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A BILL TO BE ENTITLED
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AN ACT
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relating to a motor vehicle dealer's payment to a secured party of |
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the balance due on a used motor vehicle and to the bond requirement |
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for certain motor vehicle sellers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter H, Chapter 2301, Occupations Code, is |
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amended by adding Section 2301.363 to read as follows: |
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Sec. 2301.363. PAYMENT OF BALANCE DUE ON USED MOTOR |
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VEHICLE. If a dealer acquires a used motor vehicle with a balance |
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due to a secured party, the dealer shall submit to the department |
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evidence in the form of a notarized receipt from the secured party |
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that the dealer has paid off the entire balance before transferring |
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the vehicle, or before the date when payment is due, whichever |
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occurs first. A dealer may not offer for sale, advertise for sale, |
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or transfer a used motor vehicle with a balance due to a secured |
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party before paying off the entire balance and submitting the |
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notarized receipt to the department. |
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SECTION 2. Sections 503.033(a) and (b), Transportation |
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Code, are amended to read as follows: |
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(a) The department may not issue or renew a motor vehicle |
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dealer general distinguishing number or a wholesale motor vehicle |
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auction general distinguishing number unless the applicant |
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provides to the department: |
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(1) satisfactory proof that the applicant has |
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purchased a properly executed surety bond in the amount of $250,000 |
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[$25,000] with a good and sufficient surety approved by the |
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department; or |
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(2) other security under Subsection (c). |
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(b) The surety bond must be: |
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(1) in a form approved by the attorney general; |
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(2) conditioned on: |
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(A) the payment by the applicant of all valid |
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bank drafts, including checks, drawn by the applicant to buy motor |
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vehicles; [and] |
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(B) the transfer by the applicant of good title |
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to each motor vehicle the applicant offers for sale; and |
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(C) the applicant's compliance with Section |
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2301.363, Occupations Code. |
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SECTION 3. This Act takes effect September 1, 2009. |