Texas House Bill HB4078

Texas 2023 - 88th Regular

• Filed: 3/8/23
• Out of House Committee: 4/28/23

Caption

Relating to motor vehicle franchised dealers and the reimbursement of motor vehicle franchised dealers by manufacturers and distributors for warranty, recall, and preparation and delivery work.

Impact

The implications of HB 4078 include changes to the regulatory landscape governing the relationship between motor vehicle dealers and manufacturers. By institutionalizing obligations for reimbursement and introducing provisions limiting manufacturers' abilities to conduct audits without reasonable suspicion, the bill seeks to create a more equitable framework for dealers. This legislative change is expected to enhance the financial stability of franchised dealers by ensuring they receive timely and fair compensation for their services, potentially leading to improved service quality for consumers.

Summary

House Bill 4078 focuses on ensuring that motor vehicle franchised dealers in Texas receive appropriate compensation from manufacturers and distributors for the warranty, recall, and preparation and delivery services they provide. The bill aims to rectify existing compensation discrepancies by mandating fair payment for services rendered by dealers on behalf of the manufacturers. This legislative effort responds to longstanding concerns raised by dealers regarding inadequate compensation, which has negatively impacted their operations and financial viability.

Sentiment

Supporters of HB 4078, notably represented by the Texas Auto Dealers Association, express a positive sentiment, viewing the bill as a necessary measure to protect the interests of franchise dealers. They argue that the legislation is long overdue and reflects a vital step towards recognizing the contributions of dealers within the automotive service industry. Conversely, manufacturers like General Motors express skepticism, arguing that existing frameworks adequately address dealer needs and voicing concerns about the potential implications of the bill on their operational processes.

Contention

Notable points of contention center around the constraints placed on manufacturers regarding their audit powers and reimbursement obligations. Critics argue that the changes may lead to an imbalance in the relationship between dealers and manufacturers, potentially leading to higher costs for consumers. Discussions during committee meetings highlighted these concerns, revealing a divide between advocates for dealer protections and those wary of regulatory overreach. The outcome of this legislative effort will likely shape dealer-manufacturer dynamics in the state significantly.

Texas Constitutional Statutes Affected

Occupations Code

• Chapter 2301. Sale Or Lease Of Motor Vehicles
  • Section: 003
  • Section: New Section
  • Section: 003
  • Section: New Section
  • Section: 401
  • Section: 402
  • Section: 403
  • Section: 404
  • Section: 405
  • Section: 406