reglab/statecodes huggingface dataset:
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter I. Warranties: Reimbursement of Dealer › Section 2301.402. Rate of Compensation

Sec. 2301.402.  RATE OF COMPENSATION.  (a)  A manufacturer or distributor shall fairly and adequately compensate its dealers for warranty work.
(b)  A manufacturer or distributor may not pay or reimburse a dealer an amount of money for warranty work that is less than the amount the dealer charges a retail customer for similar nonwarranty work.
(c)  In computing the amount of money a dealer charges a retail customer under Subsection (b), the manufacturer or distributor shall use the greater of:
(1)  the average labor rate charged during the preceding six months by the dealer on 100 sequential nonwarranty repair orders, exclusive of routine maintenance;  or
(2)  the average labor rate charged for 90 consecutive days during the preceding six months by the dealer for nonwarranty repairs, exclusive of routine maintenance.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter I. Warranties: Reimbursement of Dealer › Section 2301.403. Adjustment of Warranty Labor Rate

Sec. 2301.403.  ADJUSTMENT OF WARRANTY LABOR RATE.  (a)  A dealer may request an adjustment in the dealer's warranty labor rate.  The request must be sent to the manufacturer or distributor by certified mail, return receipt requested, and must state the requested rate and include information reasonably necessary to enable the manufacturer or distributor to adequately evaluate the request.
(b)  Not later than the 60th day after the date of receipt of a request under this section, the manufacturer or distributor shall provide written notice to the requesting dealer of the approval or disapproval of the request.  If the request is disapproved, the manufacturer or distributor shall state the reasons for the disapproval.
(c)  A requesting dealer may file a protest with the board if the manufacturer or distributor:
(1)  disapproves the request;  or
(2)  fails to respond within the time required by this section.
(d)  After a protest is filed, the board may uphold the manufacturer's or distributor's decision only if the manufacturer or distributor proves by a preponderance of the evidence that the disapproval of the request or failure to respond was reasonable.
(e)  If the board does not determine that the disapproval of the request or failure to respond was reasonable, the board shall order the requested rate into effect as of the 60th day after the receipt of the request by the manufacturer or distributor.
(f)  Except by agreement of the parties, a warranty labor rate established under this subchapter may not be adjusted more often than once a year.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter I. Warranties: Reimbursement of Dealer › Section 2301.404. Time for Payment

Sec. 2301.404.  TIME FOR PAYMENT.  (a)  A manufacturer or distributor shall pay a dealer's claim for reimbursement for warranty work or dealer preparation and delivery work not later than the 30th day after the date of approval of the claim.
(b)  A claim that is not disapproved before the 31st day after the date of receipt is considered approved.
(c)  If a claim is disapproved, the manufacturer or distributor shall provide the dealer written notice of the reasons for the disapproval.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter I. Warranties: Reimbursement of Dealer › Section 2301.405. Charge Back to Dealer

Sec. 2301.405.  CHARGE BACK TO DEALER.  (a)  A manufacturer or distributor may not charge back to a dealer money paid by the manufacturer or distributor to satisfy a claim approved and paid under this subchapter unless the manufacturer or distributor shows that:
(1)  the claim was false or fraudulent;
(2)  repair work was not properly performed or was unnecessary to correct a defective condition;  or
(3)  the dealer who made the claim failed to substantiate the claim as provided by the manufacturer's or distributor's requirements that were enforceable under Section 2301.401 at the time the claim was filed.
(b)  A manufacturer or distributor may not audit a claim filed under this subchapter after the first anniversary of the date the claim is submitted unless the manufacturer or distributor has reasonable grounds to suspect that the claim was fraudulent.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter I. Warranties: Reimbursement of Dealer › Section 2301.406. Prohibited Requirements for Payment

Sec. 2301.406.  PROHIBITED REQUIREMENTS FOR PAYMENT.  A manufacturer or distributor may not require, as a prerequisite to the payment of a claim for reimbursement, that a dealer file a statement of actual time spent in performance of labor, unless actual time is the basis for reimbursement.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.451. Prohibition: Items Not Ordered

