Dealers' Choice - Fall 2019

the board and in our industry. †e TADA Legislative Committee decided to proactively prepare for future ownership trends in our industry without violating the core principles of the current franchise laws that have served Texas and Texans well over the years. SB 1415 (Hancock-Geren) allows market participants to have ownerships interests in various segments of the motor vehicle industry, provided there is no vertical integration in which a manufacturer or distributor of a motor vehicle is selling and servicing the same type of motor vehicle. SB 1415 was approved in the Senate by a vote of 30-1 on April 23 and approved in the House by a vote 142-0 on May 17. It was signed into law by Governor Abbott on June 4. LOANER VEHICLE INSURANCE COVERAGE Before the session, several insurance companies writing automobile insurance in Texas eliminated primary physical damage insurance coverage on temporary substitute vehicles. †is left consumers, unknowingly, without real coverage on the dealership’s loaner vehicles. After discovering the issue, the TADA Legislative Committee decided a legislative remedy should be pursued. HB 3420 (Lambert-Menendez) requires that an individual’s primary insurance coverage for physical damage carries forward to a temporary substitute vehicle while the customer’s own vehicle is in a motor vehicle repair facility. Over the strong objections of the insurance industry, HB 3420 was approved in the House by a vote of 129-13 on May 3 and was approved in the Senate by a vote of 28-3 on May 21. Governor Abbott signed the bill into law on June 15. TEXAS DEPARTMENT OF MOTOR VEHICLES (DMV) SUNSET BILL Approximately 140 agencies are subject to the Texas Sunset Act. Agencies typically undergo review once every 12 years, and about 20 to 30 agencies go through the Sunset process each legislative session. †e Sunset Advisory Commission’s report on a typical agency must include a recommendation

to abolish or continue the agency. Beyond continuation, the commission recommends agency improvements through changes in law and management directives. †e legislature makes the final determinations if the agency should continue to exist, and if so, what statutory modi‚cations should be incorporated. SB 604 makes changes to the operations of the DMV and extends the agency until 2031. During the Sunset process for the Texas DMV, including the legislative consideration of SB 604, the following Sunset sta recommendations were identi‚ed as the ones with the greatest potential to negatively impact the dealer community: • Restructuring the current board by replacing one franchised dealer with a public member. (PROVISION ELIMINATED) • Restructuring the current board by requiring the Governor to designate a public member as the presiding o¦cer of the board. (PROVISION ELIMINATED) • Eliminating the lease facilitator license. (PROVISION ELIMINATED) • Removing the opportunity to “cure” an advertising rule violation before being penalized. (PROVISION ELIMINATED) • Eliminating the notice and approval requirements for motor-vehicle shows and exhibitions. (NOTICE IS STILL REQUIRED BUT DMV NO LONGER HAS TO APPROVE) TADA thanks all the Texas franchised dealers who serve on the TADA Legislative Committee and all the TADA members who took the time to come to Austin this past session to lobby for the Texas dealer body. 

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