Bill Text: TX HB2293 | 2011-2012 | 82nd Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the regulation of motor vehicle dealers, manufacturers, distributors, and representatives.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Introduced - Dead) 2011-05-09 - Laid on the table subject to call [HB2293 Detail]
Download: Texas-2011-HB2293-Introduced.html
Bill Title: Relating to the regulation of motor vehicle dealers, manufacturers, distributors, and representatives.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Introduced - Dead) 2011-05-09 - Laid on the table subject to call [HB2293 Detail]
Download: Texas-2011-HB2293-Introduced.html
82R4187 MAW-F | ||
By: Hunter | H.B. No. 2293 |
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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 2301.002, Occupations Code, is amended | ||
by adding Subdivision (27-a) to read as follows: | ||
(27-a) "Property use agreement" means a contract, | ||
other than a franchise, between a franchised dealer and a | ||
manufacturer, distributor, or representative that grants the | ||
manufacturer, distributor, or representative the right to regulate | ||
the franchised dealer's use of the dealership and other facilities | ||
covered by a franchise. | ||
SECTION 2. Subchapter A, Chapter 2301, Occupations Code, is | ||
amended by adding Section 2301.008 to read as follows: | ||
Sec. 2301.008. APPLICABILITY OF CHAPTER TO BANKRUPTCY OF | ||
MANUFACTURER, DISTRIBUTOR, OR REPRESENTATIVE. Except as expressly | ||
provided by an order of a court with jurisdiction over a filing in | ||
bankruptcy by a manufacturer, distributor, or representative, the | ||
terms of this chapter apply to the manufacturer, distributor, or | ||
representative during the pendency of the bankruptcy. | ||
SECTION 3. Section 2301.359, Occupations Code, is amended | ||
by amending Subsection (e) and adding Subsections (g), (h), and (i) | ||
to read as follows: | ||
(e) A manufacturer or distributor may not unreasonably | ||
withhold approval of an application filed under Subsection (a). | ||
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(g) In determining whether to approve an application filed | ||
under Subsection (a), a manufacturer or distributor may consider: | ||
(1) whether a prospective transferee is or has been a | ||
franchised dealer in this state; | ||
(2) the moral character of the prospective transferee; | ||
or | ||
(3) the extent to which a prospective transferee | ||
satisfies any criteria developed by the manufacturer or distributor | ||
and made available to the prospective transferee, specifically to | ||
determine the business experience and financial qualifications of a | ||
prospective transferee. | ||
(h) A manufacturer or distributor may consider the criteria | ||
developed under Subsection (g)(3) only if the criteria are in | ||
writing, are reasonable, and are uniformly applied in similar | ||
situations. | ||
(i) It is unreasonable for a manufacturer or distributor to | ||
reject a prospective transferee who is of good moral character and | ||
who satisfies the criteria developed under Subsection (g)(3). | ||
SECTION 4. Section 2301.465(b), Occupations Code, is | ||
amended to read as follows: | ||
(b) Notwithstanding the terms of any franchise, after the | ||
termination of a franchise, a manufacturer, distributor, or | ||
representative shall pay to a franchised dealer or any lienholder, | ||
in accordance with the interest of each, the following amounts: | ||
(1) the dealer cost of each new motor vehicle in the | ||
dealer's inventory with mileage of 5,000 miles or less, exclusive | ||
of mileage placed on the vehicle before it was delivered to the | ||
dealer, reduced by the net discount value of each vehicle, except | ||
that if a vehicle cannot be reduced by the net discount value, the | ||
manufacturer or distributor shall pay the dealer the net cost of the | ||
vehicle; | ||
(2) the dealer cost of each new, unused, undamaged, | ||
and unsold part or accessory that: | ||
(A) is in the current parts catalogue and is | ||
still in the original, resalable merchandising package and in an | ||
unbroken lot, except in the case of sheet metal, a comparable | ||
substitute for the original package may be used; and | ||
(B) was purchased by the dealer either directly | ||
from the manufacturer or distributor or from an outgoing authorized | ||
dealer as a part of the dealer's initial inventory; | ||
(3) the fair market value of each undamaged sign owned | ||
by the dealer that bears a trademark or tradename used or claimed by | ||
the manufacturer, distributor, or representative and that was | ||
purchased from or at the request of the manufacturer, distributor, | ||
or representative; | ||
(4) the fair market value of all special tools, data | ||
processing equipment, computer software, and automotive service | ||
equipment owned by the dealer that: | ||
(A) were recommended in writing and designated as | ||
special tools, computer software, or [ |
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(B) were purchased from or at the request of the | ||
