SRC-TNM C.S.H.B. 2098 75(R) BILL ANALYSIS


Senate Research CenterC.S.H.B. 2098
By: Uher (Cain)
State Affairs
5-15-97
Committee Report (Substituted)


DIGEST 

Currently, the Texas Motor Vehicle Commission Code requires that vehicle
leasing companies and lease facilitators be licensed by the state.
However, franchised dealers are prohibited from directly or indirectly
paying a fee to a lessor or lease facilitator.  C.S.H.B. 2098 would
provide that licensed franchised dealers are not required to obtain a
lessor or lease facilitator license to lease new or used motor vehicles
that they are licensed to sell. 
 
PURPOSE

As proposed, C.S.H.B. 2098 outlines provisions regarding the regulation of
certain franchised dealers who engage in the leasing of motor vehicles. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 4.01(a), Article 4413(36), V.T.C.S. (Texas Motor
Vehicle Commission Code), to provide that a franchised dealer licensed
under this code is not required to obtain a lessor or lease facilitator
license or pay a license fee under this code to engage in the business of
leasing motor vehicles, including new motor vehicles, that the dealer is
licensed to sell. 

SECTION 2. Amends Section 5.03A(b), Article 4413(36), V.T.C.S., to provide
that the fees prohibited by this section do not include amounts paid to a
franchised dealer as a part of the consideration for the sale or
assignment of a lease or leased vehicle or other amounts paid to the
franchised dealer who transfers title of the vehicle or assigns the lease
contract to the lessor of the motor vehicle. 

SECTION 3. Amends Section 5.03A, Article 4413(36), V.T.C.S., by adding
Subsection (f), to provide that as used in Sections 5.01(7) and 5.03A(a),
the term "fee" does not include any adjustments in the purchase price paid
for the lease or leased vehicle provided that this section does not
authorize any fees for referring leases or prospective leases. 

SECTION 4. Amends SECTION 5, Article 4413(36), V.T.C.S., by adding Section
5.05, as follows: 

Sec. 5.05. USE OF CERTAIN TERMS PROHIBITED. Sets forth instances in which
a person is not prohibited from using the words "lease" or "leasing" or
any variation of those words in the person's name or in the name of an
entity owned by the person. 

SECTION 5. Effective date: September 1, 1997.

SECTION 6. Emergency clause.





 SUMMARY OF COMMITTEE CHANGES

Amends proposed relating clause.

SECTION 2.

Amends Section 5.093A(b), Article 4413(36), V.T.C.S. (Texas Motor Vehicle
Commission Code), regarding prohibited fees. 

SECTION 3.

Amends Section 5.03A, Article 4413(36), V.T.C.S., by adding Subsection
(f), regarding the term "fee." 

SECTION 4.

Amends the SECTION heading.