H.B. No. 2151
1-1 AN ACT
1-2 relating to the issuance of titles to certain motor vehicles and
1-3 the charge for title fees, registration fees, and property taxes in
1-4 motor vehicle rental agreements; providing a penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. The Certificate of Title Act (Article 6687-1,
1-7 Vernon's Texas Civil Statutes) is amended by adding Section 37A to
1-8 read as follows:
1-9 Sec. 37A. (a) In this section:
1-10 (1) "Actual cash value" means the market value of a
1-11 motor vehicle as determined:
1-12 (A) from publications commonly used by the
1-13 automotive and insurance industries to establish the value of motor
1-14 vehicles; or
1-15 (B) if the entity determining the value is an
1-16 insurance company, by any other procedure recognized by the
1-17 insurance industry, including market surveys, that is applied by
1-18 the company in a uniform manner.
1-19 (2) "Automobile recycler" means a person in the
1-20 business of dealing in salvage motor vehicles for the purpose of
1-21 dismantling the vehicles to sell used parts or a person otherwise
1-22 engaged in the business of acquiring, selling, or dealing in
1-23 salvage parts for reuse or resale as parts. The term includes a
1-24 dealer in used motor vehicle parts.
2-1 (3) "Casual sale" means the sale at auction of not
2-2 more than one nonrepairable motor vehicle or late model salvage
2-3 motor vehicle to the same person during a calendar year.
2-4 (4) "Insurance company" means a person authorized to
2-5 write automobile insurance in Texas or an out-of-state insurance
2-6 company that pays a loss claim for a motor vehicle in Texas.
2-7 (5) "Late model motor vehicle" means a motor vehicle
2-8 with a model year equal to the then current calendar year or one of
2-9 the five preceding calendar years.
2-10 (6) "Late model salvage motor vehicle" or "salvage
2-11 motor vehicle" means a late model motor vehicle, other than a late
2-12 model vehicle that is a nonrepairable motor vehicle, that is
2-13 damaged to the extent that the total estimated cost of repairs,
2-14 other than repairs related to hail damage but including parts and
2-15 labor, is equal to or greater than an amount equal to 75 percent of
2-16 the actual cash value of the vehicle in its predamaged condition.
2-17 (7) "Major component part" means one of the following
2-18 parts of a motor vehicle:
2-19 (A) the engine;
2-20 (B) the transmission;
2-21 (C) the frame;
2-22 (D) the right or left front fender;
2-23 (E) the hood;
2-24 (F) a door allowing entrance to or egress from
2-25 the passenger compartment of the vehicle;
2-26 (G) the front or rear bumper;
2-27 (H) the right or left quarter panel;
3-1 (I) the deck lid, tailgate, or hatchback;
3-2 (J) the cargo box of a pickup truck;
3-3 (K) the cab of a truck; or
3-4 (L) the body of a passenger vehicle.
3-5 (8) "Nonrepairable motor vehicle" means a late model
3-6 motor vehicle that is damaged or missing a major component part to
3-7 the extent that the total estimated cost of repairs to rebuild or
3-8 reconstruct the vehicle, including parts and labor other than the
3-9 costs of materials and labor for repainting the vehicle and
3-10 excluding sales taxes on the total cost of the repairs, and
3-11 excluding the cost of repairs to repair hail damage, is equal to or
3-12 greater than an amount equal to 95 percent of the actual cash value
3-13 of the vehicle in its predamaged condition.
3-14 (9) "Nonrepairable motor vehicle certificate of title"
3-15 means a document issued by the department that evidences ownership
3-16 of a nonrepairable motor vehicle. A nonrepairable motor vehicle
3-17 certificate of title for a vehicle that is nonrepairable because of
3-18 damage caused exclusively by flood must bear an appropriate
3-19 notation on its face.
3-20 (10) "Older model motor vehicle" means a motor vehicle
3-21 that was manufactured in a model year before the sixth preceding
3-22 model year, including the current model year.
3-23 (11) "Other negotiable evidence of ownership" means a
3-24 document other than a Texas certificate of title or a salvage
3-25 certificate of title that relates to a motor vehicle that the
3-26 department considers sufficient to support issuance of a Texas
3-27 certificate of title for the vehicle.