Sec. 2301.451.  PROHIBITION:  ITEMS NOT ORDERED.  A manufacturer, distributor, or representative may not require or attempt to require a franchised dealer to order, accept delivery of, or pay anything of value, directly or indirectly, for a motor vehicle or an appliance, part, accessory, or any other commodity unless the dealer voluntarily ordered or contracted for the item.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.452. Delivery of Motor Vehicle or Part

Sec. 2301.452.  DELIVERY OF MOTOR VEHICLE OR PART.  (a)  A manufacturer, distributor, or representative shall deliver in a reasonable quantity and within a reasonable time to a franchised dealer who holds a franchise for a motor vehicle sold or distributed by the manufacturer, distributor, or representative any new motor vehicle or part or accessory for a new motor vehicle as covered by the franchise if the vehicle, part, or accessory is publicly advertised as being available for delivery or is actually being delivered.
(b)  This section does not apply to a delivery prevented by:
(1)  an act of God;
(2)  a work stoppage or delay because of a strike or labor dispute;
(3)  a freight embargo;  or
(4)  another cause beyond the control of the manufacturer, distributor, or representative.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.454. Modification or Replacement of Franchise

Sec. 2301.454.  MODIFICATION OR REPLACEMENT OF FRANCHISE.  (a)  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not modify or replace a franchise if the modification or replacement would adversely affect to a substantial degree the dealer's sales, investment, or obligations to provide service to the public, unless:
(1)  the manufacturer, distributor, or representative provides written notice by registered or certified mail to each affected dealer and the department of the modification or replacement; and
(2)  if a protest is filed under this section, the board approves the modification or replacement.
(b)  The notice required by Subsection (a)(1) must:
(1)  be given not later than the 60th day before the date of the modification or replacement; and
(2)  contain on its first page a conspicuous statement that reads: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE TEXAS DEPARTMENT OF MOTOR VEHICLES IN AUSTIN, TEXAS, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE PROPOSED MODIFICATION OR REPLACEMENT OF YOUR FRANCHISE UNDER THE TERMS OF CHAPTER 2301, OCCUPATIONS CODE, IF YOU OPPOSE THIS ACTION."
(c)  A franchised dealer may file a protest with the board of the modification or replacement not later than the latter of:
(1)  the 60th day after the date of the receipt of the notice;  or
(2)  the time specified in the notice.
(d)  After a protest is filed, the board shall determine whether the manufacturer, distributor, or representative has established by a preponderance of the evidence that there is good cause for the proposed modification or replacement.  The prior franchise continues in effect until the board resolves the protest.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.615, eff. Sept. 1, 2003.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 1290 (H.B. 2017), Sec. 15, eff. September 1, 2011.
Acts 2021, 87th Leg., R.S., Ch. 276 (H.B. 3514), Sec. 4, eff. September 1, 2021.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.455. Determination of Good Cause for Termination, Discontinuance, Modification, or Replacement

Sec. 2301.455.  DETERMINATION OF GOOD CAUSE FOR TERMINATION, DISCONTINUANCE, MODIFICATION, OR REPLACEMENT.  (a)  Notwithstanding the terms of any franchise, in determining whether good cause has been established under Section 2301.453 or 2301.454, the board shall consider all existing circumstances, including:
(1)  the dealer's sales in relation to the sales in the market;
(2)  the dealer's investment and obligations;
(3)  injury or benefit to the public;
(4)  the adequacy of the dealer's service facilities, equipment, parts, and personnel in relation to those of other dealers of new motor vehicles of the same line-make;
(5)  whether warranties are being honored by the dealer;
(6)  the parties' compliance with the franchise, except to the extent that the franchise conflicts with this chapter;  and
(7)  the enforceability of the franchise from a public policy standpoint, including issues of the reasonableness of the franchise's terms, oppression, adhesion, and the parties' relative bargaining power.
(b)  The desire of a manufacturer, distributor, or representative for market penetration does not by itself constitute good cause.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.456. Use of Advertising

