BILL ANALYSIS
C.S.H.B. 2599
By: Kubiak
04-12-95
Committee Report (Substituted)
BACKGROUND
Over 125,000 autos were stolen in Texas in 1993 with a value of 600
million dollars. These vehicles are then sold with switched
identification plates or dismantled by "chop shops" and sold to
both legitimate and illegitimate repair facilities. Current law,
(Vernon's Texas Revised Civil Statutes, Article 6687) does not
provide for the licensing of salvage dealers and salvage vehicle
rebuilders.
PURPOSE
House Bill 2599 will license salvage vehicle dealers and limit
transfer of vehicles and vehicle titles to those entities that are
licensed creating a workable method for law enforcement to track
salvage and non-repairable vehicles and titles.
RULEMAKING AUTHORITY
Section 1.02 specifically requires the Texas Department of
Transportation (TxDOT) to adopt rules for the administration of
this act. These rules govern Sec. 2.01, 2.02, 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 2.09, 4.01, 4.02. These rules also impact
Section 7(c) which places a time limit on the adoption of such
rules.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 1, Title 116.
Part 1 Revises statutes
Sec. 1.01 Adds Definitions of (1)actual cash value, (2)automobile
Recycler, (3)commission, (4)department, (5)late model salvage
vehicle, (6)major component part, (7)motor vehicle,
(8)nonrepairable vehicle, (9)nonrepairable vehicle certificate of
title, (10)person, (11)salvage part, and (12)salvage vehicle,
(13)salvage vehicle agent, (14)salvage vehicle certificate of
title, (15)salvage vehicle dealer, and (16)salvage vehicle record.
Sec. 1.02 allows the Texas Transportation Commission to adopt new
rules and (b)set reasonable fees to administer this act.
Sec. 1.03 Determination of estimated costs of parts and labor by
use of rate and time allocations commonly assessed in the repair
industry.
Part 2 sets license requirements.
Sec. 2.01 Requires licensing to act as an automobile recycle,
salvage vehicle dealer as an agent. Exempts insurance companies
operating within the state.
Sec. 2.02 Sets forth guidelines for license applications.
Sec. 2.03 Sets forth guidelines for corporate or partnership
license applications.
Sec. 2.04 Sets forth guidelines for out-of-state dealer
applications.
Sec. 2.05 Classifies salvage vehicle dealers according to activity
performed by the dealers.
Sec. 2.06 Requires Texas Department of Transportation to
investigate applicant's qualifications within fifteen days.
Sec. 2.07 Requires Texas Department of Transportation to issue
license to applicants meeting necessary qualifications and paying
necessary fees.
Sec. 2.08 Sets guidelines for license renewal.
Sec. 2.09 Requires registration of business locations.
Part 3 sets forth duties of license holder.
Sec. 3.01 Sets forth guidelines for dealers to assign and transfer
titles.
Sec. 3.02 Requires salvage vehicle dealers to maintain proper
records.
Sec. 3.03 Sets forth requirements for transfer of vehicles and
vehicle titles.
Sec. 3.04 Limits salvage vehicle to no more than two agents.
Part 4 sets forth disciplinary actions and penalties.
Sec. 4.01 Requires Texas Department of Transportation to adopt
rules for disciplinary actions and subjects proceeding to Chapter
2001, Government Code.
Sec. 4.02 Establishes as a Class "A" Misdemeanor anyone acting as
(a)a salvage vehicle dealer, or (b)salvage vehicle agent, without
a license issued under this article.
SECTION 2. Amends Article 6687-2a Vernon's Texas Civil Statutes as
follows:
Subsection (1) is amended to replace motor vehicle salvage dealer
with salvage vehicle dealer with the meaning assigned by Article
6687-1A, Revised Statutes.
(2)defines component part
(3)defines front-end assembly
(4)defines tail section
(5)defines federal safety sticker
(6)defines interior component part as front or rear seat or radio
of a motor vehicle.
(7)defines special assembly part as tires, wheels, tailgate, or
removable glass top of a motor vehicle.
(8)defines motor vehicle under V.T.C.S., Article 6701d, Section 2,
Subsection B
(b)replaces motor vehicle salvage dealer with salvage vehicle
dealer and State Department of Highways and Public Transportation
with Texas Department of Transportation.
