Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
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), is amended to
1-7 read as follows:
1-8 Section 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
2-28 distinguishing number issued by the Department pursuant to the
2-29 terms of Chapter 503, Transportation Code [Article 6686, Revised
2-30 Statutes].
3-1 (8) [(24)] "Dealership" means the physical premises
3-2 and business facilities on which a franchised dealer operates his
3-3 business, including the sale and repair of motor vehicles. The
3-4 term includes premises or facilities at which a person engages only
3-5 in the repair of motor vehicles if repairs are performed pursuant
3-6 to the terms of a franchise and a motor vehicle manufacturer's
3-7 warranty.
3-8 (9) [(20)] "Department" means the Texas Department of
3-9 Transportation.
3-10 (10) "Director" means the director of the board.
3-11 (11) [(6)] "Distributor" means any person who
3-12 distributes and/or sells new motor vehicles to franchised dealers
3-13 and who is not a manufacturer.
3-14 (12) "Executive Director" means the Executive Director
3-15 of the Texas Department of Transportation.
3-16 (13) [(27)] "Fire-fighting vehicle" means a motor
3-17 vehicle which has as its sole purpose transporting fire fighters to
3-18 the scene of a fire and providing equipment to fight the fire, if
3-19 the vehicle is built on a truck chassis with a gross carrying
3-20 capacity of at least 10,000 pounds, to which the following have
3-21 been permanently affixed or mounted:
3-22 (A) a water tank with a minimum combined
3-23 capacity of 500 gallons; and
3-24 (B) a centrifugal water pump with a minimum
3-25 capacity of not less than 750 gallons per minute at 150 pounds per
3-26 square inch net pump pressure.
3-27 (14) [(8)] "Franchise" means one or more contracts
3-28 between a franchised dealer as franchisee, and either a
3-29 manufacturer or a distributor as franchisor under which (A) the
3-30 franchisee is granted the right to sell and service new motor
4-1 vehicles manufactured or distributed by the franchisor or only
4-2 service motor vehicles pursuant to the terms of a franchise and a
4-3 manufacturer's warranty; (B) the franchisee as an independent
4-4 business is a component of franchisor's distribution system; (C)
4-5 the franchisee is substantially associated with franchisor's
4-6 trademark, tradename and commercial symbol; (D) the franchisee's
4-7 business is substantially reliant on franchisor for a continued
4-8 supply of motor vehicles, parts, and accessories for the conduct of
4-9 its business; or (E) any right, duty, or obligation granted or
4-10 imposed by this Act is affected. The term includes a written
4-11 communication from a franchisor to a franchisee by which a duty is
4-12 imposed on the franchisee.
4-13 (15) [(4)] "Franchised dealer " means any person who
4-14 holds a franchised motor vehicle dealer's general distinguishing
4-15 number issued by the Department pursuant to the terms of Chapter
4-16 503, Transportation Code [Article 6686, Revised Statutes], and who
4-17 is engaged in the business of buying, selling, or exchanging new
4-18 motor vehicles and servicing or repairing motor vehicles pursuant
4-19 to the terms of a franchise and a manufacturer's warranty at an
4-20 established and permanent place of business pursuant to a franchise
4-21 in effect with a manufacturer or distributor.
4-22 (16) "General distinguishing number" means a dealer
4-23 license issued by the Department pursuant to the terms of Chapter
4-24 503, Transportation Code.
4-25 (17) [(23)] "Lease" means a transfer of the right to
4-26 possession and use of a motor vehicle for a term in excess of 180
4-27 days in return for consideration.
4-28 (18) [(25)] "Lease facilitator" means a person, other
4-29 than a dealer or a bona fide employee of a dealer, or a vehicle
4-30 lessor or a bona fide employee of a vehicle lessor, who:
5-1 (A) holds himself out to any person as a "motor
5-2 vehicle leasing company" or "motor vehicle leasing agent" or uses a
5-3 similar title, for the purpose of soliciting or procuring a person
5-4 to enter into a contract or agreement to become the lessee of a
5-5 vehicle that is not, and will not be, titled in the name of and
5-6 registered to the lease facilitator; or
5-7 (B) otherwise solicits a person to enter into a
5-8 contract or agreement to become a lessee of a vehicle that is not,
5-9 and will not be, titled in the name of and registered to the lease
5-10 facilitator, or who is otherwise engaged in the business of
5-11 securing lessees or prospective lessees of motor vehicles that are
5-12 not, and will not be, titled in the name of and registered to the
5-13 facilitator.
5-14 (19) [(24)] "Lessor" means a person who acquires title
5-15 to a [new] motor vehicle for the purpose of leasing the vehicle to
5-16 another person.
5-17 (20) [(25)] "Licensee" means a person who holds a
5-18 license or general distinguishing number issued by the Board under
5-19 the terms of this Act or Chapter 503, Transportation Code [a
5-20 general distinguishing number issued by the Department pursuant to
5-21 the terms of Article 6686, Revised Statutes].
5-22 (21) [(5)] "Manufacturer" means any person who
5-23 manufactures or assembles new motor vehicles either within or
5-24 without this State.
5-25 (22) [(26)] "Manufacturer's statement of origin" means
5-26 a certificate on a form prescribed by the Department showing the
5-27 original transfer of a new motor vehicle from the manufacturer to
5-28 the original purchaser.
5-29 (23) [(10)] "Motor home" means a motor vehicle which
5-30 is designed to provide temporary living quarters and which:
6-1 (A) is built onto as an integral part of, or is
6-2 permanently attached to, a motor vehicle chassis; and
6-3 (B) contains at least four of the following
6-4 independent life support systems if each is permanently installed
6-5 and designed to be removed only for purposes of repair or
6-6 replacement and meets the standards of the American National
6-7 Standards Institute, Standards for Recreational Vehicles:
6-8 (i) a cooking facility with an on-board
6-9 fuel source;
6-10 (ii) a gas or electric refrigerator;
6-11 (iii) a toilet with exterior evacuation;
6-12 (iv) a heating or air conditioning system
6-13 with an on-board power or fuel source separate from the vehicle
6-14 engine;
6-15 (v) a potable water supply system that
6-16 includes at least a sink, a faucet, and a water tank with an
6-17 exterior service supply connection;
6-18 (vi) a 110-125 volt electric power supply.
6-19 (24) [(12)] "Motor home manufacturer" means a person
6-20 other than the manufacturer of the chassis of a motor vehicle who,
6-21 prior to the retail sale of the motor vehicle, performs
6-22 modifications on the chassis that result in the finished product
6-23 being classified as a motor home.
6-24 (25) [(1)] "Motor vehicle" means:
6-25 (A) every fully self-propelled vehicle which has
6-26 as its primary purpose the transport of a person or persons, or
6-27 property, on a public highway, and having two or more wheels;
6-28 (B) every two or more wheeled fully
6-29 self-propelled, titled vehicle which has as its primary purpose the
6-30 transport of a person or persons or property and is not
7-1 manufactured for use on public streets, roads, or highways; or
7-2 (C) an engine, transmission, or rear axle
7-3 manufactured for installation in a vehicle having as its primary
7-4 purpose the transport of a person or persons or property on a
7-5 public highway and having a gross vehicle weight rating of more
7-6 than 16,000 pounds, whether or not attached to a vehicle chassis.
7-7 (26) [(2)] "New motor vehicle" means a motor vehicle
7-8 which has not been the subject of a "retail sale" without regard to
7-9 the mileage of the vehicle.
7-10 (27) [(22)] "Nonfranchised dealer" means a person[,
7-11 other than a franchised dealer,] who holds an independent motor
7-12 vehicle dealer's general distinguishing number or a wholesale motor
7-13 vehicle dealer's general distinguishing number issued by the
7-14 Department pursuant to the terms of Chapter 503, Transportation
7-15 Code [Article 6686, Revised Statutes].
7-16 (28) [(16)] "Party" means each person or agency named
7-17 or admitted as a party and whose legal rights, duties, or
7-18 privileges are to be determined by the Commission after an
7-19 opportunity for adjudicative hearing.
7-20 (29) [(3)] "Person" means a natural person,
7-21 partnership, corporation, association, trust, estate, or any other
7-22 legal entity.
7-23 (30) [(17)] "Relocation" means the transfer of an
7-24 existing dealership operation to facilities at a different
7-25 location, including a transfer which results in a consolidation or
7-26 dualing of an existing dealer's operation.
