1-1 By: Bosse (Senate Sponsor - Cain) H.B. No. 2151
1-2 (In the Senate - Received from the House May 4, 1995;
1-3 May 4, 1995, read first time and referred to Committee on State
1-4 Affairs; May 15, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 11, Nays 0; May 15, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 2151 By: Cain
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the issuance of titles to certain motor vehicles;
1-11 providing a penalty.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. The Certificate of Title Act (Article 6687-1,
1-14 Vernon's Texas Civil Statutes) is amended by adding Section 37A to
1-15 read as follows:
1-16 Sec. 37A. (a) In this section:
1-17 (1) "Actual cash value" means the market value of a
1-18 motor vehicle as determined:
1-19 (A) from publications commonly used by the
1-20 automotive and insurance industries to establish the value of motor
1-21 vehicles; or
1-22 (B) if the entity determining the value is an
1-23 insurance company, by any other procedure recognized by the
1-24 insurance industry, including market surveys, that is applied by
1-25 the company in a uniform manner.
1-26 (2) "Automobile recycler" means a person in the
1-27 business of dealing in salvage motor vehicles for the purpose of
1-28 dismantling the vehicles to sell used parts or a person otherwise
1-29 engaged in the business of acquiring, selling, or dealing in
1-30 salvage parts for reuse or resale as parts. The term includes a
1-31 dealer in used motor vehicle parts.
1-32 (3) "Casual sale" means the sale at auction of not
1-33 more than one nonrepairable motor vehicle or late model salvage
1-34 motor vehicle to the same person during a calendar year.
1-35 (4) "Insurance company" means a person authorized to
1-36 write automobile insurance in Texas or an out-of-state insurance
1-37 company that pays a loss claim for a motor vehicle in Texas.
1-38 (5) "Late model motor vehicle" means a motor vehicle
1-39 with a model year equal to the then current calendar year or one of
1-40 the five preceding calendar years.
1-41 (6) "Late model salvage motor vehicle" or "salvage
1-42 motor vehicle" means a late model motor vehicle, other than a late
1-43 model vehicle that is a nonrepairable motor vehicle, that is
1-44 damaged to the extent that the total estimated cost of repairs,
1-45 other than repairs related to hail damage but including parts and
1-46 labor, is equal to or greater than an amount equal to 75 percent of
1-47 the actual cash value of the vehicle in its predamaged condition.
1-48 (7) "Major component part" means one of the following
1-49 parts of a motor vehicle:
1-50 (A) the engine;
1-51 (B) the transmission;
1-52 (C) the frame;
1-53 (D) the right or left front fender;
1-54 (E) the hood;
1-55 (F) a door allowing entrance to or egress from
1-56 the passenger compartment of the vehicle;
1-57 (G) the front or rear bumper;
1-58 (H) the right or left quarter panel;
1-59 (I) the deck lid, tailgate, or hatchback;
1-60 (J) the cargo box of a pickup truck;
1-61 (K) the cab of a truck; or
1-62 (L) the body of a passenger vehicle.
1-63 (8) "Nonrepairable motor vehicle" means a late model
1-64 motor vehicle that is damaged or missing a major component part to
1-65 the extent that the total estimated cost of repairs to rebuild or
1-66 reconstruct the vehicle, including parts and labor other than the
1-67 costs of materials and labor for repainting the vehicle and
1-68 excluding sales taxes on the total cost of the repairs, and
2-1 excluding the cost of repairs to repair hail damage, is equal to or
2-2 greater than an amount equal to 95 percent of the actual cash value
2-3 of the vehicle in its predamaged condition.
2-4 (9) "Nonrepairable motor vehicle certificate of title"
2-5 means a document issued by the department that evidences ownership
2-6 of a nonrepairable motor vehicle. A nonrepairable motor vehicle
2-7 certificate of title for a vehicle that is nonrepairable because of
2-8 damage caused exclusively by flood must bear an appropriate
2-9 notation on its face.
2-10 (10) "Older model motor vehicle" means a motor vehicle
2-11 that was manufactured in a model year before the sixth preceding
2-12 model year, including the current model year.
