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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of motor vehicle manufacturers and |
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distributors. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2301.465(a)(1), Occupations Code, is |
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amended to read as follows: |
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(1) "Net cost" means the franchised dealer cost for a |
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new, unsold, undamaged, and complete motor vehicle [of the current
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model year or the previous model year] in a dealer's inventory: |
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(A) plus any charges by the manufacturer, |
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distributor, or representative for distribution, delivery, and |
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taxes; and |
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(B) less all allowances paid to the franchised |
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dealer by the manufacturer, distributor, or representative. |
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SECTION 2. Section 2301.467, Occupations Code, is amended |
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to read as follows: |
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Sec. 2301.467. PROHIBITIONS: SALES STANDARDS, RELOCATIONS, |
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FACILITY CHANGES, PURCHASE OF EQUIPMENT. (a) Notwithstanding the |
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terms of any franchise, a manufacturer, distributor, or |
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representative may not: |
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(1) require adherence to unreasonable sales or service |
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standards; or |
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(2) unreasonably require a franchised dealer to |
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purchase special tools or equipment. |
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(b) Notwithstanding the terms of any franchise, a |
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manufacturer, distributor, or representative may not unreasonably |
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require a franchised dealer to relocate, or to replace or |
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substantially change, alter, or remodel the dealer's facilities. |
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For purposes of this subsection, an act is reasonable if it is |
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justifiable in light of current and reasonably foreseeable |
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projections of economic conditions, financial expectations, and |
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the market for new motor vehicles in the relevant market area. |
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(c) The prohibitions under this section apply to the |
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relationship between a manufacturer and: |
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(1) a current franchisee of the manufacturer; or |
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(2) a franchised dealer who is seeking to become a |
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franchisee of the manufacturer. |
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SECTION 3. Section 2301.472(d), Occupations Code, is |
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amended to read as follows: |
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(d) In determining whether a manufacturer or distributor |
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has established that the denial or withholding of approval is |
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reasonable, the board shall consider all existing circumstances, |
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including: |
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(1) the dealer's sales in relation to the sales in the |
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market; |
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(2) the dealer's investment and obligations; |
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(3) injury or benefit to the public; |
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(4) the adequacy of the dealer's sales and service |
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facilities, equipment, parts, and personnel in relation to those of |
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other dealers of new motor vehicles of the same line-make; |
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(5) whether warranties are being honored by the dealer |
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agreement; |
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(6) the parties' compliance with the franchise, except |
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to the extent that the franchise conflicts with this chapter; |
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(7) the enforceability of the franchise from a public |
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policy standpoint, including issues of the reasonableness of the |
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franchise's terms, oppression, adhesion, and the parties' relative |
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bargaining power; |
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(8) whether the dealer complies with reasonable |
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capitalization requirements or will be able to comply with |
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reasonable capitalization requirements within a reasonable time; |
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(9) any harm to the manufacturer or distributor if the |
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denial or withholding of approval is not upheld; [and] |
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(10) any harm to the dealer if the denial or |
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withholding of approval is upheld; and |
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(11) whether the denial or withholding of approval is |
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justified in light of current and reasonably foreseeable |
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projections of economic conditions, financial expectations, and |
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the market for new motor vehicles in the relevant market area. |
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SECTION 4. Section 2301.475, Occupations Code, is amended |
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by adding Subsection (c) to read as follows: |
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(c) Money paid by a manufacturer or distributor as a result |
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of an incentive program: |
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(1) shall be paid to a dealer; and |
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(2) may not be paid to an employee of a dealer. |
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SECTION 5. Subchapter J, Chapter 2301, Occupations Code, is |
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amended by adding Section 2301.479 to read as follows: |
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Sec. 2301.479. ADVERSE ACTION IN CONNECTION WITH EXPORT OF |
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VEHICLE. (a) Except as otherwise provided by this section, a |
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manufacturer, distributor, or representative may not take an |
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adverse action against a franchised dealer because the franchised |
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dealer sells or leases a vehicle that is later exported to a |
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location outside the United States. |
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(b) A franchise provision that allows a manufacturer, |
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distributor, or representative to take adverse action against a |
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franchised dealer because the franchised dealer sells or leases a |
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vehicle that is later exported to a location outside the United |
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States is enforceable only if, at the time of the original sale or |
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lease, the dealer has actual knowledge that the vehicle will be |
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exported to a location outside the United States. |
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(c) A franchised dealer is presumed to have no actual |
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knowledge that a vehicle the dealer sells or leases will be exported |
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to a location outside the United States if, under the laws of a |
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state of the United States: |
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(1) the vehicle is titled; |
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(2) the vehicle is registered; and |
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(3) applicable state and local taxes are paid for the |
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vehicle. |
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(d) The presumption under Subsection (c) may be rebutted by |
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direct, clear, and convincing evidence that the franchised dealer |
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had actual knowledge at the time of the original sale or lease that |
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the vehicle will be exported to a location outside the United |
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States. |
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(e) Except as otherwise expressly permitted by this |
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section, a franchise provision that allows a manufacturer, |
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distributor, or representative to take adverse action against a |
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franchised dealer because the franchised dealer sells or leases a |
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vehicle that is later exported to a location outside the United |
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States is void and unenforceable. |
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SECTION 6. Section 2301.652(a), Occupations Code, is |
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amended to read as follows: |
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(a) The board may deny an application for a license to |
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establish a dealership if, following a protest, the applicant fails |
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to establish good cause for establishing the dealership. In |
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determining good cause, the board shall consider: |
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(1) whether the manufacturer or distributor of the |
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same line-make of new motor vehicle is being adequately represented |
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as to sales and service; |
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(2) whether the protesting franchised dealer |
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representing the same line-make of new motor vehicle is in |
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substantial compliance with the dealer's franchise, to the extent |
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that the franchise is not in conflict with this chapter; |
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(3) the desirability of a competitive marketplace; |
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(4) any harm to the protesting franchised dealer; |
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[and] |
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(5) the public interest; and |
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(6) current and reasonably foreseeable projections of |
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economic conditions, financial expectations, and the market for new |
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motor vehicles in the relevant market area. |
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SECTION 7. This Act takes effect September 1, 2009. |