Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
By: Cain S.B. No. 695
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of motor vehicle dealers and
1-2 manufacturers.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.03, Texas Motor Vehicle Commission Code
1-5 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
1-6 read as follows:
1-7 Section 1.03. DEFINITIONS. In this Act:
1-8 (1) [(26)] "Ambulance" means a vehicle used
1-9 exclusively for providing emergency medical care to an injured or
1-10 ill person or transporting an injured or ill person, if the vehicle
1-11 provides:
1-12 (A) a driver's compartment;
1-13 (B) a compartment to accommodate an emergency
1-14 medical care technician or paramedic and two injured or ill persons
1-15 so positioned that one of the injured or ill persons can be given
1-16 intensive life-support during transit;
1-17 (C) equipment and supplies for emergency care of
1-18 an injured or ill person where the ill person is located or at the
1-19 scene of an injury-producing incident as well as in transit;
1-20 (D) two-way radio communication capability; and
1-21 (E) equipment for light rescue or extrication
1-22 procedures.
1-23 (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
3-1 manufactured motor vehicle.
3-2 (7) [(23)] "Dealer" means a person who holds a general
3-3 distinguishing number issued by the Department pursuant to the
3-4 terms of Chapter 503, Transportation Code [Article 6686, Revised
3-5 Statutes].
3-6 (8) [(24)] "Dealership" means the physical premises
3-7 and business facilities on which a franchised dealer operates his
3-8 business, including the sale and repair of motor vehicles. The
3-9 term includes premises or facilities at which a person engages only
3-10 in the repair of motor vehicles if repairs are performed pursuant
3-11 to the terms of a franchise and a motor vehicle manufacturer's
3-12 warranty.
3-13 (9) [(20)] "Department" means the Texas Department of
3-14 Transportation.
3-15 (10) "Director" means the director of the board.
3-16 (11) [(6)] "Distributor" means any person who
3-17 distributes and/or sells new motor vehicles to franchised dealers
3-18 and who is not a manufacturer.
3-19 (12) "Executive Director" means the Executive Director
3-20 of the Texas Department of Transportation.
3-21 (13) [(27)] "Fire-fighting vehicle" means a motor
3-22 vehicle which has as its sole purpose transporting fire fighters to
3-23 the scene of a fire and providing equipment to fight the fire, if
3-24 the vehicle is built on a truck chassis with a gross carrying
3-25 capacity of at least 10,000 pounds, to which the following have
4-1 been permanently affixed or mounted:
4-2 (A) a water tank with a minimum combined
4-3 capacity of 500 gallons; and
4-4 (B) a centrifugal water pump with a minimum
4-5 capacity of not less than 750 gallons per minute at 150 pounds per
4-6 square inch net pump pressure.
4-7 (14) [(8)] "Franchise" means one or more contracts
4-8 between a franchised dealer as franchisee, and either a
4-9 manufacturer or a distributor as franchisor under which (A) the
4-10 franchisee is granted the right to sell and service new motor
4-11 vehicles manufactured or distributed by the franchisor or only
4-12 service motor vehicles pursuant to the terms of a franchise and a
4-13 manufacturer's warranty; (B) the franchisee as an independent
4-14 business is a component of franchisor's distribution system;
4-15 (C) the franchisee is substantially associated with franchisor's
4-16 trademark, trade name and commercial symbol; (D) the franchisee's
4-17 business is substantially reliant on franchisor for a continued
4-18 supply of motor vehicles, parts, and accessories for the conduct of
4-19 its business; or (E) any right, duty, or obligation granted or
4-20 imposed by this Act is affected. The term includes a written
4-21 communication from a franchisor to a franchisee by which a duty is
4-22 imposed on the franchisee.
4-23 (15) [(4)] "Franchised dealer" means any person who
4-24 holds a franchised motor vehicle dealer's general distinguishing
4-25 number issued by the Department pursuant to the terms of Chapter
5-1 503, Transportation Code [Article 6686, Revised Statutes], and who
5-2 is engaged in the business of buying, selling, or exchanging new
5-3 motor vehicles and servicing or repairing motor vehicles pursuant
5-4 to the terms of a franchise and a manufacturer's warranty at an
5-5 established and permanent place of business pursuant to a franchise
5-6 in effect with a manufacturer or distributor.
5-7 (16) "General distinguishing number" means a dealer
5-8 license issued by the Department pursuant to the terms of Chapter
5-9 503, Transportation Code.
5-10 (17) [(23)] "Lease" means a transfer of the right to
5-11 possession and use of a motor vehicle for a term in excess of 180
5-12 days in return for consideration.
5-13 (18) [(25)] "Lease facilitator" means a person, other
5-14 than a dealer or a bona fide employee of a dealer, or a vehicle
5-15 lessor or a bona fide employee of a vehicle lessor, who:
5-16 (A) holds himself out to any person as a "motor
5-17 vehicle leasing company" or "motor vehicle leasing agent" or uses a
5-18 similar title, for the purpose of soliciting or procuring a person
5-19 to enter into a contract or agreement to become the lessee of a
5-20 vehicle that is not, and will not be, titled in the name of and
5-21 registered to the lease facilitator; or
5-22 (B) otherwise solicits a person to enter into a
5-23 contract or agreement to become a lessee of a vehicle that is not,
5-24 and will not be, titled in the name of and registered to the lease
5-25 facilitator, or who is otherwise engaged in the business of
6-1 securing lessees or prospective lessees of motor vehicles that are
6-2 not, and will not be, titled in the name of and registered to the
6-3 facilitator.
6-4 (19) [(24)] "Lessor" means a person who acquires title
6-5 to a [new] motor vehicle for the purpose of leasing the vehicle to
6-6 another person.
6-7 (20) [(25)] "Licensee" means a person who holds a
6-8 license or general distinguishing number issued by the Board under
6-9 the terms of this Act or Chapter 503, Transportation Code [a
6-10 general distinguishing number issued by the Department pursuant to
6-11 the terms of Article 6686, Revised Statutes].
6-12 (21) [(5)] "Manufacturer" means any person who
6-13 manufacturers or assembles new motor vehicles either within or
6-14 without this State.
6-15 (22) [(26)] "Manufacturer's statement of origin" means
6-16 a certificate on a form prescribed by the Department showing the
6-17 original transfer of a new motor vehicle from the manufacturer to
6-18 the original purchaser.
6-19 (23) [(10)] "Motor home" means a motor vehicle which
6-20 is designed to provide temporary living quarters and which:
6-21 (A) is built onto as an integral part of, or is
6-22 permanently attached to, a motor vehicle chassis; and
6-23 (B) contains at least four of the following
6-24 independent life support systems if each is permanently installed
6-25 and designed to be removed only for purposes of repair or
7-1 replacement and meets the standards of the American National
7-2 Standards Institute, Standards for Recreational Vehicles:
7-3 (i) a cooking facility with an on-board
7-4 fuel source;
7-5 (ii) a gas or electric refrigerator;
7-6 (iii) a toilet with exterior evacuation;
7-7 (iv) a heating or air conditioning system
7-8 with an on-board power or fuel source separate from the vehicle
7-9 engine;
7-10 (v) a potable water supply system that
7-11 includes at least a sink, a faucet, and a water tank with an
7-12 exterior service supply connection;
7-13 (vi) a 110-125 volt electric power supply.
7-14 (24) [(12)] "Motor home manufacturer" means a person
7-15 other than the manufacturer of the chassis of a motor vehicle who,
7-16 prior to the retail sale of the motor vehicle, performs
7-17 modifications on the chassis that result in the finished product
7-18 being classified as a motor home.
7-19 (25) [(1)] "Motor vehicle" means:
7-20 (A) every fully self-propelled vehicle which has
7-21 as its primary purpose the transport of a person or persons, or
7-22 property, on a public highway, and having two or more wheels;
7-23 (B) every two or more wheeled fully
7-24 self-propelled, titled vehicle which has as its primary purpose the
7-25 transport of a person or persons or property and is not
8-1 manufactured for use on public streets, roads, or highways; or
8-2 (C) an engine, transmission, or rear axle
8-3 manufactured for installation in a vehicle having as its primary
8-4 purpose the transport of a person or persons or property on a
8-5 public highway and having a gross vehicle weight rating of more
8-6 than 16,000 pounds, whether or not attached to a vehicle chassis.
8-7 (26) [(2)] "New motor vehicle" means a motor vehicle
8-8 which has not been the subject of a "retail sale" without regard to
8-9 the mileage of the vehicle.
