|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the regulation of motor vehicle manufacturers and |
|
distributors. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 2301.257, Occupations Code, is amended |
|
by adding Subsection (d) to read as follows: |
|
(d) The act of filing an application under this section or a |
|
form prescribed under this section does not establish the applicant |
|
as a franchised dealer. |
|
SECTION 2. Section 2301.359, Occupations Code, is amended |
|
by amending Subsection (e) and adding Subsections (g), (h), and (i) |
|
to read as follows: |
|
(e) A manufacturer or distributor may not unreasonably |
|
withhold approval of an application filed under Subsection (a). |
|
[It is unreasonable for a manufacturer or distributor to reject a
|
|
prospective transferee who is of good moral character and who meets
|
|
the written, reasonable, and uniformly applied standards or
|
|
qualifications, if any, of the manufacturer or distributor relating
|
|
to the prospective transferee's business experience and financial
|
|
qualifications.] |
|
(g) In determining whether to approve an application filed |
|
under Subsection (a), a manufacturer or distributor may consider: |
|
(1) whether a prospective transferee has been a |
|
franchised dealer in this state; |
|
(2) the moral character of the prospective transferee; |
|
and |
|
(3) the extent to which a prospective transferee meets |
|
the criteria, if any, developed by the manufacturer or distributor |
|
and made available to the prospective transferee, specifically to |
|
determine the business experience and financial qualifications of a |
|
prospective transferee. |
|
(h) The criteria described by Subsection (g)(3) may be |
|
applied by a manufacturer or distributor only if the criteria are |
|
written, reasonable, and uniformly applied in similar situations. |
|
(i) It is unreasonable for a manufacturer or distributor to |
|
withhold approval of a prospective transferee who is of good moral |
|
character and who meets the criteria described by Subsection |
|
(g)(3). |
|
SECTION 3. Section 2301.360(b), Occupations Code, is |
|
amended to read as follows: |
|
(b) In a protest under this section, the board must |
|
determine whether the rejection was reasonable under the criteria |
|
described by Section 2301.359(g)(3) [prospective transferee is
|
|
qualified]. The burden is on the manufacturer or distributor to |
|
prove that the prospective transferee is not qualified under the |
|
criteria. The board shall enter an order holding that the |
|
prospective transferee either is qualified or is not qualified. |
|
SECTION 4. Section 2301.464(a), Occupations Code, is |
|
amended to read as follows: |
|
(a) Not later than the 60th day before the date a franchised |
|
dealer proposes to begin the relocation of a dealership, the dealer |
|
must provide written notice of the dealer's intent to relocate to |
|
the dealer's manufacturer, distributor, or representative. The |
|
notice must be sent by certified mail, return receipt requested. |
|
Notwithstanding the terms of any franchise, a manufacturer, |
|
distributor, or representative may not deny or withhold approval of |
|
a written application to relocate a franchise unless: |
|
(1) the applicant receives written notice of the |
|
denial or withholding of approval not later than the 60th day after |
|
the date the application is received; and |
|
(2) if the applicant files a protest with the board, |
|
the board makes a determination of reasonable grounds under this |
|
section. |
|
SECTION 5. Section 2301.465, Occupations Code, is amended |
|
by amending Subsections (a) and (b) and adding Subsections (h) and |
|
(i) to read as follows: |
|
(a) In this section: |
|
(1) "Net cost" means the franchised dealer cost for a |
|
new, unsold, undamaged, and complete motor vehicle [of the current
|
|
model year or the previous model year] in a dealer's inventory: |
|
(A) plus any charges by the manufacturer, |
|
distributor, or representative for distribution, delivery, and |
|
taxes; and |
|
(B) less all allowances paid to the franchised |
|
dealer by the manufacturer, distributor, or representative. |
|
(2) "Net discount value" is the net cost multiplied by |
|
the total mileage, exclusive of mileage placed on the motor vehicle |
|
before it was delivered to the dealer, divided by 100,000. |
|
(b) Notwithstanding the terms of any franchise, after the |
|
termination of a franchise, a manufacturer, distributor, or |
|
representative shall pay to a franchised dealer or any lienholder, |
|
in accordance with the interest of each, the following amounts: |
|
(1) the dealer cost of each new motor vehicle in the |
|
dealer's inventory with mileage of 5,000 [6,000] miles or less, |
|
exclusive of mileage placed on the vehicle before it was delivered |
|
to the dealer, reduced by the net discount value of each vehicle, |
|
except that if a vehicle cannot be reduced by the net discount |
|
value, the manufacturer or distributor shall pay the dealer the net |
|
cost of the vehicle; |
|
(2) the dealer cost of each new, unused, undamaged, |
|
and unsold part or accessory that: |
|
(A) is in the current parts catalogue and is |
|
still in the original, resalable merchandising package and in an |
|
unbroken lot, except in the case of sheet metal, a comparable |
|
substitute for the original package may be used; and |
|
(B) was purchased by the dealer either directly |
|
from the manufacturer or distributor or from an outgoing authorized |
|
dealer as a part of the dealer's initial inventory; |
|
(3) the fair market value of each undamaged sign owned |
|
by the dealer that bears a trademark or tradename used or claimed by |
|
the manufacturer, distributor, or representative and that was |
|
purchased from or at the request of the manufacturer, distributor, |
|
or representative; |
|
(4) the fair market value of all special tools, data |
|
processing equipment, and automotive service equipment owned by the |
|
dealer that: |
|
(A) were recommended in writing and designated as |
|
special tools and equipment; |
|
(B) were purchased from or at the request of the |
|
manufacturer, distributor, or representative; and |
|
(C) are in usable and good condition except for |
|
reasonable wear and tear; and |
|
(5) the cost of transporting, handling, packing, |
|
storing, and loading any property subject to repurchase under this |
|
section. |
|
(h) Notwithstanding any other law, this section does not |
|
require a manufacturer, distributor, or representative to |
|
repurchase a motor vehicle that: |
|
(1) at the time of termination of the franchise had |
|
been in the dealer's inventory for at least 24 months after the date |
|
the dealer took delivery of the vehicle; or |
|
(2) the dealer purchased not more than 30 days before |
|
the date of termination of the franchise solely in anticipation of |
|
the termination and, in the ordinary course of business, would not |
|
have purchased. |
|
(i) For purposes of this section, a sale of the assets or |
|
stock of a dealership to a buyer who continues the operation of the |
|
dealership is not a termination of a franchise. |
|
SECTION 6. Section 2301.467, Occupations Code, is amended |
|
to read as follows: |
|
Sec. 2301.467. PROHIBITIONS: SALES STANDARDS, RELOCATIONS, |
|
FACILITY CHANGES, PURCHASE OF EQUIPMENT. (a) Notwithstanding the |
|
terms of any franchise, a manufacturer, distributor, or |
|
representative may not: |
|
(1) require adherence to unreasonable sales or service |
|
standards; or |
|
(2) unreasonably require a franchised dealer to |
|
purchase special tools or equipment. |
|
(b) Notwithstanding the terms of any franchise, a |
|
manufacturer, distributor, or representative may not unreasonably |
|
require a franchised dealer to relocate, or to replace or |
|
substantially change, alter, or remodel the dealer's facilities. |
|
For purposes of this subsection, an act is reasonable if it is |
|
justifiable in light of current and reasonably foreseeable |
|
projections of economic conditions, financial expectations, and |
|
the market for new motor vehicles in the relevant market area. |
|
(c) The prohibitions under this section apply to the |
|
relationship between a manufacturer and: |
|
(1) a current franchisee of the manufacturer; or |
|
(2) a franchised dealer who is seeking to become a |
|
franchisee of the manufacturer. |
|
SECTION 7. Section 2301.472(d), Occupations Code, is |
|
amended to read as follows: |
|
(d) In determining whether a manufacturer or distributor |
|
has established that the denial or withholding of approval is |
|
reasonable, the board shall consider all existing circumstances, |
|
including: |
|
(1) the dealer's sales in relation to the sales in the |
|
market; |
|
(2) the dealer's investment and obligations; |
|
(3) injury or benefit to the public; |
|
(4) the adequacy of the dealer's sales and service |
|
facilities, equipment, parts, and personnel in relation to those of |
|
other dealers of new motor vehicles of the same line-make; |
|
(5) whether warranties are being honored by the dealer |
|
agreement; |
|
(6) the parties' compliance with the franchise, except |
|
to the extent that the franchise conflicts with this chapter; |
|
(7) the enforceability of the franchise from a public |
|
policy standpoint, including issues of the reasonableness of the |
|
franchise's terms, oppression, adhesion, and the parties' relative |
|
bargaining power; |
|
(8) whether the dealer complies with reasonable |
|
capitalization requirements or will be able to comply with |
|
reasonable capitalization requirements within a reasonable time; |
|
(9) any harm to the manufacturer or distributor if the |
|
denial or withholding of approval is not upheld; [and] |
|
(10) any harm to the dealer if the denial or |
|
withholding of approval is upheld; |
|
(11) the manufacturer's or distributor's investment |