4-1 (12) "Out-of-state buyer" means a person licensed by
4-2 another state or jurisdiction in an automotive business if the
4-3 Texas Department of Transportation has listed the holders of such
4-4 license as permitted purchasers of salvage motor vehicles or
4-5 nonrepairable motor vehicles based on substantially similar
4-6 licensing requirements and on whether salvage vehicle dealers
4-7 licensed in Texas are permitted to purchase salvage motor vehicles
4-8 or nonrepairable motor vehicles in the other state or jurisdiction.
4-9 (13) "Person" means an individual, firm, corporation,
4-10 company, partnership, or other entity.
4-11 (14) "Rebuilder" means a person that acquires and
4-12 repairs, for operation on public highways, five or more late model
4-13 salvage motor vehicles in any 12-month period.
4-14 (15) "Salvage motor vehicle certificate of title"
4-15 means any document issued by the department that evidences
4-16 ownership of a salvage motor vehicle. A salvage motor vehicle
4-17 certificate of title for a vehicle that is a salvage motor vehicle
4-18 because of damage caused exclusively by flood must bear an
4-19 appropriate notation on its face.
4-20 (16) "Salvage vehicle dealer" has the meaning assigned
4-21 by Section 1.01, Article 6687-1a, Revised Statutes.
4-22 (b)(1) An insurance company that is licensed to conduct
4-23 business in this state and that acquires ownership of a late model
4-24 salvage motor vehicle through payment of a claim shall surrender a
4-25 properly assigned certificate of title to the department, on a form
4-26 prescribed by the department.
4-27 (2) For a vehicle described by Subsection (a)(6) of
5-1 this section but not by Subsection (a)(8) of this section, the
5-2 insurance company shall apply for a salvage motor vehicle
5-3 certificate of title. For a vehicle described by Subsection (a)(8)
5-4 of this section, the insurance company shall apply for a
5-5 nonrepairable motor vehicle certificate of title.
5-6 (3) An insurance company may not sell a late model
5-7 salvage motor vehicle to which this subsection applies unless the
5-8 department has issued a salvage motor vehicle certificate of title
5-9 or a nonrepairable motor vehicle certificate of title for the
5-10 vehicle or a comparable ownership document has been issued by
5-11 another state or jurisdiction for the vehicle.
5-12 (4) An insurance company may sell a late model salvage
5-13 motor vehicle to which this subsection applies, or assign a salvage
5-14 motor vehicle certificate of title or a nonrepairable motor vehicle
5-15 certificate of title for the vehicle, only to a salvage vehicle
5-16 dealer, an out-of-state buyer, a buyer in a casual sale at auction,
5-17 or a person described by Subsection (g), Article 6687-2b, Revised
5-18 Statutes. If the vehicle is not a late model salvage motor vehicle
5-19 or a nonrepairable motor vehicle, the insurance company is not
5-20 required to surrender the regular certificate of title for the
5-21 vehicle or to be issued a salvage motor vehicle certificate of
5-22 title or a nonrepairable motor vehicle certificate of title for the
5-23 vehicle.
5-24 (5) If an insurance company acquires ownership of a
5-25 motor vehicle other than a late model salvage motor vehicle or a
5-26 nonrepairable motor vehicle through payment of a claim, the company
5-27 shall, on delivery of the vehicle to a buyer of the vehicle,
6-1 deliver the buyer a properly assigned certificate of title for the
6-2 vehicle. An insurance company or other person who acquires
6-3 ownership of a motor vehicle other than a late model salvage motor
6-4 vehicle or a nonrepairable motor vehicle may voluntarily and upon
6-5 proper application obtain a salvage motor vehicle certificate of
6-6 title or a nonrepairable motor vehicle certificate of title for the
6-7 vehicle.
6-8 (6) This subsection does not apply to a vehicle that
6-9 has been stolen and recovered unless the damage to the vehicle
6-10 causes the vehicle to be a salvage motor vehicle or a nonrepairable
6-11 motor vehicle.
