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