8-10 (27) [(22)] "Nonfranchised dealer" means a person[,
8-11 other than a franchised dealer,] who holds an independent motor
8-12 vehicle dealer's general distinguishing number or a wholesale motor
8-13 vehicle dealer's general distinguishing number issued by the
8-14 Department pursuant to the terms of Chapter 503, Transportation
8-15 Code [Article 6686, Revised Statutes].
8-16 (28) [(16)] "Party" means each person or agency named
8-17 or admitted as a party and whose legal rights, duties, or
8-18 privileges are to be determined by the Commission after an
8-19 opportunity for adjudicative hearing.
8-20 (29) [(3)] "Person" means a natural person,
8-21 partnership, corporation, association, trust, estate, or any other
8-22 legal entity.
8-23 (30) [(17)] "Relocation" means the transfer of an
8-24 existing dealership operation to facilities at a different
8-25 location, including a transfer which results in a consolidation or
9-1 dualing of an existing dealer's operation.
9-2 (31) [(7)] "Representative" means any person who is or
9-3 acts as an agent, employee or representative of a manufacturer,
9-4 distributor, or converter who performs any duties in this State
9-5 relating to promoting the distribution and/or sale of new motor
9-6 vehicles or contacts dealers in this State on behalf of a
9-7 manufacturer, distributor, or converter.
9-8 (32) [(18)] "Retail sale" means the sale of a motor
9-9 vehicle except:
9-10 (A) a sale in which the purchaser acquires a
9-11 vehicle for the purpose of resale; or
9-12 (B) a sale of a vehicle that is operated under
9-13 and in accordance with Section 503.061, Transportation Code
9-14 [Article 6686, Revised Statutes].
9-15 (33) [(15)] "Rule" means a statement by the Commission
9-16 of general and future applicability that implements, interprets, or
9-17 prescribes law or policy or describes the organization or
9-18 procedural practice requirements of the Commission. The term
9-19 includes the amendment or repeal of a prior rule, but does not
9-20 include statements concerning only the internal management of the
9-21 Commission which do not affect the rights of a person not connected
9-22 with the Commission.
9-23 (34) [(21)] "Transportation Commission" means the
9-24 Texas Transportation Commission of the Texas Department of
9-25 Transportation.
10-1 (35) [(19)] "Warranty work" means parts, labor, and
10-2 any other expenses incurred by a franchised dealer in complying
10-3 with the terms of a manufacturer's or distributor's warranty.
10-4 SECTION 2. Section 2.01, Texas Motor Vehicle Commission Code
10-5 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
10-6 read as follows:
10-7 Section 2.01. TEXAS MOTOR VEHICLE BOARD [COMMISSION].
10-8 (a) The board is an independent agency within the department. The
10-9 board [Texas Motor Vehicle Commission] shall carry out the
10-10 functions and duties conferred upon it by this Act and by other
10-11 provision of law.
10-12 (b) A reference in this Act to the "commission" or the Texas
10-13 Motor Vehicle Commission means the board [Motor Vehicle Board of
10-14 the Texas Department of Transportation]. A reference in other law,
10-15 rule or regulation to the Texas Motor Vehicle Commission means the
10-16 board [Motor Vehicle Board of the Texas Department of
10-17 Transportation].
10-18 (c) [A reference in this Act to the "Executive Director" or
10-19 the Executive Director of the Texas Motor Vehicle Commission means
10-20 the Director of the Motor Vehicle Division of the Texas Department
10-21 of Transportation.] A reference in other law, rule or regulation
10-22 to the Executive Director of the Texas Motor Vehicle Commission
10-23 means the Director [of the Motor Vehicle Division of the Texas
10-24 Department of Transportation].
10-25 (d) A reference in law, rule or regulation to the Texas
11-1 Motor Vehicle Commission Code means this Act.
11-2 SECTION 3. 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 Section 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 4. 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 5. 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 Section 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
12-1 executive and administrative officer. The Director, who shall be
12-2 an attorney licensed to practice law in this state, is charged with
12-3 administering, enforcing, and carrying out the provisions of this
12-4 Act. The Director serves at the pleasure of the Executive Director
12-5 [of the Texas Department of Transportation].
12-6 (b) The [Executive] Director or his designated
12-7 representative shall meet with the board [Commissioners] in an
12-8 advisory capacity without vote in all proceedings of the board
12-9 [Commission]. The [Executive] Director shall submit the reports to
12-10 the board [Commission] as may be required by the board's
12-11 [Commission's] rules or by this Act.
12-12 (c) The [Executive] Director or his designee shall maintain
12-13 all minutes of board [Commission] proceedings and shall serve as
12-14 the custodian of the files and records of the board [Commission].
12-15 (d) The [Executive] Director, on behalf of the board
12-16 [Commission], may negotiate with and, with the consent of a
12-17 majority of the board [Commissioners], enter into contracts or
12-18 other agreements with the United States or any of its agencies,
12-19 with states and political subdivisions thereof, or any other entity
12-20 for the purpose of carrying out the powers, duties, and
12-21 responsibilities of the board [Commission].
12-22 (e) The [Executive] Director shall appoint and employ such
12-23 board [Commission] staff as are necessary to carry out the duties
12-24 and functions of the [Executive] Director and the board
12-25 [Commission] under this Act. The board [Commission] shall develop
13-1 and implement policies that clearly define the respective
13-2 responsibilities of the board [Commission] and the staff of the
13-3 board [Commission].
13-4 (f) An employee of the board [Commission] is subject to
13-5 dismissal who has an interest in or is related within the first
13-6 degree by consanguinity or affinity, as determined under Article
13-7 5996h, Revised Statutes, to a person who has an interest in a
13-8 business that manufactures, distributes, converts, [or] sells, or
13-9 leases motor vehicles.
13-10 (g) [(h)] Notwithstanding any other provision of law, the
13-11 [Executive] Director, each member of the board [Texas Motor Vehicle
13-12 Commission], each Hearing Examiner and all other employees of the
13-13 board [Texas Motor Vehicle Commission] are not personally liable
13-14 for damages occasioned by their official acts or omissions except
13-15 when such acts or omissions constitute intentional or malicious
13-16 malfeasance. The Attorney General shall defend any action brought
13-17 against a member or employee of the board [Commission] in
13-18 connection with an official act or omission, whether or not at the
13-19 time of the institution of the action the defendant has previously
13-20 ceased to serve the Commission in any capacity, and the State of
13-21 Texas shall indemnify any such person from and against a judgment
13-22 entered against the person in any such actions though the State may
13-23 seek contribution if liability is otherwise permitted by this
13-24 subsection.
13-25 (h) [(i)] Unless otherwise provided by this Act or by board
14-1 [Commission] rules, all applications, petitions, or other documents
14-2 requiring action by the board [Commission] shall be directed to the
14-3 [Executive] Director.
14-4 (i) [(j)] The board [Commission] shall provide to its
14-5 members and employees, as often as necessary, information regarding
14-6 their qualifications for office or employment under this Act and
14-7 their responsibilities under applicable laws relating to standards
14-8 of conduct for state officers or employees.
14-9 SECTION 6. Section 2.13, Texas Motor Vehicle Commission Code
14-10 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
14-11 read as follows:
14-12 Sec. 2.13. Intraagency career ladder program; annual
14-13 performance evaluations; information; equal opportunity
14-14 implementation plan; public information. (a) The [Executive]
14-15 Director or his designee shall develop an intraagency career ladder
14-16 program. The program shall require intraagency postings of all
14-17 nonentry level positions concurrently with any public posting.
14-18 (b) The [Executive] Director or his designee shall develop a
14-19 system of annual performance evaluations. All merit pay for board
14-20 [Commission] employees must be based on the system established
14-21 under this subsection.
14-22 (c) The [Executive] Director or his designee shall prepare
14-23 information describing the functions of the [Commission] and
14-24 describing the procedures by which complaints or protests are filed
14-25 with and resolved by the board [Commission]. The board
15-1 [Commission] shall make the information available to the general
15-2 public and appropriate state agencies.
15-3 (d) The [Executive] Director or his designee shall prepare
15-4 and maintain a written policy statement to assure implementation of
15-5 a program of equal employment opportunity under which all personnel
15-6 transactions are made without regard to race, color, handicap, sex,
15-7 religion, age, or national origin. The policy statement must
15-8 include:
15-9 (1) personnel policies, including policies relating to
15-10 recruitment, evaluation, selection, appointment, training, and
15-11 promotion of personnel;
15-12 (2) a comprehensive analysis of the board [Commission]
15-13 work force that meets federal and state guidelines;
15-14 (3) procedures by which a determination can be made of
15-15 significant underuse in the board [Commission] work force of all
15-16 persons for whom federal or state guidelines encourage a more
15-17 equitable balance; and
15-18 (4) reasonable methods to appropriately address those
15-19 areas of significant underuse.
