81R8184 BEF-F
By: Watson S.B. No. 1758
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.