1-1 By: Noreiga (Senate Sponsor - Whitmire) H.B. No. 3521 1-2 (In the Senate - Received from the House April 26, 1999; 1-3 April 27, 1999, read first time and referred to Committee on State 1-4 Affairs; May 14, 1999, reported favorably by the following vote: 1-5 Yeas 8, Nays 0; May 14, 1999, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to motor vehicle title services; providing a criminal 1-9 penalty. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Chapter 520, Transportation Code, is amended by 1-12 adding Subchapter E to read as follows: 1-13 SUBCHAPTER E. MOTOR VEHICLE TITLE SERVICES 1-14 Sec. 520.051. DEFINITIONS. In this subchapter: 1-15 (1) "Motor vehicle" has the meaning assigned by 1-16 Section 501.002. 1-17 (2) "Motor vehicle title service" means any person 1-18 that for compensation directly or indirectly assists other persons 1-19 in obtaining title documents by submitting, transmitting, or 1-20 sending applications for title documents to the appropriate 1-21 government agencies. 1-22 (3) "Title documents" means motor vehicle title 1-23 applications, motor vehicle registration renewal applications, 1-24 motor vehicle mechanic's lien title applications, motor vehicle 1-25 storage lien title applications, motor vehicle temporary 1-26 registration permits, motor vehicle title application transfers 1-27 occasioned by the death of the title holder, or notifications under 1-28 Chapter 683 of this code or Chapter 70, Property Code. 1-29 (4) "Title service license holder" means a person who 1-30 holds a motor vehicle title service license or a title service 1-31 runner's license. 1-32 (5) "Title service record" means the written record 1-33 for each transaction in which a motor vehicle title service 1-34 receives compensation. 1-35 (6) "Title service runner" means any person employed 1-36 by a licensed motor vehicle title service to submit or present 1-37 title documents to the county tax assessor-collector. 1-38 Sec. 520.052. APPLICABILITY. This subchapter applies to any 1-39 motor vehicle title service operating in a county that has a 1-40 population of more than 2.8 million. 1-41 Sec. 520.053. LICENSE REQUIRED. A person may not act as a 1-42 motor vehicle title service or act as an agent for that business 1-43 unless that person holds a license issued under this subchapter. 1-44 Sec. 520.054. GENERAL LICENSE APPLICATION REQUIREMENTS. 1-45 (a) An applicant for a motor vehicle title service license must 1-46 apply on a form prescribed by the county tax assessor-collector. 1-47 The application form must be signed by the applicant and 1-48 accompanied by the application fee. 1-49 (b) An application must include: 1-50 (1) the applicant's name, business address, and 1-51 business telephone number; 1-52 (2) the name under which the applicant will do 1-53 business; 1-54 (3) the physical address of each office from which the 1-55 applicant will conduct business; 1-56 (4) a statement indicating whether the applicant has 1-57 previously applied for a license under this subchapter, the result 1-58 of the previous application, and whether the applicant has ever 1-59 been the holder of a license under this subchapter that was revoked 1-60 or suspended; 1-61 (5) information from the applicant as required by the 1-62 county tax assessor-collector to establish the business reputation 1-63 and character of the applicant; 1-64 (6) the applicant's federal tax identification number; 2-1 (7) the applicant's state sales tax number; and 2-2 (8) any other information required by rules adopted 2-3 under this subchapter. 2-4 Sec. 520.055. APPLICATION REQUIREMENTS: CORPORATION. In 2-5 addition to the information required in Section 520.054, an 2-6 applicant for a motor vehicle title service license that intends to 2-7 engage in business as a corporation shall submit the following 2-8 information: 2-9 (1) the state of incorporation; 2-10 (2) the name, address, date of birth, and social 2-11 security number of each of the principal owners and directors of 2-12 the corporation; 2-13 (3) information about each officer and director as 2-14 required by the county tax assessor-collector to establish the 2-15 business reputation and character of the applicant; and 2-16 (4) a statement indicating whether an employee, 2-17 officer, or director has been refused a motor vehicle title service 2-18 license or a title service runner's license or has been the holder 2-19 of a license that was revoked or suspended. 2-20 Sec. 520.056. APPLICATION REQUIREMENTS: PARTNERSHIP. In 2-21 addition to the information required in Section 520.054, a motor 2-22 vehicle title service license applicant that intends to engage in 2-23 business as a partnership shall submit an application that includes 2-24 the following information: 2-25 (1) the name, address, date of birth, and social 2-26 security number of each partner; 2-27 (2) information about each partner as required by the 2-28 county tax assessor-collector to establish the business reputation 2-29 and character of the applicant; and 2-30 (3) a statement indicating whether a partner or 2-31 employee has been refused a motor vehicle title service license or 2-32 a title service runner's license or has been the holder of a 2-33 license that was revoked or suspended. 2-34 Sec. 520.057. RECORDS. (a) A holder of a motor vehicle 2-35 title service license shall maintain records as required by this 2-36 section on a form prescribed and made available by the county tax 2-37 assessor-collector for each transaction in which the license holder 2-38 receives compensation. The records shall include: 2-39 (1) the date of the transaction; 2-40 (2) the name, age, address, sex, driver's license 2-41 number, and a legible photocopy of the driver's license for each 2-42 customer; and 2-43 (3) the license plate number, vehicle identification 2-44 number, and a legible photocopy of proof of financial 2-45 responsibility for the motor vehicle involved. 