BILL ANALYSIS

S.B. 2245

By: West

Transportation

Committee Report (Unamended)

BACKGROUND AND PURPOSE

State law provides a process through which a person in possession of a vehicle may apply for a bonded title when they do not have the automobile's title that officially confirms ownership. The process requires the person to secure a surety bond which serves as a form of insurance to protect the interest of any previous owners or lienholders of the vehicle. The bill sponsor has informed the committee, however, that the current bonded title process provides opportunities for title disputes, fraud, and vehicle theft. S.B. 2245 makes certain revisions to the bonded title process in an effort to secure the process and protect lienholders and previous owners.

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 rulemaking authority is expressly granted to the Texas Department of Motor Vehicles in SECTION 1 of this bill.

ANALYSIS

S.B. 2245 amends the Transportation Code to revise the list of conditions which each qualify a person to obtain a title for a motor vehicle in their possession by filing a bond, as an alternative to an application for a hearing following the refusal, rescission, cancellation, suspension, or revocation of a title by the Texas Department of Motor Vehicles (TxDMV), as follows:

· changes the condition that the person provides a release of all liens with bond to a condition that the person provides a release of all liens less than 10 years old; and

· includes a condition that the lienholder of any lien less than 10 years old has gone out of business, the security interest on the vehicle was not transferred to or otherwise acquired by another person, and the applicant provides sufficient evidence of those facts in the form and manner prescribed by TxDMV rule.

S.B. 2245 requires TxDMV, on receipt of a bond filing as an alternative to a hearing, to notify any recorded owner or lienholder of the vehicle of the bond filing. If a person who files a bond does not hold a general distinguishing number issued under state law, TxDMV may only issue title on or after the 30th day after the date on which the person submits an application for title and may not issue title if any recorded owner or lienholder with an interest in the vehicle objects to the issuance of the title. The bill establishes that failure to object to the issuance of title does not waive the right of an interested person to bring an action to recover on the bond.

S.B. 2245 applies only to a bond for a motor vehicle title that is filed on or after the bill's effective date.

EFFECTIVE DATE

September 1, 2025.