Pub. 62 2021-2022 Issue 1

13 FALL 2021 concerns, the legislature provided for a stand-alone code section declaring that a manufacturer or distributor may not own an interest in a dealer or dealership; operate or control a dealer or dealership, or act in the capacity of a dealer except under certain stated and limited exceptions provided for in the statute. 38 Although amendments have been made since its passage regarding a manufacturer’s or distributor’s prohibited ownership, operation, control, or acting in the capacity of a dealer, in 2019, the 86th Legislature determined to look to the type of vehicle that is manufactured or distributed for this prohibition, as well as retaining the prohibition for ownership, operation, control, or acting in the capacity of a non-franchised dealer. 39 Conclusion This statute has been through numerous legislative iterations, and it continues to serve Texas and Texans. The legislature reviews and amends the statute continuously. The responsibilities and rights as deliberated upon and passed by the legislature consider the public, the consumer, the licensees, and the State. The law does not “protect” dealers or anyone else. The law is there to keep a very complex distribution system under some semblance of control for the benefit of everyone: manufacturers, dealers, consumers, and the public alike. If the system is going to work, it must work for all involved. The motor vehicle industry is ever-changing, and the franchised dealer continuously adapts to meet the needs of the consumer, the dealership’s community, the dealership’s employees, the manufacturer, and the public. The wisdom exhibited by the men and women of the 62nd Legislature 50 years ago continues today, i.e., to ensure a sound system of distributing and selling motor vehicles. The charge from the legislature to the Texas Department of Motor Vehicles, its Board, directors, and staff remains central to the statute’s stated policy and purpose and its functionality. On behalf of all TADA members, a very Happy 50th to the past and present board, directors, agency, and staff who work(ed) to uphold the statute these 50-plus years, and to many more anniversaries!  1 Act of April 7, 1971, 62nd Leg., R.S., ch. 51, 1971 Tex. Gen. Laws 89. 2 In 1995, independent dealers were incorporated into the statute as well as lessors and lease facilitators (Act of June 8, 1995, 74th Leg., R.S., ch. 357, 1995 Tex. Gen. Laws 2887; Act of June 8, 1995, 74th Leg., R.S., ch. 345, 1995 Tex. Gen. Laws 2869). 3 Id., 1971 Tex. Gen. Laws 90-91. 4 Act of Sept. 1, 1979, 66th Leg., R.S., ch 709, 1979 Tex. Gen. Laws 1726. 5 Act of June 11, 1987, 70th Leg., R.S., ch. 357, 1987 Tex. Gen. Laws 1783. 6 Act of June 11, 1997, 75th Leg., R.S., ch. 639, 1997 Tex. Gen. Laws 2188-2189. 7 Act of June 14, 2005, 79th Leg., R.S., ch. 281, §§7.01 - 7.06, 2005 Tex. Gen. Laws 839-840. 8 Act of Sept. 1, 2009, 81st Leg., R.S., ch. 933, §6.01, 2009 Tex. Gen. Laws 2519. 9 Id., 2009 Tex. Gen. Laws 2485-2486. 10 Id. at 1971 Tex. Gen. Laws 93. 11 Act of June 19, 1983, 68th Leg., R.S., ch. 651, 1983 Tex. Gen. Laws 4143-4146. 12 “Lemon Law Annual Report,” Texas Department of Motor Vehicles, FY 2020. 13 Id. 1971 Tex. Gen. Laws 93-94, 96, 98. 14 Lia Sastric, “The Cost of a Car the Year You Were Born,” https://finance. yahoo.com/news/much-35-263-car-today-193020607.html 15 Id. 1971 Tex. Gen. Laws 95. 16 Id., Lia Sastric. 17 Id. 1979 Tex. Gen. Laws 1730. 18 Id., Lia Sastric.. 19 Id., 1983 Tex. Gen. Laws 4138. 20 Id., 1987 Tex. Gen. Laws 1788. 21 Id., Lia Sastric. 22 Id., Lia Sastric. 23 Act of June 16, 1991, 72nd Leg., R.S., ch. 501, 1991 Tex. Gen. Laws 1754-1755. 24 Id., 1995 Tex. Gen. Laws 2872 - 2873. 25 Id., 1995 Tex. Gen. Laws 2893. 26 Id., Lia Sastric. 27 Id., 1997 Tex. Gen. Laws 2196. 28 Id., Lia Sastric. 29 The manufacturer and distributor “representative” license category was repealed in 2019. Act of June 4, 2019, 86th Leg., R.S., ch. 594, 2019 Tex. Gen. Laws 1663. 30 Id., 1971 Tex. Gen. Laws 96. 31 Act of June 10, 1977, 65th Leg., R.S., ch. 357, 1977 Tex. Gen. Laws 948. 32 Id., 1987 Tex. Gen. Laws 1788. 33 Id., 1995 Tex. Gen. Laws 2894. 34 Act of May 28, 1981, 67th Leg., R.S., ch. 235, 1981 Tex. Gen. Laws 557. 35 Id., 1983 Tex. Gen. Laws 4143. 36 Id., 1987 Tex. Gen. Laws 1791. See Act of June 16, 1989, 71st Leg., R.S., ch. 1130, 1989 Tex. Gen. Laws 4669. In this legislative session, the Legislature provided that the “make” of a conversion is that of the chassis manufacturer and the “make” of a motor home is that of the motor home manufacturer. See Id., 1991 Tex. Gen. Laws 1749, 1760. The definition of “ dealer” included any person engaged in the business of buying, selling, or exchanging new motor vehicles at an established and permanent place of business pursuant to a franchise and the definition of “engage in the business of buying, selling, or exchanging new motor vehicles” was dropped from this section. 37 Id., 1995 Tex. Gen. Laws 2900. 38 Act of June 18, 1999, 76th Leg., R.S., ch. 1047, 1999 Tex. Gen. Laws 3875-3876. The Fifth Circuit has upheld the statutory prohibition against vertical integration in Ford Motor Co. v. Bray, 264 F.3d 493 (5th Cir. 2001) and again in International Truck and Engine Corp. v. Bray, 372 F.3d 717 (5th Cir. 2004). 39 Act of June 4, 2019, 86th Leg., R.S., ch. 440, 2019 Tex. Gen. Laws 837-838.