bill rewrites bonded title and salvage paperwork rules

The text as introduced · 1,670 words

89R8973 GP-D

By: Paul
H.B. No. 4368

A BILL TO BE ENTITLED

AN ACT

relating to title requirements, identification number inspections,

and evidence of ownership for certain vehicles.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 501.032, Transportation Code, is amended

by amending Subsection (a) and adding Subsection (a-1) to read as

follows:

(a) A [ In addition to any requirement established by

department rule, a ] motor vehicle, trailer, or semitrailer must

have an identification number inspection under Section 501.0321 if:

(1) the department does not have a motor vehicle

record for the motor vehicle, trailer, or semitrailer in the

department's registration and title system, and the owner of the

motor vehicle, trailer, or semitrailer is filing a bond with the

department under Section 501.053;

(2) the motor vehicle, trailer, or semitrailer was

last titled or registered outside of the United States and imported

into the United States; or

(3) the owner or person claiming ownership requires an

assigned or reassigned identification number under Section

501.033.

(a-1) The department by rule may establish additional

categories of motor vehicles, trailers, or semitrailers not

specified in Subsection (a) that are required to have vehicle

identification number inspections under Section 501.0321.

SECTION 2. Section 501.0321(a), Transportation Code, is

amended to read as follows:

(a) An inspection required under Section 501.032 or a rule

adopted under that section must verify, as applicable, the identity

of:

(1) a motor vehicle;

(2) a trailer or semitrailer;

(3) a frame, body, or motor of a motor vehicle; or

(4) an item of equipment not required to be titled but

that may be registered under Chapter 502 or issued licensed plates

under Chapter 504.

SECTION 3. Section 501.053, Transportation Code, is amended

by amending Subsections (a) and (c) and adding Subsections (b-1)

and (b-2) to read as follows:

(a) As an alternative to the procedure provided by Section

501.052, the person may obtain a title by filing a bond with the

department if the vehicle is in the possession of the applicant and:

(1) there is no security interest on the vehicle;

(2) any lien on the vehicle is at least 10 years old;

[ or ]

(3) the person provides a release of all liens less

than 10 years old; or

(4) the lienholder of any lien less than 10 years old

has gone out of business, the security interest on the vehicle was

not transferred to or otherwise acquired by another person, and the

applicant provides sufficient evidence of those facts in the form

and manner prescribed by department rule [ with bond ].

(b-1) On receipt of a bond filing under this section, the

department shall notify any recorded owner or lienholder of the

vehicle of the bond filing.

(b-2) If a person who files a bond under this section does

not hold a general distinguishing number issued under Subchapter B,

Chapter 503, the department:

(1) may only issue title on or after the 30th day after

the date on which the person submits an application for title under

Section 501.023; and

(2) may not issue title if any recorded owner or

lienholder with an interest in the vehicle objects to the issuance

of the title.

(c) An interested person has a right of action to recover on

the bond for a breach of the bond's condition. The aggregate

liability of the surety to all persons may not exceed the amount of

the bond. Failure to object to the issuance of title under

Subsection (b-2)(2) does not waive the right of an interested

person to bring an action to recover on the bond filed under this

section.

SECTION 4. Section 501.091, Transportation Code, is amended

by adding Subdivision (1-a) to read as follows:

(1-a) "Auction sales receipt" means a document

certifying the sale of a motor vehicle at auction by a law

enforcement agency or public sale for a lien foreclosure.

SECTION 5. The heading to Section 501.0925, Transportation

Code, is amended to read as follows:

Sec. 501.0925. INSURANCE COMPANY NOT REQUIRED TO SURRENDER

EVIDENCE OF OWNERSHIP [ CERTIFICATES OF TITLE ] IN CERTAIN

SITUATIONS.

SECTION 6. Sections 501.0925(a), (b), (c), (d), and (f),

Transportation Code, are amended to read as follows:

(a) An insurance company that acquires, through payment of a

claim, ownership or possession of a motor vehicle covered by a

[ certificate of ] title or a manufacturer's certificate of origin

that the company is unable to obtain may obtain from the department

not earlier than the 30th day after the date of payment of the

claim:

(1) a salvage vehicle title for a salvage motor

vehicle;

(2) a nonrepairable vehicle title for a nonrepairable

motor vehicle; or

(3) a [ regular certificate of ] title for a motor

vehicle other than a salvage motor vehicle or a nonrepairable motor

vehicle.

(b) An application for a title under Subsection (a) must be

submitted to the department on a form prescribed by the department

and include:

(1) a statement that the insurance company has

provided at least two written notices attempting to obtain the

evidence of ownership [ certificate of title ] for the motor vehicle;

and

(2) evidence acceptable to the department that the

insurance company has made payment of a claim involving the motor

vehicle.

