BILL ANALYSIS H.B. 1227 By: Bosse (Whitmire) Economic Development 05-19-95 Senate Committee Report (Unamended) BACKGROUND A 1985 state law allows mechanics to repossess vehicles from people who pay repair bills with bad checks. The intention of the law is to protect mechanics, but it has led some repossession companies to engage in unscrupulous business practices due to vagueness in the language of the current statute. A vehicle owner must pay the repair debt and repossession and storage costs in order to recover the vehicle. Language in a 1993 amendment limits the repossession charge to a "reasonable fair market value." This provision has been manipulated to the advantage of some repossession companies. PURPOSE As proposed, H.B. 1227 allows repossession of a motor vehicle due to a default on the payment of repair charges by the vehicle owner as a result of insufficient funds. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 70.001, Property Code, by amending Subsections (b), (e), and (f) and by adding Subsection (g), as follows: (b) Provides that the lien provided by this section continues to exist and the worker is entitled to possession of the vehicle, motorboat, vessel, or outboard motor (vehicle) until the amount due is paid unless the vehicle is possessed by a person who became a bona fide purchaser of the vehicle after a stop payment order was made if a worker relinquishes possession of a vehicle in return for a check or money order, rather than a written order for payment, on which payment is stopped. (e) Prohibits a worker from transferring, rather than selling for cash or other consideration to a third party, and prohibits a person who performs repossession services from accepting a check or money order that is received as payment for repair of an article and that is returned to the worker because of insufficient funds or no funds, because the drawer or maker of the check or money order has no account, or because the account on which the check or money order is drawn has been closed. (f) Provides that a person commits a Class B misdemeanor for transferring or accepting, rather than selling, a check or money order in violation of Subsection (e). (g) Requires a motor vehicle that is repossessed under this section to be delivered to the location where the repair was performed or a vehicle storage facility licensed under Article 6687-9a, V.T.C.S. (Vehicle Storage Facility Act). Requires the motor vehicle to remain at the repair location or a licensed vehicle storage facility at all times until the motor vehicle is lawfully returned to the motor vehicle's owner or lienholder or is disposed of as provided by this subchapter. SECTION 2. Effective date: September 1, 1995. SECTION 3. Emergency clause.