7-27 (31) [(7)] "Representative" means any person who is or
7-28 acts as an agent, employee or representative of a manufacturer,
7-29 distributor, or converter who performs any duties in this State
7-30 relating to promoting the distribution and/or sale of new motor
8-1 vehicles or contacts dealers in this State on behalf of a
8-2 manufacturer, distributor, or converter.
8-3 (32) [(18)] "Retail sale" means the sale of a motor
8-4 vehicle except:
8-5 (A) a sale in which the purchaser acquires a
8-6 vehicle for the purpose of resale; or
8-7 (B) a sale of a vehicle that is operated under
8-8 and in accordance with Section 503.061, Transportation Code
8-9 [Article 6686, Revised Statutes].
8-10 (33) [(15)] "Rule" means a statement by the Commission
8-11 of general and future applicability that implements, interprets, or
8-12 prescribes law or policy or describes the organization or
8-13 procedural practice requirements of the Commission. The term
8-14 includes the amendment or repeal of a prior rule, but does not
8-15 include statements concerning only the internal management of the
8-16 Commission which do not affect the rights of a person not connected
8-17 with the Commission.
8-18 (34) [(21)] "Transportation Commission" means the
8-19 Texas Transportation Commission of the Texas Department of
8-20 Transportation.
8-21 (35) [(19)] "Warranty work" means parts, labor, and
8-22 any other expenses incurred by a franchised dealer in complying
8-23 with the terms of a manufacturer's or distributor's warranty.
8-24 SECTION 2. Section 2.01, Texas Motor Vehicle Commission Code
8-25 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
8-26 read as follows:
8-27 Sec. 2.01. TEXAS MOTOR VEHICLE BOARD [COMMISSION]. (a) The
8-28 board is an independent agency within the department. The board
8-29 [Texas Motor Vehicle Commission] shall carry out the functions and
8-30 duties conferred upon it by this Act and by other provision of law.
9-1 (b) A reference in this Act to the "commission" or the Texas
9-2 Motor Vehicle Commission means the board [Motor Vehicle Board of
9-3 the Texas Department of Transportation]. A reference in other law,
9-4 rule or regulation to the Texas Motor Vehicle Commission means the
9-5 board [Motor Vehicle Board of the Texas Department of
9-6 Transportation].
9-7 (c) [A reference in this Act to the "Executive Director" or
9-8 the Executive Director of the Texas Motor Vehicle Commission means
9-9 the Director of the Motor Vehicle Division of the Texas Department
9-10 of Transportation.] A reference in other law, rule or regulation
9-11 to the Executive Director of the Texas Motor Vehicle Commission
9-12 means the Director [of the Motor Vehicle Division of the Texas
9-13 Department of Transportation].
9-14 (d) A reference in law, rule or regulation to the Texas
9-15 Motor Vehicle Commission Code means this Act.
9-16 SECTION 3. Section 2.07, 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. 2.07. Per diem; expenses. Each member of the board
9-20 [Commission] shall be entitled to $50.00 per day for each day
9-21 actually engaged in the duties of the office, including time spent
9-22 in necessary travel to and from meetings and otherwise, together
9-23 with all travel and other necessary expenses incurred while
9-24 performing official duties.
9-25 SECTION 4. Section 2.08A.(c), Texas Motor Vehicle Commission
9-26 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
9-27 to read as follows:
9-28 (c) If the [Executive] Director has knowledge that a
9-29 potential ground for removal exists, the [Executive] Director shall
9-30 notify the Chairman of the Commission of the ground. The Chairman
10-1 shall then notify the Governor that a potential ground for removal
10-2 exists.
10-3 SECTION 5. Section 2.09, Texas Motor Vehicle Commission Code
10-4 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
10-5 read as follows:
10-6 Section 2.09. [EXECUTIVE] DIRECTOR; STAFF; CONTRACTS;
10-7 INDEMNITY. (a) The Executive Director [of the Texas Department of
10-8 Transportation] shall appoint the Director [of the Motor Vehicle
10-9 Division] who is [shall be] the board's [division's] chief
10-10 executive and administrative officer. The Director, who shall be
10-11 an attorney licensed to practice law in this state, is charged with
10-12 administering, enforcing, and carrying out the provisions of this
10-13 Act. The Director serves at the pleasure of the Executive Director
10-14 [of the Texas Department of Transportation].
10-15 (b) The [Executive] Director or his designated
10-16 representative shall meet with the board [Commissioners] in an
10-17 advisory capacity without vote in all proceedings of the board
10-18 [Commission]. The [Executive] Director shall submit the reports to
10-19 the board [Commission] as may be required by the board's
10-20 [Commission's] rules or by this Act.
10-21 (c) The [Executive] Director or his designee shall maintain
10-22 all minutes of board [Commission] proceedings and shall serve as
10-23 the custodian of the files and records of the board [Commission].
10-24 (d) The [Executive] Director, on behalf of the board
10-25 [Commission], may negotiate with and, with the consent of a
10-26 majority of the board [Commissioners], enter into contracts or
10-27 other agreements with the United States or any of its agencies,
10-28 with states and political subdivisions thereof, or any other entity
10-29 for the purpose of carrying out the powers, duties, and
10-30 responsibilities of the board [Commission].
11-1 (e) The [Executive] Director shall appoint and employ such
11-2 board [Commission] staff as are necessary to carry out the duties
11-3 and functions of the [Executive] Director and the board
11-4 [Commission] under this Act. The board [Commission] shall develop
11-5 and implement policies that clearly define the respective
11-6 responsibilities of the board [Commission] and the staff of the
11-7 board [Commission].
11-8 (f) An employee of the board [Commission] is subject to
11-9 dismissal who has an interest in or is related within the first
11-10 degree by consanguinity or affinity, as determined under Article
11-11 5996h, Revised Statutes, to a person who has an interest in a
11-12 business that manufactures, distributes, converts, [or] sells, or
11-13 leases motor vehicles.
11-14 (g) [(h)] Notwithstanding any other provision of law, the
11-15 [Executive] Director, each member of the board [Texas Motor Vehicle
11-16 Commission], each Hearing Examiner and all other employees of the
11-17 board [Texas Motor Vehicle Commission] are not personally liable
11-18 for damages occasioned by their official acts or omissions except
11-19 when such acts or omissions constitute intentional or malicious
11-20 malfeasance. The Attorney General shall defend any action brought
11-21 against a member or employee of the board [Commission] in
11-22 connection with an official act or omission, whether or not at the
11-23 time of the institution of the action the defendant has previously
11-24 ceased to serve the Commission in any capacity, and the State of
11-25 Texas shall indemnify any such person from and against a judgment
11-26 entered against the person in any such actions though the State may
11-27 seek contribution if liability is otherwise permitted by this
11-28 subsection.
11-29 (h) [(i)] Unless otherwise provided by this Act or by board
11-30 [Commission] rules, all applications, petitions, or other documents
12-1 requiring action by the board [Commission] shall be directed to the
12-2 [Executive] Director.
12-3 (i) [(j)] The board [Commission] shall provide to its
12-4 members and employees, as often as necessary, information regarding
12-5 their qualifications for office or employment under this Act and
12-6 their responsibilities under applicable laws relating to standards
12-7 of conduct for state officers or employees.
12-8 SECTION 6. Section 2.13, Texas Motor Vehicle Commission Code
12-9 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
12-10 read as follows:
12-11 Section 2.13. Intraagency career ladder program; annual
12-12 performance evaluations; information; equal opportunity
12-13 implementation plan; public information. (a) The [Executive]
12-14 Director or his designee shall develop an intraagency career ladder
12-15 program. The program shall require intraagency postings of all
12-16 nonentry level positions concurrently with any public posting.
12-17 (b) The [Executive] Director or his designee shall develop a
12-18 system of annual performance evaluations. All merit pay for board
12-19 [Commission] employees must be based on the system established
12-20 under this subsection.
12-21 (c) The [Executive] Director or his designee shall prepare
12-22 information describing the functions of the [Commission] and
12-23 describing the procedures by which complaints or protests are filed
12-24 with and resolved by the board [Commission]. The board
12-25 [Commission] shall make the information available to the general
12-26 public and appropriate state agencies.
