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