78R6303 DWS-F

By:  Wilson                                                       H.B. No. 1573


A BILL TO BE ENTITLED
AN ACT
relating to nonrepairable and salvage motor vehicles. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 2302.002, Occupations Code, is amended to read as follows: Sec. 2302.002. CLASSIFICATION OF VEHICLES. For purposes of this chapter: (1) a vehicle is a [late model salvage motor vehicle or a] salvage motor vehicle if the vehicle: (A) conforms to the definition of that term in Section 501.0911, Transportation Code [is a late model motor vehicle with a major component part that is damaged or missing to the extent that the total estimated cost of repairs to rebuild or reconstruct the vehicle, including parts and labor and excluding the cost to repair hail damage, is equal to or greater than an amount equal to 75 percent of the actual cash value of the vehicle in its predamaged condition]; or (B) is a damaged vehicle that comes into this state under a salvage motor vehicle certificate of title or other comparable certificate of title; and (2) a vehicle is a nonrepairable motor vehicle if the vehicle: (A) conforms to the definition of that term in Section 501.0911, Transportation Code; or (B) is a vehicle that comes into this state with a nonrepairable motor vehicle certificate of title or other comparable certificate of title. SECTION 2. Section 2302.107, Occupations Code, is amended by amending Subsections (a) and (d) and adding Subsection (e) to read as follows: (a) Except as provided by Subsection (e), a [A] person may not act as a salvage vehicle agent unless the person holds a salvage vehicle agent license issued under this chapter. (d) A salvage vehicle agent may acquire, sell, or otherwise deal in [late model] salvage motor vehicles, nonrepairable motor vehicles, or salvage parts as directed by the authorizing dealer. (e) A person is not required to hold a salvage vehicle agent license to act as a salvage vehicle agent if the person: (1) holds a salvage vehicle dealer license; (2) is a partner, owner, officer, or employee of a person who holds a salvage vehicle dealer license; or (3) only transports salvage or nonrepairable motor vehicles for a person who holds a salvage vehicle dealer license. SECTION 3. Section 501.0911(a), Transportation Code, is amended by amending Subdivisions (8), (12), (13), and (15) and adding Subdivisions (13-a) and (16) to read as follows: (8) "Nonrepairable motor vehicle" means a [late model] motor vehicle that: (A) is damaged, wrecked, or burned to the extent that the only residual value of the vehicle is as a source of parts or scrap metal; or (B) comes into this state under a title or other ownership document that indicates that the vehicle is nonrepairable, junked, or for parts or dismantling only [or missing a major component part to the extent that the total estimated cost of repairs to rebuild or reconstruct the vehicle, including parts and labor other than the costs of materials and labor for repainting the vehicle and excluding sales taxes on the total cost of the repairs, and excluding the cost of repairs to repair hail damage, is equal to or greater than an amount equal to 95 percent of the actual cash value of the vehicle in its predamaged condition]. (12) "Out-of-state buyer" means a person licensed in an automotive business by another state or jurisdiction if the department has listed the holders of such a license as permitted purchasers of salvage motor vehicles or nonrepairable motor vehicles based on substantially similar licensing requirements and on whether salvage vehicle dealers licensed in Texas are permitted to purchase salvage motor vehicles or nonrepairable motor vehicles in the other state or jurisdiction. (13) "Rebuilder" means a person who acquires and repairs, for operation on public highways, five or more [late model] salvage motor vehicles in any calendar year [12-month period]. (13-a) "Salvage motor vehicle" means a motor vehicle, other than a nonrepairable motor vehicle, that: (A) is the subject of a payment of a total loss claim by an insurance company to the insured, but not including a motor vehicle that: (i) has been stolen and recovered, unless the vehicle is damaged to the extent that the total estimated cost of repairs, including parts and labor but excluding repairs related to hail damage, equals or exceeds 75 percent of the actual cash value of the vehicle in its predamaged condition; or (ii) is a total loss solely due to hail damage; (B) is sold, transferred, or otherwise disposed of by the vehicle's owner, other than an insurance company that acquired the vehicle through payment of a total loss claim, in a damaged condition to the extent that the total estimated