
30-25 by the net discount value of each, where "net discount value" is
31-1 determined according to the following formula: net cost multiplied
31-2 by total mileage divided by 100,000, and where "net cost" equals
31-3 the dealer cost plus any charges by the manufacturer, distributor,
31-4 or representative for distribution, delivery, and taxes, less all
31-5 allowances paid to the dealer by the manufacturer, distributor, or
31-6 representative for new, unsold, undamaged, and complete motor
31-7 vehicles of current model year or one year prior model year in the
31-8 dealer's inventory, except that if a vehicle cannot be reduced by
31-9 the net discount value, the manufacturer or distributor shall pay
31-10 the dealer the net cost of the vehicle;
31-11 (B) the dealer cost of each new, unused,
31-12 undamaged, and unsold part or accessory if the part or accessory is
31-13 in the current parts catalogue and is still in the original,
31-14 resalable merchandising package and in unbroken lots, except that
31-15 in the case of sheet metal, a comparable substitute for the
31-16 original package may be used, and if the part or accessory was
31-17 purchased by the dealer either directly from the manufacturer or
31-18 distributor or from an outgoing authorized dealer as a part of the
31-19 dealer's initial inventory;
31-20 (C) the fair market value of each undamaged sign
31-21 owned by the dealer which bears a trademark or tradename used or
31-22 claimed by the manufacturer, distributor, or representative if the
31-23 sign was purchased from or purchased at the request of the
31-24 manufacturer, distributor, or representative;
31-25 (D) the fair market value of all special tools,
32-1 data processing equipment, and automotive service equipment owned
32-2 by the dealer which were recommended in writing and designated as
32-3 special tools and equipment and purchased from or purchased at the
32-4 request of the manufacturer, distributor, or representative, if the
32-5 tools and equipment are in usable and good condition except for
32-6 reasonable wear and tear;
32-7 (E) the cost of transporting, handling, packing,
32-8 storing, and loading of any property subject to repurchase under
32-9 this section;
32-10 (F) except as provided by this subdivision, any
32-11 sums due as provided by Paragraph (A) of this subdivision within 60
32-12 days after termination of a franchise and any sums due as provided
32-13 by Paragraphs (B) through (E) of this subdivision within 90 days
32-14 after termination of a franchise. As a condition of payment, the
32-15 dealer is to comply with reasonable requirements with respect to
32-16 the return of inventory as are set out in the terms of the
32-17 franchise agreement. A manufacturer or distributor shall reimburse
32-18 a dealer for the dealer's cost for storing any property covered by
32-19 this subdivision beginning 90 days following termination. A
32-20 manufacturer or distributor shall reimburse a dealer for the
32-21 dealer's cost of storing any property covered by this subdivision
32-22 before the expiration of 90 days from the date of termination if
32-23 the dealer notifies the manufacturer or distributor of the
32-24 commencement of storage charges within that period. On receipt of
32-25 notice of the commencement of storage charges, a manufacturer or
33-1 distributor may immediately take possession of the property in
33-2 question by repurchasing the property as provided by this
33-3 subdivision. A manufacturer, distributor, or representative who
33-4 fails to pay those sums within the prescribed time or at such time
33-5 as the dealer and lienholder, if any, proffer good title prior to
33-6 the prescribed time for payment, is liable to the dealer for:
33-7 (i) <(1)> the greatest of dealer cost,
33-8 fair market value, or current price of the inventory;
33-9 (ii) <(2)> interest on the amount due
33-10 calculated at the rate applicable to a judgment of a court; and
33-11 (iii) <(3)> reasonable attorney's fees and
33-12 costs.
33-13 (17) Notwithstanding the terms of any franchise
33-14 agreement, change its distributor, its method of distribution of
33-15 its products in this state, or its business structure or ownership
33-16 in a manner that results in the termination or noncontinuance of a
33-17 franchise without good cause. The manufacturer, distributor, or
33-18 representative shall issue the same notice to the dealer and to the
33-19 Commission as is provided in Subdivisions (3)(A) and (B) of this
33-20 section and said same procedures shall apply to the parties.