12-27 (d) The [Executive] Director or his designee shall prepare
12-28 and maintain a written policy statement to assure implementation of
12-29 a program of equal employment opportunity under which all personnel
12-30 transactions are made without regard to race, color, handicap, sex,
13-1 religion, age, or national origin. The policy statement must
13-2 include:
13-3 (1) personnel policies, including policies relating to
13-4 recruitment, evaluation, selection, appointment, training, and
13-5 promotion of personnel;
13-6 (2) a comprehensive analysis of the board [Commission]
13-7 work force that meets federal and state guidelines;
13-8 (3) procedures by which a determination can be made of
13-9 significant underuse in the board [Commission] work force of all
13-10 persons for whom federal or state guidelines encourage a more
13-11 equitable balance; and
13-12 (4) reasonable methods to appropriately address those
13-13 areas of significant underuse.
13-14 A policy statement prepared under this subsection must cover
13-15 an annual period, be updated at least annually, and be filed with
13-16 the Governor's office.
13-17 The Governor's office shall deliver a biennial report to the
13-18 legislature based on the information received under this
13-19 subsection. The report may be made separately or as a part of
13-20 other biennial reports made to the legislature.
13-21 (e) The board [Commission] shall comply with Chapter 2001,
13-22 Government Code [Section 4(a)(2), Administrative Procedure and
13-23 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
13-24 Statutes),] by indexing and making available for public inspection
13-25 all rules and all other written statements of policy or
13-26 interpretations formulated, adopted, or used by the board
13-27 [Commission] in the discharge of its functions.
13-28 (f) The board [Commission] shall comply with Chapter 2001,
13-29 Government Code [Section 4(a)(3), Administrative Procedure and
13-30 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
14-1 Statutes),] by indexing and making available for public inspection
14-2 all of the board [Commission's] final orders, decisions, and
14-3 opinions.
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. Section 3.03(b), Texas Motor Vehicle Commission
14-18 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
14-19 to read as follows:
14-20 (b) The board [commission] may conduct hearings in contested
14-21 cases brought pursuant to, and as provided by Chapter 503,
14-22 Transportation Code [, Article 6686, Revised Statutes]. The
14-23 procedures applicable to a hearing conducted under this Subsection,
14-24 and the disposition of a final order after a hearing conducted
14-25 under this Subsection, are those applicable to a hearing conducted
14-26 as provided by Section 6.07(e)(2) of this Act. A decision or final
14-27 order issued under this Subsection is final, and no appeal may, as
14-28 a matter of right, be made to the Texas Transportation Commission.
14-29 The department may adopt rules applicable to procedures, hearings,
14-30 and enforcement proceedings in an action brought pursuant to this
15-1 Subsection.
15-2 SECTION 9. Section 3.04, Texas Motor Vehicle Commission Code
15-3 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
15-4 read as follows:
15-5 Section 3.04. DELEGATION OF BOARD [COMMISSION] POWERS. The
15-6 board [Commission] may delegate any power which it holds or derives
15-7 under this Act to:
15-8 (1) one or more of its members [of the Commission];
15-9 (2) the [Executive] Director; or
15-10 (3) one or more of its employees [of the Commission].
15-11 SECTION 10. Section 3.06, Texas Motor Vehicle Commission
15-12 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
15-13 to read as follows:
15-14 Section 3.06. Rules. The authority to issue rules pursuant
15-15 to this Act shall be vested in the board [Commission]. After
15-16 notice and hearing conducted by the board [Commission] or by the
15-17 [Executive] Director or his delegee in accordance with Chapter
15-18 2001, Government Code [the Administrative Procedure and Texas
15-19 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)] and
15-20 in compliance with this Act and the rules, decisions, and orders of
15-21 the board [Commission], the board [Commission] shall adopt such
15-22 rules and amendments thereto and deletions therefrom as may be
15-23 necessary or convenient to effectuate the provisions of this Act
15-24 and to govern practice and procedure before the board [Commission].
15-25 Such rules shall become effective as soon as the board
15-26 [Commission], acting by and through its [Executive] Director,
15-27 complies with the requirements of Chapter 2001, Government Code
15-28 [the Administrative Procedure and Texas Register Act] regarding
15-29 publication of official agency rules.
15-30 SECTION 11. Section 3.07, Texas Motor Vehicle Commission
16-1 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-2 to read as follows:
16-3 Section 3.07. Orders and decisions. (a) An order or
16-4 decision shall:
16-5 (1) include a separate finding of fact with respect to
16-6 each specific issue the board is required by law to consider in
16-7 reaching a decision;
16-8 (2) set forth additional [the] findings of fact and
16-9 conclusions of law on which the order or decision is based; and
16-10 (3) [shall] give the reasons for the particular
16-11 actions taken.
16-12 (b) Except as provided by Section 6.07 of this Act, all
16-13 orders and decisions shall be signed on behalf of the board
16-14 [Commission] by the Chairman or Vice-chairman and attested by the
16-15 [Executive] Director and shall have the seal affixed.
16-16 SECTION 12. Section 3.08, Texas Motor Vehicle Commission
16-17 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-18 to read as follows:
16-19 Section 3.08. Hearings; notice; hearing procedures;
16-20 complaints. (a) In this section, the term "contested case" has
16-21 the meaning given it in Chapter 2001, Government Code. A hearing
16-22 shall be conducted in all contested cases[, as defined in the
16-23 Administrative Procedure and Texas Register Act (Article 6252-13a,
16-24 Vernon's Texas Civil Statutes),] which arise in connection with
16-25 this Act or any rule of the board [Commission]. All hearings shall
16-26 be conducted in accordance with this Act, the orders, decisions, or
16-27 rules of the board [Commission], and Chapter 2001, Government Code
16-28 [the Administrative Procedure and Texas Register Act] to the extent
16-29 that Chapter 2001, Government Code [the Administrative Procedure
16-30 and Texas Register Act] does not conflict with this Act. A hearing
17-1 may be informally disposed of in accordance with Chapter 2001,
17-2 Government Code [the Administrative Procedure and Texas Register
17-3 Act]. Any hearing held under this section shall be conducted by
17-4 the [Executive] Director or any Hearing Examiner, each of whom may
17-5 be referred to in this Act as the "Examiner." The person or
17-6 persons serving as Examiner in any contested case hearing are
17-7 hereby delegated all the power and authority which the board
17-8 [Commission] has under this Act regarding the conduct of hearings,
17-9 including, without limitation, the power to hold hearings,
17-10 administer oaths, receive pleadings and evidence, issue subpoenas
17-11 to compel the attendance of witnesses, compel the production of
17-12 papers and documents, issue interlocutory orders, including cease
17-13 and desist orders in the nature of temporary restraining orders and
17-14 temporary injunctions, make findings of fact and conclusions of
17-15 law, and issue proposals for decision and recommended final orders.
17-16 (b) Notice of a hearing shall describe in summary form the
17-17 purpose of the hearing and its date, time, and place.
17-18 (c) Notice of a rulemaking hearing shall be given in
17-19 accordance with Chapter 2001, Government Code [the Administrative
17-20 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
17-21 Civil Statutes)] and the rules of the board [Commission] not less
17-22 than 30 days before the hearing date. Notice of a contested case
17-23 hearing involving a licensee [license] shall be given in accordance
17-24 with this Act and the rules of the board [Commission].
17-25 (d) Notice of a contested case hearing shall be deemed to
17-26 have been received by any person if notice of the hearing was
17-27 mailed to the last known address, of any person known to have legal
17-28 rights, duties, or privileges that could be determined at the
17-29 hearing, not less than 10 days before the hearing date. Notice of
17-30 a hearing shall be given by certified mail, return receipt
18-1 requested. Notice may be given to any officer, agent, employee,
18-2 legal representative, or attorney of any person. Notice of any
18-3 hearing may be waived by any person.
18-4 (e) A hearing shall be convened [conducted] at the time and
18-5 place stated in the hearing notice [or the hearing shall be
18-6 rescheduled and an amended notice given]. Any hearing may be
18-7 recessed until a time and place certain without further notice if
18-8 the time and place is [continued from time to time and place to
18-9 place as] announced openly before the hearing is recessed. [,
18-10 without further notice, or otherwise,] If the time and place
18-11 determined for the resumption of the hearing is not announced
18-12 openly before the hearing is recessed, the hearing may be recessed
18-13 to a time and place certain by giving advance notice as required by
18-14 Chapter 2001, Government Code [the Administrative Procedure and
18-15 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
18-16 Statutes)].