15-20 A policy statement prepared under this subsection must cover
15-21 an annual period, be updated at least annually, and be filed with
15-22 the Governor's office.
15-23 The Governor's office shall deliver a biennial report to the
15-24 legislature based on the information received under this
15-25 subsection. The report may be made separately or as a part of
16-1 other biennial reports made to the legislature.
16-2 (e) The board [Commission] shall comply with Chapter 2001,
16-3 Government Code [Section 4(a)(2), Administrative Procedure and
16-4 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
16-5 Statutes),] by indexing and making available for public inspection
16-6 all rules and all other written statements of policy or
16-7 interpretations formulated, adopted, or used by the board
16-8 [Commission] in the discharge of its functions.
16-9 (f) The board [Commission] shall comply with Chapter 2001,
16-10 Government Code [Section 4(a)(3), Administrative Procedure and
16-11 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
16-12 Statutes),] by indexing and making available for public inspection
16-13 all of the board's [Commission's] final orders, decisions, and
16-14 opinions.
16-15 SECTION 7. Section 3.01(a), Texas Motor Vehicle Commission
16-16 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
16-17 to read as follows:
16-18 (a) The board [Commission] has the general and original
16-19 power and jurisdiction to regulate all aspects of the distribution,
16-20 sale, and leasing of motor vehicles and to do all things, whether
16-21 specifically designated in this Act or implied herein, or necessary
16-22 or convenient to the exercise of this power and jurisdiction,
16-23 including the original jurisdiction to determine questions of its
16-24 own jurisdiction. In addition to the other duties placed on the
16-25 board [Commission] by this Act, the board [Commission] shall
17-1 enforce and administer the terms of Chapter 503, Transportation
17-2 Code [Article 6686, Revised Statutes].
17-3 SECTION 8. Section 3.03(b), Texas Motor Vehicle Commission
17-4 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
17-5 to read as follows:
17-6 (b) The board [commission] may conduct hearings in contested
17-7 cases brought pursuant to, and as provided by Chapter 503,
17-8 Transportation Code[, Article 6686, Revised Statutes]. The
17-9 procedures applicable to a hearing conducted under this Subsection,
17-10 and the disposition of a final order after a hearing conducted
17-11 under this Subsection, are those applicable to a hearing conducted
17-12 as provided by Section 6.07(e)(2) of this Act. A decision or final
17-13 order issued under this Subsection is final, and no appeal may, as
17-14 a matter of right, be made to the Texas Transportation Commission.
17-15 The department may adopt rules applicable to procedures, hearings,
17-16 and enforcement proceedings in an action brought pursuant to this
17-17 Subsection.
17-18 SECTION 9. Section 3.04, Texas Motor Vehicle Commission Code
17-19 (Article 4413(36), Vernon's Texas Civil Statutes), is amended to
17-20 read as follows:
17-21 Sec. 3.04. DELEGATION OF BOARD [COMMISSION] POWERS. The
17-22 board [Commission] may delegate any power which it holds or derives
17-23 under this Act to:
17-24 (1) one or more of its members [of the Commission];
17-25 (2) the [Executive] Director; or
18-1 (3) one or more of its employees [of the Commission].
18-2 SECTION 10. Section 3.06, Texas Motor Vehicle Commission
18-3 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
18-4 to read as follows:
18-5 Sec. 3.06. Rules. The authority to issue rules pursuant to
18-6 this Act shall be vested in the board [Commission]. After notice
18-7 and hearing conducted by the board [Commission] or by the
18-8 [Executive] Director or his delegee in accordance with Chapter
18-9 2001, Government Code [the Administrative Procedure and Texas
18-10 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)] and
18-11 in compliance with this Act and the rules, decisions, and orders of
18-12 the board [Commission], the board [Commission] shall adopt such
18-13 rules and amendments thereto and deletions therefrom as may be
18-14 necessary or convenient to effectuate the provisions of this Act
18-15 and to govern practice and procedure before the board [Commission].
18-16 Such rules shall become effective as soon as the board
18-17 [Commission], acting by and through its [Executive] Director,
18-18 complies with the requirements of Chapter 2001, Government Code
18-19 [the Administrative Procedure and Texas Register Act] regarding
18-20 publication of official agency rules.
18-21 SECTION 11. Section 3.07, Texas Motor Vehicle Commission
18-22 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
18-23 to read as follows:
18-24 Sec. 3.07. Orders and decisions. (a) An order or decision
18-25 shall:
19-1 (1) include a separate finding of fact with respect to
19-2 each specific issue the board is required by law to consider in
19-3 reaching a decision;
19-4 (2) set forth additional [the] findings of fact and
19-5 conclusions of law on which the order or decision is based; and
19-6 (3) [shall] give the reasons for the particular
19-7 actions taken.
19-8 (b) Except as provided by Section 6.07 of this Act, all
19-9 orders and decisions shall be signed on behalf of the board
19-10 [Commission] by the Chairman or Vice-chairman and attested by the
19-11 [Executive] Director and shall have the seal affixed.
19-12 SECTION 12. Section 3.08, Texas Motor Vehicle Commission
19-13 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
19-14 to read as follows:
19-15 Section 3.08. Hearings; notice; hearing procedures;
19-16 complaints. (a) In this section, the term "contested case" has
19-17 the meaning given it in Chapter 2001, Government Code. A hearing
19-18 shall be conducted in all contested cases[, as defined in the
19-19 Administrative Procedure and Texas Register Act (Article 6252-13a,
19-20 Vernon's Texas Civil Statutes),] which arise in connection with
19-21 this Act or any rule of the board [Commission]. All hearings shall
19-22 be conducted in accordance with this Act, the orders, decisions, or
19-23 rules of the board [Commission], and Chapter 2001, Government Code
19-24 [the Administrative Procedure and Texas Register Act] to the extent
19-25 that Chapter 2001, Government Code [the Administrative Procedure
20-1 and Texas Register Act] does not conflict with this Act. A hearing
20-2 may be informally disposed of in accordance with Chapter 2001,
20-3 Government Code [the Administrative Procedure and Texas Register
20-4 Act]. Any hearing held under this section shall be conducted by
20-5 the [Executive] Director or any Hearing Examiner, each of whom may
20-6 be referred to in this Act as the "Examiner." The person or
20-7 persons serving as Examiner in any contested case hearing are
20-8 hereby delegated all the power and authority which the board
20-9 [Commission] has under this Act regarding the conduct of hearings,
20-10 including, without limitation, the power to hold hearings,
20-11 administer oaths, receive pleadings and evidence, issue subpoenas
20-12 to compel the attendance of witnesses, compel the production of
20-13 papers and documents, issue interlocutory orders, including cease
20-14 and desist orders in the nature of temporary restraining orders and
20-15 temporary injunctions, make findings of fact and conclusions of
20-16 law, and issue proposals for decision and recommended final orders.
20-17 (b) Notice of a hearing shall describe in summary form the
20-18 purpose of the hearing and its date, time, and place.
20-19 (c) Notice of a rulemaking hearing shall be given in
20-20 accordance with Chapter 2001, Government Code [the Administrative
20-21 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
20-22 Civil Statutes)] and the rules of the board [Commission] not less
20-23 than 30 days before the hearing date. Notice of a contested case
20-24 hearing involving a licensee [license] shall be given in accordance
20-25 with this Act and the rules of the board [Commission].
21-1 (d) Notice of a contested case hearing shall be deemed to
21-2 have been received by any person if notice of the hearing was
21-3 mailed to the last known address, of any person known to have legal
21-4 rights, duties, or privileges that could be determined at the
21-5 hearing, not less than 10 days before the hearing date. Notice of
21-6 a hearing shall be given by certified mail, return receipt
21-7 requested. Notice may be given to any officer, agent, employee,
21-8 legal representative, or attorney of any person. Notice of any
21-9 hearing may be waived by any person.
