Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
By: Cain S.B. No. 1146
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the licensing of franchised dealers engaged in the
1-2 leasing of motor vehicles.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 4.01, Subchapter D, Texas Motor Vehicle
1-5 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
1-6 is amended by amending Subsection (a) to read as follows:
1-7 Sec. 4.01. (a) Except as provided by this Section, no
1-8 person shall engage in business as, serve in the capacity of, or
1-9 act as a dealer, manufacturer, distributor, converter,
1-10 representative, lessor, or lease facilitator in this State or
1-11 perform or offer to perform repair services on a motor vehicle
1-12 pursuant to the terms of a franchise and a motor vehicle
1-13 manufacturer's warranty, whether or not the person sells or offers
1-14 to sell motor vehicles at the same location, without obtaining a
1-15 license therefor as provided in this Act and the rules of the
1-16 Commission. All new license applications shall be reviewed and, in
1-17 the discretion of the Commission, investigated to determine
1-18 compliance with the provisions of this Act. License renewals may
1-19 be administratively granted unless protested. Licenses issued by
1-20 the Commission shall expire one year from date of issuance. All
1-21 licenses and renewals thereof are issued subject to all provisions
1-22 of this Act and rules of the Commission in effect upon the date of
1-23 issuance as well as all future provisions of this Act and rules
2-1 which may become effective during the term of the license. A
2-2 lessor or lease facilitator is not required to obtain a lessor or
2-3 lease facilitator license or pay a license fee under this code if
2-4 the lessor or lease facilitator is a state or federally chartered
2-5 financial institution or a regulated subsidiary of a state or
2-6 federally chartered financial institution. A trust or other entity
2-7 that owns an interest in a lease and the vehicle that is the
2-8 subject of the lease is not required to obtain a lessor license or
2-9 lease facilitator license or pay a license fee with respect to a
2-10 lease initiated, managed, serviced, and administered by a licensed
2-11 lessor. A franchised dealer licensed under this Act is not
2-12 required to obtain a lessor or lease facilitator license or pay a
2-13 license fee under this Act to engage in any capacity in the
2-14 business of leasing motor vehicles, including new motor vehicles,
2-15 the dealer is licensed to sell.
2-16 SECTION 2. Section 5.01, Subchapter E, Texas Motor Vehicle
2-17 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
2-18 is amended by amending Subsection (7) to read as follows:
2-19 Sec. 5.01. It is unlawful for any franchised dealer to:
2-20 (7) Directly or indirectly pay a fee to a lessor or
2-21 lease facilitator. The fees prohibited by this section do not
2-22 include any element of the terms or considerations relating to the
2-23 sale or assignment of a lease or leased motor vehicle by a
2-24 franchised dealer to another person who is licensed under this Act.
2-25 SECTION 3. Section 5.03A, Subchapter E, Texas Motor Vehicle
3-1 Commission Code (Article 4413(36), Vernon's Texas Civil Statutes),
3-2 is amended by amending Subsections (a) and (b) to read as follows:
3-3 Sec. 5.03A. (a) A lessor may not directly or indirectly
3-4 accept a fee from a dealer. The fees prohibited by this section do
3-5 not include any element of the terms or considerations relating to
3-6 the sale or assignment of a lease or leased motor vehicle by a
3-7 franchised dealer to another person who is licensed under this Act.
3-8 (b) A lessor may not pay a fee to any person in return for
3-9 the solicitation, procurement, or production by that person of
3-10 prospective lessees of motor vehicles unless the person receiving
3-11 the fee is a lease facilitator who holds a valid license as
3-12 provided by this code and a valid appointment from the lessor as
3-13 provided by this section. The fees prohibited by this section do
3-14 not include any element of the terms or considerations relating to
3-15 the sale or assignment of a lease or leased motor vehicle by a
3-16 franchised dealer to another person who is licensed under this Act.
3-17 SECTION 4. EFFECTIVE DATE. This Act takes effect
3-18 September 1, 1997.
3-19 SECTION 5. EMERGENCY. The importance of this legislation
3-20 and the crowded condition of the calendars in both houses create an
3-21 emergency and an imperative public necessity that the
3-22 constitutional rule requiring bills to be read on three several
3-23 days in each house be suspended, and this rule is hereby suspended.