33-21 (18) Notwithstanding the terms of any franchise
33-22 agreement, require a dealer to submit to arbitration on any issue
33-23 unless the dealer and the manufacturer, distributor, or
33-24 representative and their respective counsel agree to arbitrate
33-25 after a controversy arises. The arbitrator shall apply the
34-1 provisions of this Act in resolving the pertinent controversy.
34-2 Either party may appeal to the Commission a decision of an
34-3 arbitrator on the ground that the arbitrator failed to apply this
34-4 Act.
34-5 (19) Notwithstanding the terms of any franchise
34-6 agreement, require that a dealer join, contribute to, or affiliate
34-7 with, directly or indirectly, any advertising association.
34-8 (20) Notwithstanding the terms of a franchise
34-9 agreement:
34-10 (A) require adherence to unreasonable sales or
34-11 service standards;
34-12 (B) directly or indirectly, discriminate against
34-13 a dealer or otherwise treat dealers differently as a result of a
34-14 formula or other calculation or process intended to gauge the
34-15 performance of a dealership, except a sales contest or other
34-16 recognition program based on reasonable sales and service criteria;
34-17 (C) unreasonably require that a dealer purchase
34-18 special tools or equipment; or
34-19 (D) fail to compensate a dealer for all costs
34-20 incurred by the dealer as required by the manufacturer in complying
34-21 with the terms of a product recall by the manufacturer or
34-22 distributor, including the costs, if any, incurred by the dealer in
34-23 notifying vehicle owners of the existence of the recall.
34-24 (21) Discriminate unreasonably between or among
34-25 franchisees in the sale of a motor vehicle owned by the
35-1 manufacturer or distributor.
35-2 (22) Directly or indirectly, or through a subsidiary
35-3 or agent, require, as a condition for obtaining financing for a
35-4 motor vehicle, the purchaser of a vehicle to purchase any product
35-5 other than the motor vehicle from the manufacturer or distributor,
35-6 or from an entity owned or controlled by the manufacturer or
35-7 distributor.
35-8 (23) Directly or indirectly, or through a subsidiary
35-9 or agent, require, as a condition of its or its subsidiary's
35-10 agreement to provide financing for a motor vehicle, that any
35-11 insurance policy or service contract purchased by the motor vehicle
35-12 purchaser be purchased from a specific source.
35-13 (24) Compel a dealer through a financing subsidiary of
35-14 the manufacturer or distributor to agree to unreasonable operating
35-15 requirements or directly or indirectly to terminate a dealer
35-16 through the actions of a financing subsidiary of the manufacturer
35-17 or distributor. This subdivision does not limit the right of a
35-18 financing entity to engage in business practices in accordance with
35-19 the usage of trade in retail and wholesale motor vehicle financing.
35-20 (25) Operate as a dealer except on a temporary basis
35-21 and only if:
35-22 (A) the dealership was previously owned by a
35-23 franchised dealer and is currently for sale at a reasonable price;
35-24 or
35-25 (B) the manufacturer, distributor or
36-1 representative operates the dealership in a bona fide relationship
36-2 with a franchised dealer who has made a significant investment in
36-3 the dealership, subject to loss, and who reasonably expects to
36-4 acquire full ownership of the dealership under reasonable terms and
36-5 conditions.
36-6 (26) Prevent a dealer from selling and servicing new
36-7 motor vehicles of any line-make, or parts or products related to
36-8 those vehicles at a dealership approved for the sale and service of
36-9 new motor vehicles by any other manufacturer or distributor
36-10 licensed pursuant to the terms of this Act, if the dealership is
36-11 sufficient to enable competitive selling and servicing of all new
36-12 motor vehicles, parts, and other products sold and serviced at that
36-13 dealership.
36-14 SECTION 19. Section 5.04(a), Texas Motor Vehicle Commission
36-15 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
36-16 to read as follows:
36-17 (a) No person may engage in the business of buying, selling,
36-18 or exchanging new motor vehicles unless that person:
36-19 (1) holds a valid franchised dealer's license issued
36-20 by the Commission for the make or makes of new motor vehicles being
36-21 bought, sold, or exchanged; or
36-22 (2) is acting as a bona fide employee of the licensee.