cost of repairs, including parts and labor but excluding repairs related to hail damage, equals or exceeds 75 percent of the actual cash value of the vehicle in its predamaged condition; or (C) comes into this state under a salvage motor vehicle certificate of title or other similar ownership document. (15) "Salvage vehicle dealer" has the meaning assigned by Section 2302.001, Occupations Code [1.01, Article 6687-1a, Revised Statutes]. (16) "Total loss claim" means a claim on which an insurance company pays the owner of a motor vehicle: (A) on theft of the vehicle; or (B) the replacement cost of the vehicle, on wreck of or damage to the vehicle, based on the cost of a motor vehicle of similar kind and quality. SECTION 4. Section 501.0912, Transportation Code, is amended to read as follows: Sec. 501.0912. INSURANCE COMPANY TO SURRENDER CERTIFICATES OF TITLE TO CERTAIN [LATE MODEL] SALVAGE MOTOR VEHICLES OR NONREPAIRABLE MOTOR VEHICLES. (a) An insurance company that is licensed to conduct business in this state and that acquires, through payment of a claim, ownership or possession of a [late model] salvage motor vehicle or nonrepairable motor vehicle covered by a certificate of title issued by this state [through payment of a claim] shall surrender a properly assigned certificate of title to the department, on a form prescribed by the department, except that not earlier than the 46th day after the date of payment of the claim the insurance company may surrender a certificate of title, on a form prescribed by the department, and receive a salvage certificate of title or a nonrepairable certificate of title without obtaining a properly assigned certificate of title if the insurance company: (1) has obtained the release of all liens on the vehicle; (2) is unable to locate one or more owners of the vehicle; and (3) has provided notice to the last known address in the department's records to each owner that has not been located: (A) by registered or certified mail, return receipt requested; or (B) if a notice sent under Paragraph (A) is returned unclaimed, by publication in a newspaper of general circulation in the area where the unclaimed mail notice was sent. (b) For a salvage motor vehicle [described by Section 501.0911(6) but not by Section 501.0911(8)], the insurance company shall apply for a salvage motor vehicle certificate of title. For a nonrepairable motor vehicle [described by Section 501.0911(8)], the insurance company shall apply for a nonrepairable motor vehicle certificate of title. (c) An insurance company may not sell a [late model salvage] motor vehicle to which this section applies unless the department has issued a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title for the vehicle or a comparable ownership document has been issued by another state or jurisdiction for the vehicle. (d) An insurance company may sell a [late model salvage] motor vehicle to which this section applies, or assign a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title for the vehicle, only to a salvage vehicle dealer, an out-of-state buyer, a buyer in a casual sale at auction, or a person described by Section 2302.003, Occupations Code [Subsection (g), Article 6687-2b, Revised Statutes]. If the vehicle is not a [late model] salvage motor vehicle or a nonrepairable motor vehicle, the insurance company is not required to surrender the regular certificate of title for the vehicle or to be issued a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title for the vehicle. SECTION 5. Section 501.0913, Transportation Code, is amended to read as follows: Sec. 501.0913. INSURANCE COMPANY TO DELIVER CERTIFICATES OF TITLE TO CERTAIN MOTOR VEHICLES. (a) If an insurance company acquires ownership of a motor vehicle other than a [late model] salvage motor vehicle or a nonrepairable motor vehicle through payment of a claim, the company shall, on delivery of the vehicle to a buyer of the vehicle, deliver the buyer a properly assigned certificate of title for the vehicle. (b) An insurance company or other person who acquires ownership of a motor vehicle other than a [late model] salvage motor vehicle or a nonrepairable motor vehicle may voluntarily and on proper application obtain a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title for the vehicle. SECTION 6. Section 501.0915, Transportation Code, is amended to read as follows: Sec. 501.0915. INSURANCE COMPANY TO SUBMIT REPORT TO DEPARTMENT. (a) If after payment of a total loss claim on a [late model] salvage motor vehicle or a nonrepairable motor vehicle an insurance company does not acquire ownership of the vehicle for a reason other than the inability to locate one or more of the owners as provided by Section 