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).