Sec. 2301.456.  USE OF ADVERTISING.  A manufacturer, distributor, or representative may not:
(1)  use any false, deceptive, or misleading advertising;  or
(2)  notwithstanding the terms of any franchise, require that a franchised dealer join, contribute to, or affiliate with, directly or indirectly, any advertising association.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.457. Prohibition: Change of Franchised Dealer's Capital Structure

Sec. 2301.457.  PROHIBITION:  CHANGE OF FRANCHISED DEALER'S CAPITAL STRUCTURE.  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not prevent a franchised dealer who meets reasonable capital requirements from reasonably changing:
(1)  the capital structure of the dealership;  or
(2)  the means by or through which the dealer finances the operation of the dealership.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.458. Prohibition: Change in Dealer Ownership

Sec. 2301.458.  PROHIBITION:  CHANGE IN DEALER OWNERSHIP.  Notwithstanding the terms of any franchise, except as provided by Section 2301.359 or 2301.360, a manufacturer, distributor, or representative may not fail to give effect to or attempt to prevent the sale or transfer of:
(1)  a dealer, dealership, or franchise;
(2)  an interest in a dealer, dealership, or franchise;  or
(3)  the management of a dealer, dealership, or franchise.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.459. Prohibition: Use of Promissory Note, Security Agreement, or Insurance Policy

Sec. 2301.459.  PROHIBITION:  USE OF PROMISSORY NOTE, SECURITY AGREEMENT, OR INSURANCE POLICY.  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not require or attempt to require that a franchised dealer assign to or act as an agent for a manufacturer, distributor, or representative to secure:
(1)  a promissory note or security agreement given in connection with the sale or purchase of a new motor vehicle;  or
(2)  an insurance policy on or having to do with the operation of a vehicle that is sold.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.460. Warranty, Preparation, or Delivery Agreement Obligations

Sec. 2301.460.  WARRANTY, PREPARATION, OR DELIVERY AGREEMENT OBLIGATIONS.  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not, after a complaint and a hearing, fail or refuse to perform an obligation placed on the manufacturer in connection with the preparation, delivery, and warranty of a new motor vehicle as provided in the manufacturer's warranty, preparation, and delivery agreements.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.616, eff. Sept. 1, 2003.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 1135 (H.B. 2741), Sec. 16, eff. September 1, 2013.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.461. Liability of Franchised Dealer

Sec. 2301.461.  LIABILITY OF FRANCHISED DEALER.  (a)  Notwithstanding the terms of any franchise or any other law, a franchised dealer's preparation, delivery, and warranty obligations are the dealer's sole responsibility for product liability as between the dealer and a manufacturer or distributor.
(b)  Notwithstanding the terms of any franchise or any other law, a manufacturer or distributor shall reimburse the dealer for any loss incurred by the dealer, including legal fees, court costs, and damages, as a result of the dealer having been named a party in a product liability action, except for a loss caused by the dealer's:
(1)  failure to comply with an obligation described by Subsection (a);
(2)  negligence or intentional misconduct;  or
(3)  modification of a product without the authorization of the manufacturer or distributor.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.617, eff. Sept. 1, 2003.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 1135 (H.B. 2741), Sec. 17, eff. September 1, 2013.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.462. Succession Following Death of Franchised Dealer

Sec. 2301.462.  SUCCESSION FOLLOWING DEATH OF FRANCHISED DEALER.  (a)  Notwithstanding the terms of any franchise, except as provided by Subsection (b), a manufacturer, distributor, or representative shall honor the succession to a dealership by a legal heir or devisee under:
(1)  the will of a franchised dealer;  or
(2)  the laws of descent and distribution of this state.
(b)  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may refuse to honor a succession if, after notice and hearing, it is shown to the board that the result of the succession will be detrimental to the public interest and to the representation of the manufacturer or distributor.
(c)  This section does not prevent a franchised dealer, during the dealer's lifetime, from designating any person as a successor dealer by a written instrument filed with the manufacturer or distributor.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.618, eff. Sept. 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.463. Prohibition: Payment of Rebate by Franchised Dealer

