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  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.