By Alexander H.B. No. 1595
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of motor vehicle dealers and
1-3 manufacturers.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1.03, Texas Motor Vehicle Commission Code
1-6 (Article 4413(36), Vernon's Texas Civil Statutes), as amended by
1-7 Chapters 345 and 357, Acts of the 74th Legislature, Regular
1-8 Session, 1995, is amended to read as follows:
1-9 Sec. 1.03. Definitions. In this Act:
1-10 (1) [(26)] "Ambulance" means a vehicle used
1-11 exclusively for providing emergency medical care to an injured or
1-12 ill person or transporting an injured or ill person, if the vehicle
1-13 provides:
1-14 (A) a driver's compartment;
1-15 (B) a compartment to accommodate an emergency
1-16 medical care technician or paramedic and two injured or ill persons
1-17 so positioned that one of the injured or ill persons can be given
1-18 intensive life-support during transit;
1-19 (C) equipment and supplies for emergency care of
1-20 an injured or ill person where the ill person is located or at the
1-21 scene of an injury-producing incident as well as in transit;
1-22 (D) two-way radio communication capability; and
1-23 (E) equipment for light rescue or extrication
1-24 procedures.
2-1 (2) "Board" means the Motor Vehicle Board of the Texas
2-2 Department of Transportation.
2-3 (3) [(9)] "Broker" means a person who, for a fee,
2-4 commission, or other valuable consideration, arranges or offers to
2-5 arrange a transaction involving the sale, for purposes other than
2-6 resale, of a new motor vehicle, and who is not:
2-7 (A) a franchised dealer or bona fide employee of
2-8 a franchised dealer when acting on behalf of a franchised dealer;
2-9 (B) a representative or bona fide employee of a
2-10 representative when acting on behalf of a representative;
2-11 (C) a distributor or bona fide employee of a
2-12 distributor when acting on behalf of a distributor; or
2-13 (D) at any point in the transaction the bona
2-14 fide owner of the vehicle involved in the transaction.
2-15 (4) [(13)] "Chassis manufacturer" means a person who
2-16 manufactures and produces the frame upon which is mounted the body
2-17 of a motor vehicle.
2-18 (5) [(11)] "Conversion" means a motor vehicle, other
2-19 than a motor home, ambulance, or fire-fighting vehicle, which has
2-20 been substantially modified by a person other than the manufacturer
2-21 or distributor of the chassis of the motor vehicle and which has
2-22 not been the subject of a retail sale.
2-23 (6) [(14)] "Converter" means a person who prior to the
2-24 retail sale of a motor vehicle, assembles, installs, or affixes a
2-25 body, cab, or special equipment to a chassis, or who substantially
2-26 adds, subtracts from, or modifies a previously assembled or
2-27 manufactured motor vehicle.
3-1 (7) [(23)] "Dealer" means a person who holds a general
3-2 distinguishing number issued by the Department pursuant to the
3-3 terms of Chapter 503, Transportation Code [Article 6686, Revised
3-4 Statutes].
3-5 (8) [(24)] "Dealership" means the physical premises
3-6 and business facilities on which a franchised dealer operates his
3-7 business, including the sale and repair of motor vehicles. The
3-8 term includes premises or facilities at which a person engages only
3-9 in the repair of motor vehicles if repairs are performed pursuant
3-10 to the terms of a franchise and a motor vehicle manufacturer's
3-11 warranty.
3-12 (9) [(20)] "Department" means the Texas Department of
3-13 Transportation.
3-14 (10) "Director" means the director of the board.
3-15 (11) [(6)] "Distributor" means any person who
3-16 distributes and/or sells new motor vehicles to franchised dealers
3-17 and who is not a manufacturer.
3-18 (12) "Executive Director" means the Executive Director
3-19 of the Texas Department of Transportation.
3-20 (13) [(27)] "Fire-fighting vehicle" means a motor
3-21 vehicle which has as its sole purpose transporting fire fighters to
3-22 the scene of a fire and providing equipment to fight the fire, if
3-23 the vehicle is built on a truck chassis with a gross carrying
3-24 capacity of at least 10,000 pounds, to which the following have
3-25 been permanently affixed or mounted:
3-26 (A) a water tank with a minimum combined
3-27 capacity of 500 gallons; and
4-1 (B) a centrifugal water pump with a minimum
4-2 capacity of not less than 750 gallons per minute at 150 pounds per
4-3 square inch net pump pressure.
4-4 (14) [(8)] "Franchise" means one or more contracts
4-5 between a franchised dealer as franchisee, and either a
4-6 manufacturer or a distributor as franchisor under which (A) the
4-7 franchisee is granted the right to sell and service new motor
4-8 vehicles manufactured or distributed by the franchisor or only
4-9 service motor vehicles pursuant to the terms of a franchise and a
4-10 manufacturer's warranty; (B) the franchisee as an independent
4-11 business is a component of franchisor's distribution system; (C)
4-12 the franchisee is substantially associated with franchisor's
4-13 trademark, tradename and commercial symbol; (D) the franchisee's
4-14 business is substantially reliant on franchisor for a continued
4-15 supply of motor vehicles, parts, and accessories for the conduct of
4-16 its business; or (E) any right, duty, or obligation granted or
4-17 imposed by this Act is affected. The term includes a written
4-18 communication from a franchisor to a franchisee by which a duty is
4-19 imposed on the franchisee.
4-20 (15) [(4)] "Franchised dealer" means any person who
4-21 holds a franchised motor vehicle dealer's general distinguishing
4-22 number issued by the Department pursuant to the terms of Chapter
4-23 503, Transportation Code [Article 6686, Revised Statutes], and who
4-24 is engaged in the business of buying, selling, or exchanging new
4-25 motor vehicles and servicing or repairing motor vehicles pursuant
4-26 to the terms of a franchise and a manufacturer's warranty at an
4-27 established and permanent place of business pursuant to a franchise
5-1 in effect with a manufacturer or distributor.
5-2 (16) "General distinguishing number" means a dealer
5-3 license issued by the Department pursuant to the terms of Chapter
5-4 503, Transportation Code.
5-5 (17) [(23)] "Lease" means a transfer of the right to
5-6 possession and use of a motor vehicle for a term in excess of 180
5-7 days in return for consideration.
5-8 (18) [(25)] "Lease facilitator" means a person, other
5-9 than a dealer or a bona fide employee of a dealer, or a vehicle
5-10 lessor or a bona fide employee of a vehicle lessor, who:
5-11 (A) holds himself out to any person as a "motor
5-12 vehicle leasing company" or "motor vehicle leasing agent" or uses a
5-13 similar title, for the purpose of soliciting or procuring a person
5-14 to enter into a contract or agreement to become the lessee of a
5-15 vehicle that is not, and will not be, titled in the name of and
5-16 registered to the lease facilitator; or
5-17 (B) otherwise solicits a person to enter into a
5-18 contract or agreement to become a lessee of a vehicle that is not,
5-19 and will not be, titled in the name of and registered to the lease
5-20 facilitator, or who is otherwise engaged in the business of
5-21 securing lessees or prospective lessees of motor vehicles that are
5-22 not, and will not be, titled in the name of and registered to the
5-23 facilitator.
5-24 (19) [(24)] "Lessor" means a person who acquires title
5-25 to a [new] motor vehicle for the purpose of leasing the vehicle to
5-26 another person.
5-27 (20) [(25)] "Licensee" means a person who holds a
6-1 license or general distinguishing number issued by the Board under
6-2 the terms of this Act or Chapter 503, Transportation Code [a
6-3 general distinguishing number issued by the Department pursuant to
6-4 the terms of Article 6686, Revised Statutes].
6-5 (21) [(5)] "Manufacturer" means any person who
6-6 manufactures or assembles new motor vehicles either within or
6-7 without this State.
6-8 (22) [(26)] "Manufacturer's statement of origin" means
6-9 a certificate on a form prescribed by the Department showing the
6-10 original transfer of a new motor vehicle from the manufacturer to
6-11 the original purchaser.
6-12 (23) [(10)] "Motor home" means a motor vehicle which
6-13 is designed to provide temporary living quarters and which:
6-14 (A) is built onto as an integral part of, or is
6-15 permanently attached to, a motor vehicle chassis; and
6-16 (B) contains at least four of the following
6-17 independent life support systems if each is permanently installed
6-18 and designed to be removed only for purposes of repair or
6-19 replacement and meets the standards of the American National
6-20 Standards Institute, Standards for Recreational Vehicles:
6-21 (i) a cooking facility with an on-board
6-22 fuel source;
6-23 (ii) a gas or electric refrigerator;
6-24 (iii) a toilet with exterior evacuation;
6-25 (iv) a heating or air conditioning system
6-26 with an on-board power or fuel source separate from the vehicle
6-27 engine;
7-1 (v) a potable water supply system that
7-2 includes at least a sink, a faucet, and a water tank with an
7-3 exterior service supply connection;
7-4 (vi) a 110-125 volt electric power supply.
