Texas 2009 - 81st Regular

Texas House Bill HB2640 Compare Versions

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1	1	H.B. No. 2640
2	2
3	3
4	4	AN ACT
5	5	relating to the regulation of motor vehicle manufacturers and
6	6	distributors.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 2301.257, Occupations Code, is amended
9	9	by adding Subsection (d) to read as follows:
10	10	(d) The act of filing an application under this section or a
11	11	form prescribed under this section does not establish the applicant
12	12	as a franchised dealer.
13	13	SECTION 2. Section 2301.360(b), Occupations Code, is
14	14	amended to read as follows:
15	15	(b) In a protest under this section, the board must
16	16	determine whether the rejection was reasonable under the criteria
17	17	described by Section 2301.359 [prospective transferee is
18	18	qualified]. The burden is on the manufacturer or distributor to
19	19	prove that the prospective transferee is not qualified under the
20	20	criteria. The board shall enter an order holding that the
21	21	prospective transferee either is qualified or is not qualified.
22	22	SECTION 3. Section 2301.464(a), Occupations Code, is
23	23	amended to read as follows:
24	24	(a) Not later than the 60th day before the date a franchised
25	25	dealer proposes to begin the relocation of a dealership, the dealer
26	26	must provide written notice of the dealer's intent to relocate to
27	27	the dealer's manufacturer, distributor, or representative. The
28	28	notice must be sent by certified mail, return receipt requested.
29	29	Notwithstanding the terms of any franchise, a manufacturer,
30	30	distributor, or representative may not deny or withhold approval of
31	31	a written application to relocate a franchise unless:
32	32	(1) the applicant receives written notice of the
33	33	denial or withholding of approval not later than the 60th day after
34	34	the date the application is received; and
35	35	(2) if the applicant files a protest with the board,
36	36	the board makes a determination of reasonable grounds under this
37	37	section.
38	38	SECTION 4. Section 2301.465, Occupations Code, is amended
39	39	by amending Subsections (a) and (b) and adding Subsections (h) and
40	40	(i) to read as follows:
41	41	(a) In this section:
42	42	(1) "Net cost" means the franchised dealer cost for a
43	43	new, unsold, undamaged, and complete motor vehicle [of the current
44	44	model year or the previous model year] in a dealer's inventory:
45	45	(A) plus any charges by the manufacturer,
46	46	distributor, or representative for distribution, delivery, and
47	47	taxes; and
48	48	(B) less all allowances paid to the franchised
49	49	dealer by the manufacturer, distributor, or representative.
50	50	(2) "Net discount value" is the net cost multiplied by
51	51	the total mileage, exclusive of mileage placed on the motor vehicle
52	52	before it was delivered to the dealer, divided by 100,000.
53	53	(b) Notwithstanding the terms of any franchise, after the
54	54	termination of a franchise, a manufacturer, distributor, or
55	55	representative shall pay to a franchised dealer or any lienholder,
56	56	in accordance with the interest of each, the following amounts:
57	57	(1) the dealer cost of each new motor vehicle in the
58	58	dealer's inventory with mileage of 5,000 [6,000] miles or less,
59	59	exclusive of mileage placed on the vehicle before it was delivered
60	60	to the dealer, reduced by the net discount value of each vehicle,
61	61	except that if a vehicle cannot be reduced by the net discount
62	62	value, the manufacturer or distributor shall pay the dealer the net
63	63	cost of the vehicle;
64	64	(2) the dealer cost of each new, unused, undamaged,
65	65	and unsold part or accessory that:
66	66	(A) is in the current parts catalogue and is
67	67	still in the original, resalable merchandising package and in an
68	68	unbroken lot, except in the case of sheet metal, a comparable
69	69	substitute for the original package may be used; and
70	70	(B) was purchased by the dealer either directly
71	71	from the manufacturer or distributor or from an outgoing authorized
72	72	dealer as a part of the dealer's initial inventory;
73	73	(3) the fair market value of each undamaged sign owned
74	74	by the dealer that bears a trademark or tradename used or claimed by
75	75	the manufacturer, distributor, or representative and that was
76	76	purchased from or at the request of the manufacturer, distributor,
77	77	or representative;
78	78	(4) the fair market value of all special tools, data
79	79	processing equipment, and automotive service equipment owned by the
80	80	dealer that:
81	81	(A) were recommended in writing and designated as
82	82	special tools and equipment;
83	83	(B) were purchased from or at the request of the
84	84	manufacturer, distributor, or representative; and
85	85	(C) are in usable and good condition except for
86	86	reasonable wear and tear; and
87	87	(5) the cost of transporting, handling, packing,
88	88	storing, and loading any property subject to repurchase under this
89	89	section.