21-10 (e) A hearing shall be convened [conducted] at the time and
21-11 place stated in the hearing notice [or the hearing shall be
21-12 rescheduled and an amended notice given]. Any hearing may be
21-13 recessed until a time and place certain without further notice if
21-14 the time and place is [continued from time to time and place to
21-15 place as] announced openly before the hearing is recessed.[,
21-16 without further notice, or otherwise,] If the time and place
21-17 determined for the resumption of the hearing is not announced
21-18 openly before the hearing is recessed, the hearing may be recessed
21-19 to a time and place certain by giving advance notice as required by
21-20 Chapter 2001, Government Code [the Administrative Procedure and
21-21 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
21-22 Statutes)].
21-23 (f) Unless otherwise limited by this Act, any person, whose
21-24 legal rights, duties, or privileges are to be determined at any
21-25 hearing shall have the right to appear personally and by counsel,
22-1 to cross-examine adverse witnesses, and to produce evidence and
22-2 witnesses in the person's own behalf.
22-3 (g) In all contested cases the examiner shall serve on all
22-4 parties a copy of the examiner's proposal for decision and
22-5 recommended order containing findings of fact and conclusions of
22-6 law [shall be served on all parties and each]. A party may file
22-7 exceptions and replies to the board [Commission. After replies and
22-8 exceptions have been timely filed, the] In its review of the case,
22-9 the board may [Commission shall] consider only the materials timely
22-10 submitted [by all parties]. The board [Commission] may receive
22-11 such oral argument from any party as the board [Commission] may
22-12 allow. The board [Commission] shall take such further actions as
22-13 are conducive to the issuance of a final order and shall thereafter
22-14 issue a written final decision or order. The board's
22-15 [Commission's] written final decision or order shall be signed on
22-16 behalf of the board [Commission] by the [Executive] Director. A
22-17 majority vote of a quorum of the board [Commissioners] shall be
22-18 required to adopt final decisions or orders of the board
22-19 [Commission].
22-20 (h) A party who seeks a rehearing of an order shall do so in
22-21 accordance with the terms of Chapter 2001, Government Code [the
22-22 Administrative Procedure and Texas Register Act (Article 6252-13a,
22-23 Vernon's Texas Civil Statutes)].
22-24 (i) The owner of a motor vehicle or the owner's designated
22-25 agent may make a complaint concerning defects in a motor vehicle
23-1 which are covered by a manufacturer's, converter's, or
23-2 distributor's warranty agreement applicable to the vehicle. Any
23-3 such complaint must be made in writing to the applicable dealer,
23-4 manufacturer, converter, or distributor and must specify the
23-5 defects in the vehicle which are covered by the warranty. The
23-6 owner may also invoke the board's [Commission's] jurisdiction by
23-7 sending the board [Commission] a copy of the complaint. A hearing
23-8 may be scheduled on all complaints arising under this subsection
23-9 which are not privately resolved between the owner and the dealer,
23-10 manufacturer, converter, or distributor.
23-11 (j) On motion of any party the board [Commission] may, by
23-12 final order, and in accordance with the terms and procedures set
23-13 forth in Rule 166a, Texas Rules of Civil Procedure, dismiss a
23-14 complaint, protest, or response without holding a contested case
23-15 hearing.
23-16 SECTION 13. Section 3.09, Texas Motor Vehicle Commission
23-17 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
23-18 to read as follows:
23-19 Section 3.09. PROCEDURAL SUPREMACY [EFFECT ON ADMINISTRATIVE
23-20 PROCEDURE AND TEXAS REGISTER ACT]. In the event of any conflict
23-21 between Chapter 2001, Government Code [the Administrative Procedure
23-22 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
23-23 Statutes)] and this Act, the provisions of this Act shall prevail.
23-24 SECTION 14. Section 4.01, Texas Motor Vehicle Commission
23-25 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
24-1 by amending Subsection (b) and by adding Subsections (c), and (d)
24-2 to read as follows:
24-3 (b) In the case of a nonfranchised dealer, the term
24-4 "license" in this Act means a general distinguishing number [issued
24-5 by the Department pursuant to the authority of Article 6686,
24-6 Revised Statutes]. A nonfranchised dealer may not operate as a
24-7 dealer without a valid general distinguishing number but is not
24-8 required to obtain an additional license under the terms of this
24-9 Act. A franchised dealer shall have both a general distinguishing
24-10 number and a separate license issued under the terms of this Act.
24-11 (c) Notwithstanding the terms of this Act, a franchised
24-12 dealer is not required to have a lessor license or lease
24-13 facilitator license to engage in any capacity in the business of
24-14 leasing motor vehicles that the dealer owns and is licensed by this
24-15 Act to sell.
24-16 (d) A manufacturer or distributor that directly or
24-17 indirectly reimburses another person to perform warranty repair
24-18 services on a vehicle is engaged in business in this state whether
24-19 or not the manufacturer sells or offers for sale new motor vehicles
24-20 in this state.
24-21 SECTION 15. Section 4.02(a), Texas Motor Vehicle Commission
24-22 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
24-23 to read as follows:
24-24 (a) An application for a dealer license shall be on a form
24-25 prescribed by the board [Commission] which shall include the
25-1 information required by Chapter 503, Transportation Code [Article
25-2 6686, Revised Statutes,] and information on the applicant's
25-3 financial resources, business integrity, business ability and
25-4 experience, franchise agreement if applicable, physical facilities,
25-5 vehicle inventory, and other factors the board [Commission]
25-6 considers necessary to determine an applicant's qualifications to
25-7 adequately serve the motoring public.
25-8 SECTION 16. Section 4.03A, Texas Motor Vehicle Commission
25-9 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
25-10 to read as follows:
25-11 Section 4.03A. Lessor Application. An application for a
25-12 lessor license shall be on a form prescribed by the board
25-13 [Commission] and shall contain evidence of compliance with Chapter
25-14 503, Transportation Code [Article 6686, Revised Statutes], if
25-15 applicable, and other information prescribed by the board
25-16 [Commission]. This Act does not require a separate license for
25-17 each individual employee of a lessor.
25-18 SECTION 17. Section 4.05(a), Texas Motor Vehicle Commission
25-19 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
25-20 to read as follows:
25-21 (a) The annual license fees for licenses issued hereunder
25-22 shall be as follows:
25-23 (1) For each manufacturer and distributor, $900 plus
25-24 $20 for each individual dealer franchised by the manufacturer or
25-25 distributor.
26-1 (2) For each franchised dealer who sold 200 or fewer
26-2 new motor vehicles during the preceding calendar year, $175.
26-3 (3) For each franchised dealer who sold more than 200,
26-4 but not more than 400, new motor vehicles during the preceding
26-5 calendar year, $275.
26-6 (4) For each franchised dealer who sold more than 400,
26-7 but not more than 800, new motor vehicles during the preceding
26-8 calendar year, $400.
26-9 (5) For each franchised dealer who sold more than 800
26-10 but not more than 1,200 new motor vehicles during the preceding
26-11 calendar year, $500.
26-12 (6) For each franchised dealer who sold more than
26-13 1,200 but not more than 1,600 new motor vehicles during the
26-14 preceding calendar year, $625.
26-15 (7) For each franchised dealer who sold more than
26-16 1,600 new motor vehicles during the preceding calendar year, $750.
26-17 (8) For each location separate from his dealership at
26-18 which a franchised dealer offers no motor vehicle for sale, but
26-19 performs warranty service on vehicles the dealer is franchised and
26-20 licensed to sell, $100.
26-21 (9) [(10)] For each amendment to a dealer's license,
26-22 $25.
26-23 (10) [(8)] For each representative, $100.
26-24 (11) [(9)] For each converter,$375.
26-25 (12) [(9)] For each lessor who leased 200 or fewer
27-1 motor vehicles during the preceding calendar year, $175.
27-2 (13) [(10)] For each lessor who leased more than 200
27-3 but not more than 400 motor vehicles during the preceding calendar
27-4 year, $275.
27-5 (14) [(11)] For each lessor who leased more than 400
27-6 but not more than 800 motor vehicles during the preceding calendar
27-7 year, $400.
27-8 (15) [(12)] For each lessor who leased more than 800
27-9 but not more than 1,200 motor vehicles during the preceding
27-10 calendar year, $500.
27-11 (16) [(13)] For each lessor who leased more than 1,200
27-12 but not more than 1,600 motor vehicles during the preceding
27-13 calendar year, $625.
27-14 (17) [(14)] For each lessor who leased more than 1,600
27-15 motor vehicles during the preceding calendar year, $750.
27-16 (18) [(15)] For each lease facilitator, $375.