Sec. 2301.463.  PROHIBITION:  PAYMENT OF REBATE BY FRANCHISED DEALER.  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not require a franchised dealer to directly or indirectly pay or assume any part of a refund, rebate, discount, or other financial adjustment made by the manufacturer, distributor, or representative to, or in favor of, a customer of the dealer, unless the dealer voluntarily agrees.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.464. Relocation of Franchise

Sec. 2301.464.  RELOCATION OF FRANCHISE.  (a)  Not later than the 60th day before the date a franchised dealer proposes to begin the relocation of a dealership, the dealer must provide written notice of the dealer's intent to relocate to the dealer's manufacturer, distributor, or representative.  The notice must be sent by certified mail, return receipt requested. Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not deny or withhold approval of a written application to relocate a franchise unless:
(1)  the applicant receives written notice of the denial or withholding of approval not later than the 60th day after the date the application is received;  and
(2)  if the applicant files a protest with the board, the board makes a determination of reasonable grounds under this section.
(b)  An application under Subsection (a) to relocate a franchise must contain information reasonably necessary to enable a manufacturer or distributor to adequately evaluate the application.
(c)  If the applicant files a protest under Subsection (a)(2), the board shall hold a hearing.  After the hearing, the board shall determine whether the manufacturer or distributor has established by a preponderance of the evidence that the grounds for the denial or withholding of approval of the relocation are reasonable.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.619, eff. Sept. 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 684 (H.B. 2640), Sec. 3, eff. September 1, 2009.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.466. Arbitration

Sec. 2301.466.  ARBITRATION.  (a)  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not require a franchised dealer to submit to arbitration on any issue unless the dealer and the manufacturer, distributor, or representative and their respective counsel agree to the arbitration after a controversy arises.
(b)  An arbitrator shall apply this chapter in resolving a controversy.  Either party may appeal to the board a decision of an arbitrator on the ground that the arbitrator failed to apply this chapter.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.4671. Franchise Provision Establishing Restriction on Dealer's Use of Dealership Property

Sec. 2301.4671.  FRANCHISE PROVISION ESTABLISHING RESTRICTION ON DEALER'S USE OF DEALERSHIP PROPERTY.  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.
Added by Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 6, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.468. Inequitable Treatment of Dealers or Franchisees

Sec. 2301.468.  INEQUITABLE TREATMENT OF DEALERS OR FRANCHISEES.  Notwithstanding the terms of a franchise, a manufacturer, distributor, or representative may not treat franchised dealers of the same line-make differently as a result of the 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 treated unfairly or inequitably in the sale of a motor vehicle owned by the manufacturer or distributor.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 7, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.469. Costs of Product Recall

Sec. 2301.469.  COSTS OF PRODUCT RECALL.  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative shall compensate a franchised dealer for all costs incurred by the dealer as required by the manufacturer in complying with a product recall by the manufacturer or distributor, including any costs incurred by the dealer in notifying vehicle owners of the existence of the recall.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.470. Prohibition: Conditions for Financing Motor Vehicle

Sec. 2301.470.  PROHIBITION:  CONDITIONS FOR FINANCING MOTOR VEHICLE.  A manufacturer, distributor, or representative may not directly or indirectly, or through a subsidiary or agent, require as a condition for obtaining financing for a motor vehicle that:
(1)  the purchaser of the vehicle purchase any product other than the motor vehicle from the manufacturer, the distributor, or an entity owned or controlled by the manufacturer or distributor;  or
(2)  an insurance policy or service contract bought by the purchaser be from a specific source.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.471. Use of Financing Subsidiary

Sec. 2301.471.  USE OF FINANCING SUBSIDIARY.  (a)  A manufacturer, distributor, or representative may not:
(1)  compel a franchised dealer through a financing subsidiary of the manufacturer or distributor to agree to unreasonable operating requirements;  or
(2)  directly or indirectly terminate a franchise through the actions of a financing subsidiary of the manufacturer or distributor.
(b)  This section does not limit the right of a financing entity to engage in business practices in accordance with the usage of trade in retail and wholesale motor vehicle financing.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.472. Addition of Line-Make

