By: Brown S.B. No. 1445
A BILL TO BE ENTITLED
AN ACT
1-1 relating to transfer of title to a motor vehicle, procurement of a
1-2 copy of a motor vehicle certificate of title, the collection and
1-3 administration of the motor vehicle sales tax, and certain
1-4 disclosures that must be made to the purchaser of a motor vehicle.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 152.001, Tax Code, is amended to read as
1-7 follows:
1-8 Sec. 152.001. Definitions. In this chapter:
1-9 (1) "Sale" includes:
1-10 (A) an installment and credit sale;
1-11 (B) an exchange of property for property or
1-12 money;
1-13 (C) an exchange in which property is transferred
1-14 but the seller retains title as security for payment of the
1-15 purchase price; and
1-16 (D) any other closed transaction that
1-17 constitutes a sale.
1-18 (2) "Retail sale" means a sale of a motor vehicle
1-19 except:
1-20 (A) a sale in which the purchaser is a dealer
1-21 who holds a general distinguishing number issued pursuant to the
1-22 terms of Article 6686, Revised Statutes, who acquires a vehicle for
1-23 the exclusive purpose of resale; or
2-1 (B) a sale of a vehicle that is operated under
2-2 and in accordance with Article 6686, Revised Civil Statutes of
2-3 Texas, 1925, as amended.
2-4 (3) "Motor Vehicle" includes:
2-5 (A) a self-propelled vehicle designed to
2-6 transport persons or property on a public highway;
2-7 (B) a trailer and semitrailer, including a van,
2-8 flatbed, tank, dumpster, dolly, jeep, stinger, auxiliary axle, or
2-9 converter gear; and
2-10 (C) a house trailer as defined by the
2-11 Certificate of Title Act (Article 6687-1, Vernon's Texas Civil
2-12 Statutes).
2-13 (4) "Motor Vehicle" does not include:
2-14 (A) a device moved only by human power;
2-15 (B) a device used exclusively on stationary
2-16 rails or tracks;
2-17 (C) road-building machinery; <or>
2-18 (D) a mobile office; or
2-19 (E) a vehicle with respect to which the
2-20 certificate of title has been surrendered in exchange for a salvage
2-21 certificate in the manner provided by law.
2-22 (5) "Rental" means:
2-23 (A) an agreement by the owner of a motor vehicle
2-24 to give for not longer than 180 days the exclusive use of that
2-25 vehicle to another for consideration;
3-1 (B) an agreement by the original manufacturer of
3-2 a motor vehicle to give exclusive use of the motor vehicle to
3-3 another for consideration; or
3-4 (C) an agreement to give exclusive use of a
3-5 motor vehicle to another for re-rental purposes.
3-6 (6) "Lease" means an agreement, other than a rental,
3-7 by an owner of a motor vehicle to give for longer than 180 days
3-8 exclusive use of the vehicle to another for consideration.
3-9 (7) "Public agency" means:
3-10 (A) a department, commission, board, office,
3-11 institution, or other agency of this state or of a county, city,
3-12 town, school district, hospital district, water district, or other
3-13 special district or authority or political subdivision created by
3-14 or under the constitution or the statutes of this state; or
3-15 (B) an unincorporated agency or instrumentality
3-16 of the United States.
3-17 (8) "Gross rental receipts" means value received or
3-18 promised as consideration to the owner of a motor vehicle for
3-19 rental of the vehicle, but does not include:
3-20 (A) separately stated charges for insurance;
3-21 (B) charges for damages to the motor vehicle
3-22 occurring during the rental agreement period;
3-23 (C) separately stated charges for motor fuel
3-24 sold by the owner of the motor vehicle; or
3-25 (D) discounts.
4-1 (9) "Owner of a motor vehicle" means:
4-2 (A) a person named in the certificate of title
4-3 as the owner of the vehicle; or
4-4 (B) a person who has the exclusive use of a
4-5 motor vehicle by reason of a rental and holds the vehicle for
4-6 re-rental.
4-7 (10) "Orthopedically handicapped person" means a
4-8 person who because of a physical impairment is unable to operate or
4-9 reasonably be transported in a motor vehicle that has not been
4-10 specially modified.
