TWT H.B. 1595 75(R)BILL ANALYSIS TRANSPORTATION H.B. 1595 By: Alexander 3-25-97 Committee Report (Substituted) BACKGROUND The Texas Motor Vehicle Commission Code, Article 4413(36), Vernon's Texas Civil Statutes, is the law that provides for the licensing of motor vehicle dealers, manufacturers, distributors, lessors, and lease facilitators, and regulates the legal relations between and among these licensees and between any of these licensees and the purchasers of motor vehicles. The regulatory agency affected by the changes that would be enacted in this bill is the Texas Motor Vehicle Board (MVB), an agency within the Texas Department of Transportation (TXDOT). PURPOSE C.S.H.B. 1595 will: (1) make formal, "clean-up" amendments in the definitions and elsewhere; and (2) clarify the relationship between the Texas Motor Vehicle Board and The Texas Department of Transportation by clearly delineating the independence of the board within TXDOT without creating a major infrastructure rupture. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sec. 1.03, Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes) as follows: Renumbers definitions in alphabetical order. (2) Defines "Board" as the MVB. (7) Changes statutory reference to be consistent with bill. (10) Defines "Director" as the director of the MVB. Clarifies the distinction between the Executive Director of TXDOT and the Director of the MVB and removes the confusion from having two executive directors in the same agency. (12) Defines "Executive Director" as the Executive Director of the TXDOT. (15) Changes statutory reference to be consistent with bill. (16) Defines "General Distinguishing Number," as a dealer license that all dealers must have. This amendment is necessary because the Board's regulatory jurisdiction was increased to include used motor vehicle dealers. (19) Amends definition of "Lessor" to clarify that it includes the leasing of all vehicles, not just new ones. (20) Changes statutory reference to be consistent with bill. (27) Amends definition of "Nonfranchised dealer" to mean a person holding an independent motor vehicle dealer's or a wholesale motor vehicle general distinguishing number as defined in the bill. (32) Changes statutory reference to be consistent with bill. SECTION 2. Amends Sec. 2.01, Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by making the MVB an independent entity within the TXDOT and not an advisory board of the TXDOT for policy-making purposes, regulatory functions and duties required by this Act. SECTION 3. Amends Sec. 2.02, Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by adding Subsection (b) which makes the TXDOT Executive Director an ex officio member of the MVB. Specifies authority of Executive Director in this capacity. SECTION 4. Amends Sec 2.07, Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes) by substituting the word "board" for "commission" to distinguish between the MVB and the TXDOT. SECTION 5. Amends Sec. 2.08A (c), Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by changing the title of the chief administrator of the MVB from "Executive Director" to "Director" to distinguish between the that person and the TXDOT's Executive Director. SECTION 6. Amends Sec. 2.09, Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by substituting the word "board" for "commission". to distinguish between the MVB and the TXDOT. Changes the title of the chief administrator of the MVB from "Executive Director" to "Director" to distinguish between the that person and the TXDOT's Executive Director. Gives the TXDOT Executive Director's designee authority on behalf of the board to negotiate with, and enter into contracts or other agreements. SECTION 7. Amends Sec. 3.01(a), Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by substituting the word "board" for "commission" to distinguish between the MVB and the TXDOT. Changes statutory reference to be consistent with bill. SECTION 8. Amends Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by adding Sec. 3.01A. (a) The MVB board, in coordination with the TXDOT, develops policy clearly delineating the policymaking responsibilities of the MVB and the management responsibilities of the TXDOT. (b) The TXDOT can provide personnel and services to the MVB. The MVB may delegate authority to personnel as needed. SECTION 9. Amends Sec 3.03(b), Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by substituting the word "board" for "commission" to distinguish between the MVB and the TXDOT. Changes statutory reference to be consistent with bill. SECTION 10. Amends Sec. 3.04, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting the word "board" for "commission" to distinguish between the MVB and the TXDOT. Changes the title of the chief administrator of the MVB from "Executive Director" to "Director" to distinguish between the that person and the TXDOT's Executive Director. SECTION 11. Amends Sec. 3.06, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting the word "board" for "commission" to distinguish between the MVB and the TXDOT. Changes the title of the chief administrator of the MVB from "Executive Director" to "Director" to distinguish between the that person and the TXDOT's Executive Director. Requires the board to comply with Chapter 2001, Government Code (Administrative Procedures Act). SECTION 12. Amends Sec. 