Pub. 58 2017-2018 Issue 1

21 FALL 2017 Body shop interests pushed for certain prohibitions on insurer practices with respect to the repair of motor vehicles in the Regular Session’s HB 3804. The prohibitions largely revolved around the steering of customers to certain shops. The bill was approved by a House Committee and placed on the House Calendar, but it failed to receive timely action. TexasDepartment ofMotor Vehicle (DMV) Issues The Texas Department of Motor Vehicles requested a num- ber of issues during the Regular Session and the Legislature was receptive. Passed were DMV revisions to the Vehicle Registration Statute (SB 2075) and Vehicle Title Statute (SB 2076). The Legislature also passed HB 2070 to provide for the simplification of timelines for claims under the Lemon Law statute. The Governor signed all of the above into law, effective September 1, 2017. During the Regular Session, HB 2493 was introduced to alter the current structure of the DMV Board, including elimination of a franchised dealer slot. The bill failed to re- ceive a hearing. A number of bills (SB 1621, HB 3410, and HB 3416) were also put forward to revise the fee structure for tax assessor collectors and deputies for titling and registra- tion duties, but all failed to be approved by any committee or on the floor as an amendment. Dealer Issues HB 2949 made an important change to the administra- tion of documentary fees. The bill eliminated the need to notify the Office of the Consumer Credit Commissioner of an increase in a dealership’s maximum documentary fee if the new maximum amount is at or below the safe harbor amount. The current safe harbor amount is $150. HB 2949 is effective on September 1, 2017. In a late amendment added to SB 1731 during the Regu- lar Session, the Legislature reinstated a Texas Emissions Reduction Program (TERP) program providing monetary incentives for Texans who purchase certain new light duty vehicles with a gross vehicle weight rating of less than 10,000 pounds. Once the Texas Commission on Environmental Quality completes rulemaking in the spring of 2018, there will be $2500 incentives for up to 2000 vehicles per bien- nium that are powered by an electric drive, including plug-in electrics, plug-in hybrids, and hydrogen fuel cell vehicles. The TERP program will also provide $5000 incentives for up to 1000 vehicles purchased in the biennium that are pow- ered by compressed natural gas or liquefied petroleum gas. Regular Session SB1588, a bill to eliminate the requirement of a motor vehicle safety inspection, passed the Senate by a vote of 27-4, but the bill made it out of the House Transportation Committee too late to have a realistic opportunity tomake the lastHouseCalendar. Expectations are that this bill will be back for consideration next session. As we have seen at the federal level, there was also legislation in the Regular Session to prohibit a dealer from selling any motor vehicle with an open product recall. The bill filed at the state level, HB 3940, failed to receive a hearing. Franchise and Structural Regulatory Issues As we have seen for the past three Regular Legislative Sessions, the most consequential bills of the session were a collection of bills designed to allow motor vehicle manu- facturers to sell and service their products in the state and escape regulation under the state franchise law. Tesla and their proponents introduced two bills in both the House and Senate. HB 4236/SB 2093 would have allowed Tesla and all other motor vehicle manufacturers to own, operate, and control dealerships. HB 4014/SB 2184 pro- vided that a motor vehicle manufacturer without franchised dealers, and who made a minimal investment in the state, could operate outside the franchise law contained in Chapter 2301 of the Occupations Code or the dealer requirements contained in Chapter 503 of the Transportation Code. There was not a hearing on any of these bills. Cummins, Inc, a Fortune 500 Corporation that designs, manufactures, and distributes engines also sought to change the franchise law in Chapter 2301 of the Occupations Code. Under longstanding Texas law, an engine, transmis- sion, or rear axle manufactured for installation in a vehicle that has a gross vehicle weight rating of more than 16,000 pounds is considered a motor vehicle and is thus subject to the franchise laws. HB 3505/SB 1572 sought to amend the law to legalize Cummins’ plans to continue acting in the capacity of both a manufacturer and a franchised dealer by performing sales and warranty work at nine distributorship locations throughout Texas. While both the House and Senate bills were heard in committee, neither bill was heard on the House or Senate floor. Motor vehicle manufacturers, mobility providers, and tech- nology companies joined together in the Regular Session to push a bill designed to facilitate the testing, operation, and deployment of automated motor vehicles in Texas. The Senate Committee substitute to this bill, SB 2205, could have restricted the Texas DMVs’ ability to enforce the fran- chise law, but a floor amendment limited the scope of the regulatory restriction to the operation of such vehicles. The amendment was included in the final version of SB 2205, which is effective on September 1, 2017. 