83R7798 BEF-F
By: Gutierrez H.B. No. 1692
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of motor vehicle dealers, manufacturers,
and distributors.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2301.263, Occupations Code, is amended
to read as follows:
Sec. 2301.263. LICENSE ISSUED SUBJECT TO NEW LAW AND RULES.
Notwithstanding any other law and regardless of the renewal date of
a franchise agreement, a [A] license issued under this chapter is
subject to each provision of this chapter and board rule in effect
on the date the license is issued or renewed and each provision of
this chapter and board rule that takes effect during the term of the
license.
SECTION 2. Section 2301.405, Occupations Code, is amended
by adding Subsection (c) to read as follows:
(c) A manufacturer or distributor may not directly or
indirectly recover from a dealer an amount paid to the dealer under
this subchapter:
(1) by imposing a surcharge on the dealer; or
(2) in any manner other than by a chargeback as
provided by this section.
SECTION 3. Section 2301.4651, Occupations Code, is amended
by amending Subsections (a) and (b) and adding Subsection (i) to
read as follows:
(a) This section applies to a manufacturer, distributor, or
representative that[:
[(1) terminates or discontinues a franchise by any
means without complying with Section 2301.453; or
[(2) regardless of whether the manufacturer,
distributor, or representative complies with Section 2301.453,]
terminates or discontinues a franchise by:
(1) [(A)] discontinuing a line-make;
(2) [(B)] ceasing to do business in this state; or
(3) [(C)] changing the distributor or method of
distribution of its products in this state.
(b) In addition to the duties placed on a manufacturer,
distributor, or representative by Section 2301.465, a
manufacturer, distributor, or representative to whom this section
applies shall pay to the franchised dealer the following amounts as
applicable:
(1) either:
(A) the dealer's construction costs for a new
dealership completed in the two years preceding the date of the
termination or discontinuance described by Subsection (a); or
(B) if the dealer does not have any costs
described by Paragraph (A), the fair monthly rental value of the
dealership payable in cash each month beginning on the first day of
the first month following the date of the termination or
discontinuance described by Subsection (a) and ending on the
earlier of:
(i) the first anniversary of the
termination or discontinuance date; or
(ii) the date on which the dealer no longer
owns the dealership;
(2) the dealer's costs for upgrading or substantially
altering a dealership if the upgrades or alterations were completed
or added in the two years preceding the date of the termination or
discontinuance described by Subsection (a); and
(3) an amount equal to the value of the goodwill
associated with the franchise calculated [as it existed on the day
before the earlier of]:
(A) without consideration of the effect of the
announcement of any termination; and [the date of the termination
or discontinuance described by Subsection (a); or]
(B) as if the franchise were still in effect and
products associated with the franchise were still available [the
date on which the manufacturer, distributor, or representative
announced its intention to terminate or discontinue the franchise
in a manner described by Subsection (a)].
(i) Except as specifically provided by this section, this
section does not affect the rights granted, duties imposed, and
procedures established under Sections 2301.453 and 2301.465.
SECTION 4. Sections 2301.467(b), (b-1), and (b-2),
Occupations Code, are amended to read as follows:
(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. Except as provided by Subsection [Subsections] (b-1)
[and (b-2)], 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.
(b-1) Except as necessary to comply with health or safety
laws or to comply with technology requirements necessary to sell or
service a line-make, it is unreasonable for a manufacturer,
distributor, or representative to require a franchised dealer to
construct a new dealership or to substantially change, alter, or
remodel an existing dealership before the 10th anniversary of the
date:
(1) the construction of the dealership at that
location was completed if the construction was in substantial
compliance with standards or plans provided by a manufacturer,
distributor, or representative or through a subsidiary or agent of
the manufacturer, distributor, or representative; or[.]
(2) [(b-2) Except as necessary to comply with health
or safety laws or to comply with technology requirements necessary
to sell or service a line-make, it is unreasonable for a
manufacturer, distributor, or representative to require a
franchised dealer to substantially change, alter, or remodel an
existing dealership before the 10th anniversary of the date that] a
prior substantial change, alteration, or remodel of the dealership
at that location was completed if the change, alteration, or
remodel was in substantial compliance with standards or plans
provided by a manufacturer, distributor, or representative or
through a subsidiary or agent of the manufacturer, distributor, or
representative.
SECTION 5. Subchapter J, Chapter 2301, Occupations Code, is
amended by adding Section 2301.483 to read as follows:
Sec. 2301.483. SELECTION BY DEALER OF VENDOR OR MATERIALS
FOR DEALERSHIP IMPROVEMENT. (a) Except as provided by Subsection
(b), a manufacturer or distributor may not require a dealer to
purchase or use specific materials or to purchase goods or services
from a specific vendor when making an upgrade or improvement to the
dealer's dealership.
(b) If a manufacturer or distributor provides money
directly to a dealer to compensate the dealer for a specific upgrade
or improvement, the dealer may select the materials and vendors for
upgrade or improvement but shall select materials and vendors that
are of like kind and quality to those specified by the manufacturer
or distributor, if any.
SECTION 6. Section 2301.652, Occupations Code, is amended
by adding Subsection (d) to read as follows:
(d) For purposes of Subsection (b), a protesting dealer is
presumed to be in substantial compliance with the dealer's
franchise if the dealer is not the subject of a pending enforcement
proceeding by the board or department. The presumption created by
this subsection is rebuttable.
SECTION 7. Section 2301.6521(d), Occupations Code, is
amended to read as follows:
(d) A franchised dealer may not protest an application to
relocate a dealership under this section if the proposed relocation
site is not:
(1) more than two miles [or less] from the dealership's
current location; or
(2) closer to the franchised dealer than the site from
which the dealership is being relocated.
SECTION 8. Section 2301.702, Occupations Code, is amended
to read as follows:
Sec. 2301.702. CONFLICT WITH OTHER LAW; RULES GOVERNING
HEARINGS. (a) To the extent of a conflict between this chapter and
Chapter 2001, Government Code, this chapter controls.
(b) A board rule relating to the procedures for a hearing on
or the resolution of a dispute arising under this chapter applies to
the person conducting the hearing or dispute resolution proceeding,
regardless of whether that person is the board, the department, or
another person.
SECTION 9. (a) Section 10, Chapter 684 (H.B. 2640), Acts of
the 81st Legislature, Regular Session, 2009, is repealed.
(b) The changes in law made by Chapter 684 (H.B. 2640), Acts
of the 81st Legislature, Regular Session, 2009, apply to a license
issued under Chapter 2301, Occupations Code, regardless of the date
the license was issued or renewed.
(c) Section 16, Chapter 137 (S.B. 529), Acts of the 82nd
Legislature, Regular Session, 2011, is repealed.
(d) The changes in law made by Chapter 137 (S.B. 529), Acts
of the 82nd Legislature, Regular Session, 2011, apply to a license
issued under Chapter 2301, Occupations Code, regardless of the date
the license was issued or renewed.
SECTION 10. The changes in law made by this Act apply to a
license issued under Chapter 2301, Occupations Code, regardless of
the date the license is issued or renewed.
SECTION 11. This Act takes effect September 1, 2013.