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A BILL TO BE ENTITLED
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AN ACT
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relating to procedures for the issuance of a bonded title for a |
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motor vehicle. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 501.053, Transportation Code, is amended |
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by amending Subsections (a) and (c) and adding Subsections (b-1) |
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and (b-2) to read as follows: |
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(a) As an alternative to the procedure provided by Section |
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501.052, the person may obtain a title by filing a bond with the |
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department if the vehicle is in the possession of the applicant and: |
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(1) there is no security interest on the vehicle; |
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(2) any lien on the vehicle is at least 10 years old; |
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[or] |
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(3) the person provides a release of all liens less |
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than 10 years old; or |
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(4) the lienholder of any lien less than 10 years old |
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has gone out of business, the security interest on the vehicle was |
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not transferred to or otherwise acquired by another person, and the |
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applicant provides sufficient evidence of those facts in the form |
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and manner prescribed by department rule [with bond]. |
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(b-1) On receipt of a bond filing under this section, the |
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department shall notify any recorded owner or lienholder of the |
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vehicle of the bond filing. |
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(b-2) If a person who files a bond under this section does |
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not hold a general distinguishing number issued under Subchapter B, |
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Chapter 503, the department: |
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(1) may only issue title on or after the 30th day after |
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the date on which the person submits an application for title under |
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Section 501.023; and |
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(2) may not issue title if any recorded owner or |
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lienholder with an interest in the vehicle objects to the issuance |
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of the title. |
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(c) An interested person has a right of action to recover on |
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the bond for a breach of the bond's condition. The aggregate |
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liability of the surety to all persons may not exceed the amount of |
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the bond. Failure to object to the issuance of title under |
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Subsection (b-2)(2) does not waive the right of an interested |
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person to bring an action to recover on the bond filed under this |
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section. |
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SECTION 2. The changes in law made by this Act apply only to |
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a bond for a motor vehicle title that is filed on or after the |
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effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2025. |
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