By: Truitt (Senate Sponsor - Watson) H.B. No. 1422
(In the Senate - Received from the House April 13, 2011;
April 20, 2011, read first time and referred to Committee on
Transportation and Homeland Security; May 19, 2011, reported
favorably by the following vote: Yeas 9, Nays 0; May 19, 2011,
sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the issuance of titles for certain motor vehicles that
are the subject of insurance claims.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 501.092(a), (c), and (d),
Transportation Code, are amended to read as follows:
(a) Except as provided by Section 502.0925, an [An]
insurance company that is licensed to conduct business in this
state and that acquires, through payment of a claim, ownership or
possession of a salvage motor vehicle or nonrepairable motor
vehicle covered by a certificate of title issued by this state or a
manufacturer's certificate of origin shall surrender a properly
assigned title or manufacturer's certificate of origin to the
department, on a form prescribed by the department[, except that
not earlier than the 46th day after the date of payment of the claim
the insurance company may surrender a certificate of title, on a
form prescribed by the department, and receive a salvage
certificate of title or a nonrepairable certificate of title
without obtaining a properly assigned certificate of title if the
insurance company:
[(1) has obtained the release of all liens on the motor
vehicle;
[(2) is unable to locate one or more owners of the
motor vehicle; and
[(3) has provided notice to the last known address in
the department's records to each owner that has not been located:
[(A) by registered or certified mail, return
receipt requested; or
[(B) if a notice sent under Paragraph (A) is
returned unclaimed, by publication in a newspaper of general
circulation in the area where the unclaimed mail notice was sent].
(c) An insurance company may not sell a salvage motor
vehicle or nonrepairable motor vehicle [to which this section
applies] unless the department has issued a salvage vehicle title
or a nonrepairable vehicle title, as appropriate, for the motor
vehicle or a comparable ownership document has been issued by
another state or jurisdiction for the motor vehicle.
(d) An insurance company may sell a salvage motor vehicle or
nonrepairable motor vehicle [to which this section applies], or
assign a salvage vehicle title or a nonrepairable vehicle title for
a [the] motor vehicle, only to a salvage vehicle dealer, an
out-of-state buyer, a buyer in a casual sale at auction, a metal
recycler, or a used automotive parts recycler. If a [the] motor
vehicle is not a salvage motor vehicle or a nonrepairable motor
vehicle, the insurance company is not required to surrender the
regular certificate of title for the vehicle or to be issued a
salvage vehicle title or a nonrepairable vehicle title for the
motor vehicle.
SECTION 2. Subchapter E, Chapter 501, Transportation Code,
is amended by adding Sections 501.0925 and 501.0935 to read as
follows:
Sec. 501.0925. INSURANCE COMPANY NOT REQUIRED TO SURRENDER
CERTIFICATES OF TITLE IN CERTAIN SITUATIONS. (a) An insurance
company that acquires, through payment of a claim, ownership or
possession of a motor vehicle covered by a certificate of title that
the company is unable to obtain may obtain from the department not
earlier than the 30th day after the date of payment of the claim:
(1) a salvage vehicle title for a salvage motor
vehicle;
(2) a nonrepairable vehicle title for a nonrepairable
motor vehicle; or
(3) a regular certificate of title for a motor vehicle
other than a salvage motor vehicle or a nonrepairable motor
vehicle.
(b) An application for a title under Subsection (a) must be
submitted to the department on a form prescribed by the department
and include:
(1) a statement that the insurance company has
provided at least two written notices attempting to obtain the
certificate of title for the motor vehicle; and
(2) evidence acceptable to the department that the
insurance company has made payment of a claim involving the motor
vehicle.
(c) An insurance company that acquires, through payment of a
claim, ownership or possession of a motor vehicle covered by a
certificate of title for which the company is unable to obtain
proper assignment of the certificate may obtain from the department
not earlier than the 30th day after the date of payment of the
claim:
(1) a salvage vehicle title for a salvage motor
vehicle;
(2) a nonrepairable vehicle title for a nonrepairable
motor vehicle; or
(3) a regular certificate of title for a motor vehicle
other than a salvage motor vehicle or a nonrepairable motor
vehicle.
(d) An application for a title under Subsection (c) must be
submitted to the department on a form prescribed by the department
and include:
(1) a statement that the insurance company has
provided at least two written notices attempting to obtain a proper
assignment of the certificate of title; and
(2) the certificate of title.
(e) A title issued under Subsection (a) or (c) must be
issued in the name of the insurance company.
(f) An insurance company that acquires, through payment of a
claim, ownership or possession of a salvage motor vehicle or
nonrepairable motor vehicle covered by an out-of-state ownership
document may obtain from the department a salvage vehicle title or
nonrepairable vehicle title if:
(1) the motor vehicle was damaged, stolen, or
recovered in this state;
(2) the motor vehicle owner from whom the company
acquired ownership resides in this state; or
(3) otherwise allowed by department rule.
(g) A title may be issued under Subsection (f) if the
insurance company:
(1) surrenders a properly assigned title on a form
prescribed by the department; or
(2) complies with the application process for a title
issued under Subsection (a) or (c).
(h) The department shall issue the appropriate title to a
person authorized to apply for the title under this section if the
department determines that the application is complete and complies
with applicable law.
(i) The department by rule may provide that a person
required by this section to provide notice may provide the notice
electronically, including through the use of e-mail or an
interactive website established by the department for that purpose.
(j) Sections 501.092(c), (d), and (e) apply to a motor
vehicle acquired by an insurance company as described in Subsection
(a), (c), or (f).
(k) The department may adopt rules to implement this
section.
Sec. 501.0935. ISSUANCE OF TITLE TO SALVAGE POOL OPERATOR.
