BILL ANALYSIS
C.S.H.B. 2151
By: Bosse (Cain)
State Affairs
5-12-95
Senate Committee Report (Substituted)
BACKGROUND
Over 125,000 motor vehicles were stolen in Texas in 1993, with a
value of $600 million. These vehicles are then sold with switched
identification plates or dismantled by "chop shops" and sold to
both legitimate and illegitimate repair facilities. Many of these
parts end up on vehicles that are totaled and cannot be safely
rebuilt, but are ultimately resold to the unsuspecting public.
Current law does not adequately provide for tracking the transfer
of vehicle or vehicle titles.
PURPOSE
As proposed, C.S.H.B. 2151 sets forth regulations regarding the
issuance, recording, and surrender of certificates of title for a
late model salvage motor vehicle or a nonrepairable vehicle so that
law enforcement officials may track the transfer of salvage and
nonrepairable vehicle titles, including requiring an insurance
company to surrender the title to a vehicle upon payment of a
insurance claim as well as provide for specific certificates of
title for salvage vehicles or nonrepairable parts vehicles;
provides a criminal penalty.
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 Article 6687-1, V.T.C.S. (Certificate of Title
Act), by adding Section 37A, to define "actual cash value,"
"automobile recycler," "casual sale," "insurance company," "late
model motor vehicle," "late model salvage motor vehicle," "major
component part," "nonrepairable motor vehicle," "nonrepairable
motor vehicle certificate of title," "older model motor vehicle,"
"other negotiable evidence of ownership," "out-of-state buyer,"
"person," "rebuilder," "salvage motor vehicle certificate of
title," and "salvage vehicle dealer."
(b)(1) Requires a licensed insurance company (insurer) that
acquires ownership of a late model salvage motor vehicle
through payment of a claim to surrender a properly assigned
certificate of title (title) to the department, on a form
prescribed by the department.
(2) Requires the insurer to apply for a salvage title for a
vehicle described by Subsection (a)(6). Requires the
insurer to apply for a nonrepairable title for a vehicle
described by Subsection (a)(8).
(3) Prohibits an insurer from selling a late model salvage
motor vehicle unless the department has issued a salvage or
nonrepairable title for the vehicle or a comparable
ownership document has been issued by another state or
jurisdiction for the vehicle (comparable document).
(4) Authorizes an insurer to sell a late model salvage motor
vehicle, or assign a salvage or nonrepairable title, only to
a salvage vehicle dealer (dealer), an out-of-state buyer, a
buyer in a casual sale at auction, or a person described by
Article 6687-2b(g), V.T.C.S. (certain parties). Provides
that if the vehicle is not a late model salvage or
nonrepairable vehicle, the insurer is not required to
surrender the regular title for the vehicle or to be issued
a salvage or nonrepairable title.
(5) Requires the insurer on delivery of the vehicle to a
buyer to deliver a properly assigned title for the vehicle
if an insurer acquires ownership of a vehicle other than a
late model salvage or a nonrepairable vehicle.
(6) Provides that this section does not apply to a vehicle
that has been stolen and recovered unless the damage causes
the vehicle to be a salvage or nonrepairable vehicle.
(c)(1) Requires the insurer to submit to the department a
report stating certain information if after a payment of a
total loss claim on a late model salvage or nonrepairable
vehicle an insurer does not acquire ownership of the vehicle.
(2) Prohibits the owner of a late model salvage vehicle to
which this section applies from transferring ownership of
the vehicle by sale or otherwise unless the department has
issued a salvage or nonrepairable title for the vehicle or
a comparable ownership document.
(d)(1) Prohibits a person that owns a late model salvage
vehicle from selling, transferring, or releasing the vehicle
to a person other than certain parties, and requires the
person to deliver to that person a properly assigned title.
Requires the purchaser, if the assigned title is not a salvage
title, a nonrepairable title, or a comparable document, to
surrender the title to the department and apply for a salvage
or a nonrepairable title within 10 days after receiving the
title.
(2) Requires a dealer that acquires ownership of a late
model salvage vehicle for the purpose of dismantling,
scrapping, or destroying the vehicle to submit to the
department a report stating that the dealer will perform
such actions accompanied by a properly assigned regular
certificate, salvage or nonrepairable title, or a comparable
document.
(3) Requires the department to issue the dealer a receipt
for the title, salvage and nonrepairable title, or a
comparable document.
(e) Requires a dealer that acquires an older model vehicle for
the purpose of dismantling, scrapping, or destroying the
vehicle and that receives a properly assigned title to perform
submit certain information to the department and keep a record
of the vehicle for a certain within 31 days after the dealer
acquires the vehicle.
(f) Requires a person, other than a dealer or insurer, that
acquires ownership of a late model salvage or a nonrepairable
vehicle which has not been issued a salvage or nonrepairable
title, or a comparable document to, before selling the
vehicle, surrender the properly assigned title and apply to
the department for a salvage or nonrepairable title, as
appropriate.