7-5 (24) [(12)] "Motor home manufacturer" means a person
7-6 other than the manufacturer of the chassis of a motor vehicle who,
7-7 prior to the retail sale of the motor vehicle, performs
7-8 modifications on the chassis that result in the finished product
7-9 being classified as a motor home.
7-10 (25) [(1)] "Motor vehicle" means:
7-11 (A) every fully self-propelled vehicle which has
7-12 as its primary purpose the transport of a person or persons, or
7-13 property, on a public highway, and having two or more wheels;
7-14 (B) every two or more wheeled fully
7-15 self-propelled, titled vehicle which has as its primary purpose the
7-16 transport of a person or persons or property and is not
7-17 manufactured for use on public streets, roads, or highways; or
7-18 (C) an engine, transmission, or rear axle
7-19 manufactured for installation in a vehicle having as its primary
7-20 purpose the transport of a person or persons or property on a
7-21 public highway and having a gross vehicle weight rating of more
7-22 than 16,000 pounds, whether or not attached to a vehicle chassis.
7-23 (26) [(2)] "New motor vehicle" means a motor vehicle
7-24 which has not been the subject of a "retail sale" without regard to
7-25 the mileage of the vehicle.
7-26 (27) [(22)] "Nonfranchised dealer" means a person[,
7-27 other than a franchised dealer,] who holds an independent motor
8-1 vehicle dealer's general distinguishing number or a wholesale motor
8-2 vehicle dealer's general distinguishing number issued by the
8-3 Department pursuant to the terms of Chapter 503, Transportation
8-4 Code [Article 6686, Revised Statutes].
8-5 (28) [(16)] "Party" means each person or agency named
8-6 or admitted as a party and whose legal rights, duties, or
8-7 privileges are to be determined by the Commission after an
8-8 opportunity for adjudicative hearing.
8-9 (29) [(3)] "Person" means a natural person,
8-10 partnership, corporation, association, trust, estate, or any other
8-11 legal entity.
8-12 (30) [(17)] "Relocation" means the transfer of an
8-13 existing dealership operation to facilities at a different
8-14 location, including a transfer which results in a consolidation or
8-15 dualing of an existing dealer's operation.
8-16 (31) [(7)] "Representative" means any person who is or
8-17 acts as an agent, employee or representative of a manufacturer,
8-18 distributor, or converter who performs any duties in this State
8-19 relating to promoting the distribution and/or sale of new motor
8-20 vehicles or contacts dealers in this State on behalf of a
8-21 manufacturer, distributor, or converter.
8-22 (32) [(18)] "Retail sale" means the sale of a motor
8-23 vehicle except:
8-24 (A) a sale in which the purchaser acquires a
8-25 vehicle for the purpose of resale; or
8-26 (B) a sale of a vehicle that is operated under
8-27 and in accordance with Section 503.061, Transportation Code
9-1 [Article 6686, Revised Statutes].
9-2 (33) [(15)] "Rule" means a statement by the Commission
9-3 of general and future applicability that implements, interprets, or
9-4 prescribes law or policy or describes the organization or
9-5 procedural practice requirements of the Commission. The term
9-6 includes the amendment or repeal of a prior rule, but does not
9-7 include statements concerning only the internal management of the
9-8 Commission which do not affect the rights of a person not connected
9-9 with the Commission.
9-10 (34) [(21)] "Transportation Commission" means the
9-11 Texas Transportation Commission of the Texas Department of
9-12 Transportation.
9-13 (35) [(19)] "Warranty work" means parts, labor, and
9-14 any other expenses incurred by a franchised dealer in complying
9-15 with the terms of a manufacturer's or distributor's warranty.
9-16 SECTION 2. Section 2.01, Texas Motor Vehicle Commission Code
9-17 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
9-18 read as follows:
9-19 Sec. 2.01. TEXAS MOTOR VEHICLE BOARD [COMMISSION]. (a) In
9-20 conducting the policy-making and regulatory functions and duties
9-21 imposed on the board by this Act, whether mandatory or
9-22 discretionary, and unless otherwise provided by this Act, the board
9-23 is an independent entity within the department and is not an
9-24 advisory body to the department. The board [Texas Motor Vehicle
9-25 Commission] shall carry out the functions and duties conferred upon
9-26 it by this Act and by other provision of law.
9-27 (b) A reference in this Act to the "commission" or the Texas
10-1 Motor Vehicle Commission means the board [Motor Vehicle Board of
10-2 the Texas Department of Transportation]. A reference in other law,
10-3 rule or regulation to the Texas Motor Vehicle Commission means the
10-4 board [Motor Vehicle Board of the Texas Department of
10-5 Transportation].
10-6 (c) [A reference in this Act to the "Executive Director" or
10-7 the Executive Director of the Texas Motor Vehicle Commission means
10-8 the Director of the Motor Vehicle Division of the Texas Department
10-9 of Transportation.] A reference in other law, rule or regulation
10-10 to the Executive Director of the Texas Motor Vehicle Commission
10-11 means the Director [of the Motor Vehicle Division of the Texas
10-12 Department of Transportation].
10-13 (d) A reference in law, rule or regulation to the Texas
10-14 Motor Vehicle Commission Code means this Act.
10-15 SECTION 3. Section 2.02, Texas Motor Vehicle Commission Code
10-16 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
10-17 read as follows:
10-18 Sec. 2.02. Members of Board. (a) The Motor Vehicle Board
10-19 of the Texas Department of Transportation consists of six persons
10-20 appointed by the Governor with the advice and consent of the
10-21 Senate.
10-22 (b) The Executive Director is a member of the board ex
10-23 officio. The Executive Director may attend a meeting of the board
10-24 and may confer with and advise the board, the Chairman, or the
10-25 Director. The Executive Director may not vote on a matter coming
10-26 before the board and is not counted in the determination of a
10-27 quorum at a meeting of the board. Except as provided by this
11-1 subsection, the provisions of this Act relating to members of the
11-2 board do not apply to the Executive Director.
11-3 SECTION 4. Section 2.07, Texas Motor Vehicle Commission Code
11-4 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
11-5 read as follows:
11-6 Sec. 2.07. PER DIEM; EXPENSES. Each member of the board
11-7 [Commission] shall be entitled to $50.00 per day for each day
11-8 actually engaged in the duties of the office, including time spent
11-9 in necessary travel to and from meetings and otherwise, together
11-10 with all travel and other necessary expenses incurred while
11-11 performing official duties.
11-12 SECTION 5. Section 2.08A(c), Texas Motor Vehicle Commission
11-13 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
11-14 to read as follows:
11-15 (c) If the [Executive] Director has knowledge that a
11-16 potential ground for removal exists, the [Executive] Director shall
11-17 notify the Chairman of the Commission of the ground. The Chairman
11-18 shall then notify the Governor that a potential ground for removal
11-19 exists.
11-20 SECTION 6. Section 2.09, Texas Motor Vehicle Commission Code
11-21 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
11-22 read as follows:
11-23 Sec. 2.09. [EXECUTIVE] DIRECTOR; STAFF; CONTRACTS;
11-24 INDEMNITY. (a) The Executive Director [of the Texas Department of
11-25 Transportation] shall appoint the Director, [of the Motor Vehicle
11-26 Division] who is [shall be] the board's [division's] chief
11-27 executive and administrative officer. The Director, who shall be
12-1 an attorney licensed to practice law in this state, is charged with
12-2 administering, enforcing, and carrying out the provisions of this
12-3 Act. The Director serves at the pleasure of the Executive Director
12-4 [of the Texas Department of Transportation].
12-5 (b) The [Executive] Director or his designated
12-6 representative shall meet with the board [Commissioners] in an
12-7 advisory capacity without vote in all proceedings of the board
12-8 [Commission]. The [Executive] Director shall submit the reports to
12-9 the board [Commission] as may be required by the board's
12-10 [Commission's] rules or by this Act.
12-11 (c) The [Executive] Director or his designee shall maintain
12-12 all minutes of board [Commission] proceedings and shall serve as
12-13 the custodian of the files and records of the board [Commission].
12-14 (d) The [Executive] Director, or his designee, on behalf of
12-15 the board [Commission], may negotiate with and, with the consent of
12-16 a majority of the board [Commissioners], enter into contracts or
12-17 other agreements with the United States or any of its agencies,
12-18 with states and political subdivisions thereof, or any other entity
12-19 for the purpose of carrying out the powers, duties, and
12-20 responsibilities of the board [Commission].
12-21 (e) The [Executive] Director shall appoint and employ such
12-22 board [Commission] staff as are necessary to carry out the duties
12-23 and functions of the [Executive] Director and the board
12-24 [Commission] under this Act. The board [Commission] shall develop
12-25 and implement policies that clearly define the respective
12-26 responsibilities of the board [Commission] and the staff of the
12-27 board [Commission].
