By Noriega H.B. No. 3521 76R11338 WP-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to motor vehicle title services; providing a criminal 1-3 penalty. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 520, Transportation Code, is amended by 1-6 adding Subchapter E to read as follows: 1-7 SUBCHAPTER E. MOTOR VEHICLE TITLE SERVICES 1-8 Sec. 520.051. DEFINITIONS. In this subchapter: 1-9 (1) "Motor vehicle" has the meaning assigned by 1-10 Section 501.002. 1-11 (2) "Motor vehicle title service" means any person 1-12 that for compensation directly or indirectly assists other persons 1-13 in obtaining title documents by submitting, transmitting, or 1-14 sending applications for title documents to the appropriate 1-15 government agencies. 1-16 (3) "Title documents" means motor vehicle title 1-17 applications, motor vehicle registration renewal applications, 1-18 motor vehicle mechanic's lien title applications, motor vehicle 1-19 storage lien title applications, motor vehicle temporary 1-20 registration permits, motor vehicle title application transfers 1-21 occasioned by the death of the title holder, or notifications under 1-22 Chapter 683 of this code or Chapter 70, Property Code. 1-23 (4) "Title service license holder" means a person who 1-24 holds a motor vehicle title service license or a title service 2-1 runner's license. 2-2 (5) "Title service record" means the written record 2-3 for each transaction in which a motor vehicle title service 2-4 receives compensation. 2-5 (6) "Title service runner" means any person employed 2-6 by a licensed motor vehicle title service to submit or present 2-7 title documents to the county tax assessor-collector. 2-8 Sec. 520.052. APPLICABILITY. This subchapter applies to any 2-9 motor vehicle title service operating in a county that has a 2-10 population of more than 2.8 million. 2-11 Sec. 520.053. LICENSE REQUIRED. A person may not act as a 2-12 motor vehicle title service or act as an agent for that business 2-13 unless that person holds a license issued under this subchapter. 2-14 Sec. 520.054. GENERAL LICENSE APPLICATION REQUIREMENTS. 2-15 (a) An applicant for a motor vehicle title service license must 2-16 apply on a form prescribed by the county tax assessor-collector. 2-17 The application form must be signed by the applicant and 2-18 accompanied by the application fee. 2-19 (b) An application must include: 2-20 (1) the applicant's name, business address, and 2-21 business telephone number; 2-22 (2) the name under which the applicant will do 2-23 business; 2-24 (3) the physical address of each office from which the 2-25 applicant will conduct business; 2-26 (4) a statement indicating whether the applicant has 2-27 previously applied for a license under this subchapter, the result 3-1 of the previous application, and whether the applicant has ever 3-2 been the holder of a license under this subchapter that was revoked 3-3 or suspended; 3-4 (5) information from the applicant as required by the 3-5 county tax assessor-collector to establish the business reputation 3-6 and character of the applicant; 3-7 (6) the applicant's federal tax identification number; 3-8 (7) the applicant's state sales tax number; and 3-9 (8) any other information required by rules adopted 3-10 under this subchapter. 3-11 Sec. 520.055. APPLICATION REQUIREMENTS: CORPORATION. In 3-12 addition to the information required in Section 520.054, an 3-13 applicant for a motor vehicle title service license that intends to 3-14 engage in business as a corporation shall submit the following 3-15 information: 3-16 (1) the state of incorporation; 3-17 (2) the name, address, date of birth, and social 3-18 security number of each of the principal owners and directors of 3-19 the corporation; 3-20 (3) information about each officer and director as 3-21 required by the county tax assessor-collector to establish the 3-22 business reputation and character of the applicant; and 3-23 (4) a statement indicating whether an employee, 3-24 officer, or director has been refused a motor vehicle title service 3-25 license or a title service runner's license or has been the holder 3-26 of a license that was revoked or suspended. 3-27 Sec. 520.056. APPLICATION REQUIREMENTS: PARTNERSHIP. In 4-1 addition to the information required in Section 520.054, a motor 4-2 vehicle title service license applicant that intends to engage in 4-3 business as a partnership shall submit an application that includes 4-4 the following information: 4-5 (1) the name, address, date of birth, and social 4-6 security number of each partner; 4-7 (2) information about each partner as required by the 4-8 county tax assessor-collector to establish the business reputation 4-9 and character of the applicant; and 4-10 (3) a statement indicating whether a partner or 4-11 employee has been refused a motor vehicle title service license or 4-12 a title service runner's license or has been the holder of a 4-13 license that was revoked or suspended. 4-14 Sec. 520.057. RECORDS. (a) A holder of a motor vehicle 4-15 title service license shall maintain records as required by this 4-16 section on a form prescribed and made available by the county tax 4-17 assessor-collector for each transaction in which the license holder 4-18 receives compensation. The records shall include: 4-19 (1) the date of the transaction; 4-20 (2) the name, age, address, sex, driver's license 4-21 number, and a legible photocopy of the driver's license for each 4-22 customer; and 4-23 (3) the license plate number, vehicle identification 4-24 number, and a legible photocopy of proof of financial 4-25 responsibility for the motor vehicle involved. 