By Noriega H.B. No. 3521 76R5675 WP-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to motor vehicle title services; providing criminal 1-3 penalties. 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, lost 1-18 motor vehicle title applications, motor vehicle mechanic's lien 1-19 title applications, motor vehicle storage lien title applications, 1-20 motor vehicle temporary registration permits, motor vehicle title 1-21 application transfers occasioned by the death of the title holder, 1-22 motor vehicle salvage title applications, certificates, or 1-23 non-repairable salvage title certified applications. 1-24 (4) "Title service clerk" means any person: 2-1 (A) having an ownership interest in a motor 2-2 vehicle title service; 2-3 (B) having managerial authority over the 2-4 operations of a motor vehicle title service; or 2-5 (C) who directly or indirectly provides services 2-6 for compensation to assist a motor vehicle title service in the 2-7 processing and filing of title documents, including assistance from 2-8 office managers, clerical personnel, notaries, subcontractors, or 2-9 consultants. 2-10 (5) "Title service license holder" means a person who 2-11 holds a motor vehicle title service license, a title service 2-12 runner's license, or a title service clerk's license. 2-13 (6) "Title service record" means the written record 2-14 for each transaction in which a motor vehicle title service 2-15 receives compensation. 2-16 (7) "Title service runner" means any person employed 2-17 by a licensed motor vehicle title service to submit or present 2-18 title documents to the department or any county tax 2-19 assessor-collector in this state. 2-20 Sec. 520.052. APPLICABILITY. This subchapter applies to any 2-21 motor vehicle title service operating in a county that has a 2-22 population of more than 1.6 million. 2-23 Sec. 520.053. LICENSE REQUIRED. (a) A person may not act 2-24 as a motor vehicle title service or act as an agent for that 2-25 business unless that person holds a license issued under this 2-26 subchapter. 2-27 (b) A person may not act as a title service clerk or a title 3-1 service runner unless the person holds a license issued under this 3-2 subchapter. 3-3 Sec. 520.054. GENERAL LICENSE APPLICATION REQUIREMENTS. 3-4 (a) An applicant for a motor vehicle title service license must 3-5 apply on a form prescribed by the county tax assessor-collector. 3-6 The application form must be signed by the applicant and 3-7 accompanied by the application fee. 3-8 (b) An application must include: 3-9 (1) the applicant's name, business address, and 3-10 business telephone number; 3-11 (2) the name under which the applicant will do 3-12 business; 3-13 (3) the physical address of each office from which the 3-14 applicant will conduct business; 3-15 (4) a statement indicating whether the applicant has 3-16 previously applied for a license under this subchapter, the result 3-17 of the previous application, and whether the applicant has ever 3-18 been the holder of a license under this subchapter that was revoked 3-19 or suspended; 3-20 (5) information from the applicant as required by the 3-21 county tax assessor-collector to establish the business reputation 3-22 and character of the applicant; 3-23 (6) the applicant's federal tax identification number; 3-24 (7) the applicant's state sales tax number; and 3-25 (8) any other information required by rules adopted 3-26 under this subchapter. 3-27 Sec. 520.055. APPLICATION REQUIREMENTS: CORPORATION. In 4-1 addition to the information required in Section 520.054, an 4-2 applicant for a motor vehicle title service license that intends to 4-3 engage in business as a corporation shall submit the following 4-4 information: 4-5 (1) the state of incorporation; 4-6 (2) the name, address, date of birth, and social 4-7 security number of each of the principal owners and directors of 4-8 the corporation; 4-9 (3) information about each officer and director as 4-10 required by the county tax assessor-collector to establish the 4-11 business reputation and character of the applicant; and 4-12 (4) a statement indicating whether an employee, 4-13 officer, or director has been refused a motor vehicle title service 4-14 license, a title service clerk's license, or a title service 4-15 runner's license, or has been the holder of a license that was 4-16 revoked or suspended. 4-17 Sec. 520.056. APPLICATION REQUIREMENTS: PARTNERSHIP. In 4-18 addition to the information required in Section 520.054, a motor 4-19 vehicle title service license applicant that intends to engage in 4-20 business as a partnership shall submit an application that includes 4-21 the following information: 4-22 (1) the name, address, date of birth, and social 4-23 security number of each partner; 4-24 (2) information about each partner as required by the 4-25 county tax assessor-collector to establish the business reputation 4-26 and character of the applicant; and 4-27 (3) a statement indicating whether a partner or 5-1 employee has been refused a motor vehicle title service license, a 5-2 title service clerk's license, or a title service runner's license, 5-3 or has been the holder of a license that was revoked or suspended. 