27-17 SECTION 18. Section 5.01, Texas Motor Vehicle Commission
27-18 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
27-19 to read as follows:
27-20 Section 5.01. Franchised dealers. It is unlawful for any
27-21 franchised dealer to:
27-22 (1) Require a retail purchaser of a new motor vehicle
27-23 as a condition of sale and delivery thereof to purchase special
27-24 features, equipment, parts, or accessories not ordered or desired
27-25 by the purchaser, provided such features, equipment, parts, or
28-1 accessories are not already installed on the new motor vehicle at
28-2 the time of sale.
28-3 (2) Fail to perform the obligations placed on the
28-4 selling franchised dealer in connection with the delivery and
28-5 preparation of a new motor vehicle for retail sale as provided in
28-6 the manufacturer's preparation and delivery agreements on file with
28-7 the Commission and applicable to such vehicle.
28-8 (3) Fail to perform the obligations placed on the
28-9 franchised dealer in connection with the manufacturer's warranty
28-10 agreements on file with the Commission.
28-11 (4) Operate without appropriate signs readily and
28-12 easily visible to the public, identifying the franchised dealer's
28-13 place of business and the products the franchised dealer offers for
28-14 sale. In the event of a conflict with another law or ordinance,
28-15 this Subdivision prevails, and in the event of a dispute, the Board
28-16 has exclusive jurisdiction to determine whether a sign or signs are
28-17 in compliance with the terms of this Subdivision. In the event of
28-18 a dispute, the Board shall uphold local ordinances of a home-rule
28-19 city and protect franchised dealers from retribution by
28-20 manufacturers or distributors for having complied with local
28-21 ordinances.
28-22 (5) [(7)] Directly or indirectly pay a fee to a lessor
28-23 or lease facilitator.
28-24 SECTION 19. Section 5.01A, Texas Motor Vehicle Commission
28-25 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
29-1 to read as follows:
29-2 Section 5.01A. DEALERS. No dealer may:
29-3 (1) use false, deceptive, or misleading advertising;
29-4 (2) [operate as a dealer without a currently valid
29-5 license or general distinguishing number issued by the Board;]
29-6 [(3)] violate a rule of the Board; or
29-7 (3) [(4)] aid or abet a person who violates this Act.
29-8 SECTION 20. Section 5.02(b), Texas Motor Vehicle Commission
29-9 Code, (Article 4413(36), Vernon's Texas Civil Statutes), is amended
29-10 to read as follows:
29-11 (b) It is unlawful for any manufacturer, distributor, or
29-12 representative to:
29-13 (1) Require or attempt to require any dealer to order,
29-14 accept delivery of or pay anything of value, directly or
29-15 indirectly, for any motor vehicle, appliance, part, accessory or
29-16 any other commodity unless voluntarily ordered or contracted for by
29-17 such dealer.
29-18 (2) Refuse or fail to deliver, in reasonable
29-19 quantities and within a reasonable time, to a dealer having a
29-20 franchise agreement for the retail sale of any motor vehicles sold
29-21 or distributed by such manufacturer, distributor, or
29-22 representative, any new motor vehicle or parts or accessories to
29-23 new motor vehicles as are covered by such franchise if such
29-24 vehicle, parts or accessories are publicly advertised as being
29-25 available for delivery or are actually being delivered; provided,
30-1 however, this provision is not violated if such failure is caused
30-2 by acts of God, work stoppage or delays due to strikes or labor
30-3 disputes, freight embargoes or other causes beyond the control of
30-4 the manufacturer, distributor, or representative.
30-5 (3) Notwithstanding the terms of any franchise
30-6 agreement:
30-7 (A) Terminate or refuse to continue any
30-8 franchise with a dealer or directly or indirectly force or attempt
30-9 to force a dealer to discontinue a line-make or parts or products
30-10 related to that line-make unless all of the following conditions
30-11 are met:
30-12 (i) the dealer and the board [Commission]
30-13 have received written notice by registered or certified mail from
30-14 the manufacturer, distributor, or representative not less than 60
30-15 days before the effective date of termination or noncontinuance
30-16 setting forth the specific grounds for termination or
30-17 noncontinuance; and
30-18 (ii) the written notice contains on the
30-19 first page thereof a conspicuous statement which reads as follows:
30-20 "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE
30-21 TEXAS MOTOR VEHICLE BOARD [COMMISSION] IN AUSTIN, TEXAS, AND HAVE A
30-22 HEARING IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR
30-23 NONCONTINUANCE OF YOUR FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR
30-24 VEHICLE COMMISSION CODE IF YOU OPPOSE THIS ACTION."; and
30-25 (iii) the manufacturer, distributor, or
31-1 representative has received the informed, written consent of the
31-2 affected dealer or the appropriate period for the affected dealer
31-3 to protest the proposed franchise termination or noncontinuance has
31-4 lapsed; or
31-5 (iv) if the affected dealer files a
31-6 protest with the board [Commission] within the greater of (1) 60
31-7 days after receiving its 60-day notice of proposed termination or
31-8 noncontinuance or (2) the time specified in such notice, the board
31-9 [Commission] determines that the party seeking to terminate or not
31-10 continue a dealer's franchise has established by a preponderance of
31-11 the evidence, at a hearing called by the board [Commission], that
31-12 there is good cause for the proposed termination or noncontinuance.
31-13 (v) Notwithstanding Subdivisions (3)(A)(i)
31-14 and (3)(A)(iv) of this section, notice may be made not less than 15
31-15 days prior to the effective date of termination or noncontinuance
31-16 if a licensed dealer fails to conduct its customary sales and
31-17 service operations during its customary business hours for seven
31-18 consecutive business days unless such failure is caused by an act
31-19 of God, work stoppage or delays due to strikes or labor disputes,
31-20 an order of the board [Commission], or other causes beyond the
31-21 control of the dealer.
31-22 (B) Whenever a dealer files a timely protest to
31-23 a proposed franchise termination or noncontinuance, the board
31-24 [Commission] shall notify the party seeking to terminate or to not
31-25 continue the protesting dealer's franchise that a timely protest
32-1 has been filed, that a hearing is required in accordance with this
32-2 Act, and that the party who gave the dealer notice of termination
32-3 or noncontinuance of the franchise may not terminate or refuse to
32-4 continue the franchise until the board [Commission] issues its
32-5 final decision or order.
32-6 (C) If a franchise is terminated or not
32-7 continued, another franchise in the same line-make will be
32-8 established within a reasonable time unless it is shown to the
32-9 board [Commission] by a preponderance of the evidence that the
32-10 community or trade area cannot reasonably support such a
32-11 dealership. If this showing is made, no dealer license shall be
32-12 thereafter issued in the same area unless a change in circumstances
32-13 is established.
32-14 (4) Notwithstanding the terms of any franchise
32-15 agreement, modify or replace a franchise with a succeeding
32-16 franchise if the modification or replacement would adversely
32-17 affect, to a substantial degree, the dealer's sales, investment, or
32-18 obligations to provide service to the public, unless the
32-19 manufacturer, distributor, or representative has first given the
32-20 board [Commission] and each affected dealer written notice by
32-21 registered or certified mail of any such action 60 days in advance
32-22 of the modification or replacement. The written notice shall
32-23 contain on the first page thereof a conspicuous statement which
32-24 reads as follows: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE
32-25 A PROTEST WITH THE TEXAS MOTOR VEHICLE BOARD [COMMISSION] IN
33-1 AUSTIN, TEXAS, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE
33-2 PROPOSED MODIFICATION OR REPLACEMENT OF YOUR FRANCHISE WITH A
33-3 SUCCEEDING FRANCHISE UNDER THE TERMS OF THE TEXAS MOTOR VEHICLE
33-4 COMMISSION CODE IF YOU OPPOSE THIS ACTION." Within the greater of
33-5 (1) 60 days after receipt of such notice or (2) the time specified
33-6 in such notice, a dealer may file a protest with the board
33-7 [Commission] and the modification or replacement shall not become
33-8 effective unless and until the board [Commission] determines that
33-9 the party seeking to modify or replace a franchise with a
33-10 succeeding franchise has demonstrated by a preponderance of the
33-11 evidence that there is good cause for the modification or
33-12 replacement. The prior franchise shall continue in effect until
33-13 the protest is resolved by the board [Commission].