Sec. 2301.472.  ADDITION OF LINE-MAKE.  (a)  Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not deny or withhold approval of a franchised dealer's application to add a line-make or parts or products related to that line-make unless:
(1)  the manufacturer or distributor provides written notice of the denial or withholding of approval to the applicant not later than the 60th day after the date the application is received;  and
(2)  if the applicant files a protest under this section, the board upholds the denial or withholding of approval.
(b)  After receiving notice under Subsection (a)(1), a dealer may file a protest with the board.
(c)  If the dealer files a protest, the board may uphold the manufacturer's or distributor's decision to deny or withhold approval of the addition of the line-make only if the manufacturer or distributor establishes by a preponderance of the evidence that the denial or withholding of approval was reasonable.
(d)  In determining whether a manufacturer or distributor has established that the denial or withholding of approval is reasonable, the board shall consider all existing circumstances, including:
(1)  the dealer's sales in relation to the sales in the market;
(2)  the dealer's investment and obligations;
(3)  injury or benefit to the public;
(4)  the adequacy of the dealer's sales and service facilities, equipment, parts, and personnel in relation to those of other dealers of new motor vehicles of the same line-make;
(5)  whether warranties are being honored by the dealer agreement;
(6)  the parties' compliance with the franchise, except to the extent that the franchise conflicts with this chapter;
(7)  the enforceability of the franchise from a public policy standpoint, including issues of the reasonableness of the franchise's terms, oppression, adhesion, and the parties' relative bargaining power;
(8)  whether the dealer complies with reasonable capitalization requirements or will be able to comply with reasonable capitalization requirements within a reasonable time;
(9)  any harm to the manufacturer or distributor if the denial or withholding of approval is not upheld;
(10)  any harm to the dealer if the denial or withholding of approval is upheld;
(11)  the manufacturer's or distributor's investment and obligations; and
(12)  whether the denial or withholding of approval is justified 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.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 684 (H.B. 2640), Sec. 6, eff. September 1, 2009.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.473. Models Within Line-Make

Sec. 2301.473.  MODELS WITHIN LINE-MAKE.  A manufacturer, distributor, or representative may not:
(1)  fail or refuse to offer to its same line-make franchised dealers all models manufactured for that line-make;  or
(2)  require as a prerequisite to receiving a model or series of vehicles that a franchised dealer:
(A)  pay an extra fee;
(B)  purchase unreasonable advertising displays or other materials;  or
(C)  remodel, renovate, or recondition the dealer's existing facilities.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.474. Payment of Costs for Administrative or Civil Proceeding

Sec. 2301.474.  PAYMENT OF COSTS FOR ADMINISTRATIVE OR CIVIL PROCEEDING.  (a)  A manufacturer, distributor, or representative may not require a franchised dealer to compensate the manufacturer or distributor for any court costs, attorney's fees, or other expenses incurred in an administrative or civil proceeding arising under this chapter.
(b)  This section does not prohibit a manufacturer and a franchised dealer from entering into an agreement to share costs in a proceeding in which the dealer and manufacturer have the same or similar interests.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.4749. Manufacturer or Distributor Incentive Programs: Payment to Dealer

Sec. 2301.4749.  MANUFACTURER OR DISTRIBUTOR INCENTIVE PROGRAMS:  PAYMENT TO DEALER.  (a)  A manufacturer or distributor shall pay a dealer's claim filed under a manufacturer or distributor incentive program not later than the 30th day after the date the claim is approved.
(b)  A claim is considered approved unless a manufacturer or distributor rejects the claim not later than the 31st day after the date of receipt of the claim by the manufacturer or distributor.
(c)  The manufacturer or distributor shall provide the dealer with written notice of a rejection of a claim and the reasons for the rejection.
Added by Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 8, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.475. Manufacturer or Distributor Incentive Programs: Audit or Chargeback