18-17 (f) Unless otherwise limited by this Act, any person whose
18-18 legal rights, duties, or privileges are to be determined at any
18-19 hearing shall have the right to appear personally and by counsel,
18-20 to cross-examine adverse witnesses, and to produce evidence and
18-21 witnesses in the person's own behalf.
18-22 (g) In all contested cases the examiner shall serve on all
18-23 parties a copy of the examiner's proposal for decision and
18-24 recommended order containing findings of fact and conclusions of
18-25 law [shall be served on all parties and each]. A party may file
18-26 exceptions and replies to the board [Commission. After replies and
18-27 exceptions have been timely filed, the] In its review of the case,
18-28 the board may [Commission shall] consider only the materials timely
18-29 submitted [by all parties]. The board [Commission] may receive
18-30 such oral argument from any party as the board [Commission] may
19-1 allow. The board [Commission] shall take such further actions as
19-2 are conducive to the issuance of a final order and shall thereafter
19-3 issue a written final decision or order. The board's
19-4 [Commission's] written final decision or order shall be signed on
19-5 behalf of the board [Commission] by the [Executive] Director. A
19-6 majority vote of a quorum of the board [Commissioners] shall be
19-7 required to adopt final decisions or orders of the board
19-8 [Commission].
19-9 (h) A party who seeks a rehearing of an order shall do so in
19-10 accordance with the terms of Chapter 2001, Government Code [the
19-11 Administrative Procedure and Texas Register Act (Article 6252-13a,
19-12 Vernon's Texas Civil Statutes)].
19-13 (i) The owner of a motor vehicle or the owner's designated
19-14 agent may make a complaint concerning defects in a motor vehicle
19-15 which are covered by a manufacturer's, converter's, or
19-16 distributor's warranty agreement applicable to the vehicle. Any
19-17 such complaint must be made in writing to the applicable dealer,
19-18 manufacturer, converter, or distributor and must specify the
19-19 defects in the vehicle which are covered by the warranty. The
19-20 owner may also invoke the board's [Commission's] jurisdiction by
19-21 sending the board [Commission] a copy of the complaint. A hearing
19-22 may be scheduled on all complaints arising under this subsection
19-23 which are not privately resolved between the owner and the dealer,
19-24 manufacturer, converter, or distributor.
19-25 (j) On motion of any party the board [Commission] may, by
19-26 final order, and in accordance with the terms and procedures set
19-27 forth in Rule 166a, Texas Rules of Civil Procedure, dismiss a
19-28 complaint, protest, or response without holding a contested case
19-29 hearing.
19-30 SECTION 13. Section 3.09, Texas Motor Vehicle Commission
20-1 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
20-2 to read as follows:
20-3 Sec. 3.09. PROCEDURAL SUPREMACY [EFFECT ON ADMINISTRATIVE
20-4 PROCEDURE AND TEXAS REGISTER ACT]. In the event of any conflict
20-5 between Chapter 2001, Government Code [the Administrative Procedure
20-6 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
20-7 Statutes)] and this Act, the provisions of this Act shall prevail.
20-8 SECTION 14. Section 4.01, Texas Motor Vehicle Commission
20-9 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
20-10 by amending Subsection (b) and by adding Subsections (c), and (d)
20-11 to read as follows:
20-12 (b) In the case of a nonfranchised dealer, the term
20-13 "license" in this Act means a general distinguishing number [issued
20-14 by the Department pursuant to the authority of Article 6686,
20-15 Revised Statutes]. A nonfranchised dealer may not operate as a
20-16 dealer without a valid general distinguishing number but is not
20-17 required to obtain an additional license under the terms of this
20-18 Act. A franchised dealer shall have both a general distinguishing
20-19 number and a separate license issued under the terms of this Act.
20-20 (c) Notwithstanding the terms of this Act, a franchised
20-21 dealer is not required to have a lessor license or lease
20-22 facilitator license to engage in any capacity in the business of
20-23 leasing motor vehicles that the dealer owns and is licensed by this
20-24 Act to sell.
20-25 (d) A manufacturer or distributor that directly or
20-26 indirectly reimburses another person to perform warranty repair
20-27 services on a vehicle is engaged in business in this state whether
20-28 or not the manufacturer sells or offers for sale new motor vehicles
20-29 in this state.
20-30 SECTION 15. Section 4.02(a), Texas Motor Vehicle Commission
21-1 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
21-2 to read as follows:
21-3 (a) An application for a dealer license shall be on a form
21-4 prescribed by the board [Commission] which shall include the
21-5 information required by Chapter 503, Transportation Code [Article
21-6 6686, Revised Statutes,] and information on the applicant's
21-7 financial resources, business integrity, business ability and
21-8 experience, franchise agreement if applicable, physical facilities,
21-9 vehicle inventory, and other factors the board [Commission]
21-10 considers necessary to determine an applicant's qualifications to
21-11 adequately serve the motoring public.
21-12 SECTION 16. Section 4.03A, Texas Motor Vehicle Commission
21-13 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
21-14 to read as follows:
21-15 Section 4.03A. Lessor Application. An application for a
21-16 lessor license shall be on a form prescribed by the board
21-17 [Commission] and shall contain evidence of compliance with Chapter
21-18 503, Transportation Code [Article 6686, Revised Statutes], if
21-19 applicable, and other information prescribed by the board
21-20 [Commission]. This Act does not require a separate license for
21-21 each individual employee of a lessor.
21-22 SECTION 17. Section 4.05(a), Texas Motor Vehicle Commission
21-23 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
21-24 to read as follows:
21-25 (a) The annual license fees for licenses issued hereunder
21-26 shall be as follows:
21-27 (1) For each manufacturer and distributor, $900 plus
21-28 $20 for each individual dealer franchised by the manufacturer or
21-29 distributor.
21-30 (2) For each franchised dealer who sold 200 or fewer
22-1 new motor vehicles during the preceding calendar year, $175.
22-2 (3) For each franchised dealer who sold more than 200,
22-3 but not more than 400, new motor vehicles during the preceding
22-4 calendar year, $275.
22-5 (4) For each franchised dealer who sold more than 400,
22-6 but not more than 800, new motor vehicles during the preceding
22-7 calendar year, $400.
22-8 (5) For each franchised dealer who sold more than 800
22-9 but not more than 1,200 new motor vehicles during the preceding
22-10 calendar year, $500.
22-11 (6) For each franchised dealer who sold more than
22-12 1,200 but not more than 1,600 new motor vehicles during the
22-13 preceding calendar year, $625.
22-14 (7) For each franchised dealer who sold more than
22-15 1,600 new motor vehicles during the preceding calendar year, $750.
22-16 (8) For each location separate from his dealership at
22-17 which a franchised dealer offers no motor vehicle for sale, but
22-18 performs warranty service on vehicles the dealer is franchised and
22-19 licensed to sell, $100.
22-20 (9) [(10)] For each amendment to a dealer's license,
22-21 $25.
22-22 (10) [(8)] For each representative, $100.
22-23 (11) [(9)] For each converter, $375.
22-24 (12) [(9)] For each lessor who leased 200 or fewer
22-25 motor vehicles during the preceding calendar year, $175.
22-26 (13) [(10)] For each lessor who leased more than 200
22-27 but not more than 400 motor vehicles during the preceding calendar
22-28 year, $275.
22-29 (14) [(11)] For each lessor who leased more than 400
22-30 but not more than 800 motor vehicles during the preceding calendar
23-1 year, $400.
23-2 (15) [(12)] For each lessor who leased more than 800
23-3 but not more than 1,200 motor vehicles during the preceding
23-4 calendar year, $500.
23-5 (16) [(13)] For each lessor who leased more than 1,200
23-6 but not more than 1,600 motor vehicles during the preceding
23-7 calendar year, $625.
23-8 (17) [(14)] For each lessor who leased more than 1,600
23-9 motor vehicles during the preceding calendar year, $750.
23-10 (18) [(15)] For each lease facilitator, $375.
23-11 SECTION 18. Section 5.01, Texas Motor Vehicle Commission
23-12 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
23-13 to read as follows:
23-14 Sec. 5.01. FRANCHISED DEALERS. It is unlawful for any
23-15 franchised dealer to:
23-16 (1) Require a retail purchaser of a new motor vehicle
23-17 as a condition of sale and delivery thereof to purchase special
23-18 features, equipment, parts, or accessories not ordered or desired
23-19 by the purchaser, provided such features, equipment, parts, or
23-20 accessories are not already installed on the new motor vehicle at
23-21 the time of sale.
