By Uher H.B. No. 2098
75R7814 JMM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation 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 5.01, Texas Motor Vehicle Commission Code
2-16 (Article 4413(36), Vernon's Texas Civil Statutes), as amended by
2-17 Chapters 345 and 357, Acts of the 74th Legislature, Regular
2-18 Session, 1995, is amended to read as follows:
2-19 Sec. 5.01. FRANCHISED DEALERS. It is unlawful for any
2-20 franchised dealer to:
2-21 (1) Require a retail purchaser of a new motor vehicle
2-22 as a condition of sale and delivery thereof to purchase special
2-23 features, equipment, parts, or accessories not ordered or desired
2-24 by the purchaser, provided such features, equipment, parts, or
2-25 accessories are not already installed on the new motor vehicle at
2-26 the time of sale.
2-27 (2) Fail to perform the obligations placed on the
3-1 selling franchised dealer in connection with the delivery and
3-2 preparation of a new motor vehicle for retail sale as provided in
3-3 the manufacturer's preparation and delivery agreements on file with
3-4 the Commission and applicable to such vehicle.
3-5 (3) Fail to perform the obligations placed on the
3-6 franchised dealer in connection with the manufacturer's warranty
3-7 agreements on file with the Commission.
3-8 (4) Operate without appropriate signs readily and
3-9 easily visible to the public, identifying the franchised dealer's
3-10 place of business and the products the franchised dealer offers for
3-11 sale. In the event of a conflict with another law or ordinance,
3-12 this Subdivision prevails, and in the event of a dispute, the Board
3-13 has exclusive jurisdiction to determine whether a sign or signs are
3-14 in compliance with the terms of this Subdivision. In the event of
3-15 a dispute, the Board shall uphold local ordinances of a home-rule
3-16 city and protect franchised dealers from retribution by
3-17 manufacturers or distributors for having complied with local
3-18 ordinances.
3-19 (5) [(7)] Directly or indirectly pay a fee to a lessor
3-20 or lease facilitator, other than a fee that is an element of the
3-21 terms or considerations relating to the sale or assignment of a
3-22 lease or leased motor vehicle by a franchised dealer to another
3-23 person licensed under this code.
3-24 SECTION 3. Section 5.03A, Texas Motor Vehicle Commission
3-25 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
3-26 by adding Subsection (f) to read as follows:
3-27 (f) A fee prohibited under this section does not include a
4-1 fee that is an element of the terms or considerations relating to
4-2 the sale or assignment of a lease or leased motor vehicle by a
4-3 franchised dealer to another person licensed under this code.
4-4 SECTION 4. This Act takes effect September 1, 1997.
4-5 SECTION 5. The importance of this legislation and the
4-6 crowded condition of the calendars in both houses create an
4-7 emergency and an imperative public necessity that the
4-8 constitutional rule requiring bills to be read on three several
4-9 days in each house be suspended, and this rule is hereby suspended.