36-23 SECTION 20. Section 6.01(a), Texas Motor Vehicle Commission
36-24 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
36-25 to read as follows:
37-1 (a) In the event the Commission determines, after a
37-2 proceeding conducted in accordance with this Act and the rules of
37-3 the Commission, that any person is violating or has violated any
37-4 provision of this Act or any rule or order of the Commission issued
37-5 pursuant to this Act, the Commission may levy a civil penalty not
37-6 to exceed $10,000.00 for each day of violation and for each act of
37-7 violation. Notwithstanding a law to the contrary, including
37-8 without limitation the provisions of Government Code Section
37-9 403.094(h), all <All> civil penalties recovered under this Act
37-10 shall be deposited in the State Treasury to the credit of the State
37-11 Highway Fund <paid to the General Revenue Fund of the State of
37-12 Texas>.
37-13 SECTION 21. Section 6.06, Texas Motor Vehicle Commission
37-14 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
37-15 by amending Subsection (a) and adding Subsection (f) to read as
37-16 follows:
37-17 (a) Notwithstanding any other provision of law, including
37-18 the terms of Subchapter E, Chapter 17, Business and Commerce Code,
37-19 in addition to the other remedies provided by this subchapter, a
37-20 person, including a licensee, who has sustained actual damages as a
37-21 result of a violation of Section 5.01, Section 5.01A or Section
37-22 5.02 of this Act, or a violation of Subchapter E, Chapter 17,
37-23 Business and Commerce Code, may maintain an action pursuant to the
37-24 terms of Subchapter E, Chapter 17, Business and Commerce Code or
37-25 any successor statute thereto and shall be entitled to all
38-1 procedures and remedies provided for therein. In any action
38-2 brought under this section, and in the interest of judicial economy
38-3 and efficiency, a judgment rendered pursuant to this section shall
38-4 pay due deference to the findings of fact and conclusions of law of
38-5 the Commission contained in a final order which forms the basis of
38-6 the action.
38-7 (f) A reference in other law to a dealer licensed by the
38-8 Texas Motor Vehicle Commission or a dealer licensed by the Motor
38-9 Vehicle Board of the Texas Department of Transportation means a
38-10 franchised dealer.
38-11 SECTION 22. Section 6.07(b), (d), (g), and (j), Texas Motor
38-12 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
38-13 Statutes), is amended to read as follows:
38-14 (b) If a new motor vehicle does not conform to all
38-15 applicable manufacturer's, converter's, or distributor's express
38-16 warranties, the manufacturer, converter, or distributor shall make
38-17 the repairs necessary to conform the vehicle to the applicable
38-18 express warranties, notwithstanding that the repairs are made after
38-19 the expiration of the warranties, if: (1) the owner or the owner's
38-20 designated agent reported the nonconformity to the manufacturer,
38-21 converter, or distributor, its agent, or its franchised
38-22 <authorized> dealer during the term of such express warranties; or
38-23 (2) a rebuttable presumption relating to the vehicle was created
38-24 under Subsection (d) of this section. This section does not in any
38-25 way limit the remedies available to an owner under a new motor
39-1 vehicle warranty that extends beyond the provisions of this
39-2 section.
39-3 (d) There is a rebuttable presumption that a reasonable
39-4 number of attempts have been undertaken to conform a motor vehicle
39-5 to the applicable express warranties if (1) the same nonconformity
39-6 has been subject to repair four or more times by the manufacturer,
39-7 converter, or distributor, its agent, or its franchised
39-8 <authorized> dealer and two of the repair attempts have been made
39-9 within a period of 12 months following the date of original
39-10 delivery to an owner, or 12,000 miles, whichever occurs first, and
39-11 the other two repair attempts occur within the 12 months or 12,000
39-12 miles immediately following the date of the second repair attempt,
39-13 whichever occurs first, but such nonconformity continues to exist;
39-14 (2) the same nonconformity creates a serious safety hazard and has
39-15 caused the vehicle to have been subject to repair two or more times
39-16 by the manufacturer, converter, or distributor, or an authorized
39-17 agent or franchised dealer, and at least one attempt to repair the
39-18 nonconformity was made in the period of 12 months or 12,000 miles,
39-19 whichever occurs first, and at least one other attempt made in the
39-20 period of 12 months or 12,000 miles after the first repair attempt,
39-21 whichever occurs first, but the nonconformity continues to exist;
39-22 or (3) the vehicle is out of service for repair for a cumulative
39-23 total of 30 or more days in the 24 months or 24,000 miles,
39-24 whichever occurs first, and at least two repair attempts were made
39-25 in the first 12 months or 12,000 miles immediately following the
40-1 date of original delivery to an owner and a nonconformity still
40-2 exists that substantially impairs the vehicle's use or market
40-3 value. The initial 12-month period or 12,000 mile limit, the
40-4 subsequent 12-month period or 12,000 mile limit, and the 30-day
40-5 period shall be extended by any period of time during which repair
40-6 services are not available to the owner because of a war, invasion,
40-7 strike or fire, flood, or other natural disaster. During any
40-8 period of time that the manufacturer or distributor lends a
40-9 comparable motor vehicle to the owner during the time the vehicle
40-10 is being repaired by a <an> franchised <authorized> dealer, the
40-11 30-day period provided for in this subsection is tolled.