23-22 (2) Fail to perform the obligations placed on the
23-23 selling franchised dealer in connection with the delivery and
23-24 preparation of a new motor vehicle for retail sale as provided in
23-25 the manufacturer's preparation and delivery agreements on file with
23-26 the Commission and applicable to such vehicle.
23-27 (3) Fail to perform the obligations placed on the
23-28 franchised dealer in connection with the manufacturer's warranty
23-29 agreements on file with the Commission.
23-30 (4) Operate without appropriate signs readily and
24-1 easily visible to the public, identifying the franchised dealer's
24-2 place of business and the products the franchised dealer offers for
24-3 sale. In the event of a conflict with another law or ordinance,
24-4 this Subdivision prevails, and in the event of a dispute, the Board
24-5 has exclusive jurisdiction to determine whether a sign or signs are
24-6 in compliance with the terms of this Subdivision. In the event of
24-7 a dispute, the Board shall uphold local ordinances of a home-rule
24-8 city and protect franchised dealers from retribution by
24-9 manufacturers or distributors for having complied with local
24-10 ordinances.
24-11 (5) [(7)] Directly or indirectly pay a fee to a lessor
24-12 or lease facilitator.
24-13 SECTION 19. Section 5.01A, Texas Motor Vehicle Commission
24-14 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
24-15 to read as follows:
24-16 Sec. 5.01A. Dealers. No dealer may:
24-17 (1) use false, deceptive, or misleading advertising;
24-18 (2) [operate as a dealer without a currently valid
24-19 license or general distinguishing number issued by the Board;]
24-20 [(3)] violate a rule of the Board; or
24-21 (3) [(4)] aid or abet a person who violates this Act.
24-22 SECTION 20. Section 5.02(b), 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 (b) It is unlawful for any manufacturer, distributor, or
24-26 representative to:
24-27 (1) Require or attempt to require any dealer to order,
24-28 accept delivery of or pay anything of value, directly or
24-29 indirectly, for any motor vehicle, appliance, part, accessory or
24-30 any other commodity unless voluntarily ordered or contracted for by
25-1 such dealer.
25-2 (2) Refuse or fail to deliver, in reasonable
25-3 quantities and within a reasonable time, to a dealer having a
25-4 franchise agreement for the retail sale of any motor vehicles sold
25-5 or distributed by such manufacturer, distributor, or
25-6 representative, any new motor vehicle or parts or accessories to
25-7 new motor vehicles as are covered by such franchise if such
25-8 vehicle, parts or accessories are publicly advertised as being
25-9 available for delivery or are actually being delivered; provided,
25-10 however, this provision is not violated if such failure is caused
25-11 by acts of God, work stoppage or delays due to strikes or labor
25-12 disputes, freight embargoes or other causes beyond the control of
25-13 the manufacturer, distributor, or representative.
25-14 (3) Notwithstanding the terms of any franchise
25-15 agreement:
25-16 (A) Terminate or refuse to continue any
25-17 franchise with a dealer or directly or indirectly force or attempt
25-18 to force a dealer to discontinue a line-make or parts or products
25-19 related to that line-make unless all of the following conditions
25-20 are met:
25-21 (i) the dealer and the board [Commission]
25-22 have received written notice by registered or certified mail from
25-23 the manufacturer, distributor, or representative not less than 60
25-24 days before the effective date of termination or noncontinuance
25-25 setting forth the specific grounds for termination or
25-26 noncontinuance; and
25-27 (ii) the written notice contains on the
25-28 first page thereof a conspicuous statement which reads as follows:
25-29 "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE
25-30 TEXAS MOTOR VEHICLE BOARD [COMMISSION] IN AUSTIN, TEXAS, AND HAVE A
26-1 HEARING IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR
26-2 NONCONTINUANCE OF YOUR FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR
26-3 VEHICLE COMMISSION CODE IF YOU OPPOSE THIS ACTION."; and
26-4 (iii) the manufacturer, distributor, or
26-5 representative has received the informed, written consent of the
26-6 affected dealer or the appropriate period for the affected dealer
26-7 to protest the proposed franchise termination or noncontinuance has
26-8 lapsed; or
26-9 (iv) if the affected dealer files a
26-10 protest with the board [Commission] within the greater of (1) 60
26-11 days after receiving its 60-day notice of proposed termination or
26-12 noncontinuance or (2) the time specified in such notice, the board
26-13 [Commission] determines that the party seeking to terminate or not
26-14 continue a dealer's franchise has established by a preponderance of
26-15 the evidence, at a hearing called by the board [Commission], that
26-16 there is good cause for the proposed termination or noncontinuance.
26-17 (v) Notwithstanding Subdivisions (3)(A)(i)
26-18 and (3)(A)(iv) of this section, notice may be made not less than 15
26-19 days prior to the effective date of termination or noncontinuance
26-20 if a licensed dealer fails to conduct its customary sales and
26-21 service operations during its customary business hours for seven
26-22 consecutive business days unless such failure is caused by an act
26-23 of God, work stoppage or delays due to strikes or labor disputes,
26-24 an order of the board [Commission], or other causes beyond the
26-25 control of the dealer.
26-26 (B) Whenever a dealer files a timely protest to
26-27 a proposed franchise termination or noncontinuance, the board
26-28 [Commission] shall notify the party seeking to terminate or to not
26-29 continue the protesting dealer's franchise that a timely protest
26-30 has been filed, that a hearing is required in accordance with this
27-1 Act, and that the party who gave the dealer notice of termination
27-2 or noncontinuance of the franchise may not terminate or refuse to
27-3 continue the franchise until the board [Commission] issues its
27-4 final decision or order.
27-5 (C) If a franchise is terminated or not
27-6 continued, another franchise in the same line-make will be
27-7 established within a reasonable time unless it is shown to the
27-8 board [Commission] by a preponderance of the evidence that the
27-9 community or trade area cannot reasonably support such a
27-10 dealership. If this showing is made, no dealer license shall be
27-11 thereafter issued in the same area unless a change in circumstances
27-12 is established.
27-13 (4) Notwithstanding the terms of any franchise
27-14 agreement, modify or replace a franchise with a succeeding
27-15 franchise if the modification or replacement would adversely
27-16 affect, to a substantial degree, the dealer's sales, investment, or
27-17 obligations to provide service to the public, unless the
27-18 manufacturer, distributor, or representative has first given the
27-19 board [Commission] and each affected dealer written notice by
27-20 registered or certified mail of any such action 60 days in advance
27-21 of the modification or replacement. The written notice shall
27-22 contain on the first page thereof a conspicuous statement which
27-23 reads as follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE
27-24 A PROTEST WITH THE TEXAS MOTOR VEHICLE BOARD [COMMISSION] IN
27-25 AUSTIN, TEXAS, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE
27-26 PROPOSED MODIFICATION OR REPLACEMENT OF YOUR FRANCHISE WITH A
27-27 SUCCEEDING FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR VEHICLE
27-28 COMMISSION CODE IF YOU OPPOSE THIS ACTION." Within the greater of
27-29 (1) 60 days after receipt of such notice or (2) the time specified
27-30 in such notice, a dealer may file a protest with the board
28-1 [Commission] and the modification or replacement shall not become
28-2 effective unless and until the board [Commission] determines that
28-3 the party seeking to modify or replace a franchise with a
28-4 succeeding franchise has demonstrated by a preponderance of the
28-5 evidence that there is good cause for the modification or
28-6 replacement. The prior franchise shall continue in effect until
28-7 the protest is resolved by the board [Commission].
28-8 (5) Notwithstanding the terms of any franchise
28-9 agreement, in determining whether good cause has been established
28-10 for modifying, replacing, terminating, or refusing to continue a
28-11 franchise, or for forcing or attempting to force a dealer to
28-12 discontinue a line-make or parts or products related to that
28-13 line-make, the board [Commission] shall consider all the existing
28-14 circumstances including, without limitation by the enumeration
28-15 herein, all the following:
28-16 (A) the dealer's sales in relation to the sales
28-17 in the market;
28-18 (B) the dealer's investment and obligations;
28-19 (C) injury to the public welfare;
28-20 (D) the adequacy of the dealer's service
28-21 facilities, equipment, parts, and personnel in relation to those of
28-22 other dealers of new motor vehicles of the same line-make;
28-23 (E) whether warranties are being honored by the
28-24 dealer;
28-25 (F) the parties' compliance with their franchise
28-26 agreement; and
28-27 (G) the enforceability of the franchise
28-28 agreement from a public policy standpoint, including, without
28-29 limitation, issues of the reasonableness of the franchise
28-30 agreement's terms, oppression, adhesion, and the relative
29-1 bargaining power of the parties.