13-1 (f) An employee of the board [Commission] is subject to
13-2 dismissal who has an interest in or is related within the first
13-3 degree by consanguinity or affinity, as determined under Article
13-4 5996h, Revised Statutes, to a person who has an interest in a
13-5 business that manufactures, distributes, converts, [or] sells, or
13-6 leases motor vehicles.
13-7 (g) [(h)] Notwithstanding any other provision of law, the
13-8 [Executive] Director, each member of the board [Texas Motor Vehicle
13-9 Commission], each Hearing Examiner and all other employees of the
13-10 board [Texas Motor Vehicle Commission] are not personally liable
13-11 for damages occasioned by their official acts or omissions except
13-12 when such acts or omissions constitute intentional or malicious
13-13 malfeasance. The Attorney General shall defend any action brought
13-14 against a member or employee of the board [Commission] in
13-15 connection with an official act or omission, whether or not at the
13-16 time of the institution of the action the defendant has previously
13-17 ceased to serve the Commission in any capacity, and the State of
13-18 Texas shall indemnify any such person from and against a judgment
13-19 entered against the person in any such actions though the State may
13-20 seek contribution if liability is otherwise permitted by this
13-21 subsection.
13-22 (h) [(i)] Unless otherwise provided by this Act or by board
13-23 [Commission] rules, all applications, petitions, or other documents
13-24 requiring action by the board [Commission] shall be directed to the
13-25 [Executive] Director.
13-26 (i) [(j)] The board [Commission] shall provide to its
13-27 members and employees, as often as necessary, information regarding
14-1 their qualifications for office or employment under this Act and
14-2 their responsibilities under applicable laws relating to standards
14-3 of conduct for state officers or employees.
14-4 SECTION 7. Section 3.01(a), Texas Motor Vehicle Commission
14-5 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
14-6 to read as follows:
14-7 (a) The board [Commission] has the general and original
14-8 power and jurisdiction to regulate all aspects of the distribution,
14-9 sale, and leasing of motor vehicles and to do all things, whether
14-10 specifically designated in this Act or implied herein, or necessary
14-11 or convenient to the exercise of this power and jurisdiction,
14-12 including the original jurisdiction to determine questions of its
14-13 own jurisdiction. In addition to the other duties placed on the
14-14 board [Commission] by this Act, the board [Commission] shall
14-15 enforce and administer the terms of Chapter 503, Transportation
14-16 Code [Article 6686, Revised Statutes].
14-17 SECTION 8. Subchapter C, Texas Motor Vehicle Commission Code
14-18 (Article 4413(36), Vernon's Texas Civil Statutes), is amended by
14-19 adding Section 3.01A to read as follows:
14-20 Sec. 3.01A. INTERACTION WITH DEPARTMENT. (a) In
14-21 coordination with the department, the board shall develop and
14-22 implement policies that clearly delineate the policy-making
14-23 responsibilities of the board and the management responsibilities
14-24 of the department.
14-25 (b) The department, by agreement with the board, may provide
14-26 personnel and services to the board as needed to carry out
14-27 purposes, powers, and duties of the board. The board may delegate
15-1 authority to personnel as needed.
15-2 SECTION 9. Section 3.03(b), Texas Motor Vehicle Commission
15-3 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
15-4 to read as follows:
15-5 (b) The board [commission] may conduct hearings in contested
15-6 cases brought pursuant to, and as provided by, Chapter 503,
15-7 Transportation Code [Article 6686, Revised Statutes]. The
15-8 procedures applicable to a hearing conducted under this Subsection,
15-9 and the disposition of a final order after a hearing conducted
15-10 under this Subsection, are those applicable to a hearing conducted
15-11 as provided by Section 6.07(e)(2) of this Act. A decision or final
15-12 order issued under this Subsection is final, and no appeal may, as
15-13 a matter of right, be made to the Texas Transportation Commission.
15-14 The department may adopt rules applicable to procedures, hearings,
15-15 and enforcement proceedings in an action brought pursuant to this
15-16 Subsection.
15-17 SECTION 10. Section 3.04, Texas Motor Vehicle Commission
15-18 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
15-19 to read as follows:
15-20 Sec. 3.04. DELEGATION OF BOARD [COMMISSION] POWERS. The
15-21 board [Commission] may delegate any power which it holds or derives
15-22 under this Act to:
15-23 (1) one or more of its members [of the Commission];
15-24 (2) the [Executive] Director; or
15-25 (3) one or more of its employees [of the Commission].
15-26 SECTION 11. Section 3.05, Texas Motor Vehicle Commission
15-27 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-1 to read as follows:
16-2 Sec. 3.05. INVESTIGATION; ENFORCEMENT. (a) Whenever the
16-3 board [Commission] has reason to believe, through receipt of a
16-4 complaint or otherwise, that a violation of this Act or a board
16-5 [Commission] rule, order, or decision has occurred or is likely to
16-6 occur, the board [Commission] shall conduct an investigation unless
16-7 it determines that a complaint is frivolous or for the purpose of
16-8 harassment. If the board's [Commission's] investigation establishes
16-9 that a violation of this Act or a board [Commission] rule, order,
16-10 or decision has occurred or is likely to occur, the board
16-11 [Commission] shall institute proceedings as it deems appropriate to
16-12 enforce this Act or its rules, orders, and decisions.
16-13 (b) Notwithstanding Subsection (a) of this section or
16-14 another provision of this Act or board rule, the board may not
16-15 initiate a proceeding alleging a violation of this Act or a board
16-16 rule relating to advertising until the board has notified the
16-17 licensee involved of the alleged violation and given the licensee
16-18 an opportunity to cure the violation without further proceedings or
16-19 liability.
16-20 SECTION 12. Section 3.06, Texas Motor Vehicle Commission
16-21 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-22 to read as follows:
16-23 Sec. 3.06. Rules. The authority to issue rules pursuant to
16-24 this Act shall be vested in the board [Commission]. After notice
16-25 and hearing conducted by the board [Commission] or by the
16-26 [Executive] Director or his delegee in accordance with Chapter
16-27 2001, Government Code, [the Administrative Procedure and Texas
17-1 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)] and
17-2 in compliance with this Act and the rules, decisions, and orders of
17-3 the board [Commission], the board [Commission] shall adopt such
17-4 rules and amendments thereto and deletions therefrom as may be
17-5 necessary or convenient to effectuate the provisions of this Act
17-6 and to govern practice and procedure before the board [Commission].
17-7 Such rules shall become effective as soon as the board
17-8 [Commission], acting by and through its [Executive] Director,
17-9 complies with the requirements of Chapter 2001, Government Code,
17-10 [the Administrative Procedure and Texas Register Act] regarding
17-11 publication of official agency rules.
17-12 SECTION 13. Section 3.07, Texas Motor Vehicle Commission
17-13 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
17-14 to read as follows:
17-15 Sec. 3.07. Orders and decisions. (a) An order or decision
17-16 shall:
17-17 (1) include a separate finding of fact with respect to
17-18 each specific issue the board is required by law to consider in
17-19 reaching a decision;
17-20 (2) set forth additional [the] findings of fact and
17-21 conclusions of law on which the order or decision is based; and
17-22 (3) [shall] give the reasons for the particular
17-23 actions taken.
17-24 (b) Except as provided by Section 6.07 of this Act, all
17-25 orders and decisions shall be signed on behalf of the board
17-26 [Commission] by the Chairman or Vice-chairman and attested by the
17-27 [Executive] Director and shall have the seal affixed.
18-1 SECTION 14. Section 3.08, Texas Motor Vehicle Commission
18-2 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
18-3 to read as follows:
18-4 Sec. 3.08. Hearings; notice; hearing procedures; complaints.
18-5 (a) In this section, the term "contested case" has the meaning
18-6 given it in Chapter 2001, Government Code. A hearing shall be
18-7 conducted in all contested cases[, as defined in the Administrative
18-8 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
18-9 Civil Statutes),] which arise in connection with this Act or any
18-10 rule of the board [Commission]. All hearings shall be conducted in
18-11 accordance with this Act, the orders, decisions, or rules of the
18-12 board [Commission], and Chapter 2001, Government Code, [the
18-13 Administrative Procedure and Texas Register Act] to the extent that
18-14 Chapter 2001, Government Code, [the Administrative Procedure and
18-15 Texas Register Act] does not conflict with this Act. A hearing may
18-16 be informally disposed of in accordance with Chapter 2001,
18-17 Government Code [the Administrative Procedure and Texas Register
18-18 Act]. Any hearing held under this section shall be conducted by
18-19 the [Executive] Director or any Hearing Examiner, each of whom may
18-20 be referred to in this Act as the "Examiner." The person or
18-21 persons serving as Examiner in any contested case hearing are
18-22 hereby delegated all the power and authority which the board
18-23 [Commission] has under this Act regarding the conduct of hearings,
18-24 including, without limitation, the power to hold hearings,
18-25 administer oaths, receive pleadings and evidence, issue subpoenas
18-26 to compel the attendance of witnesses, compel the production of
18-27 papers and documents, issue interlocutory orders, including cease
19-1 and desist orders in the nature of temporary restraining orders and
19-2 temporary injunctions, make findings of fact and conclusions of
19-3 law, and issue proposals for decision and recommended final orders.
