Texas Senate Bill SB1827

Texas 2009 - 81st Regular

• Out of Senate Committee: 3/31/09
• Voted on by Senate: 4/9/09
• Out of House Committee: 5/11/09
• Voted on by House: 5/15/09
• Governor Action: 6/19/09
• Enrolled: 5/29/09
• Passed: 6/19/09

Caption

Relating to the constituting of certain sales of a used motor vehicle as a private disposition for purposes of Chapter 9, Business & Commerce Code.

Impact

The primary impact of SB1827 is to provide a clearer legal framework for independent auto dealers when conducting auctions. By stipulating that the specified conditions must be met—including the prohibition of bidding by the debtor or secured party and limited advertisement—this bill aims to protect the integrity of private dispositions. It allows secured parties to sell collateral without the need for extensive public notice, thus promoting efficiency in the sale process and potentially enhancing liquidity for used vehicles.

Summary

SB1827 amends Subchapter B, Chapter 503 of the Transportation Code in Texas, introducing Section 503.040, which pertains to the private disposition of used motor vehicles at auto auctions conducted by independent motor vehicle dealers. This bill clarifies that the sale of a used motor vehicle at such auctions, where the debtor and secured party are barred from bidding, is categorized as a private disposition under the Business & Commerce Code. This ensures that the transaction is treated with specific legal regard, streamlining the process for independent dealers and clearing ambiguities regarding the sale protocols of used vehicles sold at auction.

Contention

While the bill aims to simplify the auction process for used vehicles, there might be potential points of contention regarding consumer protections. Critics could argue that limiting advertising and public notice before auctions may reduce transparency for potential buyers. This lack of information might raise ethical concerns about the underlying value and condition of the vehicles being auctioned. Additionally, the exemption of the debtor and secured party from bidding may lead to fears of collusion or unfair practices in certain cases, prompting calls for stricter oversight in future legislative discussions.