33-14 (5) Notwithstanding the terms of any franchise
33-15 agreement, in determining whether good cause has been established
33-16 for modifying, replacing, terminating, or refusing to continue a
33-17 franchise, or for forcing or attempting to force a dealer to
33-18 discontinue a line-make or parts or products related to that
33-19 line-make, the board [Commission] shall consider all the existing
33-20 circumstances including, without limitation by the enumeration
33-21 herein, all the following:
33-22 (A) the dealer's sales in relation to the sales
33-23 in the market;
33-24 (B) the dealer's investment and obligations;
33-25 (C) injury to the public welfare;
34-1 (D) the adequacy of the dealer's service
34-2 facilities, equipment, parts, and personnel in relation to those of
34-3 other dealers of new motor vehicles of the same line-make;
34-4 (E) whether warranties are being honored by the
34-5 dealer;
34-6 (F) the parties' compliance with their franchise
34-7 agreement; and
34-8 (G) the enforceability of the franchise
34-9 agreement from a public policy standpoint, including, without
34-10 limitation, issues of the reasonableness of the franchise
34-11 agreement's terms, oppression, adhesion, and the relative
34-12 bargaining power of the parties.
34-13 Good cause shall not be shown solely by the desire of a
34-14 manufacturer, distributor, or representative for market
34-15 penetration.
34-16 (6) Use any false, deceptive or misleading
34-17 advertising.
34-18 (7) Notwithstanding the terms of any franchise
34-19 agreement, prevent any dealer from reasonably changing the capital
34-20 structure of his dealership or the means by or through which he
34-21 finances the operation thereof, provided that the dealer meets
34-22 reasonable capital requirements.
34-23 (8) Notwithstanding the terms of any franchise
34-24 agreement, fail to give effect to or attempt to prevent any sale or
34-25 transfer of a dealer, dealership or franchise or interest therein
35-1 or management thereof unless, after complaint or protest, it is
35-2 demonstrated to the board [Commission] after hearing that the
35-3 result of any such sale or transfer will be detrimental to the
35-4 public or the representation of the manufacturer or distributor.
35-5 (9) Notwithstanding the terms of any franchise
35-6 agreement, require or attempt to require that a dealer assign to or
35-7 act as an agent for any manufacturer, distributor or representative
35-8 in the securing of promissory notes and security agreements given
35-9 in connection with the sale or purchase of new motor vehicles or
35-10 the securing of policies of insurance on or having to do with the
35-11 operation of vehicles sold.
35-12 (10) Notwithstanding the terms of any franchise
35-13 agreement, fail or refuse, after complaint and hearing, to perform
35-14 the obligations placed on the manufacturer in connection with the
35-15 delivery, preparation and warranty of a new motor vehicle as
35-16 provided in the manufacturer's warranty, preparation, and delivery
35-17 agreements on file with the board [Commission].
35-18 (11) Notwithstanding the terms of any franchise
35-19 agreement, fail to compensate its dealers for the work and services
35-20 they are required to perform in connection with the dealer's
35-21 delivery and preparation obligations according to the agreements on
35-22 file with the board [Commission] which must be found by the board
35-23 [Commission] to be reasonable, or fail to adequately and fairly
35-24 compensate its dealers for labor, parts and other expenses incurred
35-25 by such dealer to perform under and comply with a manufacturer's or
36-1 a distributor's warranty agreement, or require, as a prerequisite
36-2 to the manufacturer's or distributor's payment of a claim for
36-3 reimbursement as required by this section, that a dealer file with
36-4 the manufacturer or distributor the actual time spent in the
36-5 performance of labor unless actual time is the basis for
36-6 reimbursement. In no event shall any manufacturer or distributor
36-7 pay its dealers an amount of money for warranty work that is less
36-8 than that charged by the dealer to the retail customers of the
36-9 dealer for nonwarranty work of like kind. All claims made by
36-10 dealers for compensation for delivery, preparation, and warranty
36-11 work shall be paid within 30 days after approval and shall be
36-12 approved or disapproved within 30 days after receipt. When any
36-13 claim is disapproved, the dealer shall be notified in writing of
36-14 the grounds for disapproval. No claim which has been approved and
36-15 paid may be charged back to the dealer unless it can be shown that
36-16 the claim was false or fraudulent, that the repairs were not
36-17 properly made or were unnecessary to correct the defective
36-18 condition, or that the dealer failed to reasonably substantiate the
36-19 claim in accordance with reasonable written requirements of the
36-20 manufacturer or distributor, if the dealer has been notified of the
36-21 requirements prior to the time the claim arose, and if the
36-22 requirements were in effect at the time the claim arose. A
36-23 manufacturer or distributor may not audit a claim after the
36-24 expiration of two years following the submission of the claim
36-25 unless the manufacturer or distributor has reasonable grounds to
37-1 suspect that a claim was fraudulent. Notwithstanding the terms of
37-2 a franchise agreement or provision of law in conflict with this
37-3 section, the dealer's delivery, preparation, and warranty
37-4 obligations as filed with the board [Commission] shall constitute
37-5 the dealer's sole responsibility for product liability as between
37-6 the dealer and manufacturer or distributor, and, except for a loss
37-7 caused by the dealer's failure to adhere to these obligations, a
37-8 loss caused by the dealer's negligence or intentional misconduct,
37-9 or a loss caused by the dealer's modification of a product without
37-10 manufacturer or distributor authorization, the manufacturer or
37-11 distributor shall reimburse the dealer for all loss incurred by the
37-12 dealer, including legal fees, court costs, and damages, as a result
37-13 of the dealer having been named a party in a product liability
37-14 action.
37-15 (12) Operate as a manufacturer, distributor, or
37-16 representative without a currently valid license from the board
37-17 [Commission] or otherwise violate this Act or rules promulgated by
37-18 the board [Commission] hereunder.
37-19 (13) Notwithstanding the terms of any franchise
37-20 agreement, to prevent or refuse to honor the succession to a
37-21 dealership by any legal heir or devisee under the will of a dealer
37-22 or under the laws of descent and distribution of this State unless
37-23 it is shown to the board [Commission], after notice and hearing,
37-24 that the result of such succession will be detrimental to the
37-25 public interest and to the representation of the manufacturer or
38-1 distributor; provided, however, nothing herein shall prevent a
38-2 dealer, during his lifetime, from designating any person as his
38-3 successor dealer, by written instrument filed with the manufacturer
38-4 or distributor.
38-5 (14) Notwithstanding the terms of any franchise
38-6 agreement, require that a dealer pay or assume, directly or
38-7 indirectly, any part of any refund, rebate, discount, or other
38-8 financial adjustment made by the manufacturer, distributor, or
38-9 representative to, or in favor of, any customer of a dealer, unless
38-10 voluntarily agreed to by such dealer.
38-11 (15) Notwithstanding the terms of any franchise
38-12 agreement, deny or withhold approval of a written application to
38-13 relocate a franchise unless (A) the applicant has received written
38-14 notice of the denial or withholding of approval within 60 days
38-15 after receipt of the application containing information reasonably
38-16 necessary to enable the manufacturer or distributor to adequately
38-17 evaluate the application, and if (B) the applicant files a protest
38-18 with the board [Commission] and the manufacturer or distributor
38-19 establishes by a preponderance of the evidence at a hearing called
38-20 by the board [Commission] that the grounds for the denial or
38-21 withholding of approval of the relocation are reasonable.