(a) In this section, "salvage pool operator" has the meaning
assigned by Section 2302.001, Occupations Code.
(b) This section applies only to a salvage pool operator
who, on request of an insurance company, takes possession of a motor
vehicle that is the subject of an insurance claim and the insurance
company subsequently:
(1) denies coverage with respect to the motor vehicle;
or
(2) does not otherwise take ownership of the motor
vehicle.
(b-1) An insurance company described by Subsection (b)
shall notify the salvage pool operator of the denial of the claim
regarding the motor vehicle or other disposition of the motor
vehicle. The insurance company must include in the notice the name
and address of the owner of the motor vehicle and the lienholder, if
any.
(c) Before the 31st day after receiving notice under
Subsection (b-1), a salvage pool operator shall notify the owner of
the motor vehicle and any lienholder that:
(1) the owner or lienholder must remove the motor
vehicle from the salvage pool operator's possession at the location
specified in the notice to the owner and any lienholder not later
than the 30th day after the date the notice is mailed; and
(2) if the motor vehicle is not removed within the time
specified in the notice, the salvage pool operator will sell the
motor vehicle and retain from the proceeds any costs actually
incurred by the operator in obtaining, handling, and disposing of
the motor vehicle as described by Subsection (d).
(d) The salvage pool operator may include in the costs
described by Subsection (c)(2) only costs actually incurred by the
salvage pool operator that have not been reimbursed by a third party
or are not subject to being reimbursed by a third party, such as
costs of notices, title searches, and towing and other costs
incurred with respect to the motor vehicle. The costs described by
Subsection (c)(2):
(1) may not include charges for storage or impoundment
of the motor vehicle; and
(2) may be deducted only from the proceeds of a sale of
the motor vehicle.
(e) The notice required of a salvage pool operator under
this section must be sent by registered or certified mail, return
receipt requested.
(f) If a motor vehicle is not removed from a salvage pool
operator's possession before the 31st day after the date notice is
mailed to the motor vehicle's owner and any lienholder under
Subsection (c), the salvage pool operator may obtain from the
department:
(1) a salvage vehicle title for a salvage motor
vehicle; or
(2) a nonrepairable vehicle title for a nonrepairable
motor vehicle.
(g) An application for a title under Subsection (f) must:
(1) be submitted to the department on a form
prescribed by the department; and
(2) include evidence that the notice was mailed as
required by Subsection (c) to the motor vehicle owner and any
lienholder.
(h) A title issued under this section must be issued in the
name of the salvage pool operator.
(i) The department shall issue the appropriate title to a
person authorized to apply for the title under this section if the
department determines that the application is complete and complies
with applicable law.
(j) On receipt of a title under this section, the salvage
pool operator shall sell the motor vehicle and retain from the
proceeds of the sale the costs incurred by the salvage pool operator
as permitted by Subsection (d) along with the cost of titling and
selling the motor vehicle. The salvage pool operator shall pay any
excess proceeds from the sale to the previous owner of the motor
vehicle and the lienholder, if any. The excess proceeds must be
mailed to the lienholder.
(k) If the previous owner of the motor vehicle and the
lienholder, if any, cannot be identified or located, any excess
proceeds from the sale of the motor vehicle under Subsection (j)
shall escheat to the State of Texas. The proceeds shall be
administered by the comptroller and shall be disposed of in the
manner provided by Chapter 74, Property Code.
SECTION 3. Sections 501.097(a) and (b), Transportation
Code, are amended to read as follows:
(a) An application for a nonrepairable vehicle title or
salvage vehicle title must:
(1) be made on a form prescribed by the department and
accompanied by a $8 application fee;
(2) include, in addition to any other information
required by the department:
(A) the name and current address of the owner;
(B) a description of the motor vehicle, including
the make, style of body, model year, and vehicle identification
number; and
(C) a statement describing whether the motor
vehicle:
(i) was the subject of a total loss claim
paid by an insurance company under Section 501.092, 501.0925, or
501.093;
(ii) is a self-insured motor vehicle under
Section 501.094;
(iii) is an export-only motor vehicle under
Section 501.099; [or]
(iv) was sold, transferred, or released to
the owner or former owner of the motor vehicle or a buyer at a casual
sale; or
(v) is a motor vehicle for which an
insurance company does not take ownership under Section 501.0935;
and
(3) include the name and address of:
(A) any currently recorded lienholder, if the
motor vehicle is a nonrepairable motor vehicle; or
(B) any currently recorded lienholder or a new
lienholder, if the motor vehicle is a salvage motor vehicle.
(b) Except as provided by Sections 501.0925 and 501.0935, on
[On] receipt of a complete application, the properly assigned title
or manufacturer's certificate of origin, and the application fee,
the department shall, before the sixth business day after the date
the department receives the application, issue the applicant the
appropriate title for the motor vehicle.
SECTION 4. Section 501.102, Transportation Code, is amended
by adding Subsection (f) to read as follows:
(f) Subsection (c) does not apply to an applicant for a
title under Sections 501.0925 and 501.0935.
SECTION 5. Section 2302.201(a), Occupations Code, is
amended to read as follows:
(a) Except as provided by Section 501.0935, Transportation
Code, a [A] salvage vehicle dealer who acquires ownership of a
salvage motor vehicle from an owner must receive from the owner a
properly assigned title.
SECTION 6. The change in law made by this Act to Section
501.102, Transportation Code, applies only to an offense committed
on or after the effective date of this Act. An offense committed
before the effective date of this Act is governed by the law in
effect on the date the offense was committed, and the former law is
continued in effect for that purpose. For purposes of this section,
an offense was committed before the effective date of this Act if
any element of the offense occurred before that date.
SECTION 7. This Act takes effect September 1, 2011.
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