29-2 Good cause shall not be shown solely by the desire of a
29-3 manufacturer, distributor, or representative for market
29-4 penetration.
29-5 (6) Use any false, deceptive or misleading
29-6 advertising.
29-7 (7) Notwithstanding the terms of any franchise
29-8 agreement, prevent any dealer from reasonably changing the capital
29-9 structure of his dealership or the means by or through which he
29-10 finances the operation thereof, provided that the dealer meets
29-11 reasonable capital requirements.
29-12 (8) Notwithstanding the terms of any franchise
29-13 agreement, fail to give effect to or attempt to prevent any sale or
29-14 transfer of a dealer, dealership or franchise or interest therein
29-15 or management thereof unless, after complaint or protest, it is
29-16 demonstrated to the board [Commission] after hearing that the
29-17 result of any such sale or transfer will be detrimental to the
29-18 public or the representation of the manufacturer or distributor.
29-19 (9) Notwithstanding the terms of any franchise
29-20 agreement, require or attempt to require that a dealer assign to or
29-21 act as an agent for any manufacturer, distributor or representative
29-22 in the securing of promissory notes and security agreements given
29-23 in connection with the sale or purchase of new motor vehicles or
29-24 the securing of policies of insurance on or having to do with the
29-25 operation of vehicles sold.
29-26 (10) Notwithstanding the terms of any franchise
29-27 agreement, fail or refuse, after complaint and hearing, to perform
29-28 the obligations placed on the manufacturer in connection with the
29-29 delivery, preparation and warranty of a new motor vehicle as
29-30 provided in the manufacturer's warranty, preparation, and delivery
30-1 agreements on file with the board [Commission].
30-2 (11) Notwithstanding the terms of any franchise
30-3 agreement, fail to compensate its dealers for the work and services
30-4 they are required to perform in connection with the dealer's
30-5 delivery and preparation obligations according to the agreements on
30-6 file with the board [Commission] which must be found by the board
30-7 [Commission] to be reasonable, or fail to adequately and fairly
30-8 compensate its dealers for labor, parts and other expenses incurred
30-9 by such dealer to perform under and comply with a manufacturer's or
30-10 a distributor's warranty agreement, or require, as a prerequisite
30-11 to the manufacturer's or distributor's payment of a claim for
30-12 reimbursement as required by this section, that a dealer file with
30-13 the manufacturer or distributor the actual time spent in the
30-14 performance of labor unless actual time is the basis for
30-15 reimbursement. In no event shall any manufacturer or distributor
30-16 pay its dealers an amount of money for warranty work that is less
30-17 than that charged by the dealer to the retail customers of the
30-18 dealer for nonwarranty work of like kind. All claims made by
30-19 dealers for compensation for delivery, preparation, and warranty
30-20 work shall be paid within 30 days after approval and shall be
30-21 approved or disapproved within 30 days after receipt. When any
30-22 claim is disapproved, the dealer shall be notified in writing of
30-23 the grounds for disapproval. No claim which has been approved and
30-24 paid may be charged back to the dealer unless it can be shown that
30-25 the claim was false or fraudulent, that the repairs were not
30-26 properly made or were unnecessary to correct the defective
30-27 condition, or that the dealer failed to reasonably substantiate the
30-28 claim in accordance with reasonable written requirements of the
30-29 manufacturer or distributor, if the dealer has been notified of the
30-30 requirements prior to the time the claim arose, and if the
31-1 requirements were in effect at the time the claim arose. A
31-2 manufacturer or distributor may not audit a claim after the
31-3 expiration of two years following the submission of the claim
31-4 unless the manufacturer or distributor has reasonable grounds to
31-5 suspect that a claim was fraudulent. Notwithstanding the terms of
31-6 a franchise agreement or provision of law in conflict with this
31-7 section, the dealer's delivery, preparation, and warranty
31-8 obligations as filed with the board [Commission] shall constitute
31-9 the dealer's sole responsibility for product liability as between
31-10 the dealer and manufacturer or distributor, and, except for a loss
31-11 caused by the dealer's failure to adhere to these obligations, a
31-12 loss caused by the dealer's negligence or intentional misconduct,
31-13 or a loss caused by the dealer's modification of a product without
31-14 manufacturer or distributor authorization, the manufacturer or
31-15 distributor shall reimburse the dealer for all loss incurred by the
31-16 dealer, including legal fees, court costs, and damages, as a result
31-17 of the dealer having been named a party in a product liability
31-18 action.
31-19 (12) Operate as a manufacturer, distributor, or
31-20 representative without a currently valid license from the board
31-21 [Commission] or otherwise violate this Act or rules promulgated by
31-22 the board [Commission] hereunder.
31-23 (13) Notwithstanding the terms of any franchise
31-24 agreement, to prevent or refuse to honor the succession to a
31-25 dealership by any legal heir or devisee under the will of a dealer
31-26 or under the laws of descent and distribution of this State unless
31-27 it is shown to the board [Commission], after notice and hearing,
31-28 that the result of such succession will be detrimental to the
31-29 public interest and to the representation of the manufacturer or
31-30 distributor; provided, however, nothing herein shall prevent a
32-1 dealer, during his lifetime, from designating any person as his
32-2 successor dealer, by written instrument filed with the manufacturer
32-3 or distributor.
32-4 (14) Notwithstanding the terms of any franchise
32-5 agreement, require that a dealer pay or assume, directly or
32-6 indirectly, any part of any refund, rebate, discount, or other
32-7 financial adjustment made by the manufacturer, distributor, or
32-8 representative to, or in favor of, any customer of a dealer, unless
32-9 voluntarily agreed to by such dealer.
32-10 (15) Notwithstanding the terms of any franchise
32-11 agreement, deny or withhold approval of a written application to
32-12 relocate a franchise unless (A) the applicant has received written
32-13 notice of the denial or withholding of approval within 60 days
32-14 after receipt of the application containing information reasonably
32-15 necessary to enable the manufacturer or distributor to adequately
32-16 evaluate the application, and if (B) the applicant files a protest
32-17 with the board [Commission] and the manufacturer or distributor
32-18 establishes by a preponderance of the evidence at a hearing called
32-19 by the board [Commission] that the grounds for the denial or
32-20 withholding of approval of the relocation are reasonable.