4-26 (b) A motor vehicle title service shall keep: 4-27 (1) two copies of all records required under this 5-1 section for at least two years after the date of the transaction; 5-2 (2) legible photocopies of any documents submitted by 5-3 a customer; and 5-4 (3) legible photocopies of any documents submitted to 5-5 the county tax assessor-collector. 5-6 Sec. 520.058. INSPECTION OF RECORDS. A motor vehicle title 5-7 service license holder or any of its employees shall allow an 5-8 inspection of records required under Section 520.057 by a peace 5-9 officer on the premises of the motor vehicle title service at any 5-10 reasonable time to verify, check, or audit the records. 5-11 Sec. 520.059. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE. 5-12 (a) The county tax assessor-collector may deny, suspend, revoke, 5-13 or reinstate a license issued under this subchapter. 5-14 (b) The county tax assessor-collector shall adopt rules that 5-15 establish grounds for the denial, suspension, revocation, or 5-16 reinstatement of a license and rules that establish procedures for 5-17 disciplinary action. Procedures issued under this subchapter are 5-18 subject to Chapter 2001, Government Code. 5-19 (c) A person whose license is revoked may not apply for a 5-20 new license before the first anniversary of the date of the 5-21 revocation. 5-22 (d) A license may not be issued under a fictitious name that 5-23 is similar to or may be confused with the name of a governmental 5-24 entity or that is deceptive or misleading to the public. 5-25 Sec. 520.060. LICENSE RENEWAL. (a) A license issued under 5-26 this subchapter expires on the first anniversary of the date of 5-27 issuance and may be renewed annually on or before the expiration 6-1 date on payment of the required renewal fee. 6-2 (b) A person who is otherwise eligible to renew a license 6-3 may renew an unexpired license by paying to the county tax 6-4 assessor-collector before the expiration date of the license the 6-5 required renewal fee. A person whose license has expired may not 6-6 engage in activities that require a license until the license has 6-7 been renewed under this section. 6-8 (c) If a person's license has been expired for 90 days or 6-9 less, the person may renew the license by paying to the county tax 6-10 assessor-collector 1-1/2 times the required renewal fee. 6-11 (d) If a person's license has been expired for longer than 6-12 90 days but less than one year, the person may renew the license by 6-13 paying to the county tax assessor-collector two times the required 6-14 renewal fee. 6-15 (e) If a person's license has been expired for one year or 6-16 longer, the person may not renew the license. The person may 6-17 obtain a new license by complying with the requirements and 6-18 procedures for obtaining an original license. 6-19 (f) Notwithstanding Subsection (e), if a person was licensed 6-20 in this state, moved to another state, and has been doing business 6-21 in the other state for the two years preceding application, the 6-22 person may renew an expired license. The person must pay to the 6-23 county tax assessor-collector a fee that is equal to two times the 6-24 required renewal fee for the license. 6-25 (g) Before the 30th day preceding the date on which a 6-26 person's license expires, the county tax assessor-collector shall 6-27 notify the person of the impending expiration. The notice must be 7-1 in writing and sent to the person's last known address according to 7-2 the records of the county tax assessor-collector. 7-3 Sec. 520.061. CRIMINAL PENALTY. (a) A person commits an 7-4 offense if the person violates this subchapter or a rule adopted by 7-5 the county tax assessor-collector under this subchapter. 7-6 (b) An offense under this section is a Class A misdemeanor. 7-7 Sec. 520.062. INJUNCTION. (a) A district attorney of the 7-8 county in which the motor vehicle title service is located may 7-9 bring an action to enjoin the operation of a motor vehicle title 7-10 service if the motor vehicle title service license holder or a 7-11 runner of the motor vehicle title service while in the scope of the 7-12 runner's employment is convicted of more than one offense under 7-13 this subchapter. 7-14 (b) If the court grants relief under Subsection (a), the 7-15 court may: 7-16 (1) enjoin the person from maintaining or 7-17 participating in the business of a motor vehicle title service for 7-18 a period of time as determined by the court; or 7-19 (2) declare the place where the person's business is 7-20 located to be closed for any use relating to the business of the 7-21 motor vehicle title service for as long as the person is enjoined 7-22 from participating in that business. 7-23 Sec. 520.063. EXEMPTIONS. The following persons and their 7-24 agents are exempt from the licensing and other requirements 7-25 established by this subchapter: 7-26 (1) a franchised motor vehicle dealer or independent 7-27 motor vehicle dealer who holds a general distinguishing number 8-1 issued by the department under Chapter 503; 8-2 (2) a motor vehicle lessor holding a license issued by 8-3 the Motor Vehicle Board under the Texas Motor Vehicle Commission 8-4 Code (Article 4413(36), Vernon's Texas Civil Statutes) or a trust 8-5 or other entity that is specifically not required to obtain a 8-6 lessor license under Section 4.01(a) of that Act; and 8-7 (3) a lease facilitator holding a license issued by 8-8 the Motor Vehicle Board under the Texas Motor Vehicle Commission 8-9 Code (Article 4413(36), Vernon's Texas Civil Statutes). 8-10 SECTION 2. This Act takes effect September 1, 1999. 8-11 SECTION 3. The importance of this legislation and the 8-12 crowded condition of the calendars in both houses create an 8-13 emergency and an imperative public necessity that the 8-14 constitutional rule requiring bills to be read on three several 8-15 days in each house be suspended, and this rule is hereby suspended.