19-4 (b) Notice of a hearing shall describe in summary form the
19-5 purpose of the hearing and its date, time, and place.
19-6 (c) Notice of a rulemaking hearing shall be given in
19-7 accordance with Chapter 2001, Government Code, [the Administrative
19-8 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
19-9 Civil Statutes)] and the rules of the board [Commission] not less
19-10 than 30 days before the hearing date. Notice of a contested case
19-11 hearing involving a licensee [license] shall be given in accordance
19-12 with this Act and the rules of the board [Commission].
19-13 (d) Notice of a contested case hearing shall be deemed to
19-14 have been received by any person if notice of the hearing was
19-15 mailed to the last known address, of any person known to have legal
19-16 rights, duties, or privileges that could be determined at the
19-17 hearing, not less than 10 days before the hearing date. Notice of
19-18 a hearing shall be given by certified mail, return receipt
19-19 requested. Notice may be given to any officer, agent, employee,
19-20 legal representative, or attorney of any person. Notice of any
19-21 hearing may be waived by any person.
19-22 (e) A hearing shall be convened [conducted] at the time and
19-23 place stated in the hearing notice [or the hearing shall be
19-24 rescheduled and an amended notice given]. Any hearing may be
19-25 recessed until a time and place certain without further notice if
19-26 the time and place is [continued from time to time and place to
19-27 place as] announced openly before the hearing is recessed. If the
20-1 time and place determined for the resumption of the hearing is not
20-2 announced openly before the hearing is recessed, the hearing may be
20-3 recessed to a time and place certain[, without further notice, or
20-4 otherwise,] by giving advance notice as required by Chapter 2001,
20-5 Government Code [the Administrative Procedure and Texas Register
20-6 Act (Article 6252-13a, Vernon's Texas Civil Statutes)].
20-7 (f) Unless otherwise limited by this Act, any person whose
20-8 legal rights, duties, or privileges are to be determined at any
20-9 hearing shall have the right to appear personally and by counsel,
20-10 to cross-examine adverse witnesses, and to produce evidence and
20-11 witnesses in the person's own behalf.
20-12 (g) In all contested cases the examiner shall serve on all
20-13 parties a copy of the examiner's proposal for decision and
20-14 recommended order containing findings of fact and conclusions of
20-15 law. A [shall be served on all parties and each] party may file
20-16 exceptions and replies to the board. In its review of the case,
20-17 the board may [Commission. After replies and exceptions have been
20-18 timely filed, the Commission shall] consider only the materials
20-19 timely submitted [by all parties]. The board [Commission] may
20-20 receive such oral argument from any party as the board [Commission]
20-21 may allow. The board [Commission] shall take such further actions
20-22 as are conducive to the issuance of a final order and shall
20-23 thereafter issue a written final decision or order. The board's
20-24 [Commission's] written final decision or order shall be signed on
20-25 behalf of the board [Commission] by the [Executive] Director. A
20-26 majority vote of a quorum of the board [Commissioners] shall be
20-27 required to adopt final decisions or orders of the board
21-1 [Commission].
21-2 (h) A party who seeks a rehearing of an order shall do so in
21-3 accordance with the terms of Chapter 2001, Government Code [the
21-4 Administrative Procedure and Texas Register Act (Article 6252-13a,
21-5 Vernon's Texas Civil Statutes)].
21-6 (i) The owner of a motor vehicle or the owner's designated
21-7 agent may make a complaint concerning defects in a motor vehicle
21-8 which are covered by a manufacturer's, converter's, or
21-9 distributor's warranty agreement applicable to the vehicle. Any
21-10 such complaint must be made in writing to the applicable dealer,
21-11 manufacturer, converter, or distributor and must specify the
21-12 defects in the vehicle which are covered by the warranty. The
21-13 owner may also invoke the board's [Commission's] jurisdiction by
21-14 sending the board [Commission] a copy of the complaint. A hearing
21-15 may be scheduled on all complaints arising under this subsection
21-16 which are not privately resolved between the owner and the dealer,
21-17 manufacturer, converter, or distributor.
21-18 (j) On motion of any party the board [Commission] may, by
21-19 final order, and in accordance with the terms and procedures set
21-20 forth in Rule 166a, Texas Rules of Civil Procedure, dismiss a
21-21 complaint, protest, or response without holding a contested case
21-22 hearing.
21-23 SECTION 15. Section 3.09, Texas Motor Vehicle Commission
21-24 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
21-25 to read as follows:
21-26 Sec. 3.09. PROCEDURAL SUPREMACY [EFFECT ON ADMINISTRATIVE
21-27 PROCEDURE AND TEXAS REGISTER ACT]. In the event of any conflict
22-1 between Chapter 2001, Government Code, [the Administrative
22-2 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
22-3 Civil Statutes)] and this Act, the provisions of this Act shall
22-4 prevail.
22-5 SECTION 16. Section 4.01, Texas Motor Vehicle Commission
22-6 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
22-7 by amending Subsection (b) and by adding Subsections (c) and (d) to
22-8 read as follows:
22-9 (b) In the case of a nonfranchised dealer, the term
22-10 "license" in this Act means a general distinguishing number [issued
22-11 by the Department pursuant to the authority of Article 6686,
22-12 Revised Statutes]. A nonfranchised dealer may not operate as a
22-13 dealer without a valid general distinguishing number but is not
22-14 required to obtain an additional license under the terms of this
22-15 Act. A franchised dealer shall have both a general distinguishing
22-16 number and a separate license issued under the terms of this Act.
22-17 (c) Notwithstanding the terms of this Act, a franchised
22-18 dealer is not required to have a lessor license or lease
22-19 facilitator license to engage in any capacity in the business of
22-20 leasing motor vehicles that the dealer owns and is licensed by this
22-21 Act to sell.
22-22 (d) A manufacturer or distributor that directly or
22-23 indirectly reimburses another person to perform warranty repair
22-24 services on a vehicle is engaged in business in this state whether
22-25 or not the manufacturer sells or offers for sale new motor vehicles
22-26 in this state.
22-27 SECTION 17. Section 4.02(a), Texas Motor Vehicle Commission
23-1 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
23-2 to read as follows:
23-3 (a) An application for a dealer license shall be on a form
23-4 prescribed by the board [Commission] which shall include the
23-5 information required by Chapter 503, Transportation Code [Article
23-6 6686, Revised Statutes], and information on the applicant's
23-7 financial resources, business integrity, business ability and
23-8 experience, franchise agreement if applicable, physical facilities,
23-9 vehicle inventory, and other factors the board [Commission]
23-10 considers necessary to determine an applicant's qualifications to
23-11 adequately serve the motoring public.
23-12 SECTION 18. Section 4.03A, Texas Motor Vehicle Commission
23-13 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
23-14 to read as follows:
23-15 Sec. 4.03A. Lessor Application. An application for a lessor
23-16 license shall be on a form prescribed by the board [Commission] and
23-17 shall contain evidence of compliance with Chapter 503,
23-18 Transportation Code [Article 6686, Revised Statutes], if
23-19 applicable, and other information prescribed by the board
23-20 [Commission]. This Act does not require a separate license for
23-21 each individual employee of a lessor.
23-22 SECTION 19. Section 4.05(a), Texas Motor Vehicle Commission
23-23 Code (Article 4413(36), Vernon's Texas Civil Statutes), as amended
23-24 by Chapters 345 and 357, Acts of the 74th Legislature, Regular
23-25 Session, 1995, is amended to read as follows:
23-26 (a) The annual license fees for licenses issued hereunder
23-27 shall be as follows:
24-1 (1) For each manufacturer and distributor, $900 plus
24-2 $20 for each individual dealer franchised by the manufacturer or
24-3 distributor.
24-4 (2) For each franchised dealer who sold 200 or fewer
24-5 new motor vehicles during the preceding calendar year, $175.
24-6 (3) For each franchised dealer who sold more than 200,
24-7 but not more than 400, new motor vehicles during the preceding
24-8 calendar year, $275.
24-9 (4) For each franchised dealer who sold more than 400,
24-10 but not more than 800, new motor vehicles during the preceding
24-11 calendar year, $400.
24-12 (5) For each franchised dealer who sold more than 800
24-13 but not more than 1,200 new motor vehicles during the preceding
24-14 calendar year, $500.
24-15 (6) For each franchised dealer who sold more than
24-16 1,200 but not more than 1,600 new motor vehicles during the
24-17 preceding calendar year, $625.
24-18 (7) For each franchised dealer who sold more than
24-19 1,600 new motor vehicles during the preceding calendar year, $750.
24-20 (8) For each location separate from his dealership at
24-21 which a franchised dealer offers no motor vehicle for sale, but
24-22 performs warranty service on vehicles the dealer is franchised and
24-23 licensed to sell, $100.
