| (a) In the absence of a showing of good cause, an application
for a franchised dealer's license of which a manufacturer or distributor
owns any interest in or has control of the dealership entity must
be submitted to the department electronically in the licensing system
designated by the department no later than 30 days before:
(1) the opening of the dealership;
(2) close of the buy-sell agreement; or
(3) the expiration of the current license.
(b) If a manufacturer or distributor applies for a
franchised dealer's license of which the manufacturer or distributor
holds an ownership interest in or has control of the dealership entity
in accordance with Occupations Code, §2301.476(d) - (f), the
license application must contain a sworn statement from the manufacturer
or distributor that the dealership was purchased from a franchised
dealer and is for sale at a reasonable price and under reasonable
terms and conditions, and that the manufacturer or distributor intends
to sell the dealership to a person not controlled or owned by the
manufacturer or distributor within 12 months of acquiring the dealership,
except as provided by subsection (h) of this section.
(c) A request for an extension of the initial 12-month
period for manufacturer or distributor ownership or control of a franchised
dealership, in accordance with Occupations Code, §2301.476(e),
must be submitted to the department in accordance with subsection
(a) of this section along with a sufficient application to renew the
new motor vehicle dealer's license. The request must contain a detailed
explanation, including appropriate documentary support, to show the
manufacturer's or distributor's good cause for failure to sell the
dealership within the initial 12-month period. The director shall
evaluate the request and determine whether the license should be renewed
for a period not to exceed 12 months or deny the renewal application.
If the renewal application is denied, the manufacturer or distributor
may request a hearing on the denial in accordance with Occupations
Code, Chapter 2301, Subchapter O and the matter will be referred to
SOAH for a hearing under Chapter 224, Subchapter C of this title (relating
to Motor Vehicle, Salvage Vehicle, and Trailer Industry License Enforcement).
(d) Requests for extensions after the first extension
is granted, as provided by Occupations Code, §2301.476(e), must
be submitted at least 120 days before the expiration of the current
license electronically in the licensing system designated by the department.
Upon receipt of a subsequent request, the department shall initiate
a hearing in accordance with Occupations Code, Chapter 2301, Subchapter
O, at which the manufacturer or distributor will be required to show
good cause for the failure to sell the dealership. The manufacturer
or distributor has the burden of proof and the burden of going forward
on the sole issue of good cause for the failure to sell the dealership.
(e) The department shall give notice of the hearing
described in subsection (d) of this section to all other franchised
dealers holding franchises for the sale and service or service only
of the same line-make of new motor vehicles that are located in the
same county in which the dealership owned or controlled by the manufacturer
or distributor is located or in an area within 15 miles of the dealership
owned or controlled by the manufacturer or distributor. Such dealers,
if any, will be allowed to intervene and protest the granting of the
subsequent extension. Notices of intervention by dealers afforded
a right to protest under Occupations Code, §2301.476(e) must
be filed with the department electronically in the licensing system
designated by the department within 15 days of the date of mailing
of the notice of hearing, and a copy must be provided to the manufacturer
or distributor. The department shall reject a notice of intervention
if the notice is not filed at least 30 days before:
(1) the opening of the dealership;
(2) close of the buy-sell agreement; or
(3) the expiration of the current license.
(f) A hearing under subsection (d) of this section
will be referred to SOAH for a hearing under Chapter 224, Subchapter
C of this title (relating to Contested Cases Between Motor Vehicle
Industry License Holders or Applicants). The franchised dealer's license
that is the subject of the hearing will continue in effect until a
final decision on the request for a subsequent extension is issued
by the board.
(g) The procedures described in subsections (d) - (f)
of this section will be followed for all extensions requested by the
manufacturer or distributor after the initial extension.
(h) An application for a new motor vehicle dealer's
license of which a manufacturer or distributor owns any interest in
the dealership entity in accordance with Occupations Code, §2301.476(g)
must contain sufficient documentation to show that the applicant meets
the requirements of Occupations Code, §2301.476(g).
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| Source Note: The provisions of this §215.113 adopted to be effective February 11, 2010, 35 TexReg 883; amended to be effective August 2, 2012, 37 TexReg 5637; amended to be effective February 13, 2017, 42 TexReg 571; amended to be effective June 1, 2024, 49 TexReg 2704 |
