HBA-MSH C.S.H.B. 642 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 642 By: Flores Transportation 3/14/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, all vehicles registered in Texas are issued a certificate of title by the Texas Department of Transportation (TxDOT). When borrowed funds are used to purchase a vehicle the original title is sent to the first lienholder, typically a financial institution, and the applicant is sent a duplicate original title. Both a duplicate original title issued by TxDOT and a title receipt issued by a county tax assessor-collector on application for a certificate of title are sufficient to prove ownership. Although duplicate titles are used to show proof of ownership, such titles are rarely needed. The title receipt issued by a county tax assessorcollector is sufficient to prove ownership. TxDOT estimates that eliminating the issuance of duplicate original titles and using registration and title receipts would result in TxDOT realizing significant savings. C.S.H.B. 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 C.S.H.B. 642 amends the Transportation Code relating to the abolition of the issuance of duplicate original titles for a motor vehicle by the Texas Department of Transportation (TxDOT). The bill requires that TxDOT send the 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, removes references to duplicate original certificates of title, and removes the provision relating to the renewal of a title receipt. 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 for registration purposes only. 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. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 642 differs from the original bill by adding a provision to prohibit the operation of a motor vehicle registered in Texas until the owner of the vehicle obtains a registration receipt evidencing title to a motor vehicle for registration purposes only. The substitute also adds a provision to allow a certificate of title issued by another jurisdiction to be used for purposes of registration or renewal of the registration of a motor vehicle.