2-13 (11) "Other negotiable evidence of ownership" means a
2-14 document other than a Texas certificate of title or a salvage
2-15 certificate of title that relates to a motor vehicle that the
2-16 department considers sufficient to support issuance of a Texas
2-17 certificate of title for the vehicle.
2-18 (12) "Out-of-state buyer" means a person licensed by
2-19 another state or jurisdiction in an automotive business if the
2-20 Texas Department of Transportation has listed the holders of such
2-21 license as permitted purchasers of salvage motor vehicles or
2-22 nonrepairable motor vehicles based on substantially similar
2-23 licensing requirements and on whether salvage vehicle dealers
2-24 licensed in Texas are permitted to purchase salvage motor vehicles
2-25 or nonrepairable motor vehicles in the other state or jurisdiction.
2-26 (13) "Person" means an individual, firm, corporation,
2-27 company, partnership, or other entity.
2-28 (14) "Rebuilder" means a person that acquires and
2-29 repairs, for operation on public highways, five or more late model
2-30 salvage motor vehicles in any 12-month period.
2-31 (15) "Salvage motor vehicle certificate of title"
2-32 means any document issued by the department that evidences
2-33 ownership of a salvage motor vehicle. A salvage motor vehicle
2-34 certificate of title for a vehicle that is a salvage motor vehicle
2-35 because of damage caused exclusively by flood must bear an
2-36 appropriate notation on its face.
2-37 (16) "Salvage vehicle dealer" has the meaning assigned
2-38 by Section 1.01, Article 6687-1a, Revised Statutes.
2-39 (b)(1) An insurance company that is licensed to conduct
2-40 business in this state and that acquires ownership of a late model
2-41 salvage motor vehicle through payment of a claim shall surrender a
2-42 properly assigned certificate of title to the department, on a form
2-43 prescribed by the department.
2-44 (2) For a vehicle described by Subsection (a)(6) of
2-45 this section but not by Subsection (a)(8) of this section, the
2-46 insurance company shall apply for a salvage motor vehicle
2-47 certificate of title. For a vehicle described by Subsection (a)(8)
2-48 of this section, the insurance company shall apply for a
2-49 nonrepairable motor vehicle certificate of title.
2-50 (3) An insurance company may not sell a late model
2-51 salvage motor vehicle to which this subsection applies unless the
2-52 department has issued a salvage motor vehicle certificate of title
2-53 or a nonrepairable motor vehicle certificate of title for the
2-54 vehicle or a comparable ownership document has been issued by
2-55 another state or jurisdiction for the vehicle.
2-56 (4) An insurance company may sell a late model salvage
2-57 motor vehicle to which this subsection applies, or assign a salvage
2-58 motor vehicle certificate of title or a nonrepairable motor vehicle
2-59 certificate of title for the vehicle, only to a salvage vehicle
2-60 dealer, an out-of-state buyer, a buyer in a casual sale at auction,
2-61 or a person described by Subsection (g), Article 6687-2b, Revised
2-62 Statutes. If the vehicle is not a late model salvage motor vehicle
2-63 or a nonrepairable motor vehicle, the insurance company is not
2-64 required to surrender the regular certificate of title for the
2-65 vehicle or to be issued a salvage motor vehicle certificate of
2-66 title or a nonrepairable motor vehicle certificate of title for the
2-67 vehicle.
2-68 (5) If an insurance company acquires ownership of a
2-69 motor vehicle other than a late model salvage motor vehicle or a
2-70 nonrepairable motor vehicle through payment of a claim, the company
3-1 shall, on delivery of the vehicle to a buyer of the vehicle,
3-2 deliver the buyer a properly assigned certificate of title for the
3-3 vehicle. An insurance company or other person who acquires
3-4 ownership of a motor vehicle other than a late model salvage motor
3-5 vehicle or a nonrepairable motor vehicle may voluntarily and upon
3-6 proper application obtain a salvage motor vehicle certificate of
3-7 title or a nonrepairable motor vehicle certificate of title for the
3-8 vehicle.
3-9 (6) This subsection does not apply to a vehicle that
3-10 has been stolen and recovered unless the damage to the vehicle
3-11 causes the vehicle to be a salvage motor vehicle or a nonrepairable
3-12 motor vehicle.
3-13 (c)(1) If after payment of a total loss claim on a late
3-14 model salvage motor vehicle or a nonrepairable motor vehicle an
3-15 insurance company does not acquire ownership of the vehicle, the
3-16 insurance company shall submit to the department, before the 31st
3-17 day after the date of the payment of the claim, on the form
3-18 prescribed by the department, a report stating that:
3-19 (A) the insurance company has paid a total loss
3-20 claim on the vehicle; and
3-21 (B) the insurance company has not acquired
3-22 ownership of the vehicle.
3-23 (2) The owner of a late model salvage motor vehicle to
3-24 which this subsection applies may not transfer ownership of the
3-25 vehicle by sale or otherwise unless the department has issued a
3-26 salvage motor vehicle certificate of title or a nonrepairable motor
3-27 vehicle certificate of title for the vehicle or a comparable
3-28 ownership document has been issued by another state or jurisdiction
3-29 for the vehicle.
3-30 (d)(1) A person that owns a late model salvage motor vehicle
3-31 may not sell, transfer, or release the vehicle to a person other
3-32 than a salvage vehicle dealer, the former owner of the vehicle, a
3-33 governmental entity, an out-of-state buyer, a buyer in a casual
3-34 sale at auction, or a person described by Subsection (g), Article
3-35 6687-2b, Revised Statutes, and shall deliver to that person a
3-36 properly assigned certificate of title for the vehicle. If the
3-37 assigned certificate of title is not a salvage motor vehicle
3-38 certificate of title, a nonrepairable motor vehicle certificate of
3-39 title, or a comparable ownership document issued by another state
3-40 or jurisdiction, the purchaser shall, not later than the 10th day
3-41 after the date the purchaser receives the certificate of title from
3-42 the owner:
3-43 (A) surrender the certificate of title to the
3-44 department; and
3-45 (B) apply for a salvage motor vehicle
3-46 certificate of title or a nonrepairable motor vehicle certificate
3-47 of title for the vehicle, as appropriate.
3-48 (2) A salvage vehicle dealer that acquires ownership
3-49 of a late model salvage motor vehicle or a nonrepairable motor
3-50 vehicle for the purpose of dismantling, scrapping, or destroying
3-51 the vehicle shall, before the 31st day after the date the dealer
3-52 acquires the vehicle, submit to the department, on the form
3-53 prescribed by the department, a report stating that the vehicle
3-54 will be dismantled, scrapped, or destroyed, accompanied by a
3-55 properly assigned regular certificate of title, salvage motor
3-56 vehicle certificate of title, nonrepairable motor vehicle
3-57 certificate of title, or a comparable ownership document issued by
3-58 another state or jurisdiction for the vehicle.
3-59 (3) On receipt of the report and the certificate of
3-60 title, the department shall issue the salvage vehicle dealer a
3-61 receipt for the certificate of title, salvage motor vehicle
3-62 certificate of title, nonrepairable motor vehicle certificate of
3-63 title, or a comparable ownership document issued by another state
3-64 or jurisdiction.
3-65 (e) A salvage vehicle dealer that acquires an older model
3-66 vehicle for the purpose of dismantling, scrapping, or destroying
3-67 the vehicle and that receives a properly assigned certificate of
3-68 title for the vehicle shall, before the 31st day after the date the
3-69 dealer acquires the vehicle:
3-70 (1) submit to the department, on the form prescribed
4-1 by the department, a report stating that the vehicle will be
4-2 dismantled, scrapped, or destroyed, accompanied by the properly
4-3 assigned regular certificate of title, salvage motor vehicle
4-4 certificate of title, nonrepairable motor vehicle certificate of
4-5 title, or a comparable ownership document issued by another state
4-6 or jurisdiction for the vehicle; and
4-7 (2) keep on the business premises of the dealer, until
4-8 the third anniversary of the date the report on the vehicle is
4-9 submitted to the department, a record of the vehicle.
4-10 (f) A person, other than a salvage vehicle dealer or an
4-11 insurance company licensed to do business in this state, that
4-12 acquires ownership of a late model salvage motor vehicle or a
4-13 nonrepairable motor vehicle which has not been issued a salvage
4-14 motor vehicle certificate of title, a nonrepairable motor vehicle
4-15 certificate of title, or a comparable ownership document issued by
4-16 another state or jurisdiction shall, before selling the vehicle,
4-17 surrender the properly assigned certificate of title for the
4-18 vehicle to the department and:
4-19 (1) if the vehicle is a vehicle described by
4-20 Subsection (a)(6) but not by Subsection (a)(8) of this section,
4-21 apply to the department for a salvage motor vehicle certificate of
4-22 title for the vehicle; or
4-23 (2) if the vehicle is a vehicle described by
4-24 Subsection (a)(8) of this section, apply to the department for a
4-25 nonrepairable motor vehicle certificate of title for the vehicle.
4-26 (g) The owner of a late model salvage motor vehicle that has
4-27 been issued a salvage motor vehicle certificate of title or a
4-28 nonrepairable motor vehicle certificate of title may sell the
4-29 vehicle only to a salvage vehicle dealer in this state, an
4-30 out-of-state buyer, a buyer in a casual sale at auction, or a
4-31 person described by Subsection (g), Article 6687-2b, Revised
4-32 Statutes.
4-33 (h) An application for a salvage motor vehicle certificate
4-34 of title or a nonrepairable motor vehicle certificate of title
4-35 must:
4-36 (1) be made on a form prescribed by the department and
4-37 accompanied by a fee established by the department, not to exceed
4-38 an amount that is sufficient, when added to other fees collected
4-39 under this Act, to recover the actual costs to the department of
4-40 issuing the certificate; and
4-41 (2) include, in addition to any other information
4-42 required by the department:
4-43 (A) the name and current address of the owner;
4-44 (B) a description of the vehicle, including the
4-45 make, style of body, model year, and vehicle identification number;
4-46 (C) a description of the damage to the vehicle;
4-47 (D) the estimated cost of repairs to the
4-48 vehicle, including parts and labor; and
4-49 (E) the predamaged actual cash value of the
4-50 vehicle.
4-51 (i)(1) On receipt of a complete application and the
4-52 prescribed application fee, the department shall, before the sixth
4-53 business day after the date the department receives the
4-54 application, issue the applicant a salvage motor vehicle
4-55 certificate of title or a nonrepairable motor vehicle certificate
4-56 of title, as appropriate.
4-57 (2) A nonrepairable motor vehicle certificate of title
4-58 must state on its face that, except as provided by Subsections (n)
4-59 and (p) of this section, the vehicle:
4-60 (A) may not be issued a regular certificate of
4-61 title or registered in this state; and
4-62 (B) may only be used for parts or scrap metal.
4-63 (j) A person who holds a salvage motor vehicle certificate
4-64 of title is entitled to possess the vehicle, record a lien on the
4-65 vehicle, transport the vehicle, and transfer ownership of the
4-66 vehicle. A vehicle for which a salvage motor vehicle certificate
4-67 of title is the most current title may not be operated on a public
4-68 highway.
4-69 (k)(1) A vehicle for which a salvage motor vehicle
4-70 certificate of title has been issued may be issued a regular
5-1 certificate of title only after application and, in addition to any
5-2 other requirement of law, only if the application:
5-3 (A) describes each major component part used to
5-4 repair the vehicle and shows the identification number required by
5-5 federal law to be affixed to or inscribed on the part; and
5-6 (B) is accompanied by a written statement signed
5-7 by a specially trained commissioned officer of the Department of
5-8 Public Safety certifying to the department that:
5-9 (i) the vehicle identification numbers and
5-10 parts identification numbers are accurate;
5-11 (ii) the applicant has proof that the
5-12 applicant owns the parts used to repair the vehicle; and
5-13 (iii) the vehicle may be safely operated
5-14 and complies with all applicable motor vehicle safety standards of
5-15 this state.
5-16 (2) The Department of Public Safety may prescribe a
5-17 fee, in an amount not to exceed the lesser of $200 or the actual
5-18 cost to that department, for conducting an inspection and providing
5-19 the written statement required by this subsection.