24-24 (9) [(10)] For each amendment to a dealer's license,
24-25 $25.
24-26 (10) [(8)] For each representative, $100.
24-27 (11) [(9)] For each converter, $375.
25-1 (12) [(9)] For each lessor who leased 200 or fewer
25-2 motor vehicles during the preceding calendar year, $175.
25-3 (13) [(10)] For each lessor who leased more than 200
25-4 but not more than 400 motor vehicles during the preceding calendar
25-5 year, $275.
25-6 (14) [(11)] For each lessor who leased more than 400
25-7 but not more than 800 motor vehicles during the preceding calendar
25-8 year, $400.
25-9 (15) [(12)] For each lessor who leased more than 800
25-10 but not more than 1,200 motor vehicles during the preceding
25-11 calendar year, $500.
25-12 (16) [(13)] For each lessor who leased more than 1,200
25-13 but not more than 1,600 motor vehicles during the preceding
25-14 calendar year, $625.
25-15 (17) [(14)] For each lessor who leased more than 1,600
25-16 motor vehicles during the preceding calendar year, $750.
25-17 (18) [(15)] For each lease facilitator, $375.
25-18 SECTION 20. Section 5.01, Texas Motor Vehicle Commission
25-19 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
25-20 to read as follows:
25-21 Sec. 5.01. FRANCHISED DEALERS. It is unlawful for any
25-22 franchised dealer to:
25-23 (1) Require a retail purchaser of a new motor vehicle
25-24 as a condition of sale and delivery thereof to purchase special
25-25 features, equipment, parts, or accessories not ordered or desired
25-26 by the purchaser, provided such features, equipment, parts, or
25-27 accessories are not already installed on the new motor vehicle at
26-1 the time of sale.
26-2 (2) Fail to perform the obligations placed on the
26-3 selling franchised dealer in connection with the delivery and
26-4 preparation of a new motor vehicle for retail sale as provided in
26-5 the manufacturer's preparation and delivery agreements on file with
26-6 the Commission and applicable to such vehicle.
26-7 (3) Fail to perform the obligations placed on the
26-8 franchised dealer in connection with the manufacturer's warranty
26-9 agreements on file with the Commission.
26-10 (4) Operate without appropriate signs readily and
26-11 easily visible to the public, identifying the franchised dealer's
26-12 place of business and the products the franchised dealer offers for
26-13 sale. In the event of a conflict with another law or ordinance,
26-14 this Subdivision prevails, and in the event of a dispute, the Board
26-15 has exclusive jurisdiction to determine whether a sign or signs are
26-16 in compliance with the terms of this Subdivision. In the event of
26-17 a dispute, the Board shall uphold local ordinances of a home-rule
26-18 city and protect franchised dealers from retribution by
26-19 manufacturers or distributors for having complied with local
26-20 ordinances.
26-21 (5) [(7)] Directly or indirectly pay a fee to a lessor
26-22 or lease facilitator.
26-23 SECTION 21. Section 5.01A, Texas Motor Vehicle Commission
26-24 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
26-25 to read as follows:
26-26 Sec. 5.01A. Dealers. No dealer may:
26-27 (1) use false, deceptive, or misleading advertising;
27-1 (2) [operate as a dealer without a currently valid
27-2 license or general distinguishing number issued by the Board;]
27-3 [(3)] violate a rule of the Board; or
27-4 (3) [(4)] aid or abet a person who violates this Act.
27-5 SECTION 22. Section 5.02(b), Texas Motor Vehicle Commission
27-6 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
27-7 to read as follows:
27-8 (b) It is unlawful for any manufacturer, distributor, or
27-9 representative to:
27-10 (1) Require or attempt to require any dealer to order,
27-11 accept delivery of or pay anything of value, directly or
27-12 indirectly, for any motor vehicle, appliance, part, accessory or
27-13 any other commodity unless voluntarily ordered or contracted for by
27-14 such dealer.
27-15 (2) Refuse or fail to deliver, in reasonable
27-16 quantities and within a reasonable time, to a dealer having a
27-17 franchise agreement for the retail sale of any motor vehicles sold
27-18 or distributed by such manufacturer, distributor, or
27-19 representative, any new motor vehicle or parts or accessories to
27-20 new motor vehicles as are covered by such franchise if such
27-21 vehicle, parts or accessories are publicly advertised as being
27-22 available for delivery or are actually being delivered; provided,
27-23 however, this provision is not violated if such failure is caused
27-24 by acts of God, work stoppage or delays due to strikes or labor
27-25 disputes, freight embargoes or other causes beyond the control of
27-26 the manufacturer, distributor, or representative.
27-27 (3) Notwithstanding the terms of any franchise
28-1 agreement:
28-2 (A) Terminate or refuse to continue any
28-3 franchise with a dealer or directly or indirectly force or attempt
28-4 to force a dealer to discontinue a line-make or parts or products
28-5 related to that line-make unless all of the following conditions
28-6 are met:
28-7 (i) the dealer and the board [Commission]
28-8 have received written notice by registered or certified mail from
28-9 the manufacturer, distributor, or representative not less than 60
28-10 days before the effective date of termination or noncontinuance
28-11 setting forth the specific grounds for termination or
28-12 noncontinuance; and
28-13 (ii) the written notice contains on the
28-14 first page thereof a conspicuous statement which reads as follows:
28-15 "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE
28-16 TEXAS MOTOR VEHICLE BOARD [COMMISSION] IN AUSTIN, TEXAS, AND HAVE A
28-17 HEARING IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR
28-18 NONCONTINUANCE OF YOUR FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR
28-19 VEHICLE COMMISSION CODE IF YOU OPPOSE THIS ACTION."; and
28-20 (iii) the manufacturer, distributor, or
28-21 representative has received the informed, written consent of the
28-22 affected dealer or the appropriate period for the affected dealer
28-23 to protest the proposed franchise termination or noncontinuance has
28-24 lapsed; or
28-25 (iv) if the affected dealer files a
28-26 protest with the board [Commission] within the greater of (1) 60
28-27 days after receiving its 60-day notice of proposed termination or
29-1 noncontinuance or (2) the time specified in such notice, the board
29-2 [Commission] determines that the party seeking to terminate or not
29-3 continue a dealer's franchise has established by a preponderance of
29-4 the evidence, at a hearing called by the board [Commission], that
29-5 there is good cause for the proposed termination or noncontinuance.
29-6 (v) Notwithstanding Subdivisions (3)(A)(i)
29-7 and (3)(A)(iv) of this section, notice may be made not less than 15
29-8 days prior to the effective date of termination or noncontinuance
29-9 if a licensed dealer fails to conduct its customary sales and
29-10 service operations during its customary business hours for seven
29-11 consecutive business days unless such failure is caused by an act
29-12 of God, work stoppage or delays due to strikes or labor disputes,
29-13 an order of the board [Commission], or other causes beyond the
29-14 control of the dealer.
29-15 (B) Whenever a dealer files a timely protest to
29-16 a proposed franchise termination or noncontinuance, the board
29-17 [Commission] shall notify the party seeking to terminate or to not
29-18 continue the protesting dealer's franchise that a timely protest
29-19 has been filed, that a hearing is required in accordance with this
29-20 Act, and that the party who gave the dealer notice of termination
29-21 or noncontinuance of the franchise may not terminate or refuse to
29-22 continue the franchise until the board [Commission] issues its
29-23 final decision or order.
29-24 (C) If a franchise is terminated or not
29-25 continued, another franchise in the same line-make will be
29-26 established within a reasonable time unless it is shown to the
29-27 board [Commission] by a preponderance of the evidence that the
30-1 community or trade area cannot reasonably support such a
30-2 dealership. If this showing is made, no dealer license shall be
30-3 thereafter issued in the same area unless a change in circumstances
30-4 is established.
30-5 (4) Notwithstanding the terms of any franchise
30-6 agreement, modify or replace a franchise with a succeeding
30-7 franchise if the modification or replacement would adversely
30-8 affect, to a substantial degree, the dealer's sales, investment, or
30-9 obligations to provide service to the public, unless the
30-10 manufacturer, distributor, or representative has first given the
30-11 board [Commission] and each affected dealer written notice by
30-12 registered or certified mail of any such action 60 days in advance
30-13 of the modification or replacement. The written notice shall
30-14 contain on the first page thereof a conspicuous statement which
30-15 reads as follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE
30-16 A PROTEST WITH THE TEXAS MOTOR VEHICLE BOARD [COMMISSION] IN
30-17 AUSTIN, TEXAS, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE
30-18 PROPOSED MODIFICATION OR REPLACEMENT OF YOUR FRANCHISE WITH A
30-19 SUCCEEDING FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR VEHICLE
30-20 COMMISSION CODE IF YOU OPPOSE THIS ACTION." Within the greater of
30-21 (1) 60 days after receipt of such notice or (2) the time specified
30-22 in such notice, a dealer may file a protest with the board
30-23 [Commission] and the modification or replacement shall not become
30-24 effective unless and until the board [Commission] determines that
30-25 the party seeking to modify or replace a franchise with a
30-26 succeeding franchise has demonstrated by a preponderance of the
30-27 evidence that there is good cause for the modification or
31-1 replacement. The prior franchise shall continue in effect until
31-2 the protest is resolved by the board [Commission].
