BILL ANALYSIS S.B. 1445 By: Brown (Siebert) 04-26-95 Committee Report (Unamended) BACKGROUND Under current law, it is the duty of the purchaser of a motor vehicle, whether the purchaser is purchasing the vehicle from a dealer or an individual, to transfer title of the vehicle, register the motor vehicle in the purchaser's name and remit the motor vehicle sales tax due on the transaction. The owner/seller of the vehicle has no duty other than to deliver the certificate of title to the purchaser. In certain transactions in which a dealer is the seller, the law takes notice of the fact that, irrespective of which party has the legal duty to transfer title, lender requirements dictate that the actual work will be done in most cases by the seller. PURPOSE As proposed, C.S.S.B. 1445 amends the Tax Code relating to transfer of title to a motor vehicle, the collection and administration of the motor vehicle sales tax, and certain disclosures that must be made to the purchaser of a motor vehicle. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 152.001, Tax Code, to redefine "retail sale" and "motor vehicle," and to redesignate existing Subsection (16). SECTION 2. Amends Section 152.021(a), Tax Code, to make a nonsubstantive change. SECTION 3. Amends Chapter 152, Tax Code, by adding Section 152.0411, as follows: Sec. 152.0411. COLLECTION BY SELLERS. (a) Requires a seller who makes a sale subject to the sales tax imposed by Section 152.021 of this chapter to add the amount of the tax to the sales price, and when the amount of the tax is added it is a debt of the purchaser to the seller until paid; and if unpaid, it is recoverable at law in the same manner as the original sales price. (b) Requires the seller to collect the tax from the purchaser and remit it to the tax assessor-collector in the time and manner provided by law. (c) Provides that this section applies only to the sale of a vehicle that is to be registered in Texas. Requires the purchaser to comply with the terms of Section 152.092 of this code. (d) Provides that this section does not apply to a seller-financed sale. SECTION 4. Amends Section 152.044, Tax Code, as follows: Sec. 152.044. PAYMENT BY SELLER. (a) Makes conforming changes. Deletes text regarding a joint statement. (b) Requires the comptroller to ascertain compliance with the terms of this section. Provides that the seller is liable for the amount of the tax, plus penalty and interest, if any, if the comptroller on audit of the records of any person finds that the documents necessary to tile and register a vehicle in the name of the purchaser of the vehicle have not been executed and delivered to the tax assessor-collector, together with the tax due, if any. SECTION 5. Amends Section 27, Article 6687-1, V.T.C.S. (Certificate of Title Act), as follows: Sec. 27. (a) Created from existing text. (b) Requires the seller of a motor vehicle to apply for the registration of, and Texas certificate of title in the name of the purchaser of the motor vehicle that is the subject of the sale. Requires the seller to file with the appropriate designated agent all documents necessary to transfer title to the vehicle and register the vehicle in the name of the purchaser and, at the same time, to remit motor vehicle sales tax if any. Provides that the duty placed on the seller by this section is solely that of the seller and applies both to a first sale and a subsequent sale. (c) Requires the seller to complete the transfer of title and registration requirements placed on the seller by Subsection (b) of this section in the time and manner provided by law. SECTION 6. Amends Section (b), Article 6.10, Title 79, V.T.C.S., to delete text of a buyer's order and retail installment contract stating that buyers may avoid payment of the fee to the seller by handling the documents and performing the services relating to the closing of the sale. SECTION 7. Amends Subsection (h-1), Article 7.01, V.T.C.S., to make conforming changes. SECTION 8. Effective date: January 1, 1996. SECTION 9. Emergency clause. SUMMARY OF COMMITTEE ACTION Pursuant to a public notice posted on April 21, 1995, at 4:04 p.m., the House Committee on Transportation met in a public hearing on Wednesday, April 26, 1995, at 2:00 p.m., or upon adjournment, in Room E1.014 of the Capitol Extension and was called to order at 6:13 p.m. by the Chair, Representative Clyde Alexander. Pursuant to Rule 4, Section 11 of the House Rules the Chair laid out S.B. 1445 by Brown, which is the companion document to H.B. 1730. Representative Bosse moved that the Committee report S.B. 1445, without amendments, to the full House with the recommendation that it do pass. The motion prevailed by the following vote: Ayes (8), Nayes (0), Absent (1), Present not voting (0).