90	90	(h) Notwithstanding any other law, this section does not
91	91	require a manufacturer, distributor, or representative to
92	92	repurchase a motor vehicle that:
93	93	(1) at the time of termination of the franchise had
94	94	been in the dealer's inventory for at least 24 months after the date
95	95	the dealer took delivery of the vehicle; or
96	96	(2) the dealer purchased not more than 30 days before
97	97	the date of termination of the franchise solely in anticipation of
98	98	the termination and, in the ordinary course of business, would not
99	99	have purchased.
100	100	(i) For purposes of this section, a sale of the assets or
101	101	stock of a dealership to a buyer who continues the operation of the
102	102	dealership is not a termination of a franchise.
103	103	SECTION 5. Section 2301.467, Occupations Code, is amended
104	104	to read as follows:
105	105	Sec. 2301.467. PROHIBITIONS: SALES STANDARDS, RELOCATIONS,
106	106	FACILITY CHANGES, PURCHASE OF EQUIPMENT. (a) Notwithstanding the
107	107	terms of any franchise, a manufacturer, distributor, or
108	108	representative may not:
109	109	(1) require adherence to unreasonable sales or service
110	110	standards; or
111	111	(2) unreasonably require a franchised dealer to
112	112	purchase special tools or equipment.
113	113	(b) Notwithstanding the terms of any franchise, a
114	114	manufacturer, distributor, or representative may not unreasonably
115	115	require a franchised dealer to relocate, or to replace or
116	116	substantially change, alter, or remodel the dealer's facilities.
117	117	For purposes of this subsection, an act is reasonable if it is
118	118	justifiable in light of current and reasonably foreseeable
119	119	projections of economic conditions, financial expectations, and
120	120	the market for new motor vehicles in the relevant market area.
121	121	(c) The prohibitions under this section apply to the
122	122	relationship between a manufacturer and:
123	123	(1) a current franchisee of the manufacturer; or
124	124	(2) a franchised dealer who is seeking to become a
125	125	franchisee of the manufacturer.
126	126	SECTION 6. Section 2301.472(d), Occupations Code, is
127	127	amended to read as follows:
128	128	(d) In determining whether a manufacturer or distributor
129	129	has established that the denial or withholding of approval is
130	130	reasonable, the board shall consider all existing circumstances,
131	131	including:
132	132	(1) the dealer's sales in relation to the sales in the
133	133	market;
134	134	(2) the dealer's investment and obligations;
135	135	(3) injury or benefit to the public;
136	136	(4) the adequacy of the dealer's sales and service
137	137	facilities, equipment, parts, and personnel in relation to those of
138	138	other dealers of new motor vehicles of the same line-make;
139	139	(5) whether warranties are being honored by the dealer
140	140	agreement;
141	141	(6) the parties' compliance with the franchise, except
142	142	to the extent that the franchise conflicts with this chapter;
143	143	(7) the enforceability of the franchise from a public
144	144	policy standpoint, including issues of the reasonableness of the
145	145	franchise's terms, oppression, adhesion, and the parties' relative
146	146	bargaining power;
147	147	(8) whether the dealer complies with reasonable
148	148	capitalization requirements or will be able to comply with
149	149	reasonable capitalization requirements within a reasonable time;
150	150	(9) any harm to the manufacturer or distributor if the
151	151	denial or withholding of approval is not upheld; [and]
152	152	(10) any harm to the dealer if the denial or
153	153	withholding of approval is upheld;
154	154	(11) the manufacturer's or distributor's investment
155	155	and obligations; and
156	156	(12) whether the denial or withholding of approval is
157	157	justified in light of current and reasonably foreseeable
158	158	projections of economic conditions, financial expectations, and
159	159	the market for new motor vehicles in the relevant market area.
160	160	SECTION 7. Section 2301.475, Occupations Code, is amended
161	161	by adding Subsection (c) to read as follows:
162	162	(c) Money paid by a manufacturer or distributor under an
163	163	incentive program may only be paid to a dealer, unless the dealer
164	164	agrees to the payment of the money to another person, including an
165	165	employee of the dealer, before the payment is made.
166	166	SECTION 8. Subchapter J, Chapter 2301, Occupations Code, is
167	167	amended by adding Section 2301.479 to read as follows:
168	168	Sec. 2301.479. ADVERSE ACTION IN CONNECTION WITH EXPORT OF
169	169	VEHICLE. (a) Except as otherwise provided by this section, a
170	170	manufacturer, distributor, or representative may not take an
171	171	adverse action against a franchised dealer because the franchised
172	172	dealer sells or leases a vehicle that is later exported to a
173	173	location outside the United States.