31-3 (5) Notwithstanding the terms of any franchise
31-4 agreement, in determining whether good cause has been established
31-5 for modifying, replacing, terminating, or refusing to continue a
31-6 franchise, or for forcing or attempting to force a dealer to
31-7 discontinue a line-make or parts or products related to that
31-8 line-make, the board [Commission] shall consider all the existing
31-9 circumstances including, without limitation by the enumeration
31-10 herein, all the following:
31-11 (A) the dealer's sales in relation to the sales
31-12 in the market;
31-13 (B) the dealer's investment and obligations;
31-14 (C) injury to the public welfare;
31-15 (D) the adequacy of the dealer's service
31-16 facilities, equipment, parts, and personnel in relation to those of
31-17 other dealers of new motor vehicles of the same line-make;
31-18 (E) whether warranties are being honored by the
31-19 dealer;
31-20 (F) the parties' compliance with their franchise
31-21 agreement; and
31-22 (G) the enforceability of the franchise
31-23 agreement from a public policy standpoint, including, without
31-24 limitation, issues of the reasonableness of the franchise
31-25 agreement's terms, oppression, adhesion, and the relative
31-26 bargaining power of the parties.
31-27 Good cause shall not be shown solely by the desire of a
32-1 manufacturer, distributor, or representative for market
32-2 penetration.
32-3 (6) Use any false, deceptive or misleading
32-4 advertising.
32-5 (7) Notwithstanding the terms of any franchise
32-6 agreement, prevent any dealer from reasonably changing the capital
32-7 structure of his dealership or the means by or through which he
32-8 finances the operation thereof, provided that the dealer meets
32-9 reasonable capital requirements.
32-10 (8) Notwithstanding the terms of any franchise
32-11 agreement, fail to give effect to or attempt to prevent any sale or
32-12 transfer of a dealer, dealership or franchise or interest therein
32-13 or management thereof unless, after complaint or protest, it is
32-14 demonstrated to the board [Commission] after hearing that the
32-15 result of any such sale or transfer will be detrimental to the
32-16 public or the representation of the manufacturer or distributor.
32-17 (9) Notwithstanding the terms of any franchise
32-18 agreement, require or attempt to require that a dealer assign to or
32-19 act as an agent for any manufacturer, distributor or representative
32-20 in the securing of promissory notes and security agreements given
32-21 in connection with the sale or purchase of new motor vehicles or
32-22 the securing of policies of insurance on or having to do with the
32-23 operation of vehicles sold.
32-24 (10) Notwithstanding the terms of any franchise
32-25 agreement, fail or refuse, after complaint and hearing, to perform
32-26 the obligations placed on the manufacturer in connection with the
32-27 delivery, preparation and warranty of a new motor vehicle as
33-1 provided in the manufacturer's warranty, preparation, and delivery
33-2 agreements on file with the board [Commission].
33-3 (11) Notwithstanding the terms of any franchise
33-4 agreement, fail to compensate its dealers for the work and services
33-5 they are required to perform in connection with the dealer's
33-6 delivery and preparation obligations according to the agreements on
33-7 file with the board [Commission] which must be found by the board
33-8 [Commission] to be reasonable, or fail to adequately and fairly
33-9 compensate its dealers for labor, parts and other expenses incurred
33-10 by such dealer to perform under and comply with a manufacturer's or
33-11 a distributor's warranty agreement, or require, as a prerequisite
33-12 to the manufacturer's or distributor's payment of a claim for
33-13 reimbursement as required by this section, that a dealer file with
33-14 the manufacturer or distributor the actual time spent in the
33-15 performance of labor unless actual time is the basis for
33-16 reimbursement. In no event shall any manufacturer or distributor
33-17 pay its dealers an amount of money for warranty work that is less
33-18 than that charged by the dealer to the retail customers of the
33-19 dealer for nonwarranty work of like kind. All claims made by
33-20 dealers for compensation for delivery, preparation, and warranty
33-21 work shall be paid within 30 days after approval and shall be
33-22 approved or disapproved within 30 days after receipt. When any
33-23 claim is disapproved, the dealer shall be notified in writing of
33-24 the grounds for disapproval. No claim which has been approved and
33-25 paid may be charged back to the dealer unless it can be shown that
33-26 the claim was false or fraudulent, that the repairs were not
33-27 properly made or were unnecessary to correct the defective
34-1 condition, or that the dealer failed to reasonably substantiate the
34-2 claim in accordance with reasonable written requirements of the
34-3 manufacturer or distributor, if the dealer has been notified of the
34-4 requirements prior to the time the claim arose, and if the
34-5 requirements were in effect at the time the claim arose. A
34-6 manufacturer or distributor may not audit a claim after the
34-7 expiration of two years following the submission of the claim
34-8 unless the manufacturer or distributor has reasonable grounds to
34-9 suspect that a claim was fraudulent. Notwithstanding the terms of
34-10 a franchise agreement or provision of law in conflict with this
34-11 section, the dealer's delivery, preparation, and warranty
34-12 obligations as filed with the board [Commission] shall constitute
34-13 the dealer's sole responsibility for product liability as between
34-14 the dealer and manufacturer or distributor, and, except for a loss
34-15 caused by the dealer's failure to adhere to these obligations, a
34-16 loss caused by the dealer's negligence or intentional misconduct,
34-17 or a loss caused by the dealer's modification of a product without
34-18 manufacturer or distributor authorization, the manufacturer or
34-19 distributor shall reimburse the dealer for all loss incurred by the
34-20 dealer, including legal fees, court costs, and damages, as a result
34-21 of the dealer having been named a party in a product liability
34-22 action.
34-23 (12) Operate as a manufacturer, distributor, or
34-24 representative without a currently valid license from the board
34-25 [Commission] or otherwise violate this Act or rules promulgated by
34-26 the board [Commission] hereunder.
34-27 (13) Notwithstanding the terms of any franchise
35-1 agreement, to prevent or refuse to honor the succession to a
35-2 dealership by any legal heir or devisee under the will of a dealer
35-3 or under the laws of descent and distribution of this State unless
35-4 it is shown to the board [Commission], after notice and hearing,
35-5 that the result of such succession will be detrimental to the
35-6 public interest and to the representation of the manufacturer or
35-7 distributor; provided, however, nothing herein shall prevent a
35-8 dealer, during his lifetime, from designating any person as his
35-9 successor dealer, by written instrument filed with the manufacturer
35-10 or distributor.
35-11 (14) Notwithstanding the terms of any franchise
35-12 agreement, require that a dealer pay or assume, directly or
35-13 indirectly, any part of any refund, rebate, discount, or other
35-14 financial adjustment made by the manufacturer, distributor, or
35-15 representative to, or in favor of, any customer of a dealer, unless
35-16 voluntarily agreed to by such dealer.
35-17 (15) Notwithstanding the terms of any franchise
35-18 agreement, deny or withhold approval of a written application to
35-19 relocate a franchise unless (A) the applicant has received written
35-20 notice of the denial or withholding of approval within 60 days
35-21 after receipt of the application containing information reasonably
35-22 necessary to enable the manufacturer or distributor to adequately
35-23 evaluate the application, and if (B) the applicant files a protest
35-24 with the board [Commission] and the manufacturer or distributor
35-25 establishes by a preponderance of the evidence at a hearing called
35-26 by the board [Commission] that the grounds for the denial or
35-27 withholding of approval of the relocation are reasonable.