501.0912(a), the insurance company shall submit to the department, before the 31st day after the date of the payment of the claim, on the form prescribed by the department, a report stating that: (1) the insurance company has paid a total loss claim on the vehicle; and (2) the insurance company has not acquired ownership of the vehicle. (b) The owner of a [late model] salvage motor vehicle to which this section applies may not transfer ownership of the vehicle by sale or otherwise unless the department has issued a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title for the vehicle or a comparable ownership document has been issued by another state or jurisdiction for the vehicle. SECTION 7. The heading to Section 501.0916, Transportation Code, is amended to read as follows: Sec. 501.0916. SALE, TRANSFER, OR RELEASE OF [LATE MODEL] SALVAGE OR NONREPAIRABLE MOTOR VEHICLE. SECTION 8. Section 501.0916, Transportation Code, is amended by amending Subsections (a), (b), and (c) and adding Subsection (f) to read as follows: (a) Except as provided by Subsection (f), a [A] person may not sell, transfer, or release a [late model] salvage motor vehicle or a nonrepairable motor vehicle to a person other than: (1) a person who holds a salvage vehicle dealer license issued under Chapter 2302, Occupations Code; (2) the former owner of the vehicle; (3) a governmental entity; (4) an out-of-state buyer; (5) a buyer in a casual sale at auction; or (6) a person described by Section 2302.003, Occupations Code. (b) A person who sells, transfers, or releases a motor vehicle under Subsection (a) or (f) shall deliver a properly assigned certificate of title for the vehicle to the person to whom the motor vehicle is sold, transferred, or released. If the assigned certificate of title is not a salvage motor vehicle certificate of title, a nonrepairable motor vehicle certificate of title, or a comparable ownership document issued by another state or jurisdiction, the purchaser shall, not later than the 10th day after the date the purchaser receives the certificate of title: (1) surrender the certificate of title to the department; and (2) apply for a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title for the vehicle, as appropriate. (c) A salvage vehicle dealer that acquires ownership of a [late model] salvage motor vehicle or a nonrepairable motor vehicle for the purpose of dismantling, scrapping, or destroying the vehicle shall, before the 31st day after the date the dealer acquires the vehicle, submit to the department, on the form prescribed by the department, a report stating that the vehicle will be dismantled, scrapped, or destroyed, accompanied by a properly assigned regular certificate of title, salvage motor vehicle certificate of title, nonrepairable motor vehicle certificate of title, or comparable ownership document issued by another state or jurisdiction for the vehicle. (f) In addition to selling to the authorized buyers listed by Subsection (a), a salvage vehicle dealer may sell not more than five salvage motor vehicles or nonrepairable motor vehicles to any individual during a calendar year. SECTION 9. Section 501.0918, Transportation Code, is amended to read as follows: Sec. 501.0918. PERSON ACQUIRING [LATE MODEL] SALVAGE MOTOR VEHICLE OR NONREPAIRABLE MOTOR VEHICLE TO SURRENDER CERTIFICATE OF TITLE. A person, other than a salvage vehicle dealer or an insurance company licensed to do business in this state, who acquires ownership of a [late model] salvage motor vehicle or a nonrepairable motor vehicle that has not been issued a salvage motor vehicle certificate of title, a nonrepairable motor vehicle certificate of title, or a comparable ownership document issued by another state or jurisdiction shall, before selling the vehicle, surrender the properly assigned certificate of title for the vehicle to the department and: (1) if the vehicle is a salvage motor vehicle [described by Section 501.0911(6) but not by Section 501.0911(8)], apply to the department for a salvage motor vehicle certificate of title for the vehicle; or (2) if the vehicle is a nonrepairable motor vehicle [described by Section 501.0911(8)], apply to the department for a nonrepairable motor vehicle certificate of title for the vehicle. SECTION 10. Section 501.0919, Transportation Code, is amended to read as follows: Sec. 501.0919. SALE OF CERTAIN [LATE MODEL] SALVAGE MOTOR VEHICLES. The owner of a [late model] salvage motor vehicle that has been issued a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title may sell the vehicle only to a salvage vehicle dealer in this state, an out-of-state buyer, a buyer in a casual sale at auction, or a person described by Section 2303.003, Occupations