5-4 Sec. 520.057. CLASSIFICATION OF LICENSE ENDORSEMENTS. 5-5 (a) The county tax assessor-collector shall classify motor vehicle 5-6 title service employees according to the type of activity performed 5-7 by the license holder. An employee of a motor vehicle title 5-8 service may not engage in activities for a particular 5-9 classification under this subchapter unless the employee holds a 5-10 license under that classification. 5-11 (b) An applicant may apply for a motor vehicle title service 5-12 license with an endorsement for an employee in one or more of the 5-13 following classifications: 5-14 (1) title service clerk; or 5-15 (2) title service runner. 5-16 (c) The county tax assessor-collector shall prescribe the 5-17 procedures and qualifications for obtaining a title service clerk's 5-18 or a title service runner's license. 5-19 Sec. 520.058. RECORDS. (a) A holder of a motor vehicle 5-20 title service license shall maintain records as required by this 5-21 section on a form prescribed and made available by the county tax 5-22 assessor-collector for each transaction in which the licensee 5-23 receives compensation. The records shall include: 5-24 (1) the date of the transaction; 5-25 (2) the name, age, address, sex, driver's license 5-26 number, and a legible photocopy of the driver's license for each 5-27 customer; and 6-1 (3) the license plate number and vehicle 6-2 identification number for the motor vehicle involved. 6-3 (b) A motor vehicle title service shall keep two copies of 6-4 all records required under this section for at least two years 6-5 after the date of the transaction. 6-6 Sec. 520.059. INSPECTION OF RECORDS. A motor vehicle title 6-7 service license holder or any of its employees shall allow an 6-8 inspection of records required under Section 520.058, by a peace 6-9 officer on the premises of the motor vehicle title service at any 6-10 reasonable time to verify, check, or audit the records. 6-11 Sec. 520.060. AGENT. The holder of a title service clerk's 6-12 license may authorize not more than five individuals to operate as 6-13 a title service runner under the holder's license. A person 6-14 authorized to operate as a title service runner under a title 6-15 service clerk's license is not required to hold a license under 6-16 Section 520.053(b) or 520.057(a). 6-17 Sec. 520.061. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE. 6-18 (a) The county tax assessor-collector may deny, suspend, revoke, 6-19 or reinstate a license issued under this subchapter. 6-20 (b) The county tax assessor-collector shall adopt rules that 6-21 establish grounds for the denial, suspension, revocation, or 6-22 reinstatement of a license and rules that establish procedures for 6-23 disciplinary action. Any procedures issued under this subchapter 6-24 are subject to Chapter 2001, Government Code. 6-25 (c) A person whose license is revoked may not apply for a 6-26 new license before the first anniversary of the date of the 6-27 revocation. 7-1 (d) A license may not be issued under a fictitious name that 7-2 is similar to or may be confused with the name of a governmental 7-3 entity or that is deceptive or misleading to the public. 7-4 Sec. 520.062. CRIMINAL PENALTY. (a) A person commits an 7-5 offense if the person violates a provision of this subchapter or a 7-6 rule adopted by the commission under this subchapter. 7-7 (b) An offense under this section is a Class A misdemeanor. 7-8 Sec. 520.063. INJUNCTION. (a) A district attorney of the 7-9 county in which the motor vehicle title service is located may 7-10 bring an action to enjoin the operation of a motor vehicle title 7-11 service if the motor vehicle title service license holder, or a 7-12 title service clerk or runner of the motor vehicle title service, 7-13 while in the scope of the clerk's or runner's employment, is 7-14 convicted of more than one offense under this subchapter. 7-15 (b) If the court grants relief under Subsection (a), the 7-16 court may: 7-17 (1) enjoin the person from maintaining or 7-18 participating in the business of a motor vehicle title service for 7-19 a period of time as determined by the court; or 7-20 (2) declare the place where the person's business is 7-21 located to be closed for any use relating to the business of the 7-22 motor vehicle title service for as long as the person is enjoined 7-23 from participating in that business. 7-24 SECTION 2. This Act takes effect September 1, 1999. 7-25 SECTION 3. The importance of this legislation and the 7-26 crowded condition of the calendars in both houses create an 7-27 emergency and an imperative public necessity that the 8-1 constitutional rule requiring bills to be read on three several 8-2 days in each house be suspended, and this rule is hereby suspended.