174	174	(b) A franchise provision that allows a manufacturer,
175	175	distributor, or representative to take adverse action against a
176	176	franchised dealer because the franchised dealer sells or leases a
177	177	vehicle that is later exported to a location outside the United
178	178	States is enforceable only if, at the time of the original sale or
179	179	lease, the dealer knew or reasonably should have known that the
180	180	vehicle would be exported to a location outside the United States.
181	181	(c) A franchised dealer is presumed to have no actual
182	182	knowledge that a vehicle the dealer sells or leases will be exported
183	183	to a location outside the United States if, under the laws of a
184	184	state of the United States:
185	185	(1) the vehicle is titled;
186	186	(2) the vehicle is registered; and
187	187	(3) applicable state and local taxes are paid for the
188	188	vehicle.
189	189	(d) The presumption under Subsection (c) may be rebutted by
190	190	direct, clear, and convincing evidence that the franchised dealer
191	191	had actual knowledge or reasonably should have known at the time of
192	192	the original sale or lease that the vehicle would be exported to a
193	193	location outside the United States.
194	194	(e) Except as otherwise permitted by this section, a
195	195	franchise provision that allows a manufacturer, distributor, or
196	196	representative to take adverse action against a franchised dealer
197	197	because the franchised dealer sells or leases a vehicle that is
198	198	later exported to a location outside the United States is void and
199	199	unenforceable.
200	200	SECTION 9. Sections 2301.652(a) and (c), Occupations Code,
201	201	are amended to read as follows:
202	202	(a) The board may deny an application for a license to
203	203	establish a dealership if, following a protest, the applicant fails
204	204	to establish good cause for establishing the dealership. In
205	205	determining good cause, the board shall consider:
206	206	(1) whether the manufacturer or distributor of the
207	207	same line-make of new motor vehicle is being adequately represented
208	208	as to sales and service;
209	209	(2) whether the protesting franchised dealer
210	210	representing the same line-make of new motor vehicle is in
211	211	substantial compliance with the dealer's franchise, to the extent
212	212	that the franchise is not in conflict with this chapter;
213	213	(3) the desirability of a competitive marketplace;
214	214	(4) any harm to the protesting franchised dealer;
215	215	[and]
216	216	(5) the public interest;
217	217	(6) any harm to the applicant; and
218	218	(7) current and reasonably foreseeable projections of
219	219	economic conditions, financial expectations, and the market for new
220	220	motor vehicles in the relevant market area.
221	221	(c) A franchised dealer may not protest an application to
222	222	relocate a dealership under this section if the proposed relocation
223	223	site is not:
224	224	(1) more than two miles [one mile] from the site where
225	225	the dealership is currently located; or
226	226	(2) closer to the franchised dealer than the site from
227	227	which the dealership is being relocated.
228	228	SECTION 10. (a) The change in law made by this Act applies
229	229	only to an agreement entered into or renewed under Chapter 2301,
230	230	Occupations Code, on or after the effective date of this Act. An
231	231	agreement entered into or renewed before the effective date of this
232	232	Act is governed by the law in effect on the date the agreement was
233	233	entered into or renewed, and the former law is continued in effect
234	234	for that purpose.
235	235	(b) The change in law made by this Act applies only to an
236	236	application filed under Chapter 2301, Occupations Code, on or after
237	237	the effective date of this Act. An application filed before that
238	238	date is governed by the law in effect on the date the application
239	239	was filed, and the former law is continued in effect for that
240	240	purpose.
241	241	SECTION 11. This Act takes effect September 1, 2009.
242	242	______________________________ ______________________________
243	243	President of the Senate Speaker of the House
244	244	I certify that H.B. No. 2640 was passed by the House on April
245	245	30, 2009, by the following vote: Yeas 143, Nays 1, 1 present, not
246	246	voting; and that the House concurred in Senate amendments to H.B.
247	247	No. 2640 on May 20, 2009, by the following vote: Yeas 134, Nays 0,
248	248	1 present, not voting.
249	249	______________________________
250	250	Chief Clerk of the House
251	251	I certify that H.B. No. 2640 was passed by the Senate, with
252	252	amendments, on May 18, 2009, by the following vote: Yeas 31, Nays
253	253	0.
254	254	______________________________
255	255	Secretary of the Senate
256	256	APPROVED: __________________
257	257	Date
258	258	__________________
259	259	Governor