Code, except that if the owner is a salvage vehicle dealer, in addition to selling to the authorized buyers listed, the dealer may sell not more than five salvage motor vehicles or nonrepairable motor vehicles to any individual during a calendar year [Subsection (g), Article 6687-2b, Revised Statutes]. SECTION 11. Section 501.0920(a), Transportation Code, is amended to read as follows: (a) An application for a salvage motor vehicle certificate of title or a nonrepairable motor vehicle certificate of title must: (1) be made on a form prescribed by the department and accompanied by a fee established by the department, not to exceed the greater of $5 or an amount that is sufficient, when added to other fees collected under this chapter, to recover the actual costs to the department of issuing the certificate; and (2) include, in addition to any other information required by the department: (A) the name and current address of the owner; (B) a description of the vehicle, including the make, style of body, model year, and vehicle identification number; (C) a description of the damage to the vehicle; (D) the estimated cost of repairs to the vehicle, including parts and labor; and (E) the predamaged actual cash value of the vehicle. SECTION 12. Section 501.0922, Transportation Code, is amended to read as follows: Sec. 501.0922. APPLICATION FOR REGULAR CERTIFICATE OF TITLE FOR SALVAGE MOTOR VEHICLE. [(a)] A vehicle for which a salvage motor vehicle certificate of title, Texas salvage certificate, or other salvage ownership document has been issued may be issued a regular certificate of title only after application and, in addition to any other requirement of law, only if the application[: [(1)] describes each major component part used to repair the vehicle and shows the identification number required by federal law to be affixed to or inscribed on the part[; and [(2) is accompanied by a written statement signed by a specially trained commissioned officer of the Department of Public Safety certifying to the department that: [(A) the vehicle identification numbers and parts identification numbers are accurate; [(B) the applicant has proof that the applicant owns the parts used to repair the vehicle; and [(C) the vehicle may be safely operated and complies with all applicable motor vehicle safety standards of this state. [(b) The Department of Public Safety may impose a fee, in an amount not to exceed the lesser of $200 or the actual cost to that department, for conducting an inspection and providing the written statement required by Subsection (a)]. SECTION 13. Section 501.0923(a), Transportation Code, is amended to read as follows: (a) On receipt of a complete application under Section 501.0922, [accompanied by the peace officer's statement and the appropriate fee for the certificate of title,] the department shall issue the applicant a certificate of title for the vehicle. SECTION 14. Section 501.0925, Transportation Code, is amended to read as follows: Sec. 501.0925. RIGHTS OF HOLDER OF NONREPAIRABLE MOTOR VEHICLE CERTIFICATE OF TITLE. A person who holds a nonrepairable motor vehicle certificate of title for a vehicle: (1) is entitled to possess the vehicle, dismantle, scrap, or destroy the vehicle, or transport the vehicle or parts of the vehicle[, or rebuild the vehicle]; (2) may not operate or permit the operation of the vehicle on a public highway; and (3) may transfer ownership of the vehicle only as permitted by law. SECTION 15. Section 501.0926, Transportation Code, is amended to read as follows: Sec. 501.0926. OFFENSE. A [Except as provided by Section 501.0927, a] person commits an offense if the person: (1) applies to the department for a certificate of title for a motor vehicle; and (2) knows that the vehicle is a nonrepairable motor vehicle that has been rebuilt. SECTION 16. Section 501.0928(a), Transportation Code, is amended to read as follows: (a) The department shall print salvage motor vehicle certificates of title and nonrepairable motor vehicle certificates of title in a color that distinguishes them from certificates of title and so that each document clearly shows that it is the ownership document for a [late model] salvage motor vehicle or a nonrepairable motor vehicle. SECTION 17. Section 501.0929(b), Transportation Code, is amended to read as follows: (b) A person who rebuilds a [late model] salvage motor vehicle for which the department has issued a salvage motor vehicle certificate of title, or who assembles a [late model] salvage motor vehicle from component parts, may apply to the department for a certificate of title for the vehicle. A certificate of title issued by the department under this subsection must bear the words "REBUILT SALVAGE." SECTION 