3.07, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by placing a duty on the board, in its hearing process, to make a formal finding "with respect to each specific issue the board is required by law to consider in reaching a decision." SECTION 13. Amends Sec. 3.08, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes) as follows: (a) Defines "contested case" as in Chapter 2001, Government Code. Substitutes Chapter 2001, Government Code, for the Administrative Procedure and Texas Register Act. Substitutes "board" for "commission". Changes reference to "Director" to mean MVB Director. (c) Substitutes Chapter 2001, Government Code, for the Administrative Procedure and Texas Register Act. Substitutes "board" for "commission". Notice of contested case refers to "licensee" rather than "license." (e) Sets forth procedures for conducting hearings. (g) Sets forth responsibilities of the hearings examiner. Substitutes "board" for "commission". (h) Substitutes Chapter 2001, Government Code, for the Administrative Procedure and Texas Register Act. (i) Substitutes "board" for "commission". (j) Substitutes "board" for "commission". SECTION 14. Amends Sec. 3.09, Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes), by changing the name of the Section to PROCEDURAL SUPREMACY. Substitutes Chapter 2001, Government Code, for the Administrative Procedure and Texas Register Act. SECTION 15. Amends Sec. 4.01, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by amending Subsection (b) and by adding Subsections (c) and (d). (b) Deletes unnecessary statutory reference. (c) Makes clear that the law does not require a franchised dealer to have an additional license to engage in the leasing of vehicles he owns and is legally licensed to sell. (d) Makes clear that a manufacturer's duty to the public does not cease when the manufacturer ceases selling motor vehicles in Texas. This amendment makes clear that so long as a manufacturer is sanctioning warranty repairs, the manufacturer must have a license. It preserves the integrity of statutory protections that would otherwise be lost if the manufacturer is allowed to escape licensing. SECTION 16. Amends Sec. 4.02(a), Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting "board" for "Commission" and making statutory references to be consistent with the bill. SECTION 17. Amends Sec. 4.03A, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting "board" for "Commission" and making statutory references to be consistent with the bill. SECTION 18. Amends Sec. 4.05(a), Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by adding an annual dealer license fee of $100 for each off-site, service-only facility dealer operates. Renumbers Subsections accordingly. SECTION 19. Amends Sec. 5.01, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by renumbering Subsections accordingly. SECTION 20. Amends Sec. 5.01A, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by removing Subdivision (2) which contained an internal conflict which exists because the current language purports to prohibit, under certain circumstances, a dealer from operating as a dealer. This language created a conflict because if a person holds a dealer license, he is a dealer and may operate as such. SECTION 21. Amends Sec. 5.02(b), Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting "board" for "commission". SECTION 22. Amends Sec. 6.02, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting "board" for "commission". SECTION 23. Amends Sec. 6.03, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting "board" for "commission". SECTION 24. Amends Subsections (e), (g) and (j) of Sec. 6.07, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substituting the word "board" for "commission". Changes the title of the chief administrator of the MVB from "Executive Director" to "Director". Specifies that judicial review is subject to Chapter 2001, Government Code. SECTION 25. Amends Subsection (a), (c), and (d), Sec. 7.01, Texas Motor Vehicle Commission Code, (Article 4413(36), Vernon's Texas Civil Statutes), by substitute "board" for "commission". Specifies that judicial review is subject to Chapter 2001, Government Code. Changes the title of the chief administrator of the MVB from "Executive Director" to "Director". SECTION 26. Emergency Clause. Effective upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 2 of the substitute deletes a reference in the original to the MVB being an "independent agency" within the TXDOT and adds language making the MVB an independent entity within the TXDOT and not an advisory board of the TXDOT for policy-making purposes, regulatory functions and duties required by this Act. SECTION 3 of the substitute makes the TXDOT Executive Director an ex officio member of the MVB. Specifies authority of Executive Director in this capacity. Renumbers remain sections accordingly. The Substitute deleted SECTION 6 of the original which dealt with intraagency career ladder programs, annual performance evaluations, information, equal opportunity implementation plan, and public information. SECTION 6 of the substitute gives the TXDOT Executive Director's designee authority on behalf of the board to negotiate with, and enter into contracts or other agreements. SECTION 8 of the substitute in entirely new. It establishes the framework under which the MVB fits into the TXDOT. Renumbers remaining Sections accordingly.