Texas House Bill HB2640

Texas 2009 - 81st Regular

• Out of House Committee: 4/17/09
• Voted on by House: 5/1/09
• Out of Senate Committee: 5/14/09
• Voted on by Senate: 5/18/09
• Governor Action: 6/19/09
• Enrolled: 5/23/09
• Passed: 6/19/09

Caption

Relating to the regulation of motor vehicle manufacturers and distributors.

Impact

The proposed changes brought forth by HB 2640 would likely have significant implications on state laws regarding motor vehicle sales and distribution. By prohibiting manufacturers and distributors from imposing unreasonable requirements on franchised dealers, the bill aims to promote fair competition within the market. This legislation may potentially lead to greater dealer autonomy, providing them with clearer guidelines on their rights and the limitations manufacturers may have over them. Moreover, it sets a framework for potential conflicts, specifically concerning the export of vehicles—which is a notable part of the bill that restricts certain types of adverse actions against dealers related to exports.

Summary

House Bill 2640 aims to amend the Occupations Code, particularly focusing on the regulation of motor vehicle manufacturers and distributors. The bill enhances the protections for franchised dealers against unreasonable practices enforced by manufacturers and distributors, setting clear standards that limit what can be demanded from dealers in terms of sales, service standards, and equipment purchases. By defining and enforcing these regulations, the bill seeks to create a more balanced relationship between dealers and manufacturers, while addressing practices that could be considered exploitative or detrimental to the dealers’ business operations.

Contention

The legislative discussions surrounding HB 2640 may also involve potential points of contention, particularly regarding how the definitions of 'reasonable' and 'unreasonable' will be interpreted in practice. Critics may argue that while the bill attempts to protect dealers, it could inadvertently lead to reduced accountability for dealers with respect to their sales practices and market representation, ultimately impacting the quality of service provided to consumers. Moreover, the regulations concerning export practices could create friction between dealers and manufacturers who may have differing interests relating to international sales and distribution.

Notable_points

Another key aspect of the bill is its focus on protecting dealers from adverse actions when vehicles are exported, specifically requiring that any action taken must rely on the dealer’s actual knowledge of an intended export at the point of sale. The detailed considerations that the board must take into account when assessing the reasonableness of a manufacturer’s actions represent a significant step toward a more equitable regulatory framework for the automotive sales industry.