(c)is amended to indicate that a salvage vehicle dealer must keep
an inventory of all used parts he purchases and delivers. This
inventory must include the date of purchase or delivery, the name
and address of the seller, the license number of the delivery
vehicle, a description of the items purchased, the identification
number of the salvage vehicle.
(d)is amended to add Subdivision (2) including used parts delivered
by commercial freight carriers.
Subsections (e-o) are renamed and amended to replace motor vehicle
salvage dealer with salvage vehicle dealer and State Department of
Highways and Public Transportation with Texas Department of
Transportation.
SECTION 3. Amends Article 6687-2 as follows:
Subsections (a) and (b) replace motor vehicle salvage dealer with
salvage vehicle dealer and State Department of Highways and Public
Transportation with Texas Department of Transportation.
SECTION 4. Amends Article 6687-2g Subsections (a) and (f) to
replace motor vehicle salvage dealer with salvage vehicle dealer.
SECTION 5. Repeals Subsection (b), Article 6687-2b, Revised
Statutes.
SECTION 6. Does not require a person to act as a Salvage Vehicle
Dealer until March 1, 1996.
SECTION 7. Effective Date of September 1, 1995 except as provided
under Subsection (b). Subsection (b) indicates that Revised
Statutes, Article 6687-1A, Sections 2.01 and 4.02 take effect March
1, 1996.
Subsection (c) requires that TxDOT adopt rules for the regulation
of salvage dealers no later than December 1, 1995.
SECTION 8. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.H.B. 2599 is essentially the same as the original version. The
Committee Substitute to H.B. 2599 does not apply to auto recyclers
or to scrap metal processors. The introduced version of H.B. 2599
is amended in the following sections: SECTION 1. Part 1. GENERAL
PROVISIONS. Sec. 1.01 Definitions; Salvage Dealers and Automobile
Recyclers do not include scrap metal merchants.
Part 2. LICENSE REQUIREMENTS. Sec 2.01 Requires licensing to act as
an automobile recycle, salvage vehicle dealer as an agent. Exempts
insurance agents. Sec. 2.05 Classifies salvage vehicle dealers
according to activity performed by the dealers. Does not include
auto recycler or vehicle scrap metal processor.
Part 3. DUTIES OF LICENSE HOLDER. Sec. 3.03 Sets forth requirements
for transfer of vehicles and vehicle titles. Exempts auto
recyclers and scrap metal processors.
SUMMARY OF COMMITTEE ACTION
Pursuant to a public notice posted on March 30, 1995 at 6:02 p.m.,
the House Committee on Transportation met in a public hearing on
Wednesday, April 5, 1995 at 2:00 p.m. or upon adjournment, in room
E1.014 of the Capitol Extension and was called to order at 6:30
p.m. by the Chair, Representative Clyde Alexander after the House
recessed. The Chair laid out H.B. 2599 and recognized
Representative Kubiak to explain H.B. 2599. The Chair recognized
the following persons who testified in support of H.B. 2599. Paul
Dugger, Representing himself and law enforcement. Wanda Lindeman,
Owner Auto Dismantler. The Chair recognized the following persons
who testified in opposition to H.B. 2599: Robert Grube, Farmers
Insurance Group. Eugene Palmer, Allstate Insurance Company. Bill
Tallas, State Farm Insurance Company. Milford Pat Smith, Farm
Bureau Insurance Companies. Charles Wirth, State Farm Insurance
Company. Jonna Kay Hogeland, National Association of Independent
Insurers. Marcia McAllister, Insurance Auto Auctions, Inc. The
Chair left H.B. 2599 pending before the Committee. Pursuant to a
public notice posted on April 7, 1995 at 5:04 p.m., the House
Committee on Transportation met in a public hearing on Wednesday,
April 12, 1995, at 2:00 p.m., or upon adjournment, in Room E1.014
of the Capitol Extension and was called to order at 3:58 p.m. by
the Chair, Representative Clyde Alexander. The Chair laid out H.B.
2599 by Kubiak, which was pending before the Committee.
Representative Price laid out the Committee Substitute to H.B.
2599, and without objection, the Substitute was adopted.
Representative Alonzo moved that the Committee report H.B. 2599, as
substituted, to the full House with the recommendation that it do
pass. The motion prevailed by the following vote: Ayes (5), Nayes
(1), Absent (3), Present not voting (0).