Pub. 62 2021-2022 Issue 1

11 FALL 2021 Licensing A foremost function of the agency is licensing. A license requirement is integral to the agency’s enforcement. A person may not engage in business or serve in the capacity of a dealer, a manufacturer, or a distributor without the requisite license issued by the department. The adopted legislation made plain that a dealer cannot operate as a dealer without a currently valid license from the ne´ Commission, and it is unlawful for a manufacturer, distributor, or representative to operate without a current and valid license from the ne´ Commission. The first license was required to be obtained no later than Dec. 1, 1971. 13 To give some perspective as to events occurring in 1971 when the legislature passed S.B. 140, a new Ford Mustang was just over $22,000; Mariner 9 became the first spacecraft to orbit another planet and its total program cost was approximately $554 million; Walt Disney World opened in Orlando, Florida; 14 and this agency’s annual license fees were as follows: 1. For each manufacturer and distributor, $200. 2. For each dealer who sold more than 200 new motor vehicles in the preceding calendar year, $50. 3. For each dealer who sold 200 or less new motor vehicles in the preceding calendar year, $25. 4. For each representative, $25. 15 Eight years later, in 1979, a new Nissan 280ZX was $39,430 and a Pontiac Grand Lemans Sedan was $27,590. The average MSRP moved into the five-figure range; Margaret Thatcher was elected U.K.’s Prime Minister; a Sony Walkman was $200 16 ; and the annual license fee increased to $300 for each manufacturer or distributor. The dealer’s fee doubled in each category to $100 and $50, respectively, and the representative fee remained at $25. 17 Nineteen-eighty-three (1983) brought the highest unemployment since 1941; a new Chevrolet Chevette was $18,834, and a Mitsubishi Starion Turbo was $28,828. Microsoft Word was introduced 18 , and the license fee increased again. A manufacturer or distributor paid an annual fee of $500. A dealer who sold up to 200 new vehicles paid $100; a dealer who sold 200 to 500 new vehicles paid $150; 500 to 1,000 new vehicle sales brought the fee to $200; and a dealer selling more than 1,000 new vehicles now paid $250. The representative fee increased to $50. 19 Annual license fees were raised again in 1987. Each manufacturer and distributor was assessed $750 for their annual license. A franchised dealer paid an annual license fee based on the number of new vehicle sales, ranging from $150 to $450. Each representative paid $75, and converters now paid $250. 20 This was the year that a new Dodge Dakota went for $17,958; the U.S. stock market crashed on Oct. 19, falling 22.6%; and a popular movie was “Fatal Attraction.” 21 The 72nd Legislature, R.S., raised license fees again in 1991 – the same year the internet went public, and a new Ford Explorer XL 4x4 was over $30,000. 22 License fees increased for a manufacturer and distributor to $825, and for dealers, the fee increase ranged from $165 to $495. A representative license went to $85; a converter’s license fee increased to $275; and now, if a dealer amended their license, a fee of $25 was assessed. 23 Lessors and lease facilitators came under the agency’s jurisdiction in 1995. A lessor’s license ranged from $175 to $750, depending upon the number of vehicles leased, and a lease facilitator paid $375. 24 Not since 1995 has the legislature increased license fees; however, as a franchised dealer’s new motor vehicle sales increase, so does their license fee. That year, the legislature increased the license fee for a manufacturer and distributor to $900 plus $20 for each franchised dealer. Franchised dealers saw an increase in their license for annual new vehicle sales: for 200 or less, $175; 200 – 400, $275; 400 – 800, $400; 800 – 1,200, $500; 1,200 – 1,600, $625; and, more than 1,600, $750. For each representative, $100, and each converter, $375. 25 Nineteen-ninety-five (1995) was when a jury found O.J. Simpson not guilty and awarded the movie “Forrest Gump” six Oscars. A new VW Jetta GL sold for $24,714, and a new Oldsmobile Cutlass Ciera sedan listed for $27,900. 26 In 1997, the legislature added a new $100 license fee category. This new category was for a dealership’s service- only location, separate from the dealership, in which a franchised dealer offers no new motor vehicle for sale but performs warranty service on vehicles that the dealer is franchised and licensed to sell. 27 That was the same year “Titanic” grossed $2.1 billion, setting a box office record, and a new Plymouth Voyager cost $28,272. 28 Although the categories of licensees today have increased since 1971, the agency’s license remains instrumental to doing business in Texas, as no person may engage in business as a dealer, manufacturer, distributor, converter, vehicle lessor, or vehicle lease facilitator without holding the requisite license from the agency. 29  TEXAS MOTOR VEHICLE CODE — CONTINUED ON PAGE 12