manufacturer, distributor, or representative; and | ||
(C) are in usable and good condition except for | ||
reasonable wear and tear; and | ||
(5) the cost of transporting, handling, packing, | ||
storing, and loading any property subject to repurchase under this | ||
section. | ||
SECTION 5. Subchapter J, Chapter 2301, Occupations Code, is | ||
amended by adding Section 2301.4651 to read as follows: | ||
Sec. 2301.4651. ADDITIONAL PAYMENT TO FRANCHISED DEALER IN | ||
CERTAIN SITUATIONS. (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: | ||
(A) discontinuing a line-make; | ||
(B) ceasing to do business in this state; or | ||
(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 constructed 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, substantially | ||
altering, or furnishing a dealership 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 as it existed on the day before the | ||
earlier of: | ||
(A) the date of the termination or discontinuance | ||
described by Subsection (a); or | ||
(B) the date on which the intention of the | ||
manufacturer, distributor, or representative to terminate or | ||
discontinue the franchise in a manner described by Subsection (a) | ||
became publicly known in the area in which the dealership is | ||
located. | ||
(c) A franchised dealer receiving money under Subsection | ||
(b)(1)(B) shall: | ||
(1) make a reasonable effort to earn income from a | ||
dealership after a termination or discontinuance described by | ||
Subsection (a); and | ||
(2) inform the manufacturer, distributor, or | ||
representative of the dealer's efforts under Subdivision (1) and of | ||
any income earned from the dealership. | ||
(d) A manufacturer, distributor, or representative may | ||
reduce the amount of a payment made to a franchised dealer under | ||
Subsection (b)(1)(B) by the amount of any income earned by the | ||
dealer from the dealership during the month preceding the payment. | ||
(e) The manufacturer, distributor, or representative, as | ||
appropriate, shall pay any amount described by Subsection | ||
(b)(1)(A), (2), or (3) not later than the 30th day after the date of | ||
the termination or discontinuance described by Subsection (a). | ||
(f) An amount payable under Subsection (b)(1)(A) or (2) does | ||
not include any amount previously paid to the franchised dealer by | ||
the manufacturer, distributor, or representative to subsidize the | ||
costs incurred by the dealer in performing the activities described | ||
by Subsection (b)(1)(A) or (2). | ||
SECTION 6. Section 2301.467, Occupations Code, is amended | ||
by amending Subsections (b) and (c) and adding Subsection (b-1) 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 (b-1) [ |
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current and reasonably foreseeable projections of economic | ||
conditions, financial expectations, and the market for new motor | ||
vehicles in the relevant market area. | ||
(b-1) 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 15th anniversary of the date the | ||
dealership at that location was constructed or substantially | ||
changed, altered, or remodeled if the construction, 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. | ||
(c) This [ |
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representative and: | ||
(1) a current franchisee of the manufacturer, | ||
distributor, or representative; [ |
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(2) a successor of a current franchisee of the | ||
manufacturer, distributor, or representative; or | ||
(3) a franchised dealer who is seeking to become a | ||
franchisee of the manufacturer, distributor, or representative. | ||
SECTION 7. Subchapter J, Chapter 2301, Occupations Code, is | ||
amended by adding Section 2301.4671 to read as follows: | ||
Sec. 2301.4671. RESTRICTION ON DEALER'S USE OF DEALERSHIP | ||
PROPERTY. (a) Notwithstanding the terms of any franchise, a | ||
manufacturer, distributor, or representative may not: | ||
(1) unreasonably limit or impair the ability of a | ||
franchised dealer to use the dealership property as the dealer | ||
considers appropriate; | ||
(2) control the use of the dealership property after | ||
the franchise is terminated or discontinued; or | ||
(3) at any time exercise exclusive control over the | ||
use of the dealership property. | ||
(b) To the extent of any conflict between this section and | ||
another section of this chapter, the other section controls over | ||
this section. | ||
SECTION 8. Section 2301.468, Occupations Code, is amended | ||
to read as follows: | ||
Sec. 2301.468. INEQUITABLE TREATMENT OF [ |
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franchise, a [ |
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not[ |
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application of a formula or other computation or process intended | ||
to gauge the performance of a dealership or otherwise enforce | ||
standards or guidelines applicable to its franchised dealers in the | ||
sale of motor vehicles if, in the application of the standards or | ||
