Dealers' Choice - Fall 2019

HB 2915 (Springer) Tax on Labor for Auto Repair HB 3760 (Guillen/Zaffirini) Buyers Tag Use by Governmental Entity HB 3842 (T. King/Hinojosa) Consignment Location SB 1193 (Flores/Landgraf) Titling Issue Upon Cessation of Business

Legislation as introduced would have decreased property tax liabil- ity and shifted tax burden to other revenue sources, including sales tax on labor on auto repairs.

HB 2915 was referred to the House Ways & Means Committee on 3/12.

HB 2915 never received a hearing in House Committee.

DEALER LICENSING

HB 3760 was amended to in- clude a provision subjecting these agencies to the statutory provi- sions relating to the unauthorized reproduction, purchase, use, or sale of temporary tags applicable to a dealer. Legislation was amended to add SB 1193 (see below), but the surety bond increase from SB 1193 was removed.

Legislation as introduced would authorize governmental agencies to obtain a dealer general distin- guishing number to issue tempo- rary buyer’s tags for vehicles sold or disposed of by the governmen- tal agency. Legislation as introduced would require a dealer to hold a general distinguishing number for a con- signment location unless the con- signment location is a wholesale motor vehicle auction. Legislation as introduced provided for the liability of and issuance of titles and permits for motor vehicles purchased from motor vehicle dealers that go out of busi- ness and increased the dealer’s surety bond from $25,000 to $50,000. Legislation as introduced sought to clarify and streamline State law relating to the operation of golf carts, neighborhood electric vehicles, and off-highway vehicles while preserving the right of TxDOT, cities, and counties to pro- hibit operation on safety grounds. Legislation as introduced would define personal delivery and mobile carrying device and set parameters on when and where they can operate and set safety and insurance requirements. Legislation as introduced sought to set up a separate titling and registration process for various types of vehicles assembled by hobbyists, including dune buggies and kit cars with DMV making safety determinations. Legislation as introduced would have authorized a lessee under a personal, family, or household motor vehicle lease agreement to contract with a lessor for an excess wear and use waiver in connection with the lease agree- ment. Legislation as introduced sought to reduce the amount of the required financial security deposit from $250,000 to $25,000 for licensed motor vehicle dealers who offer to sell service contracts only on motor vehicles sold by the provider.

HB 3760 was signed into law by Governor Abbott on June 10 and becomes effective 9/1/19.

HB 3842 was signed into law by Governor Abbott on June 14 and becomes effective on 9/1/19.

TADA expressed concerns over the lack of definition of “gone out of business,” and its effect on the surety bond process.

SB 1193 was not heard before the midnight deadline to hear Senate bills in the House but was added as an amendment to HB 3842.

OPERATION OF VEHICLES

HB 1548 (Springer/Kolkhorst) Operation of Certain Vehicles

HB 1548 was amended to further clarify existing issues that inad- vertently took away the authority of local governmental entities to allow ATVs and golf carts on their local roads.

HB 1548 was signed into law by Governor Abbott on June 14 and became effective im- mediately.

SB 969 (Hancock/Landgraf) Personal Delivery Mobile Carrying HB 1755 (E. Thompson/Hughes) Assembled Vehicles

SB 969 as amended made small changes to the areas of operation and the device equipment require- ments.

SB 969 was signed into law by Governor Abbott on June 10 and became effective im- mediately.

Legislation was amended provid- ing for DMV rulemaking authority, requiring inspections for safety purposes, excluding off-road vehicles, prohibiting sales to or from dealers, and specifying that manufacturer or a kit maker is not a hobbyist. SB 1778 as amended revises the definition of “lease agreement” by specifying that the term includes any addendum to the agreement and adds a specification that the agreement provides for the right to such possession and use for a term of more than 180 days. HB 4120 as amended adds language specifying the security deposit is: $25,000 for a motor vehicle dealer that generated $1,125,000 or less in annual gross revenue in this state from the sale of service contracts in the preceding year; $50,000 for a motor vehicle dealer that generated more than $1,125,000 and not more than $2,500,000; and $75,000 for a motor vehicle dealer that generated more than $2,500,000.

HB 1755 was signed into law by Governor Abbott on June 14 and becomes effective on 9/1/19.

FINANCIAL PRODUCT ISSUES

SB 1778 (Paxton/Holland) Excess Loss Damage Waivers

SB 1778 was signed into law by Governor Abbott on June 10 and most provisions become effective 9/1/19.

HB 4120 (Lucio III/Menendez) Financial Security Requirements on Service Contracts

HB 4120 was signed into law by Governor Abbott on June 14 and becomes effective 9/1/19.

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