Sec. 2301.475.  MANUFACTURER OR DISTRIBUTOR INCENTIVE PROGRAMS:  AUDIT OR CHARGEBACK.  (a)  Except as provided by Subsection (b), after the first anniversary of the date a manufacturer or distributor pays a claim under Section 2301.4749, the 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.
(b)  A manufacturer or distributor may make charge-backs to a dealer if, after an audit, the manufacturer or distributor has reasonable grounds to conclude that the dealer committed fraud with respect to the incentive program.
(c)  Money paid by a manufacturer or distributor under an incentive program may only be paid to a dealer, unless the dealer agrees to the payment of the money to another person, including an employee of the dealer, before the payment is made.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 684 (H.B. 2640), Sec. 7, eff. September 1, 2009.
Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 9, eff. September 1, 2011.
Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 10, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.477. Manufacturer Doing Business in This State

Sec. 2301.477.  MANUFACTURER DOING BUSINESS IN THIS STATE.  A manufacturer whose products are offered for sale in this state under a franchise entered into between its distributor or representative and a dealer is bound by the terms of the franchise and this chapter as if the manufacturer had executed the franchise.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.478. Action on Franchise

Sec. 2301.478.  ACTION ON FRANCHISE.  (a)  Notwithstanding the terms of any franchise or any other law, an action or proceeding brought by a manufacturer, representative, converter, or distributor against a dealer must be brought in an appropriate forum in this state only, and the law of this state applies to the action or proceeding.
(b)  Each party to a franchise owes to the other party a duty of good faith and fair dealing that is actionable in tort.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.479. Adverse Action in Connection With Export of Vehicle

Sec. 2301.479.  ADVERSE ACTION IN CONNECTION WITH EXPORT OF VEHICLE.  (a)  Except as otherwise provided by this section, a manufacturer, distributor, or representative may not take an adverse action against a franchised dealer because the franchised dealer sells or leases a vehicle that is later exported to a location outside the United States.
(b)  A franchise provision that allows a manufacturer, distributor, or representative to take adverse action against a franchised dealer because the franchised dealer sells or leases a vehicle that is later exported to a location outside the United States is enforceable only if, at the time of the original sale or lease, the dealer knew or reasonably should have known that the vehicle would be exported to a location outside the United States.
(c)  A franchised dealer is presumed to have no actual knowledge that a vehicle the dealer sells or leases will be exported to a location outside the United States if, under the laws of a state of the United States:
(1)  the vehicle is titled;
(2)  the vehicle is registered; and
(3)  applicable state and local taxes are paid for the vehicle.
(d)  The presumption under Subsection (c) may be rebutted by direct, clear, and convincing evidence that the franchised dealer had actual knowledge or reasonably should have known at the time of the original sale or lease that the vehicle would be exported to a location outside the United States.
(e)  Except as otherwise permitted by this section, a franchise provision that allows a manufacturer, distributor, or representative to take adverse action against a franchised dealer because the franchised dealer sells or leases a vehicle that is later exported to a location outside the United States is void and unenforceable.
Added by Acts 2009, 81st Leg., R.S., Ch. 684 (H.B. 2640), Sec. 8, eff. September 1, 2009.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.480. Disclosure of Certain Information

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)  for reasonable marketing purposes;
(3)  to validate a claim and make payment under an incentive program;
(4)  to support a dealer's claim for reimbursement for repairs performed under a manufacturer's warranty; or
(5)  to satisfy a product recall or safety obligation.
Added by Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 11, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.481. Property Use Agreement

Sec. 2301.481.  PROPERTY USE AGREEMENT.  (a)  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.
(b)  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.
(c)  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.
(d)  This section applies to a subsidiary of, or a person controlled by, a manufacturer, distributor, or representative.
Added by Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 11, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter J. Manufacturers, Distributors, and Representatives › Section 2301.482. Certain Property Use Agreements