36-1 (16) Notwithstanding the terms of any franchise
36-2 agreement, fail to pay to a dealer or any lienholder in accordance
36-3 with their respective interest after the termination of a
36-4 franchise:
36-5 (A) the dealer cost of each new motor vehicle in
36-6 the dealer's inventory with mileage of 6,000 miles or less, reduced
36-7 by the net discount value of each, where "net discount value" is
36-8 determined according to the following formula: net cost multiplied
36-9 by total mileage divided by 100,000, and where "net cost" equals
36-10 the dealer cost plus any charges by the manufacturer, distributor,
36-11 or representative for distribution, delivery, and taxes, less all
36-12 allowances paid to the dealer by the manufacturer, distributor, or
36-13 representative for new, unsold, undamaged, and complete motor
36-14 vehicles of current model year or one year prior model year in the
36-15 dealer's inventory, except that if a vehicle cannot be reduced by
36-16 the net discount value, the manufacturer or distributor shall pay
36-17 the dealer the net cost of the vehicle;
36-18 (B) the dealer cost of each new, unused,
36-19 undamaged, and unsold part or accessory if the part or accessory is
36-20 in the current parts catalogue and is still in the original,
36-21 resalable merchandising package and in unbroken lots, except that
36-22 in the case of sheet metal, a comparable substitute for the
36-23 original package may be used, and if the part or accessory was
36-24 purchased by the dealer either directly from the manufacturer or
36-25 distributor or from an outgoing authorized dealer as a part of the
36-26 dealer's initial inventory;
36-27 (C) the fair market value of each undamaged sign
37-1 owned by the dealer which bears a trademark or tradename used or
37-2 claimed by the manufacturer, distributor, or representative if the
37-3 sign was purchased from or purchased at the request of the
37-4 manufacturer, distributor, or representative;
37-5 (D) the fair market value of all special tools,
37-6 data processing equipment, and automotive service equipment owned
37-7 by the dealer which were recommended in writing and designated as
37-8 special tools and equipment and purchased from or purchased at the
37-9 request of the manufacturer, distributor, or representative, if the
37-10 tools and equipment are in usable and good condition except for
37-11 reasonable wear and tear;
37-12 (E) the cost of transporting, handling, packing,
37-13 storing, and loading of any property subject to repurchase under
37-14 this section;
37-15 (F) except as provided by this subdivision, any
37-16 sums due as provided by Paragraph (A) of this subdivision within 60
37-17 days after termination of a franchise and any sums due as provided
37-18 by Paragraphs (B) through (E) of this subdivision within 90 days
37-19 after termination of a franchise. As a condition of payment, the
37-20 dealer is to comply with reasonable requirements with respect to
37-21 the return of inventory as are set out in the terms of the
37-22 franchise agreement. A manufacturer or distributor shall
37-23 reimburse a dealer for the dealer's cost for storing any property
37-24 covered by this subdivision beginning 90 days following
37-25 termination. A manufacturer or distributor shall reimburse a
37-26 dealer for the dealer's cost of storing any property covered by
37-27 this subdivision before the expiration of 90 days from the date of
38-1 termination if the dealer notifies the manufacturer or distributor
38-2 of the commencement of storage charges within that period. On
38-3 receipt of notice of the commencement of storage charges, a
38-4 manufacturer or distributor may immediately take possession of the
38-5 property in question by repurchasing the property as provided by
38-6 this subdivision. A manufacturer, distributor, or representative
38-7 who fails to pay those sums within the prescribed time or at such
38-8 time as the dealer and lienholder, if any, proffer good title prior
38-9 to the prescribed time for payment, is liable to the dealer for:
38-10 (i) the greatest of dealer cost, fair
38-11 market value, or current price of the inventory;
38-12 (ii) interest on the amount due calculated
38-13 at the rate applicable to a judgment of a court; and
38-14 (iii) reasonable attorney's fees and
38-15 costs.
38-16 (17) Notwithstanding the terms of any franchise
38-17 agreement, change its distributor, its method of distribution of
38-18 its products in this state, or its business structure or ownership
38-19 in a manner that results in the termination or noncontinuance of a
38-20 franchise without good cause. The manufacturer, distributor, or
38-21 representative shall issue the same notice to the dealer and to the
38-22 board [Commission] as is provided in Subdivisions (3)(A) and (B) of
38-23 this section and said same procedures shall apply to the parties.
38-24 (18) Notwithstanding the terms of any franchise
38-25 agreement, require a dealer to submit to arbitration on any issue
38-26 unless the dealer and the manufacturer, distributor, or
38-27 representative and their respective counsel agree to arbitrate
39-1 after a controversy arises. The arbitrator shall apply the
39-2 provisions of this Act in resolving the pertinent controversy.
39-3 Either party may appeal to the board [Commission] a decision of an
39-4 arbitrator on the ground that the arbitrator failed to apply this
39-5 Act.
39-6 (19) Notwithstanding the terms of any franchise
39-7 agreement, require that a dealer join, contribute to, or affiliate
39-8 with, directly or indirectly, any advertising association.
39-9 (20) Notwithstanding the terms of a franchise
39-10 agreement:
39-11 (A) require adherence to unreasonable sales or
39-12 service standards;
39-13 (B) directly or indirectly, discriminate against
39-14 a dealer or otherwise treat dealers differently as a result of a
39-15 formula or other calculation or process intended to gauge the
39-16 performance of a dealership, except a sales contest or other
39-17 recognition program based on reasonable sales and service criteria;
39-18 (C) unreasonably require that a dealer purchase
39-19 special tools or equipment; or
39-20 (D) fail to compensate a dealer for all costs
39-21 incurred by the dealer as required by the manufacturer in complying
39-22 with the terms of a product recall by the manufacturer or
39-23 distributor, including the costs, if any, incurred by the dealer in
39-24 notifying vehicle owners of the existence of the recall.
39-25 (21) Discriminate unreasonably between or among
39-26 franchisees in the sale of a motor vehicle owned by the
39-27 manufacturer or distributor.
40-1 (22) Directly or indirectly, or through a subsidiary
40-2 or agent, require, as a condition for obtaining financing for a
40-3 motor vehicle, the purchaser of a vehicle to purchase any product
40-4 other than the motor vehicle from the manufacturer or distributor,
40-5 or from an entity owned or controlled by the manufacturer or
40-6 distributor.
40-7 (23) Directly or indirectly, or through a subsidiary
40-8 or agent, require, as a condition of its or its subsidiary's
40-9 agreement to provide financing for a motor vehicle, that any
40-10 insurance policy or service contract purchased by the motor vehicle
40-11 purchaser be purchased from a specific source.
40-12 (24) Compel a dealer through a financing subsidiary of
40-13 the manufacturer or distributor to agree to unreasonable operating
40-14 requirements or directly or indirectly to terminate a dealer
40-15 through the actions of a financing subsidiary of the manufacturer
40-16 or distributor. This subdivision does not limit the right of a
40-17 financing entity to engage in business practices in accordance with
40-18 the usage of trade in retail and wholesale motor vehicle financing.
40-19 (25) Operate as a dealer except on a temporary basis
40-20 and only if:
40-21 (A) the dealership was previously owned by a
40-22 franchised dealer and is currently for sale at a reasonable price;
40-23 or
40-24 (B) the manufacturer, distributor, or
40-25 representative operates the dealership in a bona fide relationship
40-26 with a franchised dealer who is required to make a significant
40-27 investment in the dealership, subject to loss, and who reasonably
41-1 expects to acquire full ownership of the dealership under
41-2 reasonable terms and conditions.
41-3 (26) Notwithstanding the terms of a franchise
41-4 agreement, deny or withhold approval of a dealer's application to
41-5 add a line-make or parts or products related to that line-make
41-6 unless, within 60 days of receipt of the dealer's written
41-7 application to add the line-make, the manufacturer or distributor
41-8 gives the dealer written notice of the denial or withholding of
41-9 approval. After receipt of notice, the dealer may file a protest
41-10 with the board [Commission]. If the dealer files a protest as
41-11 provided by this subdivision, the board [Commission] may uphold the
41-12 manufacturer's or distributor's decision to deny or withhold
41-13 approval of the addition of the line-make only if the manufacturer
41-14 or distributor proves by a preponderance of the evidence that the
41-15 denial or withholding of approval was reasonable. In determining
41-16 whether or not the manufacturer or distributor has met its burden
41-17 to show that its denial or withholding of approval is reasonable,
41-18 the board [Commission] shall consider all existing circumstances,
41-19 including, without limitation, the following:
41-20 (A) the dealer's sales in relation to the sales
41-21 in the market;
41-22 (B) the dealer's investment and obligations;
41-23 (C) injury to the public welfare;
41-24 (D) the adequacy of the dealer's sales and
41-25 service facilities, equipment, parts, and personnel in relation to
41-26 those of other dealers of new motor vehicles of the same line-make;
41-27 (E) whether warranties are being honored by the
42-1 dealer agreement;
42-2 (F) the parties' compliance with their franchise
42-3 agreement;
42-4 (G) the enforceability of the franchise
42-5 agreement from a public policy standpoint, including without
42-6 limitation, issues of the reasonableness of the franchise
42-7 agreement's terms, oppression, adhesion, and the relative
42-8 bargaining power of the parties;
42-9 (H) whether the dealer complies with reasonable
42-10 capitalization requirements or will be able to comply with
42-11 reasonable capitalization requirements within a reasonable time;
42-12 (I) the harm, if any, to the manufacturer if the
42-13 denial or withholding of approval is not upheld; and
42-14 (J) the harm, if any, to the dealer if the
42-15 denial or withholding of approval is upheld.
42-16 SECTION 23. Section 6.02, Texas Motor Vehicle Commission
42-17 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
42-18 to read as follows:
42-19 Sec. 6.02. Injunction. Whenever it appears that a person
42-20 has violated, is violating, or is threatening to violate any
42-21 provision of this Act or of any rule or order of the board
42-22 [Commission] issued pursuant to this Act [then] the board
42-23 [Commission], or the [Executive] Director when authorized by the
42-24 board [Commission], may cause a suit to be instituted in any court
42-25 for injunctive relief to restrain any such person from continuing
42-26 the violation or threat of violation or for the assessment and
42-27 recovery of a civil penalty as provided for in this Act or for both
43-1 injunctive relief and a civil penalty.
