TWT C.S.H.B. 1137 75(R)BILL ANALYSIS


TRANSPORTATION
C.S.H.B. 1137
By: Uher
2-28-97
Committee Report (Substituted)



BACKGROUND 

Due to the frequency of turnover in ownership of financial institutions,
many lien records are moved from institution to institution and are,
therefore, difficult to locate. Thus, current law demands that a motor
vehicle lienholder pay to have the lien added to the Texas Department of
Transportation's (TXDOT) records. Upon the demand of the owner, the
lienholder discharges the retired lien and forwards the title to the
owner. However, the TXDOT records continue to reflect the lien until a
records management fee is paid by the owner. Thus, the records are not as
accurate as possible. 

PURPOSE

C.S.H.B. 1137 would facilitate the orderly and timely transfer of a title
to a motor vehicle when a lien against the motor vehicle has been
discharged. It does that by regulating the time for release of the lien by
the lienholder when the lien has been discharged and by providing for the
situation when the lienholder fails to release the lien in a timely
fashion.  

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 Sec. 501.115 (a), Transportation Code, to provide that
within a reasonable time not to exceed 21 days after receipt of the final
payment due under a note secured by a lien on a motor vehicle, the
lienholder must execute and deliver to the owner or owner's designee a
discharge of the lien. 

SECTION 2. Amends Sec. 501.152, Transportation Code, to provide that an
owner is exempt from penalties if the title is in possession of the
lienholder. 

SECTION 3. Amends Sec. 503.063, Transportation Code, by providing
exceptions in Subsections (a) and (b). Adds Subsection (f) which allows a
seller to issue and additional temporary tag in the occurrence that the
prior lienholder has failed to comply with the provisions of
Transportation Code Sec. 501.115 (a). The tag is good for 21 days. 

SECTION 4. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

SECTION 1. The substitute adds a 21-day time limit by which a lienholder
must execute and deliver a discharge of a lien to the owner or owner's
designee. 

SECTIONS 2 and 3 of the substitute are entirely new and were not included
in the original.