HBA-NRS H.B. 1665 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1665 By: Alexander Transportation 3/18/2001 Committee Report (Amended) 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 in relation 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 8 (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 specific authority to order parties to perform certain acts necessary to implement the Texas Motor Vehicle Commission Code. 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 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 requires that each application for a motor vehicle manufacturer's license include a statement regarding the manufacturer's compliance with provisions relating to warranty reimbursement, procedures relating to manufacturer or distributor incentive programs, and manufacturer or distributor 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). 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 On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. EXPLANATION OF AMENDMENTS 1) Committee Amendment No.1 adds that a person is not disqualified to be appointed or serve on the Motor Vehicle Board of the Texas Department of Transportation (board) because that person, or another person, owns shares of stock in a publicly traded company that manufactures or distributes motor vehicles, if the ownership interest is not substantial. 2) The amendment removes the word "substantial" in relation to a board member's seat being automatically vacated if the member or if a relative of the first degree acquires interest in a business that manufactures, distributes, converts, leases, or sells motor vehicles. 3) The amendment 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. 4) The amendment prohibits a licensee from filing an action with the board after the expiration of four years after the date the action accrues. The amendment 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 another party to refrain from bringing an action. The amendment provides that the time limitation on filing an action with the board does not apply either 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. 5) The amendment 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 manufacturers, distributors, and representatives.