43-2 SECTION 24. Section 6.03, Texas Motor Vehicle Commission
43-3 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
43-4 to read as follows:
43-5 Sec. 6.03. Suit. At the request of the board [Commission],
43-6 or the [Executive] Director when authorized by the board
43-7 [Commission], the Attorney General shall institute and conduct a
43-8 suit in the name of the State of Texas for injunctive relief or to
43-9 recover a civil penalty or for both injunctive relief and penalty.
43-10 SECTION 25. Sections 6.07(e), (g), and (j), Texas Motor
43-11 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
43-12 Statutes), are amended to read as follows:
43-13 (e)(1) The board [Commission] shall adopt rules for the
43-14 enforcement and implementation of this section.
43-15 (2) The [Executive] Director shall, in accordance with
43-16 rules adopted by the board [Commission], conduct hearings and issue
43-17 final orders for the enforcement and implementation of this
43-18 section. Orders issued by the [Executive] Director under this
43-19 section are considered final orders of the board [Commission].
43-20 (3) Except as provided by Subdivision (6) of this
43-21 subsection, the provisions of this section are not available to an
43-22 owner in an action seeking a refund or replacement based upon the
43-23 alleged nonconformity of a motor vehicle to an express warranty
43-24 applicable to the motor vehicle unless the owner has first
43-25 exhausted the administrative remedies provided herein.
43-26 (4) The provisions of this section are not available
43-27 to a party in an action against a seller under Chapter 2 or Chapter
44-1 17, Business & Commerce Code, as amended.
44-2 (5) Except as provided by Subdivision (6) of this
44-3 subsection, the provisions of this section are available in an
44-4 action against a manufacturer, converter, or distributor brought
44-5 under Chapter 17, Business & Commerce Code, after the owner has
44-6 exhausted the administrative remedies provided by this section.
44-7 (6) If, after a complaint has been filed under this
44-8 section, the Hearing Examiner has not issued a proposal for
44-9 decision and recommended to the [Executive] Director a final order
44-10 before the expiration of the 150th day after the date the complaint
44-11 was filed, the [Executive] Director shall, in writing sent by
44-12 certified mail, so inform the complainant and the manufacturer,
44-13 converter, or distributor of the expiration of the 150-day period
44-14 and of the complainant's right to file a civil action. The board
44-15 [Commission] shall extend the 150-day period if a delay is
44-16 requested or is caused by the complainant.
44-17 (7) After receipt of the notice of the right to file a
44-18 civil action, the complainant may file a civil action against one
44-19 or more of the persons complained of in the complaint.
44-20 (8) A failure by the board [Commission] to issue a
44-21 notice of the right to file a civil action does not affect a
44-22 complainant's right to bring an action under this Act.
44-23 (9) Any party to a proceeding under this section
44-24 before the [Executive] Director that is affected by a final order
44-25 of the [Executive] Director is entitled to judicial review of the
44-26 order under the substantial evidence rule in a District Court of
44-27 Travis County, Texas. The judicial review is subject to Chapter
45-1 2001, Government Code, [the Administrative Procedure and Texas
45-2 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)]
45-3 except to the extent that that Act is inconsistent with this Act.
45-4 (g) In a hearing under this section, the [Executive]
45-5 Director shall make its order with respect to responsibility for
45-6 payment of the cost of any refund or replacement and no
45-7 manufacturer, converter, or distributor may cause any franchised
45-8 dealer to pay directly or indirectly any sum not specifically so
45-9 ordered by the [Executive] Director. If the [Executive] Director
45-10 orders a manufacturer, converter, or distributor to refund or
45-11 replace a motor vehicle because it meets the criteria set forth in
45-12 this section, the [Executive] Director may order the franchised
45-13 dealer to reimburse the owner, lienholder, manufacturer, converter,
45-14 or distributor only for items or options added to the vehicle by
45-15 the franchised dealer and only to the extent that one or more of
45-16 such items or options contributed to the defect that served as the
45-17 basis for the [Executive] Director's order of refund or
45-18 replacement. In a case involving a leased vehicle, the [Executive]
45-19 Director may terminate the lease and apportion the allowance for
45-20 use and other allowances or refunds between the lessee and lessor
45-21 of the vehicle.
45-22 (j)(1) A manufacturer, distributor, or converter that has
45-23 been ordered to repurchase or replace a vehicle shall, through its
45-24 franchised dealer, issue a disclosure statement stating that the
45-25 vehicle was repurchased or replaced by the manufacturer,
45-26 distributor, or converter under this section. The disclosure
45-27 statement must accompany the vehicle through the first retail
46-1 purchase. The manufacturer, distributor, or converter must restore
46-2 the cause of the repurchase or replacement to factory
46-3 specifications and issue a new 12-month, 12,000-mile warranty on
46-4 the vehicle. The disclosure statement must include a toll-free
46-5 telephone number of the board [Commission] that will enable a
46-6 purchaser of a repurchased or replaced vehicle to obtain
46-7 information about the condition or defect that was the basis of the
46-8 order for repurchase or replacement. The board [Commission] shall
46-9 adopt rules for the enforcement of this subdivision.
46-10 (2) The board [Commission] shall provide a toll-free
46-11 telephone number for providing information to persons who request
46-12 information about a condition or defect that was the basis for
46-13 repurchase or replacement by an order of the [Executive] Director.
46-14 The board [Commission] shall maintain an effective method of
46-15 providing information to persons who make the requests.
46-16 SECTION 26. Sections 7.01(a), (c), and (d), Texas Motor
46-17 Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil
46-18 Statutes), are amended to read as follows:
46-19 (a) Any party to a proceeding before the board [Commission]
46-20 that is affected by a final order, rule, decision, or other final
46-21 action of the board [Commission] is entitled to judicial review of
46-22 any such final board [Commission] action, under the substantial
46-23 evidence rule, in a District Court of Travis County, Texas, or in
46-24 the Court of Appeals for the Third Court of Appeals District, and
46-25 to the extent not inconsistent herewith, pursuant to Chapter 2001,
46-26 Government Code [the Administrative Procedure and Texas Register
46-27 Act (Article 6252-13a, Vernon's Texas Civil Statutes)]. Except as
47-1 otherwise provided by this Act, an appeal [Appeals] initiated in
47-2 the District Courts of Travis County shall be removable to the
47-3 Court of Appeals upon notice of removal to any such district court
47-4 by any party at any time prior to trial in the district court.
47-5 Appeals initiated in or removed to the Court of Appeals shall be
47-6 initiated under Chapter 2001, Government Code, [the Administrative
47-7 Procedure and Texas Register Act] as if initiated in a Travis
47-8 County District Court and shall, upon the filing thereof, be
47-9 thereafter governed by the Texas Rules of Appellate Procedure.
47-10 (c) Citation must be served on the [Executive] Director.
47-11 Citation must also be served on all other parties of record before
47-12 the board [Commission]. For appeals initiated in the Court of
47-13 Appeals, the court shall cause citation to be issued.
47-14 (d) Appeals in which evidence outside the board's
47-15 [Commission's] record is to be taken under Chapter 2001, Government
47-16 Code [Section 19(d)(3), Administrative Procedure and Texas Register
47-17 Act (Article 6252-13a, Vernon's Texas Civil Statutes)], or
47-18 otherwise, shall be initiated in a Travis County District Court, or
47-19 having been initiated in the Court of Appeals, shall be subject to
47-20 remand to a Travis County District Court for proceedings in
47-21 accordance with instructions from the Court of Appeals.
47-22 SECTION 27. (a) Notwithstanding the terms of Section
47-23 5.02(b)(25), Texas Motor Vehicle Commission Code (Article 4413(36),
47-24 Vernon's Texas Civil Statutes), a person who, on June 7, 1995, held
47-25 both a motor home dealer's license and a motor home manufacturer's
47-26 license issued pursuant to the terms of the Texas Motor Vehicle
47-27 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
48-1 may hold both a motor home dealer's license and motor home
48-2 manufacturer's license as those terms are defined by the Texas
48-3 Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas
48-4 Civil Statutes).
48-5 (b) Subsection (a) of this section authorizes a person to
48-6 operate as a manufacturer and a dealer of no vehicle or type of
48-7 vehicle except a motor home as that term is defined by the Texas
48-8 Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas
48-9 Civil Statutes).
48-10 SECTION 28. The importance of this legislation and the
48-11 crowded condition of the calendars in both houses create an
48-12 emergency and an imperative public necessity that the
48-13 constitutional rule requiring bills to be read on three several
48-14 days in each house be suspended, and this rule is hereby suspended,
48-15 and that this Act take effect and be in force from and after its
48-16 passage, and it is so enacted.