(c) An insurance company that acquires, through payment of a

claim, ownership or possession of a motor vehicle covered by a

[ certificate of ] title or a manufacturer's certificate of origin

for which the company is unable to obtain proper assignment of the

title or manufacturer's certificate of origin [ certificate ] may

obtain from the department not earlier than the 30th day after the

date of payment of the claim:

(1) a salvage vehicle title for a salvage motor

vehicle;

(2) a nonrepairable vehicle title for a nonrepairable

motor vehicle; or

(3) a [ regular certificate of ] title for a motor

vehicle other than a salvage motor vehicle or a nonrepairable motor

vehicle.

(d) An application for a title under Subsection (c) must be

submitted to the department on a form prescribed by the department

and include:

(1) a statement that the insurance company has

provided at least two written notices attempting to obtain a proper

assignment of the evidence of ownership [ certificate of title ]; and

(2) the evidence of ownership [ certificate of title ].

(f) An insurance company that acquires, through payment of a

claim, ownership or possession of a motor vehicle, salvage motor

vehicle , or nonrepairable motor vehicle covered by an out-of-state

title or out-of-state ownership document may obtain from the

department a title, salvage vehicle title , or nonrepairable vehicle

title , as appropriate, if:

(1) the motor vehicle was damaged, stolen, or

recovered in this state;

(2) the motor vehicle owner from whom the company

acquired ownership resides in this state; or

(3) otherwise allowed by department rule.

SECTION 7. The heading to Section 501.100, Transportation

Code, is amended to read as follows:

Sec. 501.100. APPLICATION FOR [ REGULAR CERTIFICATE OF ]

TITLE FOR SALVAGE VEHICLE.

SECTION 8. Sections 501.100(a) and (f), Transportation

Code, are amended to read as follows:

(a) The owner of a motor vehicle for which a nonrepairable

vehicle title was issued prior to September 1, 2003, [ or ] for which

a salvage vehicle title or salvage record of title has been issued ,

or for which a comparable out-of-state ownership document for a

salvage motor vehicle has been issued, may apply for a title under

Section 501.023 after the motor vehicle has been repaired, rebuilt,

or reconstructed and, in addition to any other requirement of law,

only if the application:

(1) describes each major component part used to

repair , rebuild, or reconstruct the motor vehicle;

(2) states the name of each person from whom the parts

used in repairing, rebuilding, or reconstructing [ assembling ] the

vehicle were obtained; and

(3) shows the identification number required by

federal law to be affixed to or inscribed on the part.

(f) The department may not issue a [ regular ] title for a

motor vehicle based on a:

(1) nonrepairable vehicle title issued on or after

September 1, 2003, or comparable out-of-state ownership document or

record, or evidence of a notation described by Section

501.09113(a)(2) on an out-of-state ownership document or record in

the National Motor Vehicle Title Information System ;

(2) receipt issued under Section 501.1003(b); or

(3) certificate of authority issued under Chapter 683 .

SECTION 9. Section 501.1003, Transportation Code, is

amended to read as follows:

Sec. 501.1003. SALVAGE VEHICLE DEALER RESPONSIBILITIES.

(a) If a salvage vehicle dealer acquires ownership of a

nonrepairable motor vehicle or salvage motor vehicle for the

purpose of dismantling, scrapping, or destroying the motor vehicle,

the dealer shall, before the 31st day after the date the dealer

acquires the motor vehicle, submit to the department a report

stating that the motor vehicle will be dismantled, scrapped, or

destroyed. The dealer shall:

(1) make the report in a manner prescribed by the

department; and

(2) submit with the report a properly assigned

manufacturer's certificate of origin, [ regular certificate of ]

title, nonrepairable vehicle title, salvage vehicle title, auction

sales receipt, or comparable out-of-state ownership document for

the motor vehicle.

(b) After receiving the report and title , manufacturer's

certificate of origin, auction sales receipt, or document, the

department shall issue the salvage vehicle dealer a receipt for the

manufacturer's certificate of origin, [ regular certificate of ]

title, nonrepairable vehicle title, salvage vehicle title, auction

sales receipt, or comparable out-of-state ownership document.

(c) The department shall adopt rules to notify the salvage

vehicle dealer if the vehicle was not issued a printed title, but

has a record of title in the department's titling system.

SECTION 10. Section 501.053, Transportation Code, as

amended by this Act, applies only to a bond for a motor vehicle

title that is filed on or after the effective date of this Act.

SECTION 11. This Act takes effect September 1, 2025.