HBA-EVB C.S.H.B. 3521 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3521 By: Noriega Transportation 4/8/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, motor vehicle title services are unregulated, post no bonds, and are not required to maintain records. Such third-party title services have been linked to vehicle insurance fraud and car theft. C.S.H.B. 3521 regulates motor vehicle title services in counties with a population of more than 2.8 million. The bill also requires that motor vehicle title services in such counties be registered and licensed, and required to maintain records that are available for inspection. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 520, Transportation Code, by adding Subchapter E, as follows: SUBCHAPTER E. MOTOR VEHICLE TITLE SERVICES Sec 520.051. DEFINITIONS. Defines "motor vehicle," "motor vehicle title service," "title documents," "title service license holder," " title service record," and "title service runner." Sec. 520.052. APPLICABILITY. Applies this subchapter to any motor vehicle title service operating in a county that has a population of more than 2.8 million. Sec. 520.053. LICENSE REQUIRED. Prohibits a person from acting as a motor vehicle title service or as an agent for that business unless that person holds a license issued under this subchapter. Sec. 520.054. GENERAL LICENSE APPLICATION REQUIREMENTS. (a) Provides that an applicant for a motor vehicle title service license must apply on a form prescribed by the county tax assessor-collector. Provides that the application form must be signed by the applicant and be accompanied by the application fee. (b) Sets forth the enumerated information the application must include. Sec. 520.055. APPLICATION REQUIREMENTS: CORPORATION. Requires an applicant for a motor vehicle title service license that intends to engage in business as a corporation to submit, in addition to the information required in Section 520.054, an enumerated list of information. Sec. 520.056. APPLICATION REQUIREMENTS: PARTNERSHIP. Requires an applicant for a motor vehicle title service license that intends to engage in business as a partnership to submit, in addition to the information required in Section 520.054, an application that includes an enumerated list of information. Sec. 520.057. RECORDS. (a) Requires a holder of a motor vehicle title service license to maintain records as required by this section on a form prescribed and made available by the county tax assessor-collector for each transaction in which the license holder receives compensation. Requires the records to include the date of transaction; the name, age, address, sex, driver's license number; and adds the requirement for a legible photocopy of proof of financial responsibility for the motor vehicle involved. Requires a motor vehicle title service to keep two copies of all records required under this section for at least two years after the date of the transaction; legible photocopies of any documents submitted by a customer; and legible photocopies of any documents submitted by the county tax assessor-collector. Sec. 520.058. INSPECTION OF RECORDS. Requires a motor vehicle title service license holder or any of its employees to allow an inspection of records required under Section 520.057, by a peace officer on the premises of the motor vehicle title service at any reasonable time to verify, check, or audit the records. Sec. 520.059. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE. (a) Authorizes the county tax assessor-collector to deny, suspend, revoke, or reinstate a license issued under this subchapter. (b) Requires the county tax assessor-collector to adopt rules that establish grounds for the denial, suspension, revocation, or reinstatement of a license, and rules that establish procedures for disciplinary action. Provides that any procedures issued under this subchapter are subject to Chapter 2001, Government Code. (c) Prohibits a person whose license is revoked from applying for a new license before the first anniversary of the date of the revocation. (d) Prohibits a license from being issued under a fictitious name that is similar to or may be confused with the name of a governmental entity or that is deceptive or misleading to the public. Sec. 520.060. LICENSE RENEWAL. (a) Provides that a license issued under this subchapter expires on the first anniversary of the date of issuance and authorizes annual renewal on or before the expiration date on payment of the required fee. (b) Authorizes a person who is otherwise eligible to renew a license to renew an unexpired license by paying to the county tax assessor-collector before the expiration date of the license the required renewal fee. Prohibits a person whose license has expired from engaging in activities that require a license until the license has been renewed under this section. (c) Authorizes a person to renew the license by paying to the county tax assessor-collector one and a half times the required renewal fee if a person's license has been expired for 90 days or less. (d) Authorizes a person to renew the license by paying to the county tax assessor-collector two times the required renewal fee if a person's license has been expired for longer than 90 days but less than one year. (e) Prohibits license renewal for a person whose license has been expired for one year or longer. Authorizes the person to obtain a new license by complying with the requirements and procedures for obtaining an original license. (f) Authorizes a person to renew an expired license, notwithstanding Subsection (e), if a person was licensed in this state, moved to another state, and has been doing business in the other state for the two years preceding application. Provides that the person must pay to the county tax assessor-collector a fee that is equal to two times the required fee for the license. (g) Requires the county tax