4-11 (11) "Volunteer fire department" means a company,
4-12 department, or association whose members receive no or nominal
4-13 compensation and which is organized for the purpose of answering
4-14 fire alarms and extinguishing fires or answering fire alarms,
4-15 extinguishing fires, and providing emergency medical services.
4-16 (12) "Motor vehicle used for religious purposes" means
4-17 a motor vehicle that is:
4-18 (A) designed to carry more than six passengers;
4-19 (B) sold to, rented to, or used by a church or
4-20 religious society;
4-21 (C) used primarily for the purpose of providing
4-22 transportation to and from a church or religious service or
4-23 meeting; and
4-24 (D) not registered as a passenger vehicle and
4-25 not used primarily for the personal or official needs or duties of
5-1 a minister.
5-2 (13) "Farm machine" means a self-propelled motor
5-3 vehicle specially adapted for use in the production of crops or
5-4 rearing of livestock, including poultry, and use in feedlots and
5-5 includes a self-propelled motor vehicle specially adapted for
5-6 applying plant food materials, agricultural chemicals, or feed for
5-7 livestock. "Farm machine" does not include any self-propelled
5-8 motor vehicle specifically designed or specially adapted for the
5-9 sole purpose of transporting agricultural products, plant food
5-10 materials, agricultural chemicals, or feed for livestock.
5-11 (14) <(15)> "Nonprofit" means:
5-12 (A) organized as a nonprofit corporation under
5-13 the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
5-14 Vernon's Texas Civil Statutes); or
5-15 (B) organized and operated in a way that does
5-16 not result in accrual of distributable profits, realization of
5-17 private gain resulting from payment of compensation other than
5-18 reasonable compensation for services rendered by persons who are
5-19 not members of the organization, or realization of any other form
5-20 of private gain.
5-21 (15) <(16)> "Seller-financed sale" means a retail sale
5-22 of a motor vehicle by a dealer licensed under Article 6686, Revised
5-23 Statutes, in which the seller collects all or part of the total
5-24 consideration in periodic payments and retains a lien on the motor
5-25 vehicle until all payments have been received. The term does not
6-1 include a:
6-2 (A) retail sale of a motor vehicle in which a
6-3 person other than the seller provides the consideration for the
6-4 sale and retains a lien on the motor vehicle as collateral;
6-5 (B) lease; or
6-6 (C) rental.
6-7 (16) "Mobile office" means a trailer designed to be
6-8 used as an office, sales outlet, or other workplace.
6-9 SECTION 2. Subsection (a), Section 152.021, Tax Code, is
6-10 amended to read as follows:
6-11 (a) A tax is imposed on every retail sale of every motor
6-12 vehicle sold in this state. Except as provided by this chapter
6-13 <Section 152.047>, the tax is an obligation of and shall be paid by
6-14 the purchaser of the motor vehicle.
6-15 SECTION 3. Chapter 152, Tax Code, is amended by adding
6-16 Section 152.0411 to read as follows:
6-17 Sec. 152.0411. COLLECTION BY SELLERS. (a) A seller who
6-18 makes a sale subject to the sales tax imposed by Section 152.021
6-19 shall add the amount of the tax to the sales price, and when the
6-20 amount of the tax is added:
6-21 (1) it is a debt of the purchaser to the seller until
6-22 paid; and
6-23 (2) if unpaid, it is recoverable at law in the same
6-24 manner as the original sales price.
6-25 (b) The seller shall collect the tax from the purchaser and
7-1 remit it to the tax assessor-collector in the time and manner
7-2 provided by law.
7-3 (c) This section applies only to the sale of a vehicle that
7-4 is to be titled and registered in Texas. If a purchaser intends to
7-5 register a vehicle outside Texas, the purchaser shall comply with
7-6 the terms of Section 152.092.
7-7 (d) This section does not apply to a seller-financed sale.
7-8 SECTION 4. Section 152.044, Tax Code, is amended to read as
7-9 follows:
7-10 Sec. 152.044. Payment by Seller. (a) If the comptroller on
7-11 an audit of the records of a seller finds that the amount of tax
7-12 due was incorrectly reported on a joint statement and that the
7-13 amount of tax paid was less than the amount due <or that the seller
7-14 failed to execute and deliver to the purchaser a joint statement
7-15 and any other documents necessary to register the vehicle>, the
7-16 seller and purchaser are jointly and severally liable for the
7-17 amount of the tax determined to be due.
7-18 (b) The comptroller shall ascertain compliance with the
7-19 terms of this section. If the comptroller on an audit of the
7-20 records of any person finds that the documents necessary to title
7-21 and register a vehicle in the name of the purchaser of the vehicle
7-22 have not been executed and delivered to the tax assessor-collector,
7-23 together with tax due, if any, the seller is liable for the amount
7-24 of the tax due, plus penalty and interest, if any.
7-25 SECTION 5. Section 27, Certificate of Title Act (Article
8-1 6687-1, Vernon's Texas Civil Statutes), is amended to read as
8-2 follows:
8-3 Sec. 27. (a) Before selling or disposing of any motor
8-4 vehicle required to be registered or licensed in this State on any
8-5 highway or public place within this State, except with dealer's
8-6 metal or cardboard license number thereto attached as now provided
8-7 by law, the owner shall make application to the designated agent in
8-8 the county of his domicile or the county in which the vehicle is
8-9 purchased or encumbered upon a form to be prescribed by the
8-10 Department for a certificate of title for such motor vehicle.
8-11 (b) The seller of a motor vehicle shall apply for the
8-12 registration of and Texas certificate of title in the name of the
8-13 purchaser of the motor vehicle that is the subject of the sale.
8-14 The seller shall file with the appropriate designated agent all
8-15 documents necessary to transfer title to the vehicle and register
8-16 the vehicle in the name of the purchaser and at the same time shall
8-17 remit motor vehicle sales tax, if any. The duty placed on the
8-18 seller by this section is solely that of the seller and applies
8-19 both to a first sale and a subsequent sale.
8-20 (c) The seller shall complete the transfer of title and
8-21 registration requirements placed on the seller by Subsection (b) of
8-22 this section in the time and manner provided by law.
8-23 SECTION 6. Section 36, Certificate of Title Act (Article
8-24 6687-1, Vernon's Texas Civil Statutes), is amended to read as
8-25 follows:
9-1 Sec. 36. (a) Should a certificate of title, "Duplicate
9-2 Original" or "Original," be lost or destroyed, the owner or lien
9-3 holder thereof may, in the manner provided by this section and the
9-4 rules of the Department, procure a certified copy of same directly
9-5 from the Department by making application upon such form as may be
9-6 prescribed by the Department from time to time, accompanied by a
9-7 fee of $2, which shall be deposited in the State Highway Fund and
9-8 be expended as provided by Section 57 of this Act, provided
9-9 however, that the certified copy of the certificate of title marked
9-10 "Original" shall issue only to the first lien holder where a lien
9-11 is disclosed thereon. Said certified copy and all subsequent
9-12 certificates of title issued, until transfer of ownership of said
9-13 motor vehicle, shall be plainly marked across their faces
9-14 "Certified Copy," and all subsequent purchasers or lien holders of
9-15 said motor vehicle shall acquire only such rights, title, or
9-16 interest in such motor vehicles as the holder of the said certified
9-17 copy had, provided however, that upon the transfer of title to said
9-18 motor vehicle, the words "Certified Copy" shall be eliminated from
9-19 the new certificate of title. Any purchasers or lien holders of
9-20 such motor vehicle may at the time of such purchase or at the time
9-21 lien is established require the seller or owner to indemnify him
9-22 and all subsequent purchasers of said motor vehicle against any
9-23 loss which he or they may suffer by reason of any claim or claims
9-24 presented upon the said original certificate of title. In the
9-25 event of recovery of the said certificate of title, "Duplicate
10-1 Original" or "Original" thereof, the said owner shall forthwith
10-2 surrender the same to the Department for cancellation and the words
10-3 "Certified Copy" shall be eliminated from said certificates
10-4 thereafter issued by the Department.
