Dealers' Choice - Fall 2019

TADA REVIEW OF THE 86 TH LEGISLATIVE SESSION

FRANCHISE ISSUES

SB 1415 (Hancock/Geren) Modern Ownership (TADA Priority) SB 1267 / HB 2602 (Watson/S. Thompson) Cummins HB 3420 (Lambert/Menendez) Loaner Insurance Coverage (TADA Priority) HB 259 (E. Thompson/Hancock) Named Driver

Legislation as introduced sought to allow market participants to own entities with interests in various segments of the motor vehicle industry, provided there is no vertical integration by type of motor vehicle. Legislation as introduced would have allowed manufacturers of heavy- duty truck engines, trans- missions, or rear axles to own and operate dealerships. Legislation as introduced sought to require that an individual’s primary insurance coverage for physical damage carries forward to a temporary substitute vehicle provided by an auto repair facility w hile the insured’s vehicle is in for repair. Legislation as introduced required a named driver policy to be an operator’s policy with any named driver exclusion under the policy to specifically name each excluded driver. Legislation as introduced would have prohibited certain insurer practices related to auto repair claims to ensure quality parts are used to make repairs in the body shops of the insured’s choice. Legislation as introduced extend- ed the agency for an additional 12 years and made changes to the operations of the DMV, includ- ing removing the opportunity to “cure” an advertising rule violation before being penalized and elimi- nating the notice and approval requirements for motor vehicle shows and exhibitions. Legislation as introduced would require the governor to establish a division to review certain rules proposed by state agencies that issue licenses.

SB 1415 was amended to clarify the definition of franchised dealer and dealership.

SB 1415 was signed into law by Gov- ernor Abbott on June 4 and becomes effective 9/1/19.

TADA opposed HB 2602 in the House Licensing and Administra- tive Procedures Committee.

HB 2602 was heard in the House Li- censing and Administrative Procedures Committee on 4/16, but no further action was taken. SB 1267 was never heard in Senate committee. HB 3420 was signed into law by Governor Abbott on June 15 and becomes effective 9/1/19. Provisions will apply to all policies delivered, issued for delivery, or renewed on or after 1/1/20.

INSURANCE

HB 3420 was amended to clarify that coverage carries forward while the insured’s vehicle is at the repair facility for service, re- pair, maintenance, damage, or to obtain an estimate and provides coverage for a substitute vehicle with a gross vehicle weight rating of 14,000 pounds or less. TADA supported HB 259 in both the House Insurance Committee and the Senate Business & Com- merce Committee.

HB 259 was signed into law by Gov- ernor Abbott on June 5 and becomes effective 9/1/19.

HB 1348 (Clardy) Auto Body Shops

TADA supported HB 1348 in the House Insurance Committee.

HB 1348 was approved by the House Insurance Committee on 4/17 and placed on the House calendar for 5/9 but was not heard before the midnight deadline to hear House bills that day.

SUNSET

SB 604 (Buckingham/Paddie) DMV Sunset

SB 604 as amended eliminated the provision removing the opportu- nity to “cure” an advertising rule violation before being penalized and retained the notice require- ment for motor vehicle shows and exhibitions but TxDMV no longer must approve.

SB 604 was signed into law by Gover- nor Abbott on June 10 and becomes effective 9/1/19.

SB 1995 (Birdwell/Paddie) Governor & Rulemaking

SB 1995 was amended throughout the process, but the final product reflects the intent of the bill as introduced.

SB 1995 was signed into law by Governor Abbott on June 10 and becomes effective 9/1/19.

TAX

SB 2 (Bettencourt/Burrows) Property Tax Reform

Legislation as introduced lowered the rollback tax rate from the cur- rent 8 percent to 2.5 percent and required an automatic ratification election if a taxing unit adopts a tax rate that exceeds the rollback rate. Legislation as introduced would prohibit off highway vehicles purchased outside the state from being titled unless applicants have paid to Comptroller the applicable use tax.

SB 2 was amended to limit rev- enue increases at the local level to 3.5 percent for cities and counties before a ratification election is triggered. HB 1543 as amended includes a definition for “manufacturer” and “new off-highway vehicle” and includes an authorization for the Comptroller to promulgate forms and adopt rules as necessary to implement the prohibition against the issuance of such a title receipt or certificate of title.

SB 2 was signed into law by Governor Abbott on June 12 and becomes effective 1/1/20.

HB 1543 (Springer/Fallon) Out of State Purchases

HB 1543 was signed into law by Governor Abbott on June 2 and becomes effective 9/1/19.

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FALL 2019