assessor-collector to notify the person of the impending expiration before the 30th day preceding the date on which a person's license expires. Provides that the notice must be in writing and sent to the person's last known address according to the records of the county tax assessor-collector. Sec. 520.061. CRIMINAL PENALTY. Provides that a person commits a Class A misdemeanor if the person violates this subchapter or a rule adopted by the county tax assessor-collector under this chapter. Sec. 520.062. INJUNCTION. (a) Authorizes a district attorney of the county in which the motor vehicle title service is located to bring an action to enjoin the operation of a motor vehicle title service if the motor vehicle title service license holder or a title service runner of the motor vehicle title service, while in the scope of the runner's employment, is convicted of more than one offense under this subchapter. (b) Authorizes the court, if the court grants relief under Subsection (a), to enjoin the person from maintaining or participating in the business of a motor vehicle title service for a period of time as determined by the court; or declare the place where the person's business is located to be closed for any use relating to the business of the motor vehicle title service for as long as the person is enjoined from participating in that business. Sec. 520.063. EXEMPTIONS. Provides that the following persons and their agents are exempt from the licensing and other requirements established by this subchapter: (1) a franchised motor vehicle dealer or independent motor vehicle dealer who holds a general distinguishing number issued by the department under Chapter 503; (2) a motor vehicle lessor holding a license issued by the Motor Vehicle Board under the Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes) or a trust or other entity that is specifically not required to obtain a lessor license under Section 4.01(a) of that Act; and (3) a lease facilitator holding a license issued by the Motor Vehicle Board under the Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes). SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute differs from the original bill in SECTION 1 (proposed Sec. 520.051, Transportation Code) by deleting "lost motor vehicle applications," "motor vehicle salvage title applications," "certificates," and "non-repairable salvage title certified applications," from the definition of "title documents." Deletes the definition of "title service clerk" in proposed Subdivision (4). Redefines "title service runner" as any person employed by a licensed motor vehicle title service to submit or present title documents to the county tax assessor-collector, rather than any person employed by a licensed motor vehicle title service to submit or present title documents to the department or any county tax assessor-collector in this state. The substitute differs from the original bill in SECTION 1 (proposed Sec. 520.052, Transportation Code) by providing that this subchapter applies to any motor vehicle title service operating in a county that has a population of more than 2.8 million, rather than 1.6 million. The substitute differs from the original bill in SECTION 1 (proposed Sec. 520.053, Transportation Code) by deleting Subsection (b) from the original, which prohibited a person from acting as a title service clerk or a title service runner without a license issued under this Subchapter. The substitute differs from the original bill in SECTION 1 (proposed Sec. 520.055, Transportation Code) to make a conforming change. The substitute differs from the original bill in SECTION 1 (proposed Sec. 520.056, Transportation Code) to make a conforming change. The substitute differs from the original bill in SECTION 1 (proposed Sec. 520.057, Transportation Code), as follows: Proposed Section 520.057 (Classification of License Endorsements), of the original bill is deleted. Section 520.058 (Records) of the original bill is redesignated as Section 520.057 of the substitute. The substitute uses the term, "license holder," instead of "licensee". The substitute adds a legible photocopy of proof of financial responsibility for the motor vehicle involved; legible photocopies of any documents submitted by a customer; and legible photocopies of any documents submitted by the county tax assessor-collector to the recordkeeping requirements. Makes conforming changes. Section 520.058 (Inspection of Records) in the substitute is redesignated from Section 520.059 in the original bill. Makes conforming changes. Section 520.059 (Denial, Suspension, or Revocation of License) in the substitute is redesignated from Section 520.061 in the original bill. Makes conforming changes. The substitute deletes proposed Section 520.060 (Agent) from the original bill. The substitute adds a new Section 520.060 to provide specifics for license renewal and renewals following various expiration periods. Section 520.061 (Criminal Penalty) in the substitute is redesignated from Section 520.062 in the original bill. Section 520.062 (Injunction) in the substitute is redesignated from Section 520.063 in the original bill. The substitute adds new proposed Section 520.063 (Exemptions), which provides that the following persons and their agents are exempt from the licensing and other requirements established by this subchapter: (1) a franchised motor vehicle dealer or independent motor vehicle dealer who holds a general distinguishing number issued by the department under Chapter 503; (2) a motor vehicle lessor holding a license issued by the Motor Vehicle Board under the Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes) or a trust or other entity that is specifically not required to obtain a lessor license under Section 4.01(a) of that Act; and (3) a lease facilitator holding a license issued by the Motor Vehicle Board under the Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes).