BILL ANALYSIS |
|
C.S.H.B. 1504 |
|
By: Kuempel |
|
Licensing & Administrative Procedures |
|
Committee Report (Substituted) |
|
BACKGROUND AND PURPOSE
Industry observers have noted that the retail automobile industry is recovering in Texas after a recent contraction and that, consequently, manufacturers and distributors have insisted that franchised dealers make upgrades to their facilities to meet image program requirements. These dealership upgrades often are costly projects, requiring substantial financial resources of the dealer to complete. According to interested parties, as part of the image program requirements for dealerships, automobile manufacturers and distributors typically limit the vendors or materials that a particular dealer can use on a project and allow a dealer to use the materials and vendors of the dealer's choice only by means of an exception. By limiting the vendors and materials in this way, franchised dealers often face delays and significant additional expense in obtaining the services of vendors outside their local area or the state.
C.S.H.B. 1504 seeks to provide franchised dealers additional flexibility in complying with image program requirements with regard to the selection of materials, goods, services, and vendors for motor vehicle dealership upgrades and improvements.
|
||||||||
|
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
|
||||||||
|
ANALYSIS
C.S.H.B. 1504 amends the Occupations Code to prohibit a motor vehicle manufacturer or distributor from requiring a motor vehicle dealer to purchase or use specific materials or to purchase materials, goods, or services from a specific vendor when making an upgrade or improvement to the dealer's dealership or from directly or indirectly taking an adverse action against a dealer who chooses materials, goods, or services or a vendor for an upgrade to the dealer's dealership as provided by the bill's provisions. The bill authorizes a dealer, if a manufacturer or distributor provides money, credit, an allowance, or a reimbursement directly or indirectly to the dealer to compensate the dealer for the cost of, or a substantial portion of the cost of, a specific upgrade or improvement to the dealer's dealership, to select the materials, goods, services, and vendors for the upgrade or improvement but requires the dealer to select materials, goods, services, and vendors that are of like kind and quality to those specified by the manufacturer or distributor, if any. The bill's provisions do not allow a dealer or a vendor selected by a dealer to infringe on, eliminate, or impair a manufacturer's or distributor's intellectual property rights and do not apply to a sign that contains intellectual property owned by a manufacturer or distributor.
C.S.H.B. 1504 establishes that its provisions apply to a manufacturer, distributor, and dealer regardless of the date the person's license is issued or renewed and regardless of the date a franchise agreement is entered into or renewed.
|
||||||||
|
EFFECTIVE DATE
September 1, 2013.
|
||||||||
|
COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 1504 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
|
||||||||
|