HBA-NRS H.B. 1665 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1665
By: Alexander
Transportation
8/7/2001
Enrolled



BACKGROUND AND PURPOSE 

The Motor Vehicle Board of the Texas Department of Transportation (board)
is the state's licensor of manufacturers, distributors, dealers, lessors,
and lease facilitators. The board's power and authority is established
through the Texas Motor Vehicle Commission Code. Changes in the motor
vehicle industry have resulted in the need for certain parts of the code to
be updated virtually every session. House Bill 1665 makes language changes
relating to the redesignation of the Texas Motor Vehicle Commission as the
board, modifications to duties and authority of the board, and
modifications to the regulation of the sale of motor vehicles. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Motor Vehicle Board of the Texas
Department of Transportation in SECTION 6 (Section 3.03, Article 4413(36),
V.T.C.S.) and SECTION 9 (Section 4.01, Article 4413(36), V.T.C.S.) of this
bill. 

ANALYSIS

House Bill 1665 amends the Texas Motor Vehicle Commission Code to
standardize references to the Motor Vehicle Board of the Texas Department
of Transportation (board). The bill clarifies and amends eligibility
requirements of those who are appointed to the board (Sec. 2.03).  

The bill provides that the board has the authority to enforce an order that
requires a manufacturer, distributor, or representative to pay costs and
expenses to a dealer or any lienholder, in accordance with their respective
interest, after the termination of a franchise. The bill also authorizes
the board, rather than the Texas Department of Transportation, to adopt
rules applicable to procedures, hearings, and enforcement proceedings in an
action pursuant to hearings involving dealer's and manufacturer's vehicle
license plates (Sec. 3.03). The bill provides that the board is not
required to pay a filing fee when filing a complaint or other enforcement
action (Sec. 3.05). The bill prohibits a licensee from filing an action
with the board after the expiration of four years after the date the action
accrues. The bill authorizes the limitations period to be extended for a
period not to exceed 180 days on a showing that the failure timely to
commence an action was caused by reliance on fraudulent statements or
inducements made by a party for the purpose of inducing a party to refrain
from bringing an action. The bill provides that the time limitation on
filing an action with the board does not apply to an action for which the
Texas Motor Vehicle Commission Code or rules of the board establish
procedural time limits or to an action brought by the owner of a motor
vehicle through a complaint concerning defects in the motor vehicle which
are covered by a manufacturer's, converter's, or distributor's warranty
agreement (Sec. 3.08). The bill authorizes the board to issue a duplicate
license for any license it issues, to charge a fee of $50 for the issuance
of a duplicate license, and to adopt rules applicable to the issuance of a
duplicate license (Secs. 4.01 and 4.05).  

The bill provides that a request for an application for a dealer license is
confidential, is not an open record, and is not available for public
inspection (Sec. 4.02). The bill requires that each application for a motor
vehicle manufacturer's license include a statement regarding the
manufacturer's compliance with the provisions of the Texas Motor Vehicle
Commission Code relating to warranty reimbursements, incentive  programs,
and ownership, operation, or control of a dealership (Sec. 4.03).  

H.B. 1665 authorizes the board to deny an application for a license,
suspend or revoke an outstanding license, or place on probation or
reprimand a licensee who wilfully defrauds any buyer, not only a retail
buyer (Sec. 4.06). The bill modifies the method for determining the dealer
cost of new motor  vehicles that is used after the termination of a
contract between a franchised dealer and a manufacturer or distributor
(Sec. 5.02). For purposes of determining compliance with certain provisions
relating to the sale of a dealership by a manufacturer or distributor, the
bill provides that the price of a dealership and the other terms and
conditions of a contract for the sale of a dealership are reasonable if the
purchaser is a franchised dealer who had made a significant investment in
the dealership, subject to loss, has an ownership interest in the
dealership, and operates the dealership under a plan to acquire full
ownership of the dealership within a reasonable time and under reasonable
terms and conditions (Sec. 5.02C).  

The bill sets forth that a time limit relating to board proceedings imposed
on the board or on a dealer by the terms of the Texas Motor Vehicle
Commission Code is tolled during the pendency of mandatory mediation
proceedings required by the code or by a franchise agreement (Sec. 5.02D).  

EFFECTIVE DATE

May 18, 2001.