32-21 (16) Notwithstanding the terms of any franchise
32-22 agreement, fail to pay to a dealer or any lienholder in accordance
32-23 with their respective interest after the termination of a
32-24 franchise:
32-25 (A) the dealer cost of each new motor vehicle in
32-26 the dealer's inventory with mileage of 6,000 miles or less, reduced
32-27 by the net discount value of each, where "net discount value" is
32-28 determined according to the following formula: net cost multiplied
32-29 by total mileage divided by 100,000, and where "net cost" equals
32-30 the dealer cost plus any charges by the manufacturer, distributor,
33-1 or representative for distribution, delivery, and taxes, less all
33-2 allowances paid to the dealer by the manufacturer, distributor, or
33-3 representative for new, unsold, undamaged, and complete motor
33-4 vehicles of current model year or one year prior model year in the
33-5 dealer's inventory, except that if a vehicle cannot be reduced by
33-6 the net discount value, the manufacturer or distributor shall pay
33-7 the dealer the net cost of the vehicle;
33-8 (B) the dealer cost of each new, unused,
33-9 undamaged, and unsold part or accessory if the part or accessory is
33-10 in the current parts catalogue and is still in the original,
33-11 resalable merchandising package and in unbroken lots, except that
33-12 in the case of sheet metal, a comparable substitute for the
33-13 original package may be used, and if the part or accessory was
33-14 purchased by the dealer either directly from the manufacturer or
33-15 distributor or from an outgoing authorized dealer as a part of the
33-16 dealer's initial inventory;
33-17 (C) the fair market value of each undamaged sign
33-18 owned by the dealer which bears a trademark or tradename used or
33-19 claimed by the manufacturer, distributor, or representative if the
33-20 sign was purchased from or purchased at the request of the
33-21 manufacturer, distributor, or representative;
33-22 (D) the fair market value of all special tools,
33-23 data processing equipment, and automotive service equipment owned
33-24 by the dealer which were recommended in writing and designated as
33-25 special tools and equipment and purchased from or purchased at the
33-26 request of the manufacturer, distributor, or representative, if the
33-27 tools and equipment are in usable and good condition except for
33-28 reasonable wear and tear;
33-29 (E) the cost of transporting, handling, packing,
33-30 storing, and loading of any property subject to repurchase under
34-1 this section;
34-2 (F) except as provided by this subdivision, any
34-3 sums due as provided by Paragraph (A) of this subdivision within 60
34-4 days after termination of a franchise and any sums due as provided
34-5 by Paragraphs (B) through (E) of this subdivision within 90 days
34-6 after termination of a franchise. As a condition of payment, the
34-7 dealer is to comply with reasonable requirements with respect to
34-8 the return of inventory as are set out in the terms of the
34-9 franchise agreement. A manufacturer or distributor shall
34-10 reimburse a dealer for the dealer's cost for storing any property
34-11 covered by this subdivision beginning 90 days following
34-12 termination. A manufacturer or distributor shall reimburse a
34-13 dealer for the dealer's cost of storing any property covered by
34-14 this subdivision before the expiration of 90 days from the date of
34-15 termination if the dealer notifies the manufacturer or distributor
34-16 of the commencement of storage charges within that period. On
34-17 receipt of notice of the commencement of storage charges, a
34-18 manufacturer or distributor may immediately take possession of the
34-19 property in question by repurchasing the property as provided by
34-20 this subdivision. A manufacturer, distributor, or representative
34-21 who fails to pay those sums within the prescribed time or at such
34-22 time as the dealer and lienholder, if any, proffer good title prior
34-23 to the prescribed time for payment, is liable to the dealer for:
34-24 (i) the greatest of dealer cost, fair
34-25 market value, or current price of the inventory;
34-26 (ii) interest on the amount due calculated
34-27 at the rate applicable to a judgment of a court; and
34-28 (iii) reasonable attorney's fees and
34-29 costs.
34-30 (17) Notwithstanding the terms of any franchise
35-1 agreement, change its distributor, its method of distribution of
35-2 its products in this state, or its business structure or ownership
35-3 in a manner that results in the termination or noncontinuance of a
35-4 franchise without good cause. The manufacturer, distributor, or
35-5 representative shall issue the same notice to the dealer and to the
35-6 board [Commission] as is provided in Subdivisions (3)(A) and (B) of
35-7 this section and said same procedures shall apply to the parties.
35-8 (18) Notwithstanding the terms of any franchise
35-9 agreement, require a dealer to submit to arbitration on any issue
35-10 unless the dealer and the manufacturer, distributor, or
35-11 representative and their respective counsel agree to arbitrate
35-12 after a controversy arises. The arbitrator shall apply the
35-13 provisions of this Act in resolving the pertinent controversy.
35-14 Either party may appeal to the board [Commission] a decision of an
35-15 arbitrator on the ground that the arbitrator failed to apply this
35-16 Act.
35-17 (19) Notwithstanding the terms of any franchise
35-18 agreement, require that a dealer join, contribute to, or affiliate
35-19 with, directly or indirectly, any advertising association.
35-20 (20) Notwithstanding the terms of a franchise
35-21 agreement:
35-22 (A) require adherence to unreasonable sales or
35-23 service standards;
35-24 (B) directly or indirectly, discriminate against
35-25 a dealer or otherwise treat dealers differently as a result of a
35-26 formula or other calculation or process intended to gauge the
35-27 performance of a dealership, except a sales contest or other
35-28 recognition program based on reasonable sales and service criteria;
35-29 (C) unreasonably require that a dealer purchase
35-30 special tools or equipment; or
36-1 (D) fail to compensate a dealer for all costs
36-2 incurred by the dealer as required by the manufacturer in complying
36-3 with the terms of a product recall by the manufacturer or
36-4 distributor, including the costs, if any, incurred by the dealer in
36-5 notifying vehicle owners of the existence of the recall.
36-6 (21) Discriminate unreasonably between or among
36-7 franchisees in the sale of a motor vehicle owned by the
36-8 manufacturer or distributor.
36-9 (22) Directly or indirectly, or through a subsidiary
36-10 or agent, require, as a condition for obtaining financing for a
36-11 motor vehicle, the purchaser of a vehicle to purchase any product
36-12 other than the motor vehicle from the manufacturer or distributor,
36-13 or from an entity owned or controlled by the manufacturer or
36-14 distributor.
36-15 (23) Directly or indirectly, or through a subsidiary
36-16 or agent, require, as a condition of its or its subsidiary's
36-17 agreement to provide financing for a motor vehicle, that any
36-18 insurance policy or service contract purchased by the motor vehicle
36-19 purchaser be purchased from a specific source.
36-20 (24) Compel a dealer through a financing subsidiary of
36-21 the manufacturer or distributor to agree to unreasonable operating
36-22 requirements or directly or indirectly to terminate a dealer
36-23 through the actions of a financing subsidiary of the manufacturer
36-24 or distributor. This subdivision does not limit the right of a
36-25 financing entity to engage in business practices in accordance with
36-26 the usage of trade in retail and wholesale motor vehicle financing.
36-27 (25) Operate as a dealer except on a temporary basis
36-28 and only if:
36-29 (A) the dealership was previously owned by a
36-30 franchised dealer and is currently for sale at a reasonable price;
37-1 or
37-2 (B) the manufacturer, distributor, or
37-3 representative operates the dealership in a bona fide relationship
37-4 with a franchised dealer who is required to make a significant
37-5 investment in the dealership, subject to loss, and who reasonably
37-6 expects to acquire full ownership of the dealership under
37-7 reasonable terms and conditions.
37-8 (26) Notwithstanding the terms of a franchise
37-9 agreement, deny or withhold approval of a dealer's application to
37-10 add a line-make or parts or products related to that line-make
37-11 unless, within 60 days of receipt of the dealer's written
37-12 application to add the line-make, the manufacturer or distributor
37-13 gives the dealer written notice of the denial or withholding of
37-14 approval. After receipt of notice, the dealer may file a protest
37-15 with the board [Commission]. If the dealer files a protest as
37-16 provided by this subdivision, the board [Commission] may uphold the
37-17 manufacturer's or distributor's decision to deny or withhold
37-18 approval of the addition of the line-make only if the manufacturer
37-19 or distributor proves by a preponderance of the evidence that the
37-20 denial or withholding of approval was reasonable. In determining
37-21 whether or not the manufacturer or distributor has met its burden
37-22 to show that its denial or withholding of approval is reasonable,
37-23 the board [Commission] shall consider all existing circumstances,
37-24 including, without limitation, the following:
37-25 (A) the dealer's sales in relation to the sales
37-26 in the market;
37-27 (B) the dealer's investment and obligations;
37-28 (C) injury to the public welfare;
37-29 (D) the adequacy of the dealer's sales and
37-30 service facilities, equipment, parts, and personnel in relation to
38-1 those of other dealers of new motor vehicles of the same line-make;
38-2 (E) whether warranties are being honored by the
38-3 dealer agreement;
38-4 (F) the parties' compliance with their franchise
38-5 agreement;
38-6 (G) the enforceability of the franchise
38-7 agreement from a public policy standpoint, including without
38-8 limitation, issues of the reasonableness of the franchise
38-9 agreement's terms, oppression, adhesion, and the relative
38-10 bargaining power of the parties;
38-11 (H) whether the dealer complies with reasonable
38-12 capitalization requirements or will be able to comply with
38-13 reasonable capitalization requirements within a reasonable time;
38-14 (I) the harm, if any, to the manufacturer if the
38-15 denial or withholding of approval is not upheld; and
38-16 (J) the harm, if any, to the dealer if the
38-17 denial or withholding of approval is upheld.