10-5 (b) Except as provided by this subsection, the Department
10-6 may not issue a certified copy of a certificate of title before the
10-7 fourth business day after application has been made. The
10-8 Department may issue a certified copy of a certificate of title to
10-9 the registered owner of the vehicle or the holder of a recorded
10-10 lien against the vehicle, or a verified agent of either, before the
10-11 fourth business day following application if the applicant submits
10-12 personal identification, including a photograph, issued by an
10-13 agency of this state or the United States. If the applicant is an
10-14 agent seeking issuance of a certified copy of a certificate of
10-15 title to a motor vehicle on behalf of the registered owner or lien
10-16 holder, the agent shall submit verifiable proof that the person is
10-17 an agent of the registered owner or lien holder and personal
10-18 identification, including a photograph, issued by agency of this
10-19 state or the United States. In addition to the other requirements
10-20 of this subsection, if an applicant for a certified copy of a
10-21 certificate of title is a person other than the registered owner of
10-22 the vehicle or the registered holder of a lien against the vehicle,
10-23 or a verified agent of either, the Department may not issue a
10-24 certified copy of a certificate of title to a vehicle except by
10-25 mail.
11-1 SECTION 7. Section (b), Article 6.10, Title 79, Revised
11-2 Statutes (Article 5069-6.10, Vernon's Texas Civil Statutes), is
11-3 amended to read as follows:
11-4 (b) Preliminary worksheets that are shown to the buyer in
11-5 which a sale price is computed, an order from the buyer, and the
11-6 retail installment contract must include, in reasonable proximity
11-7 to the place in the worksheet, order, or contract where the
11-8 documentary fee is disclosed, the amount of the fee and the
11-9 following notice in bold-faced type:
11-10 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE AND IS NOT
11-11 REQUIRED BY LAW, BUT MAY BE CHARGED TO A BUYER FOR THE
11-12 HANDLING OF DOCUMENTS AND THE PERFORMING OF SERVICES
11-13 RELATED TO THE CLOSING OF A SALE. <A BUYER MAY AVOID
11-14 PAYMENT OF THE FEE BY HANDLING THESE DOCUMENTS AND
11-15 PERFORMING THESE SERVICES.> A DOCUMENTARY FEE MAY NOT
11-16 EXCEED $50. THIS NOTICE IS REQUIRED BY LAW."
11-17 SECTION 8. Section (h-1), Article 7.01, Title 79, Revised
11-18 Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes), is
11-19 amended to read as follows:
11-20 (h-1) In addition to the provisions of Section (h) of this
11-21 article, "principal balance" includes a motor vehicle inspection
11-22 fee and a documentary fee for services actually rendered to, for or
11-23 on behalf of the retail buyer in preparing, handling, and
11-24 processing documents relating to the motor vehicle and the closing
11-25 of the transaction evidenced by the retail installment contract.
12-1 If a documentary fee is charged:
12-2 (i) it must be charged to both cash and
12-3 credit buyers;
12-4 (ii) it may not exceed $50;
12-5 (iii) it shall be disclosed on the retail
12-6 installment contract as a separate itemized charge; and
12-7 (iv) the buyer's order and the retail
12-8 installment contract shall include in reasonable proximity to the
12-9 point in the buyer's order and retail installment contract where
12-10 the documentary fee is disclosed the amount of the documentary fee
12-11 to be charged and the following notice in type that is boldfaced,
12-12 capitalized, underlined, or otherwise set out from surrounding
12-13 written material so as to be conspicuous:
12-14 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
12-15 DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE
12-16 CHARGED TO BUYERS FOR HANDLING DOCUMENTS AND PERFORMING
12-17 SERVICES RELATING TO THE CLOSING OF A SALE. <BUYERS
12-18 MAY AVOID PAYMENT OF THE FEE TO THE SELLER BY HANDLING
12-19 THE DOCUMENTS AND PERFORMING THE SERVICES RELATING TO
12-20 THE CLOSING OF THE SALE.> A DOCUMENTARY FEE MAY NOT
12-21 EXCEED $50. THIS NOTICE IS REQUIRED BY LAW."
12-22 (v) If the language primarily used in the
12-23 oral sales presentation is not the same as that in which the retail
12-24 installment contract is written, the seller shall furnish to the
12-25 buyer a written statement containing the notice set out in
13-1 Subsection (iv) in the language primarily used in the oral sales
13-2 presentation.
13-3 SECTION 9. This Act takes effect January 1, 1996.
13-4 SECTION 10. The importance of this legislation and the
13-5 crowded condition of the calendars in both houses create an
13-6 emergency and an imperative public necessity that the
13-7 constitutional rule requiring bills to be read on three several
13-8 days in each house be suspended, and this rule is hereby suspended,
13-9 and that this Act take effect and be in force according to its
13-10 terms, and it is so enacted.