6-12 (c)(1) If after payment of a total loss claim on a late
6-13 model salvage motor vehicle or a nonrepairable motor vehicle an
6-14 insurance company does not acquire ownership of the vehicle, the
6-15 insurance company shall submit to the department, before the 31st
6-16 day after the date of the payment of the claim, on the form
6-17 prescribed by the department, a report stating that:
6-18 (A) the insurance company has paid a total loss
6-19 claim on the vehicle; and
6-20 (B) the insurance company has not acquired
6-21 ownership of the vehicle.
6-22 (2) The owner of a late model salvage motor vehicle to
6-23 which this subsection applies may not transfer ownership of the
6-24 vehicle by sale or otherwise unless the department has issued a
6-25 salvage motor vehicle certificate of title or a nonrepairable motor
6-26 vehicle certificate of title for the vehicle or a comparable
6-27 ownership document has been issued by another state or jurisdiction
7-1 for the vehicle.
7-2 (d)(1) A person that owns a late model salvage motor vehicle
7-3 may not sell, transfer, or release the vehicle to a person other
7-4 than a salvage vehicle dealer, the former owner of the vehicle, a
7-5 governmental entity, an out-of-state buyer, a buyer in a casual
7-6 sale at auction, or a person described by Subsection (g), Article
7-7 6687-2b, Revised Statutes, and shall deliver to that person a
7-8 properly assigned certificate of title for the vehicle. If the
7-9 assigned certificate of title is not a salvage motor vehicle
7-10 certificate of title, a nonrepairable motor vehicle certificate of
7-11 title, or a comparable ownership document issued by another state
7-12 or jurisdiction, the purchaser shall, not later than the 10th day
7-13 after the date the purchaser receives the certificate of title from
7-14 the owner:
7-15 (A) surrender the certificate of title to the
7-16 department; and
7-17 (B) apply for a salvage motor vehicle
7-18 certificate of title or a nonrepairable motor vehicle certificate
7-19 of title for the vehicle, as appropriate.
7-20 (2) A salvage vehicle dealer that acquires ownership
7-21 of a late model salvage motor vehicle or a nonrepairable motor
7-22 vehicle for the purpose of dismantling, scrapping, or destroying
7-23 the vehicle shall, before the 31st day after the date the dealer
7-24 acquires the vehicle, submit to the department, on the form
7-25 prescribed by the department, a report stating that the vehicle
7-26 will be dismantled, scrapped, or destroyed, accompanied by a
7-27 properly assigned regular certificate of title, salvage motor
8-1 vehicle certificate of title, nonrepairable motor vehicle
8-2 certificate of title, or a comparable ownership document issued by
8-3 another state or jurisdiction for the vehicle.
8-4 (3) On receipt of the report and the certificate of
8-5 title, the department shall issue the salvage vehicle dealer a
8-6 receipt for the certificate of title, salvage motor vehicle
8-7 certificate of title, nonrepairable motor vehicle certificate of
8-8 title, or a comparable ownership document issued by another state
8-9 or jurisdiction.
8-10 (e) A salvage vehicle dealer that acquires an older model
8-11 vehicle for the purpose of dismantling, scrapping, or destroying
8-12 the vehicle and that receives a properly assigned certificate of
8-13 title for the vehicle shall, before the 31st day after the date the
8-14 dealer acquires the vehicle:
8-15 (1) submit to the department, on the form prescribed
8-16 by the department, a report stating that the vehicle will be
8-17 dismantled, scrapped, or destroyed, accompanied by the properly
8-18 assigned regular certificate of title, salvage motor vehicle
8-19 certificate of title, nonrepairable motor vehicle certificate of
8-20 title, or a comparable ownership document issued by another state
8-21 or jurisdiction for the vehicle; and
8-22 (2) keep on the business premises of the dealer, until
8-23 the third anniversary of the date the report on the vehicle is
8-24 submitted to the department, a record of the vehicle.
