HBA-MSH H.B. 642 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 642 By: Flores Transportation 7/25/2001 Enrolled BACKGROUND AND PURPOSE All vehicles registered in Texas are issued a certificate of title by the Texas Department of Transportation (TxDOT). Prior to the 77th Legislature, when borrowed funds were used to purchase a vehicle the original title was sent to the first lienholder, typically a financial institution, and the applicant was sent a duplicate original title. Although duplicate titles were used to show proof of ownership, such titles were rarely needed. Both a duplicate original title issued by TxDOT and a title receipt issued by a county tax assessorcollector on application for a certificate of title were sufficient to prove ownership. TxDOT estimated that eliminating the issuance of duplicate original titles and using registration and title receipts would result in TxDOT realizing annual savings of approximately $841,000. House Bill 642 removes the requirement that TxDOT issue duplicate original titles, authorizes the use of a registration receipt or certificate of title issued by another jurisdiction to prove ownership of a vehicle, and authorizes TxDOT to issue titles valid for registration purposes only. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Transportation in SECTION 4 (Section 501.029, Transportation Code) and in SECTION 8 of this bill. ANALYSIS House Bill 642 amends the Transportation Code to require Texas Department of Transportation (TxDOT) to send a motor vehicle certificate of title to the applicant or, if there is a lien on the vehicle, to the first lienholder. The bill authorizes TxDOT, by rule, to provide for the issuance of a title valid for registration purposes only and sets forth the application fee for such a title. The bill requires TxDOT to adopt rules to account for the abolition of duplicate original certificates of title. The bill authorizes a person to use a registration receipt to evidence title to a motor vehicle and not to transfer an interest in or establish a lien on the vehicle. The bill prohibits the owner of a motor vehicle registered in Texas from operating or allowing to be operated the motor vehicle until the owner obtains a certificate of title for the vehicle or a registration receipt evidencing title to motor vehicle. The bill prohibits TxDOT from registering or renewing the registration of a motor vehicle for which a certificate of title is required unless the owner obtains a certificate of title for the vehicle or presents satisfactory evidence that a certificate of title was previously issued to the owner by TxDOT or another jurisdiction. EFFECTIVE DATE September 1, 2001.