5-20 (l)(1) On receipt of a complete application under Subsection
5-21 (k) of this section, accompanied by the peace officer's statement
5-22 and the appropriate fee for the certificate of title, the
5-23 department shall issue the applicant a certificate of title for
5-24 the vehicle.
5-25 (2) A certificate of title issued under this
5-26 subsection must:
5-27 (A) bear on its face the words "REBUILT
5-28 SALVAGE"; and
5-29 (B) describe or disclose the vehicle's former
5-30 condition in a manner understandable to a potential purchaser of
5-31 the vehicle.
5-32 (m)(1) On proper application by the owner of a vehicle
5-33 brought into this state from another state or jurisdiction that has
5-34 on any certificate of title issued by the other state or
5-35 jurisdiction a "rebuilt," "salvage," "nonrepairable," or analogous
5-36 notation, the department shall issue the applicant a certificate of
5-37 title or other appropriate document for the vehicle.
5-38 (2) A certificate of title or other appropriate
5-39 document issued under this subsection must show on its face:
5-40 (A) the date of issuance;
5-41 (B) the name and address of the owner;
5-42 (C) any registration number assigned to the
5-43 vehicle;
5-44 (D) a description of the vehicle as determined
5-45 by the department; and
5-46 (E) any notation the department considers
5-47 necessary or appropriate.
5-48 (n) A person who holds a nonrepairable motor vehicle
5-49 certificate of title for a vehicle:
5-50 (1) is entitled to possess the vehicle, dismantle,
5-51 scrap, or destroy the vehicle, transport the vehicle or parts of
5-52 the vehicle, or rebuild the vehicle;
5-53 (2) may not operate or permit the operation of the
5-54 vehicle on a public highway; and
5-55 (3) may transfer ownership of the vehicle only as
5-56 permitted by law.
5-57 (o) Except as provided by Subsection (p) of this section, a
5-58 person commits an offense if the person:
5-59 (1) applies to the department for a certificate of
5-60 title for a motor vehicle; and
5-61 (2) knows that the vehicle is a nonrepairable motor
5-62 vehicle that has been rebuilt.
5-63 (p)(1) A person who rebuilds a nonrepairable vehicle may
5-64 apply to the department for a certificate of title for the vehicle
5-65 if, in addition to any other requirement of law, the application:
5-66 (A) contains the information required by
5-67 Subsection (k)(1)(A) of this section; and
5-68 (B) is accompanied by a written statement that
5-69 complies with Subsection (k)(1)(B) of this section.
5-70 (2) The Department of Public Safety may prescribe a
6-1 fee, in an amount not to exceed the lesser of $200 or the actual
6-2 cost to that department, for conducting an inspection and providing
6-3 the written statement required by this subsection.
6-4 (3) On receipt of a complete application under this
6-5 subsection, accompanied by the appropriate fee for the certificate
6-6 of title, the department shall issue the applicant a certificate of
6-7 title for the vehicle that conforms to Subsection (l)(2) of this
6-8 section.
6-9 (q) For purposes of this section:
6-10 (1) the estimated cost of repair parts shall be
6-11 determined by using a manual of repair costs or other instrument
6-12 that is generally recognized and commonly used in the motor vehicle
6-13 insurance industry to determine those costs or an estimate of the
6-14 actual cost of the repair parts; and
6-15 (2) the estimated labor costs shall be computed by
6-16 using the hourly rate and time allocations that are reasonable and
6-17 commonly assessed in the repair industry in the community in which
6-18 the repairs are performed.
6-19 (r) The department shall print salvage motor vehicle
6-20 certificates of title and nonrepairable motor vehicle certificates
6-21 of title in a color that distinguishes them from certificates of
6-22 title and so that each document clearly shows that it is the
6-23 ownership document for a late model salvage motor vehicle or a
6-24 nonrepairable motor vehicle.
6-25 (s) A rebuilder must possess a certificate of title, a
6-26 salvage motor vehicle certificate of title, a nonrepairable motor
6-27 vehicle certificate of title, or a comparable ownership document
6-28 issued by another state or jurisdiction for any motor vehicle that
6-29 is:
6-30 (1) in the rebuilder's inventory; and
6-31 (2) being offered for resale.