2-46 (b) A motor vehicle title service shall keep: 2-47 (1) two copies of all records required under this 2-48 section for at least two years after the date of the transaction; 2-49 (2) legible photocopies of any documents submitted by 2-50 a customer; and 2-51 (3) legible photocopies of any documents submitted to 2-52 the county tax assessor-collector. 2-53 Sec. 520.058. INSPECTION OF RECORDS. A motor vehicle title 2-54 service license holder or any of its employees shall allow an 2-55 inspection of records required under Section 520.057 by a peace 2-56 officer on the premises of the motor vehicle title service at any 2-57 reasonable time to verify, check, or audit the records. 2-58 Sec. 520.059. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE. 2-59 (a) The county tax assessor-collector may deny, suspend, revoke, 2-60 or reinstate a license issued under this subchapter. 2-61 (b) The county tax assessor-collector shall adopt rules that 2-62 establish grounds for the denial, suspension, revocation, or 2-63 reinstatement of a license and rules that establish procedures for 2-64 disciplinary action. Procedures issued under this subchapter are 2-65 subject to Chapter 2001, Government Code. 2-66 (c) A person whose license is revoked may not apply for a 2-67 new license before the first anniversary of the date of the 2-68 revocation. 2-69 (d) A license may not be issued under a fictitious name that 3-1 is similar to or may be confused with the name of a governmental 3-2 entity or that is deceptive or misleading to the public. 3-3 Sec. 520.060. LICENSE RENEWAL. (a) A license issued under 3-4 this subchapter expires on the first anniversary of the date of 3-5 issuance and may be renewed annually on or before the expiration 3-6 date on payment of the required renewal fee. 3-7 (b) A person who is otherwise eligible to renew a license 3-8 may renew an unexpired license by paying to the county tax 3-9 assessor-collector before the expiration date of the license the 3-10 required renewal fee. A person whose license has expired may not 3-11 engage in activities that require a license until the license has 3-12 been renewed under this section. 3-13 (c) If a person's license has been expired for 90 days or 3-14 less, the person may renew the license by paying to the county tax 3-15 assessor-collector 1-1/2 times the required renewal fee. 3-16 (d) If a person's license has been expired for longer than 3-17 90 days but less than one year, the person may renew the license by 3-18 paying to the county tax assessor-collector two times the required 3-19 renewal fee. 3-20 (e) If a person's license has been expired for one year or 3-21 longer, the person may not renew the license. The person may 3-22 obtain a new license by complying with the requirements and 3-23 procedures for obtaining an original license. 3-24 (f) Notwithstanding Subsection (e), if a person was licensed 3-25 in this state, moved to another state, and has been doing business 3-26 in the other state for the two years preceding application, the 3-27 person may renew an expired license. The person must pay to the 3-28 county tax assessor-collector a fee that is equal to two times the 3-29 required renewal fee for the license. 3-30 (g) Before the 30th day preceding the date on which a 3-31 person's license expires, the county tax assessor-collector shall 3-32 notify the person of the impending expiration. The notice must be 3-33 in writing and sent to the person's last known address according to 3-34 the records of the county tax assessor-collector. 3-35 Sec. 520.061. CRIMINAL PENALTY. (a) A person commits an 3-36 offense if the person violates this subchapter or a rule adopted by 3-37 the county tax assessor-collector under this subchapter. 3-38 (b) An offense under this section is a Class A misdemeanor. 3-39 Sec. 520.062. INJUNCTION. (a) A district attorney of the 3-40 county in which the motor vehicle title service is located may 3-41 bring an action to enjoin the operation of a motor vehicle title 3-42 service if the motor vehicle title service license holder or a 3-43 runner of the motor vehicle title service while in the scope of the 3-44 runner's employment is convicted of more than one offense under 3-45 this subchapter. 3-46 (b) If the court grants relief under Subsection (a), the 3-47 court may: 3-48 (1) enjoin the person from maintaining or 3-49 participating in the business of a motor vehicle title service for 3-50 a period of time as determined by the court; or 3-51 (2) declare the place where the person's business is 3-52 located to be closed for any use relating to the business of the 3-53 motor vehicle title service for as long as the person is enjoined 3-54 from participating in that business. 3-55 Sec. 520.063. EXEMPTIONS. The following persons and their 3-56 agents are exempt from the licensing and other requirements 3-57 established by this subchapter: 3-58 (1) a franchised motor vehicle dealer or independent 3-59 motor vehicle dealer who holds a general distinguishing number 3-60 issued by the department under Chapter 503; 3-61 (2) a motor vehicle lessor holding a license issued by 3-62 the Motor Vehicle Board under the Texas Motor Vehicle Commission 3-63 Code (Article 4413(36), Vernon's Texas Civil Statutes) or a trust 3-64 or other entity that is specifically not required to obtain a 3-65 lessor license under Section 4.01(a) of that Act; and 3-66 (3) a lease facilitator holding a license issued by 3-67 the Motor Vehicle Board under the Texas Motor Vehicle Commission 3-68 Code (Article 4413(36), Vernon's Texas Civil Statutes). 3-69 SECTION 2. This Act takes effect September 1, 1999. 4-1 SECTION 3. The importance of this legislation and the 4-2 crowded condition of the calendars in both houses create an 4-3 emergency and an imperative public necessity that the 4-4 constitutional rule requiring bills to be read on three several 4-5 days in each house be suspended, and this rule is hereby suspended. 4-6 * * * * *