38-22 (16) Notwithstanding the terms of any franchise
38-23 agreement, fail to pay to a dealer or any lienholder in accordance
38-24 with their respective interest after the termination of a
38-25 franchise:
39-1 (A) the dealer cost of each new motor vehicle in
39-2 the dealer's inventory with mileage of 6,000 miles or less, reduced
39-3 by the net discount value of each, where "net discount value" is
39-4 determined according to the following formula: net cost multiplied
39-5 by total mileage divided by 100,000, and where "net cost" equals
39-6 the dealer cost plus any charges by the manufacturer, distributor,
39-7 or representative for distribution, delivery, and taxes, less all
39-8 allowances paid to the dealer by the manufacturer, distributor, or
39-9 representative for new, unsold, undamaged, and complete motor
39-10 vehicles of current model year or one year prior model year in the
39-11 dealer's inventory, except that if a vehicle cannot be reduced by
39-12 the net discount value, the manufacturer or distributor shall pay
39-13 the dealer the net cost of the vehicle;
39-14 (B) the dealer cost of each new, unused,
39-15 undamaged, and unsold part or accessory if the part or accessory is
39-16 in the current parts catalogue and is still in the original,
39-17 resalable merchandising package and in unbroken lots, except that
39-18 in the case of sheet metal, a comparable substitute for the
39-19 original package may be used, and if the part or accessory was
39-20 purchased by the dealer either directly from the manufacturer or
39-21 distributor or from an outgoing authorized dealer as a part of the
39-22 dealer's initial inventory;
39-23 (C) the fair market value of each undamaged sign
39-24 owned by the dealer which bears a trademark or tradename used or
39-25 claimed by the manufacturer, distributor, or representative if the
40-1 sign was purchased from or purchased at the request of the
40-2 manufacturer, distributor, or representative;
40-3 (D) the fair market value of all special tools,
40-4 data processing equipment, and automotive service equipment owned
40-5 by the dealer which were recommended in writing and designated as
40-6 special tools and equipment and purchased from or purchased at the
40-7 request of the manufacturer, distributor, or representative, if the
40-8 tools and equipment are in usable and good condition except for
40-9 reasonable wear and tear;
40-10 (E) the cost of transporting, handling, packing,
40-11 storing, and loading of any property subject to repurchase under
40-12 this section;
40-13 (F) except as provided by this subdivision, any
40-14 sums due as provided by Paragraph (A) of this subdivision within 60
40-15 days after termination of a franchise and any sums due as provided
40-16 by Paragraphs (B) through (E) of this subdivision within 90 days
40-17 after termination of a franchise. As a condition of payment, the
40-18 dealer is to comply with reasonable requirements with respect to
40-19 the return of inventory as are set out in the terms of the
40-20 franchise agreement. A manufacturer or distributor shall reimburse
40-21 a dealer for the dealer's cost for storing any property covered by
40-22 this subdivision beginning 90 days following termination. A
40-23 manufacturer or distributor shall reimburse a dealer for the
40-24 dealer's cost of storing any property covered by this subdivision
40-25 before the expiration of 90 days from the date of termination if
41-1 the dealer notifies the manufacturer or distributor of the
41-2 commencement of storage charges within that period. On receipt of
41-3 notice of the commencement of storage charges, a manufacturer or
41-4 distributor may immediately take possession of the property in
41-5 question by repurchasing the property as provided by this
41-6 subdivision. A manufacturer, distributor, or representative who
41-7 fails to pay those sums within the prescribed time or at such time
41-8 as the dealer and lienholder, if any, proffer good title prior to
41-9 the prescribed time for payment, is liable to the dealer for:
41-10 (i) the greatest of dealer cost, fair
41-11 market value, or current price of the inventory;
41-12 (ii) interest on the amount due calculated
41-13 at the rate applicable to a judgment of a court; and
41-14 (iii) reasonable attorney's fees and
41-15 costs.
41-16 (17) Notwithstanding the terms of any franchise
41-17 agreement, change its distributor, its method of distribution of
41-18 its products in this state, or its business structure or ownership
41-19 in a manner that results in the termination or noncontinuance of a
41-20 franchise without good cause. The manufacturer, distributor, or
41-21 representative shall issue the same notice to the dealer and to the
41-22 board [Commission] as is provided in Subdivisions (3)(A) and (B) of
41-23 this section and said same procedures shall apply to the parties.
41-24 (18) Notwithstanding the terms of any franchise
41-25 agreement, require a dealer to submit to arbitration on any issue
42-1 unless the dealer and the manufacturer, distributor, or
42-2 representative and their respective counsel agree to arbitrate
42-3 after a controversy arises. The arbitrator shall apply the
42-4 provisions of this Act in resolving the pertinent controversy.
42-5 Either party may appeal to the board [Commission] a decision of an
42-6 arbitrator on the ground that the arbitrator failed to apply this
42-7 Act.
42-8 (19) Notwithstanding the terms of any franchise
42-9 agreement, require that a dealer join, contribute to, or affiliate
42-10 with, directly or indirectly, any advertising association.
42-11 (20) Notwithstanding the terms of a franchise
42-12 agreement:
42-13 (A) require adherence to unreasonable sales or
42-14 service standards;
42-15 (B) directly or indirectly, discriminate against
42-16 a dealer or otherwise treat dealers differently as a result of a
42-17 formula or other calculation or process intended to gauge the
42-18 performance of a dealership, except a sales contest or other
42-19 recognition program based on reasonable sales and service criteria;
42-20 (C) unreasonably require that a dealer purchase
42-21 special tools or equipment; or
42-22 (D) fail to compensate a dealer for all costs
42-23 incurred by the dealer as required by the manufacturer in complying
42-24 with the terms of a product recall by the manufacturer or
42-25 distributor, including the costs, if any, incurred by the dealer in
43-1 notifying vehicle owners of the existence of the recall.
43-2 (21) Discriminate unreasonably between or among
43-3 franchisees in the sale of a motor vehicle owned by the
43-4 manufacturer or distributor.
43-5 (22) Directly or indirectly, or through a subsidiary
43-6 or agent, require, as a condition for obtaining financing for a
43-7 motor vehicle, the purchaser of a vehicle to purchase any product
43-8 other than the motor vehicle from the manufacturer or distributor,
43-9 or from an entity owned or controlled by the manufacturer or
43-10 distributor.
43-11 (23) Directly or indirectly, or through a subsidiary
43-12 or agent, require, as a condition of its or its subsidiary's
43-13 agreement to provide financing for a motor vehicle, that any
43-14 insurance policy or service contract purchased by the motor vehicle
43-15 purchaser be purchased from a specific source.
43-16 (24) Compel a dealer through a financing subsidiary of
43-17 the manufacturer or distributor to agree to unreasonable operating
43-18 requirements or directly or indirectly to terminate a dealer
43-19 through the actions of a financing subsidiary of the manufacturer
43-20 or distributor. This subdivision does not limit the right of a
43-21 financing entity to engage in business practices in accordance with
43-22 the usage of trade in retail and wholesale motor vehicle financing.
43-23 (25) Operate as a dealer except on a temporary basis
43-24 and only if:
43-25 (A) the dealership was previously owned by a
44-1 franchised dealer and is currently for sale at a reasonable price;
44-2 or
44-3 (B) the manufacturer, distributor, or
44-4 representative operates the dealership in a bona fide relationship
44-5 with a franchised dealer who is required to make a significant
44-6 investment in the dealership, subject to loss, and who reasonably
44-7 expects to acquire full ownership of the dealership under
44-8 reasonable terms and conditions.
44-9 (26) Notwithstanding the terms of a franchise
44-10 agreement, deny or withhold approval of a dealer's application to
44-11 add a line-make or parts or products related to that line-make
44-12 unless, within 60 days of receipt of the dealer's written
44-13 application to add the line-make, the manufacturer or distributor
44-14 gives the dealer written notice of the denial or withholding of
44-15 approval. After receipt of notice, the dealer may file a protest
44-16 with the board [Commission]. If the dealer files a protest as
44-17 provided by this subdivision, the board [Commission] may uphold the
44-18 manufacturer's or distributor's decision to deny or withhold
44-19 approval of the addition of the line-make only if the manufacturer
44-20 or distributor proves by a preponderance of the evidence that the
44-21 denial or withholding of approval was reasonable. In determining
44-22 whether or not the manufacturer or distributor has met its burden
44-23 to show that its denial or withholding of approval is reasonable,
44-24 the board [Commission] shall consider all existing circumstances,
44-25 including, without limitation, the following:
45-1 (A) the dealer's sales in relation to the sales
45-2 in the market;
45-3 (B) the dealer's investment and obligations;
45-4 (C) injury to the public welfare;
45-5 (D) the adequacy of the dealer's sales and
45-6 service facilities, equipment, parts, and personnel in relation to
45-7 those of other dealers of new motor vehicles of the same line-make;
45-8 (E) whether warranties are being honored by the
45-9 dealer agreement;
45-10 (F) the parties' compliance with their franchise
45-11 agreement;
45-12 (G) the enforceability of the franchise
45-13 agreement from a public policy standpoint, including without
45-14 limitation, issues of the reasonableness of the franchise
45-15 agreement's terms, oppression, adhesion, and the relative
45-16 bargaining power of the parties;
45-17 (H) whether the dealer complies with reasonable
45-18 capitalization requirements or will be able to comply with
45-19 reasonable capitalization requirements within a reasonable time;
45-20 (I) the harm, if any, to the manufacturer if the
45-21 denial or withholding of approval is not upheld; and
45-22 (J) the harm, if any, to the dealer if the
45-23 denial or withholding of approval is upheld.
