1-1 AN ACT
1-2 relating to the licensing of certain franchised dealers who engage
1-3 in the leasing of motor vehicles.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 4.01(a), Texas Motor Vehicle Commission
1-6 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
1-7 to read as follows:
1-8 (a) Except as provided by this Section, no person shall
1-9 engage in business as, serve in the capacity of, or act as a
1-10 dealer, manufacturer, distributor, converter, representative,
1-11 lessor, or lease facilitator in this State or perform or offer to
1-12 perform repair services on a motor vehicle pursuant to the terms of
1-13 a franchise and a motor vehicle manufacturer's warranty, whether or
1-14 not the person sells or offers to sell motor vehicles at the same
1-15 location, without obtaining a license therefor as provided in this
1-16 Act and the rules of the Commission. All new license applications
1-17 shall be reviewed and, in the discretion of the Commission,
1-18 investigated to determine compliance with the provisions of this
1-19 Act. License renewals may be administratively granted unless
1-20 protested. Licenses issued by the Commission shall expire one year
1-21 from date of issuance. All licenses and renewals thereof are
1-22 issued subject to all provisions of this Act and rules of the
1-23 Commission in effect upon the date of issuance as well as all
1-24 future provisions of this Act and rules which may become effective
2-1 during the term of the license. A lessor or lease facilitator is
2-2 not required to obtain a lessor or lease facilitator license or pay
2-3 a license fee under this code if the lessor or lease facilitator is
2-4 a state or federally chartered financial institution or a regulated
2-5 subsidiary of a state or federally chartered financial institution.
2-6 A trust or other entity that owns an interest in a lease and the
2-7 vehicle that is the subject of the lease is not required to obtain
2-8 a lessor license or lease facilitator license or pay a license fee
2-9 with respect to a lease initiated, managed, serviced, and
2-10 administered by a licensed lessor. A franchised dealer licensed
2-11 under this code is not required to obtain a lessor or lease
2-12 facilitator license or pay a license fee under this code to engage
2-13 in the business of leasing motor vehicles, including new motor
2-14 vehicles, that the dealer is licensed to sell.
2-15 SECTION 2. Section 5.03A(b), Texas Motor Vehicle Commission
2-16 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
2-17 to read as follows:
2-18 (b) A lessor may not pay a fee to any person in return for
2-19 the solicitation, procurement, or production by that person of
2-20 prospective lessees of motor vehicles unless the person receiving
2-21 the fee is a lease facilitator who holds a valid license as
2-22 provided by this code and a valid appointment from the lessor as
2-23 provided by this section. The fees prohibited by this section do
2-24 not include amounts paid to a franchised dealer as a part of the
2-25 consideration for the sale or assignment of a lease or leased
2-26 vehicle or other amounts paid to the franchised dealer who
2-27 transfers title of the vehicle or assigns the lease contract to the
3-1 lessor of the motor vehicle.
3-2 SECTION 3. Section 5.03A, Texas Motor Vehicle Commission
3-3 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
3-4 by adding Subsection (f) to read as follows:
3-5 (f) As used in Sections 5.01(7) and 5.03A(a), the term "fee"
3-6 does not include any adjustments in the purchase price paid for the
3-7 lease or leased vehicle. Provided, however, that this section does
3-8 not authorize any fees for referring leases or prospective lessees.
3-9 SECTION 4. Subchapter E, Texas Motor Vehicle Commission Code
3-10 (Article 4413(36), Vernon's Texas Civil Statutes), is amended by
3-11 adding Section 5.05 to read as follows:
3-12 Sec. 5.05. USE OF CERTAIN TERMS PROHIBITED. A person may
3-13 not use the words "lease" or "leasing" or any variation of those
3-14 words in the person's name or in the name of an entity owned by the
3-15 person unless the person is:
3-16 (1) licensed under this Act as a lessor or lease
3-17 facilitator; or
3-18 (2) exempt under Section 4.01 of this Act from the
3-19 requirement to obtain a license.
3-20 SECTION 5. This Act takes effect September 1, 1997.
3-21 SECTION 6. The importance of this legislation and the
3-22 crowded condition of the calendars in both houses create an
3-23 emergency and an imperative public necessity that the
3-24 constitutional rule requiring bills to be read on three several
3-25 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2098 was passed by the House on April
30, 1997, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 2098 on May 29, 1997, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2098 was passed by the Senate, with
amendments, on May 26, 1997, by the following vote: Yeas 31, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor