| |
| |
|
|
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 2301.465(a)(1), Occupations Code, is |
|
|
amended to read as follows: |
|
|
(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. |
|
|
SECTION 2. 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 3. 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; and |
|
|
(11) 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 4. Section 2301.475, Occupations Code, is amended |
|
|
by adding Subsection (c) to read as follows: |
|
|
(c) Money paid by a manufacturer or distributor as a result |
|
|
of an incentive program: |
|
|
(1) shall be paid to a dealer; and |
|
|
(2) may not be paid to an employee of a dealer. |
|
|
SECTION 5. 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 has actual knowledge that the vehicle will 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 at the time of the original sale or lease that |
|
|
the vehicle will be exported to a location outside the United |
|
|
States. |
|
|
(e) Except as otherwise expressly 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 6. Section 2301.652(a), Occupations Code, is |
|
|
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; and |
|
|
(6) current and reasonably foreseeable projections of |
|
|
economic conditions, financial expectations, and the market for new |
|
|
motor vehicles in the relevant market area. |
|
|
SECTION 7. This Act takes effect September 1, 2009. |