45-24 SECTION 21. Section 6.02, Texas Motor Vehicle Commission
45-25 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
46-1 to read as follows:
46-2 Section 6.02. Injunction. Whenever it appears that a person
46-3 has violated, is violating, or is threatening to violate any
46-4 provision of this Act or of any rule or order of the board
46-5 [Commission] issued pursuant to this Act [then] the board
46-6 [Commission], or the [Executive] Director when authorized by the
46-7 board [Commission], may cause a suit to be instituted in any court
46-8 for injunctive relief to restrain any such person from continuing
46-9 the violation or threat of violation or for the assessment and
46-10 recovery of a civil penalty as provided for in this Act or for both
46-11 injunctive relief and a civil penalty.
46-12 SECTION 22. Section 6.03, Texas Motor Vehicle Commission
46-13 Code (Article 4413(36), Vernon's Texas Civil Statutes), is amended
46-14 to read as follows:
46-15 Section 6.03. Suit. At the request of the board
46-16 [Commission,] or the [Executive] Director when authorized by the
46-17 board [Commission], the Attorney General shall institute and
46-18 conduct a suit in the name of the State of Texas for injunctive
46-19 relief or to recover a civil penalty or for both injunctive relief
46-20 and penalty.
46-21 SECTION 23. Subsections (e), (g), and (j), Section 6.07,
46-22 Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's
46-23 Texas Civil Statutes), are amended to read as follows:
46-24 (e)(1) The board [Commission] shall adopt rules for the
46-25 enforcement and implementation of this section.
47-1 (2) The [Executive] Director shall, in accordance with
47-2 rules adopted by the board [Commission], conduct hearings and issue
47-3 final orders for the enforcement and implementation of this
47-4 section. Orders issued by the [Executive] Director under this
47-5 section are considered final orders of the board [Commission].
47-6 (3) Except as provided by Subdivision (6) of this
47-7 subsection, the provisions of this section are not available to an
47-8 owner in an action seeking a refund or replacement based upon the
47-9 alleged nonconformity of a motor vehicle to an express warranty
47-10 applicable to the motor vehicle unless the owner has first
47-11 exhausted the administrative remedies provided herein.
47-12 (4) The provisions of this section are not available
47-13 to a party in an action against a seller under Chapter 2 or Chapter
47-14 17, Business & Commerce Code, as amended.
47-15 (5) Except as provided by Subdivision (6) of this
47-16 subsection, the provisions of this section are available in an
47-17 action against a manufacturer, converter, or distributor brought
47-18 under Chapter 17, Business & Commerce Code, after the owner has
47-19 exhausted the administrative remedies provided by this section.
47-20 (6) If, after a complaint has been filed under this
47-21 section, the Hearing Examiner has not issued a proposal for
47-22 decision and recommended to the [Executive] Director a final order
47-23 before the expiration of the 150th day after the date the complaint
47-24 was filed, the [Executive] Director shall, in writing sent by
47-25 certified mail, so inform the complainant and the manufacturer,
48-1 converter, or distributor of the expiration of the 150-day period
48-2 and of the complainant's right to file a civil action. The board
48-3 [Commission] shall extend the 150-day period if a delay is
48-4 requested or is caused by the complainant.
48-5 (7) After receipt of the notice of the right to file a
48-6 civil action, the complainant may file a civil action against one
48-7 or more of the persons complained of in the complaint.
48-8 (8) A failure by the [Commission] to issue a notice of
48-9 the right to file a civil action does not affect a complainant's
48-10 right to bring an action under this Act.
48-11 (9) Any party to a proceeding under this section
48-12 before the [Executive] Director that is affected by a final order
48-13 of the [Executive] Director is entitled to judicial review of the
48-14 order under the substantial evidence rule in a District Court of
48-15 Travis County, Texas. The judicial review is subject to Chapter
48-16 2001, Government Code [the Administrative Procedure and Texas
48-17 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)]
48-18 except to the extent that that Act is inconsistent with this Act.
48-19 (g) In a hearing under this section, the [Executive]
48-20 Director shall make its order with respect to responsibility for
48-21 payment of the cost of any refund or replacement and no
48-22 manufacturer, converter, or distributor may cause any franchised
48-23 dealer to pay directly or indirectly any sum not specifically so
48-24 ordered by the [Executive] Director. If the [Executive] Director
48-25 orders a manufacturer, converter, or distributor to refund or
49-1 replace a motor vehicle because it meets the criteria set forth in
49-2 this section, the [Executive] Director may order the franchised
49-3 dealer to reimburse the owner, lienholder, manufacturer, converter,
49-4 or distributor only for items or options added to the vehicle by
49-5 the franchised dealer and only to the extent that one or more of
49-6 such items or options contributed to the defect that served as the
49-7 basis for the [Executive] Director's order of refund or
49-8 replacement. In a case involving a leased vehicle, the [Executive]
49-9 Director may terminate the lease and apportion the allowance for
49-10 use and other allowances or refunds between the lessee and lessor
49-11 of the vehicle.
49-12 (j)(1) A manufacturer, distributor, or converter that has
49-13 been ordered to repurchase or replace a vehicle shall, through its
49-14 franchised dealer, issue a disclosure statement stating that the
49-15 vehicle was repurchased or replaced by the manufacturer,
49-16 distributor, or converter under this section. The disclosure
49-17 statement must accompany the vehicle through the first retail
49-18 purchase. The manufacturer, distributor, or converter must restore
49-19 the cause of the repurchase or replacement to factory
49-20 specifications and issue a new 12-month, 12,000-mile warranty on
49-21 the vehicle. The disclosure statement must include a toll-free
49-22 telephone number of the board [Commission] that will enable a
49-23 purchaser of a repurchased or replaced vehicle to obtain
49-24 information about the condition or defect that was the basis of the
49-25 order for repurchase or replacement. The board [Commission] shall
50-1 adopt rules for the enforcement of this subdivision.
50-2 (2) The board [Commission] shall provide a toll-free
50-3 telephone number for providing information to persons who request
50-4 information about a condition or defect that was the basis for
50-5 repurchase or replacement by an order of the [Executive] Director.
50-6 The board [Commission] shall maintain an effective method of
50-7 providing information to persons who make the requests.
50-8 SECTION 24. Subsections (a), (c), and (d), Section 7.01,
50-9 Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's
50-10 Texas Civil Statutes), are amended to read as follows:
50-11 (a) Any party to a proceeding before the board [Commission]
50-12 that is affected by a final order, rule, decision, or other final
50-13 action of the board [Commission] is entitled to judicial review of
50-14 any such final board [Commission] action, under the substantial
50-15 evidence rule, in a District Court of Travis County, Texas, or in
50-16 the Court of Appeals for the Third Court of Appeals District, and
50-17 to the extent not inconsistent herewith, pursuant to Chapter 2001,
50-18 Government Code [the Administrative Procedure and Texas Register
50-19 Act (Article 6252-13a, Vernon's Texas Civil Statutes)]. Except as
50-20 otherwise provided by this Act, an appeal [Appeals] initiated in
50-21 the District Courts of Travis County shall be removable to the
50-22 Court of Appeals upon notice of removal to any such district court
50-23 by any party at any time prior to trial in the district court.
50-24 Appeals initiated in or removed to the Court of Appeals shall be
50-25 initiated under Chapter 2001, Government Code [the Administrative
51-1 Procedure and Texas Register Act] as if initiated in a Travis
51-2 County District Court and shall, upon the filing thereof, be
51-3 thereafter governed by the Texas Rules of Appellate Procedure.
51-4 (c) Citation must be served on the [Executive] Director.
51-5 Citation must also be served on all other parties of record before
51-6 the board [Commission]. For appeals initiated in the Court of
51-7 Appeals, the court shall cause citation to be issued.
51-8 (d) Appeals in which evidence outside the board's
51-9 [Commission's] record is to be taken under Chapter 2001, Government
51-10 Code [Section 19(d)(3), Administrative Procedure and Texas Register
51-11 Act (Article 6252-13a, Vernon's Texas Civil Statutes)], or
51-12 otherwise, shall be initiated in a Travis County District Court, or
51-13 having been initiated in the Court of Appeals, shall be subject to
51-14 remand to a Travis County District Court for proceedings in
51-15 accordance with instructions from the Court of Appeals.
51-16 SECTION 25. EMERGENCY. The importance of this legislation
51-17 and the crowded condition of the calendars in both houses create an
51-18 emergency and an imperative public necessity that the
51-19 constitutional rule requiring bills to be read on three several
51-20 days in each house be suspended, and this rule is hereby suspended,
51-21 and that this Act take effect and be in force from and after its
51-22 passage, and it is so enacted.