6-32 (t) A person that rebuilds a late model salvage motor
6-33 vehicle for which the department has issued a salvage motor vehicle
6-34 certificate of title, or who assembles a late model salvage motor
6-35 vehicle from component parts, may apply to the department for a
6-36 certificate of title for the vehicle. A certificate of title
6-37 issued by the department under this subsection must bear the words
6-38 "REBUILT SALVAGE."
6-39 (u) Except as herein otherwise expressly provided, the
6-40 provisions of this section shall be exclusively enforced by the
6-41 department or any other governmental or law enforcement agency or
6-42 its personnel. The department, or an agent, officer, or employee
6-43 of the department, is not liable to a person damaged or injured by
6-44 an act or omission relating to the issuance of a certificate of
6-45 title, salvage motor vehicle certificate of title, or nonrepairable
6-46 motor vehicle certificate of title under this section.
6-47 (v)(1) This section does not apply to, and does not preclude
6-48 or prohibit any sales to, purchases by, or other transactions by or
6-49 with, a person described by Subsection (g), Article 6687-2b,
6-50 Revised Statutes, except as provided by Subdivision (2) or (3) of
6-51 this subsection.
6-52 (2) A person described by Subsection (g), Article
6-53 6687-2b, Revised Statutes, shall submit to the department the
6-54 certificate of title or equivalent document that the person
6-55 receives in conjunction with the purchase of a motor vehicle not
6-56 later than the 60th day after the date of receipt of the
6-57 certificate of title or equivalent document.
6-58 (3) This section applies to a transaction with a
6-59 person described by Subsection (g), Article 6687-2b, Revised
6-60 Statutes, in which a motor vehicle is sold or delivered to the
6-61 person for the purpose of reuse or resale as a motor vehicle or as
6-62 motor vehicle parts if the motor vehicle is so used.
6-63 (w) An owner to whom Section 152.065, Tax Code, applies is
6-64 prohibited from retaining for use or using a motor vehicle that has
6-65 been issued a certificate of title under Subsection (l) of this
6-66 section for a usual commercial purpose of that owner.
6-67 (x) This section does not:
6-68 (1) prohibit the owner of a late model salvage motor
6-69 vehicle or a nonrepairable motor vehicle from selling the vehicle
6-70 to any person, if the vehicle is so classified solely because of
7-1 water damage caused by flood conditions; or
7-2 (2) limit the ability or authority of an insurance
7-3 company to adjust or settle a claim for loss on a motor vehicle.
7-4 SECTION 2. Section 62, Certificate of Title Act (Article
7-5 6687-1, Vernon's Texas Civil Statutes), is amended to read as
7-6 follows:
7-7 Sec. 62. (a) Except as provided by Subsection (b) of this
7-8 section, any <Any> person who shall violate any provisions of this
7-9 Act shall be guilty of a misdemeanor, and upon conviction thereof
7-10 shall be fined in any sum not less than One Dollar ($1) nor more
7-11 than One Hundred Dollars ($100) for the first offense, and may,
7-12 upon any subsequent conviction for a violation of the same
7-13 provision, within the discretion of the jury, be given double the
7-14 amount of punishment provided for a first violation.
7-15 (b) A person who violates Section 37A of this Act or a rule
7-16 adopted under Section 37A of this Act commits a Class A
7-17 misdemeanor.
7-18 SECTION 3. Section 37, Certificate of Title Act (Article
7-19 6687-1, Vernon's Texas Civil Statutes), is repealed.
7-20 SECTION 4. This Act takes effect September 1, 1995, but only
7-21 if H.B. No. 2599, 74th Legislature, Regular Session, 1995, is
7-22 enacted and becomes law. If H.B. No. 2599, 74th Legislature,
7-23 Regular Session, 1995, does not become law, this Act has no effect.
7-24 SECTION 5. The importance of this legislation and the
7-25 crowded condition of the calendars in both houses create an
7-26 emergency and an imperative public necessity that the
7-27 constitutional rule requiring bills to be read on three several
7-28 days in each house be suspended, and this rule is hereby suspended.
7-29 * * * * *