8-25 (f) A person, other than a salvage vehicle dealer or an
8-26 insurance company licensed to do business in this state, that
8-27 acquires ownership of a late model salvage motor vehicle or a
9-1 nonrepairable motor vehicle which has not been issued a salvage
9-2 motor vehicle certificate of title, a nonrepairable motor vehicle
9-3 certificate of title, or a comparable ownership document issued by
9-4 another state or jurisdiction shall, before selling the vehicle,
9-5 surrender the properly assigned certificate of title for the
9-6 vehicle to the department and:
9-7 (1) if the vehicle is a vehicle described by
9-8 Subsection (a)(6) but not by Subsection (a)(8) of this section,
9-9 apply to the department for a salvage motor vehicle certificate of
9-10 title for the vehicle; or
9-11 (2) if the vehicle is a vehicle described by
9-12 Subsection (a)(8) of this section, apply to the department for a
9-13 nonrepairable motor vehicle certificate of title for the vehicle.
9-14 (g) The owner of a late model salvage motor vehicle that has
9-15 been issued a salvage motor vehicle certificate of title or a
9-16 nonrepairable motor vehicle certificate of title may sell the
9-17 vehicle only to a salvage vehicle dealer in this state, an
9-18 out-of-state buyer, a buyer in a casual sale at auction, or a
9-19 person described by Subsection (g), Article 6687-2b, Revised
9-20 Statutes.
9-21 (h) An application for a salvage motor vehicle certificate
9-22 of title or a nonrepairable motor vehicle certificate of title
9-23 must:
9-24 (1) be made on a form prescribed by the department and
9-25 accompanied by a fee established by the department, not to exceed
9-26 an amount that is sufficient, when added to other fees collected
9-27 under this Act, to recover the actual costs to the department of
10-1 issuing the certificate; and
10-2 (2) include, in addition to any other information
10-3 required by the department:
10-4 (A) the name and current address of the owner;
10-5 (B) a description of the vehicle, including the
10-6 make, style of body, model year, and vehicle identification number;
10-7 (C) a description of the damage to the vehicle;
10-8 (D) the estimated cost of repairs to the
10-9 vehicle, including parts and labor; and
10-10 (E) the predamaged actual cash value of the
10-11 vehicle.
10-12 (i)(1) On receipt of a complete application and the
10-13 prescribed application fee, the department shall, before the sixth
10-14 business day after the date the department receives the
10-15 application, issue the applicant a salvage motor vehicle
10-16 certificate of title or a nonrepairable motor vehicle certificate
10-17 of title, as appropriate.
10-18 (2) A nonrepairable motor vehicle certificate of title
10-19 must state on its face that, except as provided by Subsections (n)
10-20 and (p) of this section, the vehicle:
10-21 (A) may not be issued a regular certificate of
10-22 title or registered in this state; and
10-23 (B) may only be used for parts or scrap metal.
10-24 (j) A person who holds a salvage motor vehicle certificate
10-25 of title is entitled to possess the vehicle, record a lien on the
10-26 vehicle, transport the vehicle, and transfer ownership of the
10-27 vehicle. A vehicle for which a salvage motor vehicle certificate
11-1 of title is the most current title may not be operated on a public
11-2 highway.
11-3 (k)(1) A vehicle for which a salvage motor vehicle
11-4 certificate of title has been issued may be issued a regular
11-5 certificate of title only after application and, in addition to any
11-6 other requirement of law, only if the application:
11-7 (A) describes each major component part used to
11-8 repair the vehicle and shows the identification number required by
11-9 federal law to be affixed to or inscribed on the part; and
11-10 (B) is accompanied by a written statement signed
11-11 by a specially trained commissioned officer of the Department of
11-12 Public Safety certifying to the department that:
11-13 (i) the vehicle identification numbers and
11-14 parts identification numbers are accurate;
11-15 (ii) the applicant has proof that the
11-16 applicant owns the parts used to repair the vehicle; and
11-17 (iii) the vehicle may be safely operated
11-18 and complies with all applicable motor vehicle safety standards of
11-19 this state.
11-20 (2) The Department of Public Safety may prescribe a
11-21 fee, in an amount not to exceed the lesser of $200 or the actual
11-22 cost to that department, for conducting an inspection and providing
11-23 the written statement required by this subsection.
11-24 (l)(1) On receipt of a complete application under Subsection
11-25 (k) of this section, accompanied by the peace officer's statement
11-26 and the appropriate fee for the certificate of title, the
11-27 department shall issue the applicant a certificate of title for
12-1 the vehicle.
12-2 (2) A certificate of title issued under this
12-3 subsection must:
12-4 (A) bear on its face the words "REBUILT
12-5 SALVAGE"; and
12-6 (B) describe or disclose the vehicle's former
12-7 condition in a manner understandable to a potential purchaser of
12-8 the vehicle.
12-9 (m)(1) On proper application by the owner of a vehicle
12-10 brought into this state from another state or jurisdiction that has
12-11 on any certificate of title issued by the other state or
12-12 jurisdiction a "rebuilt," "salvage," "nonrepairable," or analogous
12-13 notation, the department shall issue the applicant a certificate of
12-14 title or other appropriate document for the vehicle.
12-15 (2) A certificate of title or other appropriate
12-16 document issued under this subsection must show on its face:
12-17 (A) the date of issuance;
12-18 (B) the name and address of the owner;
12-19 (C) any registration number assigned to the
12-20 vehicle;
12-21 (D) a description of the vehicle as determined
12-22 by the department; and
12-23 (E) any notation the department considers
12-24 necessary or appropriate.
12-25 (n) A person who holds a nonrepairable motor vehicle
12-26 certificate of title for a vehicle:
12-27 (1) is entitled to possess the vehicle, dismantle,
13-1 scrap, or destroy the vehicle, transport the vehicle or parts of
13-2 the vehicle, or rebuild the vehicle;
13-3 (2) may not operate or permit the operation of the
13-4 vehicle on a public highway; and
13-5 (3) may transfer ownership of the vehicle only as
13-6 permitted by law.
13-7 (o) Except as provided by Subsection (p) of this section, a
13-8 person commits an offense if the person:
13-9 (1) applies to the department for a certificate of
13-10 title for a motor vehicle; and
13-11 (2) knows that the vehicle is a nonrepairable motor
13-12 vehicle that has been rebuilt.
13-13 (p)(1) A person who rebuilds a nonrepairable vehicle may
13-14 apply to the department for a certificate of title for the vehicle
13-15 if, in addition to any other requirement of law, the application:
13-16 (A) contains the information required by
13-17 Subsection (k)(1)(A) of this section; and
13-18 (B) is accompanied by a written statement that
13-19 complies with Subsection (k)(1)(B) of this section.
13-20 (2) The Department of Public Safety may prescribe a
13-21 fee, in an amount not to exceed the lesser of $200 or the actual
13-22 cost to that department, for conducting an inspection and providing
13-23 the written statement required by this subsection.
13-24 (3) On receipt of a complete application under this
13-25 subsection, accompanied by the appropriate fee for the certificate
13-26 of title, the department shall issue the applicant a certificate of
13-27 title for the vehicle that conforms to Subsection (l)(2) of this
14-1 section.
14-2 (q) For purposes of this section:
14-3 (1) the estimated cost of repair parts shall be
14-4 determined by using a manual of repair costs or other instrument
14-5 that is generally recognized and commonly used in the motor vehicle
14-6 insurance industry to determine those costs or an estimate of the
14-7 actual cost of the repair parts; and
14-8 (2) the estimated labor costs shall be computed by
14-9 using the hourly rate and time allocations that are reasonable and
14-10 commonly assessed in the repair industry in the community in which
14-11 the repairs are performed.
14-12 (r) The department shall print salvage motor vehicle
14-13 certificates of title and nonrepairable motor vehicle certificates
14-14 of title in a color that distinguishes them from certificates of
14-15 title and so that each document clearly shows that it is the
14-16 ownership document for a late model salvage motor vehicle or a
14-17 nonrepairable motor vehicle.
14-18 (s) A rebuilder must possess a certificate of title, a
14-19 salvage motor vehicle certificate of title, a nonrepairable motor
14-20 vehicle certificate of title, or a comparable ownership document
14-21 issued by another state or jurisdiction for any motor vehicle that
14-22 is:
14-23 (1) in the rebuilder's inventory; and
14-24 (2) being offered for resale.
14-25 (t) A person that rebuilds a late model salvage motor
14-26 vehicle for which the department has issued a salvage motor vehicle
14-27 certificate of title, or who assembles a late model salvage motor
15-1 vehicle from component parts, may apply to the department for a
15-2 certificate of title for the vehicle. A certificate of title
15-3 issued by the department under this subsection must bear the words
15-4 "REBUILT SALVAGE."
