| 1 | 1 | | 81R7299 ATP-D |
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| 2 | 2 | | By: Davis of Dallas H.B. No. 2299 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a motor vehicle dealer's payment to a secured party of |
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| 8 | 8 | | the balance due on a used motor vehicle and to the bond requirement |
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| 9 | 9 | | for certain motor vehicle sellers. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter H, Chapter 2301, Occupations Code, is |
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| 12 | 12 | | amended by adding Section 2301.363 to read as follows: |
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| 13 | 13 | | Sec. 2301.363. PAYMENT OF BALANCE DUE ON USED MOTOR |
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| 14 | 14 | | VEHICLE. If a dealer acquires a used motor vehicle with a balance |
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| 15 | 15 | | due to a secured party, the dealer shall submit to the department |
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| 16 | 16 | | evidence in the form of a notarized receipt from the secured party |
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| 17 | 17 | | that the dealer has paid off the entire balance before transferring |
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| 18 | 18 | | the vehicle, or before the date when payment is due, whichever |
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| 19 | 19 | | occurs first. A dealer may not offer for sale, advertise for sale, |
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| 20 | 20 | | or transfer a used motor vehicle with a balance due to a secured |
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| 21 | 21 | | party before paying off the entire balance and submitting the |
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| 22 | 22 | | notarized receipt to the department. |
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| 23 | 23 | | SECTION 2. Sections 503.033(a) and (b), Transportation |
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| 24 | 24 | | Code, are amended to read as follows: |
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| 25 | 25 | | (a) The department may not issue or renew a motor vehicle |
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| 26 | 26 | | dealer general distinguishing number or a wholesale motor vehicle |
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| 27 | 27 | | auction general distinguishing number unless the applicant |
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| 28 | 28 | | provides to the department: |
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| 29 | 29 | | (1) satisfactory proof that the applicant has |
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| 30 | 30 | | purchased a properly executed surety bond in the amount of $250,000 |
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| 31 | 31 | | [$25,000] with a good and sufficient surety approved by the |
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| 32 | 32 | | department; or |
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| 33 | 33 | | (2) other security under Subsection (c). |
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| 34 | 34 | | (b) The surety bond must be: |
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| 35 | 35 | | (1) in a form approved by the attorney general; |
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| 36 | 36 | | (2) conditioned on: |
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| 37 | 37 | | (A) the payment by the applicant of all valid |
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| 38 | 38 | | bank drafts, including checks, drawn by the applicant to buy motor |
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| 39 | 39 | | vehicles; [and] |
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| 40 | 40 | | (B) the transfer by the applicant of good title |
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| 41 | 41 | | to each motor vehicle the applicant offers for sale; and |
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| 42 | 42 | | (C) the applicant's compliance with Section |
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| 43 | 43 | | 2301.363, Occupations Code. |
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| 44 | 44 | | SECTION 3. This Act takes effect September 1, 2009. |
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