40-12 (g) In a hearing under this section, the Executive Director
40-13 shall make its order with respect to responsibility for payment of
40-14 the cost of any refund or replacement and no manufacturer,
40-15 converter, or distributor may cause any franchised dealer to pay
40-16 directly or indirectly any sum not specifically so ordered by the
40-17 Executive Director. If the Executive Director orders a
40-18 manufacturer, converter, or distributor to refund or replace a
40-19 motor vehicle because it meets the criteria set forth in this
40-20 section, the Executive Director may order the franchised dealer to
40-21 reimburse the owner, lienholder, manufacturer, converter, or
40-22 distributor only for items or options added to the vehicle by the
40-23 franchised dealer and only to the extent that one or more of such
40-24 items or options contributed to the defect that served as the basis
40-25 for the Executive Director's order of refund or replacement. In a
41-1 case involving a leased vehicle, the Executive Director may
41-2 terminate the lease and apportion the allowance for use and other
41-3 allowances or refunds between the lessee and lessor of the vehicle.
41-4 (j)(1) A manufacturer, distributor, or converter that has
41-5 been ordered to repurchase or replace a vehicle shall, through its
41-6 franchised <representative> dealer, issue a disclosure statement
41-7 stating that the vehicle was repurchased or replaced by the
41-8 manufacturer, distributor, or converter under this section. The
41-9 disclosure statement must accompany the vehicle through the first
41-10 retail purchase. The manufacturer, distributor, or converter must
41-11 restore the cause of the repurchase or replacement to factory
41-12 specifications and issue a new 12-month, 12,000-mile warranty on
41-13 the vehicle. The disclosure statement must include a toll-free
41-14 telephone number of the Commission that will enable a purchaser of
41-15 a repurchased or replaced vehicle to obtain information about the
41-16 condition or defect that was the basis of the order for repurchase
41-17 or replacement. The Commission shall adopt rules for the
41-18 enforcement of this subdivision.
41-19 (2) The Commission shall provide a toll-free telephone
41-20 number for providing information to persons who request information
41-21 about a condition or defect that was the basis for repurchase or
41-22 replacement by an order of the Executive Director. The Commission
41-23 shall maintain an effective method of providing information to
41-24 persons who make the requests.
41-25 (l) Information filed with the Board under this section is
42-1 not a public record and is not subject to release under Chapter
42-2 552, Government Code.
42-3 SECTION 24. CONSTRUCTION; TRANSITION. (a) In the event of
42-4 a conflict between the terms of this Act and Article 6686, Revised
42-5 Statutes, the terms of this Act prevail.
42-6 (b) The Executive Director of the Motor Vehicle Board of the
42-7 Texas Department of Transportation shall oversee the transition of
42-8 duties and responsibilities provided by this Act.
42-9 SECTION 25. EFFECTIVE DATE: This Act takes effect
42-10 January 1, 1996.
42-11 SECTION 26. The importance of this legislation and the
42-12 crowded condition of the calendars in both houses create an
42-13 emergency and an imperative public necessity that the
42-14 constitutional rule requiring bills to be read on three several
42-15 days in each house be suspended, and this rule is hereby suspended,
42-16 and that this Act take effect and be in force according to its
42-17 terms, and it is so enacted.