Sec. 2301.482.  CERTAIN PROPERTY USE AGREEMENTS.  (a)  Notwithstanding Section 2301.481(b)(1), and subject to this section, a dealer may enter into a property use agreement for cash consideration that grants the manufacturer or distributor the exclusive rights to direct the use of the dealership.
(b)  In the event the dealer breaches the terms of the property use agreement described by Subsection (a) by altering the use of the property during the term of the agreement in violation of the agreement, the property use agreement is terminated and the dealer must reimburse the manufacturer or distributor in an amount determined by dividing the amount of the manufacturer's or distributor's cash consideration provided under Subsection (a) by the market value of the property identified in the original property use agreement at the time any necessary real estate has been purchased and any necessary construction has been completed, and multiplying the resulting quotient by the market value of the property at the time of the breach.
(c)  For purposes of this section, the market value of property is to be determined by three appraisers chosen as follows:
(1)  one selected by the affected manufacturer or distributor;
(2)  one selected by the affected dealer; and
(3)  one selected by mutual agreement of the manufacturer or distributor and the dealer.
Added by Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 11, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter K. Mediation Between Dealer and Manufacturer or Distributor › Section 2301.521. Definition

Sec. 2301.521.  DEFINITION.  In this subchapter, "mediation" means a nonbinding forum in which an impartial mediator facilitates communication between parties to promote reconciliation, settlement, or understanding between the parties.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter K. Mediation Between Dealer and Manufacturer or Distributor › Section 2301.522. Mediation Applicable

Sec. 2301.522.  MEDIATION APPLICABLE.  (a)  In an action brought against a manufacturer or distributor under Subchapter J by a 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.
(b)  Subsection (a) applies only if the dealer's franchise does not contain an arbitration provision in conflict with this chapter.  In a dispute concerning whether Subsection (a) applies, the board shall enter an order either that the franchise contains a provision in conflict with this chapter or that it does not.  If the board determines that the franchise does not contain an arbitration provision that conflicts with this chapter, the board shall order the parties to proceed to mediation as provided by this subchapter.
(c)  An order issued under Subsection (b) is not appealable.
(d)  This subchapter does not apply to an action brought by the board to enforce this chapter.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529), Sec. 12, eff. September 1, 2011.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter K. Mediation Between Dealer and Manufacturer or Distributor › Section 2301.523. Mediator

Sec. 2301.523.  MEDIATOR.  (a)  By agreement, the parties shall select and compensate a mediator who is qualified to serve under Section 154.052(a), Civil Practice and Remedies Code.
(b)  Sections 154.053 and 154.055, Civil Practice and Remedies Code, apply to a mediator under this subchapter.
(c)  A mediator may not impose the mediator's own judgment on the issues for that of the parties.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter K. Mediation Between Dealer and Manufacturer or Distributor › Section 2301.524. Location and Schedule of Mediation

Sec. 2301.524.  LOCATION AND SCHEDULE OF MEDIATION.  (a)  The parties by agreement shall select a venue and schedule for mediation under this subchapter.  If the parties are unable to agree on a venue and schedule, the mediator shall select a venue and schedule.
(b)  Except by written agreement of all parties, mediation must be held in this state.
(c)  Mediation must be completed not later than the 60th day after the date the board orders the parties to mediate.  The deadline may be extended by the board at the request of all parties.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.
2023 Texas Statutes › Occupations Code › Title 14 - Regulation of Motor Vehicles and Transportation › Subtitle A - Regulations Related to Motor Vehicles › Chapter 2301 - Sale or Lease of Motor Vehicles › Subchapter K. Mediation Between Dealer and Manufacturer or Distributor › Section 2301.525. Law Applicable; Conflict of Laws

Sec. 2301.525.  LAW APPLICABLE;  CONFLICT OF LAWS.  (a)  Except as provided by Subsection (b) of this section, Section 154.073, Civil Practice and Remedies Code, applies to mediation under this subchapter.
(b)  If Section 154.073, Civil Practice and Remedies Code, conflicts with another legal requirement for disclosure of communications or materials, the issue of confidentiality may be presented to the board to determine, in camera, whether the facts, circumstances, and context of the communications or materials sought to be disclosed warrant a protective order of the board or whether the communications or materials are subject to disclosure.
(c)  This subchapter controls over any other law relating to or requiring mediation between or among license holders.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.