15-5 (u) Except as herein otherwise expressly provided, the
15-6 provisions of this section shall be exclusively enforced by the
15-7 department or any other governmental or law enforcement agency or
15-8 its personnel. The department, or an agent, officer, or employee
15-9 of the department, is not liable to a person damaged or injured by
15-10 an act or omission relating to the issuance of a certificate of
15-11 title, salvage motor vehicle certificate of title, or nonrepairable
15-12 motor vehicle certificate of title under this section.
15-13 (v)(1) This section does not apply to, and does not preclude
15-14 or prohibit any sales to, purchases by, or other transactions by or
15-15 with, a person described by Subsection (g), Article 6687-2b,
15-16 Revised Statutes, except as provided by Subdivision (2) or (3) of
15-17 this subsection.
15-18 (2) A person described by Subsection (g), Article
15-19 6687-2b, Revised Statutes, shall submit to the department the
15-20 certificate of title or equivalent document that the person
15-21 receives in conjunction with the purchase of a motor vehicle not
15-22 later than the 60th day after the date of receipt of the
15-23 certificate of title or equivalent document.
15-24 (3) This section applies to a transaction with a
15-25 person described by Subsection (g), Article 6687-2b, Revised
15-26 Statutes, in which a motor vehicle is sold or delivered to the
15-27 person for the purpose of reuse or resale as a motor vehicle or as
16-1 motor vehicle parts if the motor vehicle is so used.
16-2 (w) An owner to whom Section 152.065, Tax Code, applies is
16-3 prohibited from retaining for use or using a motor vehicle that has
16-4 been issued a certificate of title under Subsection (l) of this
16-5 section for a usual commercial purpose of that owner.
16-6 (x) This section does not:
16-7 (1) prohibit the owner of a late model salvage motor
16-8 vehicle or a nonrepairable motor vehicle from selling the vehicle
16-9 to any person, if the vehicle is so classified solely because of
16-10 water damage caused by flood conditions; or
16-11 (2) limit the ability or authority of an insurance
16-12 company to adjust or settle a claim for loss on a motor vehicle.
16-13 (y) A person required to register under Section 152.065, Tax
16-14 Code, may include in each customer agreement a separate charge for
16-15 the proportionate amount of title fees, registration fees, and
16-16 property taxes paid in the preceding calendar year on their vehicle
16-17 fleet. If a person includes such charge, it must be done on a
16-18 nondiscriminatory basis and shall be collected in all agreements
16-19 except those which are exempt from the taxes imposed in Section
16-20 152.026, Tax Code.
16-21 SECTION 2. Section 62, Certificate of Title Act (Article
16-22 6687-1, Vernon's Texas Civil Statutes), is amended to read as
16-23 follows:
16-24 Sec. 62. (a) Except as provided by Subsection (b) of this
16-25 section, any <Any> person who shall violate any provisions of this
16-26 Act shall be guilty of a misdemeanor, and upon conviction thereof
16-27 shall be fined in any sum not less than One Dollar ($1) nor more
17-1 than One Hundred Dollars ($100) for the first offense, and may,
17-2 upon any subsequent conviction for a violation of the same
17-3 provision, within the discretion of the jury, be given double the
17-4 amount of punishment provided for a first violation.
17-5 (b) A person who violates Section 37A of this Act or a rule
17-6 adopted under Section 37A of this Act commits a Class A
17-7 misdemeanor.
17-8 SECTION 3. Section 37, Certificate of Title Act (Article
17-9 6687-1, Vernon's Texas Civil Statutes), is repealed.
17-10 SECTION 4. This Act takes effect September 1, 1995, but only
17-11 if H.B. No. 2599, 74th Legislature, Regular Session, 1995, is
17-12 enacted and becomes law. If H.B. No. 2599, 74th Legislature,
17-13 Regular Session, 1995, does not become law, this Act has no effect.
17-14 SECTION 5. The importance of this legislation and the
17-15 crowded condition of the calendars in both houses create an
17-16 emergency and an imperative public necessity that the
17-17 constitutional rule requiring bills to be read on three several
17-18 days in each house be suspended, and this rule is hereby suspended.