18. Section 501.0931, Transportation Code, is amended to read as follows: Sec. 501.0931. APPLICABILITY OF SUBCHAPTER. (a) This subchapter does not apply to, and does not preclude or prohibit a sale to, purchase by, or other transaction by or with, a person described by Section 2302.003, Occupations Code [Subsection (g), Article 6687-2b, Revised Statutes], except as provided by Subsections (b) and (c). (b) A person described by Section 2302.003, Occupations Code [Subsection (g), Article 6687-2b, Revised Statutes], shall submit to the department the certificate of title or equivalent document that the person receives in conjunction with the purchase of a motor vehicle not later than the 60th day after the date the person receives the certificate of title or equivalent document. (c) This subchapter applies to a transaction with a person described by Section 2302.003, Occupations Code [Subsection (g), Article 6687-2b, Revised Statutes], in which a motor vehicle is sold or delivered to the person for the purpose of reuse or resale as a motor vehicle or as motor vehicle parts if the motor vehicle is so used. (d) This subchapter does not: (1) prohibit the owner of a [late model] salvage motor vehicle or a nonrepairable motor vehicle from selling the vehicle to any person, if the vehicle is so classified solely because of water damage caused by a flood; or (2) limit the ability or authority of an insurance company to adjust or settle a claim for loss on a motor vehicle. SECTION 19. Section 501.138(a), Transportation Code, is amended to read as follows: (a) Except as provided by Section 501.1381, an [An] applicant for a certificate of title, other than the state or a political subdivision of the state, must pay the county assessor-collector a fee of $13. SECTION 20. Subchapter G, Chapter 501, Transportation Code, is amended by adding Section 501.1381 to read as follows: Sec. 501.1381. COLLECTION AND DISPOSITION OF FEES FOR NONREPAIRABLE OR SALVAGE MOTOR VEHICLE. (a) In this section, "nonrepairable motor vehicle certificate of title" and "salvage motor vehicle certificate of title" have the meanings assigned by Section 501.0911. (b) An applicant, other than the state or a political subdivision of the state, for a certificate of title for a motor vehicle currently titled under a nonrepairable motor vehicle certificate of title or a salvage motor vehicle certificate of title, Texas salvage certificate, or other salvage ownership document must pay the county assessor-collector a fee of $68. (c) The county assessor-collector shall send: (1) $15 of the fee to the county treasurer for deposit in the officers' salary fund; and (2) $53 of the fee to the department: (A) together with the salvage motor vehicle certificate of title, Texas salvage certificate, or other salvage ownership document or the nonrepairable motor vehicle certificate of title and the application within the time prescribed by Section 501.023; or (B) if the fee is deposited in an interest-bearing account or certificate in the county depository or invested in an investment authorized by Subchapter A, Chapter 2256, Government Code, not later than the 35th day after the date on which the fee is received. (d) Of the amount received under Subsection (c)(2), the department shall deposit: (1) $5 in the general revenue fund; (2) $3 to the credit of the state highway fund to recover the expenses necessary to administer this chapter; and (3) $45 to the credit of an account to be known as the motor vehicle theft enforcement account in the state highway fund to be used only by the Department of Public Safety for the enforcement of laws related to theft of motor vehicles and the prevention of motor vehicle theft. (e) The county owns all interest earned on fees deposited or invested under Subsection(c)(2)(B). The county treasurer shall credit that interest to the county general fund. SECTION 21. The following provisions are repealed: (1) Section 2302.001(6), Occupations Code; (2) Sections 501.0911(a)(5) and (6), Transportation Code; and (3) Sections 501.0914 and 501.0927, Transportation Code. SECTION 22. (a) This Act takes effect September 1, 2003. (b) The change in law made by this Act applies only to a certificate of title, Texas salvage certificate, or other salvage ownership document, or a nonrepairable motor vehicle certificate of title, issued on or after the effective date of this Act. A certificate of title, Texas salvage certificate, or other salvage ownership document, or a nonrepairable motor vehicle certificate of title, issued before the effective date of this Act is governed by the law in effect immediately preceding the effective date of this Act, and the former law is continued in effect for that purpose.