38-18 SECTION 21. Section 6.02, Texas Motor Vehicle Commission
38-19 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
38-20 to read as follows:
38-21 Sec. 6.02. Injunction. Whenever it appears that a person
38-22 has violated, is violating, or is threatening to violate any
38-23 provision of this Act or of any rule or order of the board
38-24 [Commission] issued pursuant to this Act [then] the board
38-25 [Commission], or the [Executive] Director when authorized by the
38-26 board [Commission], may cause a suit to be instituted in any court
38-27 for injunctive relief to restrain any such person from continuing
38-28 the violation or threat of violation or for the assessment and
38-29 recovery of a civil penalty as provided for in this Act or for both
38-30 injunctive relief and a civil penalty.
39-1 SECTION 22. Section 6.03, Texas Motor Vehicle Commission
39-2 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
39-3 to read as follows:
39-4 Sec. 6.03. Suit. At the request of the board [Commission,]
39-5 or the [Executive] Director when authorized by the board
39-6 [Commission], the Attorney General shall institute and conduct a
39-7 suit in the name of the State of Texas for injunctive relief or to
39-8 recover a civil penalty or for both injunctive relief and penalty.
39-9 SECTION 23. Subsections (e), (g), and (j), Section 6.07,
39-10 Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's
39-11 Texas Civil Statutes), are amended to read as follows:
39-12 (e)(1) The board [Commission] shall adopt rules for the
39-13 enforcement and implementation of this section.
39-14 (2) The [Executive] Director shall, in accordance with
39-15 rules adopted by the board [Commission], conduct hearings and issue
39-16 final orders for the enforcement and implementation of this
39-17 section. Orders issued by the [Executive] Director under this
39-18 section are considered final orders of the board [Commission].
39-19 (3) Except as provided by Subdivision (6) of this
39-20 subsection, the provisions of this section are not available to an
39-21 owner in an action seeking a refund or replacement based upon the
39-22 alleged nonconformity of a motor vehicle to an express warranty
39-23 applicable to the motor vehicle unless the owner has first
39-24 exhausted the administrative remedies provided herein.
39-25 (4) The provisions of this section are not available
39-26 to a party in an action against a seller under Chapter 2 or Chapter
39-27 17, Business & Commerce Code, as amended.
39-28 (5) Except as provided by Subdivision (6) of this
39-29 subsection, the provisions of this section are available in an
39-30 action against a manufacturer, converter, or distributor brought
40-1 under Chapter 17, Business & Commerce Code, after the owner has
40-2 exhausted the administrative remedies provided by this section.
40-3 (6) If, after a complaint has been filed under this
40-4 section, the Hearing Examiner has not issued a proposal for
40-5 decision and recommended to the [Executive] Director a final order
40-6 before the expiration of the 150th day after the date the complaint
40-7 was filed, the [Executive] Director shall, in writing sent by
40-8 certified mail, so inform the complainant and the manufacturer,
40-9 converter, or distributor of the expiration of the 150-day period
40-10 and of the complainant's right to file a civil action. The board
40-11 [Commission] shall extend the 150-day period if a delay is
40-12 requested or is caused by the complainant.
40-13 (7) After receipt of the notice of the right to file a
40-14 civil action, the complainant may file a civil action against one
40-15 or more of the persons complained of in the complaint.
40-16 (8) A failure by the [Commission] to issue a notice of
40-17 the right to file a civil action does not affect a complainant's
40-18 right to bring an action under this Act.
40-19 (9) Any party to a proceeding under this section
40-20 before the [Executive] Director that is affected by a final order
40-21 of the [Executive] Director is entitled to judicial review of the
40-22 order under the substantial evidence rule in a District Court of
40-23 Travis County, Texas. The judicial review is subject to Chapter
40-24 2001, Government Code [the Administrative Procedure and Texas
40-25 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)]
40-26 except to the extent that that Act is inconsistent with this Act.
40-27 (g) In a hearing under this section, the [Executive]
40-28 Director shall make its order with respect to responsibility for
40-29 payment of the cost of any refund or replacement and no
40-30 manufacturer, converter, or distributor may cause any franchised
41-1 dealer to pay directly or indirectly any sum not specifically so
41-2 ordered by the [Executive] Director. If the [Executive] Director
41-3 orders a manufacturer, converter, or distributor to refund or
41-4 replace a motor vehicle because it meets the criteria set forth in
41-5 this section, the [Executive] Director may order the franchised
41-6 dealer to reimburse the owner, lienholder, manufacturer, converter,
41-7 or distributor only for items or options added to the vehicle by
41-8 the franchised dealer and only to the extent that one or more of
41-9 such items or options contributed to the defect that served as the
41-10 basis for the [Executive] Director's order of refund or
41-11 replacement. In a case involving a leased vehicle, the [Executive]
41-12 Director may terminate the lease and apportion the allowance for
41-13 use and other allowances or refunds between the lessee and lessor
41-14 of the vehicle.
41-15 (j) (1) A manufacturer, distributor, or converter that has
41-16 been ordered to repurchase or replace a vehicle shall, through its
41-17 franchised dealer, issue a disclosure statement stating that the
41-18 vehicle was repurchased or replaced by the manufacturer,
41-19 distributor, or converter under this section. The disclosure
41-20 statement must accompany the vehicle through the first retail
41-21 purchase. The manufacturer, distributor, or converter must restore
41-22 the cause of the repurchase or replacement to factory
41-23 specifications and issue a new 12-month, 12,000-mile warranty on
41-24 the vehicle. The disclosure statement must include a toll-free
41-25 telephone number of the board [Commission] that will enable a
41-26 purchaser of a repurchased or replaced vehicle to obtain
41-27 information about the condition or defect that was the basis of the
41-28 order for repurchase or replacement. The board [Commission] shall
41-29 adopt rules for the enforcement of this subdivision.
41-30 (2) The board [Commission] shall provide a toll-free
42-1 telephone number for providing information to persons who request
42-2 information about a condition or defect that was the basis for
42-3 repurchase or replacement by an order of the [Executive] Director.
42-4 The board [Commission] shall maintain an effective method of
42-5 providing information to persons who make the requests.
42-6 SECTION 24. Subsections (a), (c), and (d), Sections 7.01,
42-7 Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's
42-8 Texas Civil Statutes), are amended to read as follows:
42-9 (a) Any party to a proceeding before the board [Commission]
42-10 that is affected by a final order, rule, decision, or other final
42-11 action of the board [Commission] is entitled to judicial review of
42-12 any such final board [Commission] action, under the substantial
42-13 evidence rule, in a District Court of Travis County, Texas, or in
42-14 the Court of Appeals for the Third Court of Appeals District, and
42-15 to the extent not inconsistent herewith, pursuant to Chapter 2001,
42-16 Government Code [the Administrative Procedure and Texas Register
42-17 Act (Article 6252-13a, Vernon's Texas Civil Statutes)]. Except as
42-18 otherwise provided by this Act, an appeal [Appeals] initiated in
42-19 the District Courts of Travis County shall be removable to the
42-20 Court of Appeals upon notice of removal to any such district court
42-21 by any party at any time prior to trial in the district court.
42-22 Appeals initiated in or removed to the Court of Appeals shall be
42-23 initiated under Chapter 2001, Government Code [the Administrative
42-24 Procedure and Texas Register Act] as if initiated in a Travis
42-25 County District Court and shall, upon the filing thereof, be
42-26 thereafter governed by the Texas Rules of Appellate Procedure.
42-27 (c) Citation must be served on the [Executive] Director.
42-28 Citation must also be served on all other parties of record before
42-29 the board [Commission]. For appeals initiated in the Court of
42-30 Appeals, the court shall cause citation to be issued.
43-1 (d) Appeals in which evidence outside the board's
43-2 [Commission's] record is to be taken under Chapter 2001, Government
43-3 Code [Section 19(d)(3), Administrative Procedure and Texas Register
43-4 Act (Article 6252-13a, Vernon's Texas Civil Statutes)], or
43-5 otherwise, shall be initiated in a Travis County District Court, or
43-6 having been initiated in the Court of Appeals, shall be subject to
43-7 remand to a Travis County District Court for proceedings in
43-8 accordance with instructions from the Court of Appeals.
43-9 SECTION 25. EMERGENCY. The importance of this legislation
43-10 and the crowded condition of the calendars in both houses create an
43-11 emergency and an imperative public necessity that the
43-12 constitutional rule requiring bills to be read on three several
43-13 days in each house be suspended, and this rule is hereby suspended,
43-14 and that this Act take effect and be in force from and after its
43-15 passage, and it is so enacted.