guidelines, the franchised dealers are unreasonably treated | ||
differently [ |
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manufacturer or distributor. | ||
SECTION 9. Section 2301.475(a), Occupations Code, is | ||
amended to read as follows: | ||
(a) Except as provided by Subsection (b), after the first | ||
anniversary of the date a franchised dealer submits a claim under | ||
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manufacturer or distributor may not: | ||
(1) charge back to a dealer money paid by the | ||
manufacturer or distributor as a result of the incentive program; | ||
(2) charge back to a dealer the cash value of a prize | ||
or other thing of value awarded to the dealer as a result of the | ||
incentive program; or | ||
(3) audit the records of a dealer to determine | ||
compliance with the terms of the incentive program, unless the | ||
manufacturer or distributor has reasonable grounds to believe the | ||
dealer committed fraud with respect to the incentive program. | ||
SECTION 10. Subchapter J, Chapter 2301, Occupations Code, | ||
is amended by adding Sections 2301.480 and 2301.481 to read as | ||
follows: | ||
Sec. 2301.480. DISCLOSURE OF CERTAIN INFORMATION. A | ||
manufacturer, distributor, or representative may not require that a | ||
franchised dealer provide to the manufacturer, distributor, or | ||
representative information regarding a customer, except to the | ||
extent that a specific item of information is necessary: | ||
(1) for the sale or delivery of a new motor vehicle to | ||
a customer; | ||
(2) to validate a claim and make payment under an | ||
incentive program; | ||
(3) to support a dealer's claim for reimbursement for | ||
repairs performed under a manufacturer's warranty; or | ||
(4) to satisfy a product recall or safety obligation. | ||
Sec. 2301.481. PROPERTY USE AGREEMENT. (a) A provision in | ||
a property use agreement that unreasonably limits or impairs the | ||
ability of a franchised dealer to use the dealership as the dealer | ||
considers appropriate is void and unenforceable. | ||
(b) A manufacturer, distributor, or representative may not | ||
require that a dealer enter into a property use agreement as a | ||
condition of the manufacturer, distributor, or representative: | ||
(1) entering into a franchise; | ||
(2) approving a franchised dealer's application to add | ||
a line-make; | ||
(3) approving a franchised dealer's application to | ||
relocate a franchise; or | ||
(4) approving a sale or transfer of a dealer, | ||
dealership, or franchise. | ||
(c) The following provisions in a property use agreement are | ||
void and unenforceable: | ||
(1) a limitation on the franchised dealer's ability to | ||
add a line-make; or | ||
(2) a provision that binds a franchised dealer's | ||
successor. | ||
(d) A property use agreement expires on the earlier of: | ||
(1) the date provided by the property use agreement; | ||
or | ||
(2) the termination of the franchise between the | ||
parties to the property use agreement. | ||
(e) This section applies to a subsidiary of, a person owned | ||
or controlled by, or a person whose business decisions are | ||
substantially influenced by a manufacturer, distributor, or | ||
representative. | ||
SECTION 11. Section 2301.522(a), Occupations Code, is | ||
amended to read as follows: | ||
(a) In an action brought against a manufacturer or | ||
distributor under Subchapter J [ |
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franchised dealer whose franchise provides for arbitration in | ||
compliance with this chapter, the board shall order the parties to | ||
submit the dispute to mediation in the manner provided by this | ||
subchapter. | ||
SECTION 12. Section 2301.805(a), Occupations Code, is | ||
amended to read as follows: | ||
(a) Notwithstanding any other law, including Subchapter E, | ||
Chapter 17, Business & Commerce Code, in addition to the other | ||
remedies provided by this subchapter, a person may institute an | ||
action under Subchapter E, Chapter 17, Business & Commerce Code, or | ||
any successor statute to that subchapter, and is entitled to any | ||
procedure or remedy under that subchapter, if the person: | ||
(1) has sustained damages as a result of a violation of | ||
Sections 2301.351-2301.354 or Section 2301.357; or | ||
(2) is a franchised dealer who has sustained damages | ||
as a result of a violation of: | ||
(A) Subchapter J of this chapter [ |
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(B) Subchapter E, Chapter 17, Business & Commerce | ||
Code. | ||
SECTION 13. The change in law made by this Act applies only | ||
to an agreement entered into or renewed under Chapter 2301, | ||
Occupations Code, on or after the effective date of this Act. An | ||
agreement entered into or renewed before the effective date of this | ||
Act is governed by the law in effect on the date the agreement was | ||
entered into or renewed, and the former law is continued in effect | ||
for that purpose. | ||
SECTION 14. This Act takes effect September 1, 2011. |