BILL ANALYSIS

 

 

 

C.S.H.B. 1933

By: Lujan

Transportation

Committee Report (Substituted)

 

 

 

BACKGROUND AND PURPOSE

 

In most commercial transactions, customers have the ability to return a product they purchased and receive a refund. Under Texas law, there is a clear process that outlines the way a customer can return a recently purchased new vehicle and receive a refund for many of the taxes and fees associated with that purchase. However, there are not comparable provisions that outline such a process when returning a recently purchased used vehicle. C.S.H.B. 1933 seeks to provide a window following the sale of a used vehicle in which the parties to the sale can legally rescind sale, the dealer provides a full refund to the parties involved, and the dealer is able to obtain a refund of most taxes paid under the sale.

 

CRIMINAL JUSTICE IMPACT

 

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

 

ANALYSIS

 

C.S.H.B. 1933 amends the Transportation Code to authorize the rescission or cancellation of the retail sale of a used motor vehicle by a dealer if the rescission or cancellation of the sale is acknowledged in a written rescission or cancellation agreement signed by the dealer and the buyer not later than the 30th day after the date recorded on the vehicle's title certificate for the assignment of ownership from the dealer to the buyer. The bill requires the dealer to retain the agreement with the sale records for the vehicle. The bill authorizes the dealer to request a title for resale purposes if such a sale is rescinded or canceled.

 

C.S.H.B. 1933 establishes that, if such a sale is rescinded or canceled before the dealer has submitted an application for registration and title for the vehicle in the purchaser's name or remitted any money to a county or the state in connection with the sale, the dealer is not required to send any application or money to a county or the state in connection with the sale and must return any money that was paid to the dealer in connection with the sale to the person who paid the money to the dealer. If the sale is rescinded or canceled after the dealer has submitted the application or remitted money to a county or the state in connection with the sale, the bill requires the dealer to refund any money that was paid to the dealer in connection with the sale to the person who paid the money to the dealer and authorizes the dealer to request a refund under the bill's provisions.

 

C.S.H.B. 1933 authorizes the dealer, not later than the 15th day after the date a rescission or cancellation agreement is signed by all required parties, to submit the following to the county assessor‑collector to whom the application was submitted or money was remitted:

·         a form prescribed by the Texas Department of Motor Vehicles (TxDMV) certifying that the dealer has refunded the money;

·         a copy of the rescission or cancellation agreement;

·         any certificate of title that was issued in connection with the sale before the sale was rescinded or canceled or a form prescribed by TxDMV certifying that the title was lost or destroyed; and

·         a fee for an application for title, regardless of whether the fee was paid for the rescinded or canceled sale.

 

C.S.H.B. 1933 requires the county assessor-collector, not later than the seventh day after the date it receives the items above from the dealer, to do the following:

·         refund to the dealer all required money remitted by the dealer to the county assessor‑collector in connection with the rescinded or canceled sale except any application for title fee and any registration processing and handling fee; and

·         issue a title to the dealer with the dealer as the owner and the odometer reading as recorded at the time of the rescinded or canceled sale.

The bill prohibits a dealer from offering for sale a vehicle that has been subject to rescission or cancellation under the bill's provisions and for which a title was issued in connection with the sale unless the dealer has received the title to the vehicle. The rescission or cancellation of the sale of a used motor vehicle under the bill's provisions does not affect the status of the vehicle as having been subject to a previous retail sale.

 

C.S.H.B. 1933 amends the Tax Code to require the seller of a vehicle, the sale of which is rescinded or canceled under a written rescission or cancellation agreement, to keep at the seller's principal office for at least four years from the date of the sale a copy of such an agreement. The bill authorizes a county assessor-collector to deduct an amount equal to the amount of taxes and penalties imposed under provisions relating to motor vehicle sales and use taxes attributable to the retail sale of a used motor vehicle that is rescinded or canceled and that the county assessor‑collector is required to refund. If the county assessor-collector learns of the rescission or cancellation of the sale after the amount of the taxes and penalties attributable to that sale has been sent to the comptroller of public accounts, the county assessor-collector may deduct the amount of those taxes and penalties from the next amount required to be sent to the comptroller.

 

EFFECTIVE DATE

 

January 1, 2024.

 

COMPARISON OF INTRODUCED AND SUBSTITUTE

 

While C.S.H.B. 1933 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

 

The substitute changes the date on which the rescission or cancellation agreement must be signed for a retail sale of a used motor vehicle to be rescinded or canceled from not later than the 30th day after the date of the sale, as in the introduced, to not later than the 30th day after the date recorded on the vehicle's title certificate for the assignment of ownership from the dealer to the buyer. In addition, the substitute changes the date on which the bill becomes effective, from September 1, 2023, to January 1, 2024.

 

The substitute includes the following provisions absent from the introduced:

·         a requirement for the seller of a vehicle the sale of which is rescinded or canceled to keep at the seller's principal office for at least four years from the date of the sale a copy of the rescission or cancellation agreement;

·         an authorization for a county assessor-collector to deduct a certain amount of a vehicle sales and use tax from the amount required to be sent to the comptroller attributable to the retail sale of a used motor vehicle that is rescinded or canceled; and

·         an authorization for the county assessor-collector to deduct the amount of those taxes and penalties from the next amount required to be sent to the comptroller if the county assessor-collector learns of the rescission or cancellation of the sale after the amount of the taxes and penalties attributable to that sale has been sent to the comptroller.