|
and obligations; and |
|
(12) whether the denial or withholding of approval is |
|
justified in light of current and reasonably foreseeable |
|
projections of economic conditions, financial expectations, and |
|
the market for new motor vehicles in the relevant market area. |
|
SECTION 8. Section 2301.475, Occupations Code, is amended |
|
by adding Subsection (c) to read as follows: |
|
(c) Money paid by a manufacturer or distributor under an |
|
incentive program may only be paid to a dealer, unless the dealer |
|
agrees to the payment of the money to another person, including an |
|
employee of the dealer, before the payment is made. |
|
SECTION 9. Subchapter J, Chapter 2301, Occupations Code, is |
|
amended by adding Section 2301.479 to read as follows: |
|
Sec. 2301.479. ADVERSE ACTION IN CONNECTION WITH EXPORT OF |
|
VEHICLE. (a) Except as otherwise provided by this section, a |
|
manufacturer, distributor, or representative may not take an |
|
adverse action against a franchised dealer because the franchised |
|
dealer sells or leases a vehicle that is later exported to a |
|
location outside the United States. |
|
(b) A franchise provision that allows a manufacturer, |
|
distributor, or representative to take adverse action against a |
|
franchised dealer because the franchised dealer sells or leases a |
|
vehicle that is later exported to a location outside the United |
|
States is enforceable only if, at the time of the original sale or |
|
lease, the dealer knew or reasonably should have known that the |
|
vehicle would be exported to a location outside the United States. |
|
(c) A franchised dealer is presumed to have no actual |
|
knowledge that a vehicle the dealer sells or leases will be exported |
|
to a location outside the United States if, under the laws of a |
|
state of the United States: |
|
(1) the vehicle is titled; |
|
(2) the vehicle is registered; and |
|
(3) applicable state and local taxes are paid for the |
|
vehicle. |
|
(d) The presumption under Subsection (c) may be rebutted by |
|
direct, clear, and convincing evidence that the franchised dealer |
|
had actual knowledge or reasonably should have known at the time of |
|
the original sale or lease that the vehicle would be exported to a |
|
location outside the United States. |
|
(e) Except as otherwise permitted by this section, a |
|
franchise provision that allows a manufacturer, distributor, or |
|
representative to take adverse action against a franchised dealer |
|
because the franchised dealer sells or leases a vehicle that is |
|
later exported to a location outside the United States is void and |
|
unenforceable. |
|
SECTION 10. Sections 2301.652(a) and (c), Occupations Code, |
|
are amended to read as follows: |
|
(a) The board may deny an application for a license to |
|
establish a dealership if, following a protest, the applicant fails |
|
to establish good cause for establishing the dealership. In |
|
determining good cause, the board shall consider: |
|
(1) whether the manufacturer or distributor of the |
|
same line-make of new motor vehicle is being adequately represented |
|
as to sales and service; |
|
(2) whether the protesting franchised dealer |
|
representing the same line-make of new motor vehicle is in |
|
substantial compliance with the dealer's franchise, to the extent |
|
that the franchise is not in conflict with this chapter; |
|
(3) the desirability of a competitive marketplace; |
|
(4) any harm to the protesting franchised dealer; |
|
[and] |
|
(5) the public interest; |
|
(6) any harm to the applicant; and |
|
(7) current and reasonably foreseeable projections of |
|
economic conditions, financial expectations, and the market for new |
|
motor vehicles in the relevant market area. |
|
(c) A franchised dealer may not protest an application to |
|
relocate a dealership under this section if the proposed relocation |
|
site is not: |
|
(1) more than two miles [one mile] from the site where |
|
the dealership is currently located; or |
|
(2) closer to the franchised dealer than the site from |
|
which the dealership is being relocated. |
|
SECTION 11. (a) The change in law made by this Act applies |
|
only to an agreement entered into or renewed under Chapter 2301, |
|
Occupations Code, on or after the effective date of this Act. An |
|
agreement entered into or renewed before the effective date of this |
|
Act is governed by the law in effect on the date the agreement was |
|
entered into or renewed, and the former law is continued in effect |
|
for that purpose. |
|
(b) The change in law made by this Act applies only to an |
|
application filed under Chapter 2301, Occupations Code, on or after |
|
the effective date of this Act. An application filed before that |
|
date is governed by the law in effect on the date the application |
|
was filed, and the former law is continued in effect for that |
|
purpose. |
|
SECTION 12. This Act takes effect September 1, 2009. |