(g) Authorizes the owner of a late model salvage vehicle that
has been issued a salvage or a nonrepairable title to sell the
vehicle only to certain parties.
(h) Sets forth requirements for an application for a salvage
or nonrepairable title.
(i)(1) Requires the department within six days of receiving a
complete application and the prescribed fee to issue the
applicant a salvage or nonrepairable title, as appropriate.
(2) Requires a nonrepairable title to state that the vehicle
may not be issued a regular title or registered in this
state and may only be used for parts or scrap metal, except
as provided by Subsections (n) and (p).
(j) Entitles a person who holds a salvage title to possess,
record a lien on, transport, and transfer ownership of the
vehicle. Prohibits a vehicle for which a salvage title is the
most current title from being operated on a public highway.
(k)(1) Authorizes a vehicle for which a salvage title has been
issued a regular title only after application and only if the
application meets certain requirements.
(2) Authorizes the Department of Public Safety (DPS) to
prescribe a fee for conducting an inspection and providing
the statement required by this subsection.
(l)(1) Requires the department to issue the applicant a title
on receipt of a complete application accompanied by the peace
officer's statement and the appropriate fee for the title.
(2) Sets forth requirements for the title issued under this
subsection.
(m)(1) Requires the department to issue the applicant a title
or other appropriate document for the vehicle on proper
application by the owner of a vehicle brought into this state
from another state or jurisdiction that has on any title
issued a "rebuilt," "salvage," "nonrepairable," or analogous
notation.
(2) Sets forth requirements for a title or other appropriate
document issued under this subsection.
(n) Entitles a person who holds a nonrepairable title to
possess, dismantle, scrap, destroy, transport, or rebuild the
vehicle; prohibits the person from operating the vehicle on a
public highway; and authorizes the person to transfer
ownership of the vehicle under certain circumstances.
(o) Provides that a person commits an offense if the person
applies to the department for a title and knows that the
vehicle is a nonrepairable vehicle that has been rebuilt,
except as provided by Subsection (p).
(p)(1) Authorizes a person who rebuilds a nonrepairable
vehicle to apply to the department for a title if the
application meets certain requirements.
(2) Authorizes the DPS to prescribe a fee for conducting the
inspection and providing the statement required by this
subsection.
(3) Requires the department to issue the applicant a title
for the vehicle that conforms to Subsection (1)(2) on
receipt of an application and fee for the title.
(q) Sets forth requirements for determining the estimated
costs for repairs and labor.
(r) Requires the department to print salvage and nonrepairable
titles in a colors that show that each is the ownership
document for a late model salvage or nonrepairable vehicle.
(s) Requires a rebuilder to possess a title, a salvage title,
a nonrepairable title, or a comparable document that is in the
rebuilder's inventory and being offered for resale.
(t) Authorizes a person that rebuilds a late model salvage
vehicle for which the department has issued a salvage title or
who assembles a salvage vehicle from component parts.
Requires a title under this subsection to bear the words
"REBUILT SALVAGE."
(u) Provides that the department, or an agent, officer, or
employee of the department, is not liable to a person damaged
or injured by an act or omission relating to the issuance of
a title, salvage title, or nonrepairable title.
(v)(1) Provides that this section does not apply to or
preclude or prohibit any sales to, purchases by, or other
transactions by or with, a person described by Subsection (g),
Article 6687-2b, V.T.C.S., with exceptions.
(2) Requires a person described by Subsection (g), Article
6687-2b, V.T.C.S., to submit to the department the title or
equivalent document that the person receives in conjunction
with the purchase of a vehicle within 60 days after the date
of receipt of the title or equivalent document.
(3) Applies this section to a transaction with a person
described by Subsection 9(g), Article 6687-2b, V.T.C.S., in
which a vehicle is sold or delivered to the person for the
purpose of reuse or resale as a vehicle or as vehicle parts.
(w) Prohibits an owner to whom Section 152.065, Tax Code,
applies from retaining for use or using a motor vehicle that
has been issued a certificate of title under Subsection (l)
for a usual commercial purpose of that owner.
(x) Provides that this section does not prohibit the owner of
a late model salvage vehicle or a nonrepairable vehicle from
selling the vehicle to any person, if the vehicle is so
classified solely because of water damage caused by flood
conditions; or limit the ability or authority of an insurance
company to adjust or settle a claim for loss on a motor
vehicle.
SECTION 2. Amends Section 62, Article 6687-1, V.T.C.S. (Certificate
of Title Act), as follows:
Sec. 62. (a) Created from existing text. Makes a conforming
change.
(b) Provides that a person who violates Section 37A or a
rule adopted under Section 37A commits a Class A
misdemeanor.
SECTION 3. Repealer: Section 37, Article 6687-1, V.T.C.S. (Junking
Motor Vehicle; Rebuilding or Assembling Motor Vehicle).
SECTION 4. Provides that this Act takes effect September 1, 1995,
but only if H.B. 2599 is enacted and becomes law. Provides that if
H.B. 2599 does not become law, this Act has no effect.
SECTION 5. Emergency clause.