| 1 | 1 | | By: Phillips (Senate Sponsor - Harris) H.B. No. 2575 |
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| 2 | 2 | | (In the Senate - Received from the House April 28, 2011; |
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| 3 | 3 | | May 3, 2011, read first time and referred to Committee on |
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| 4 | 4 | | Transportation and Homeland Security; May 20, 2011, reported |
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| 5 | 5 | | favorably by the following vote: Yeas 9, Nays 0; May 20, 2011, sent |
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| 6 | 6 | | to printer.) |
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| 7 | 7 | | |
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| 8 | 8 | | |
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| 9 | 9 | | A BILL TO BE ENTITLED |
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| 10 | 10 | | AN ACT |
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| 11 | 11 | | relating to the Texas Department of Motor Vehicles' electronic lien |
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| 12 | 12 | | system. |
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| 13 | 13 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 14 | 14 | | SECTION 1. Section 501.117, Transportation Code, is amended |
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| 15 | 15 | | by amending Subsection (a) and adding Subsections (d), (d-1), |
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| 16 | 16 | | (d-2), (e), and (f) to read as follows: |
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| 17 | 17 | | (a) The department by rule shall develop a system under |
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| 18 | 18 | | which a security interest in a motor vehicle may be perfected, |
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| 19 | 19 | | assigned, discharged, and canceled electronically instead of by |
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| 20 | 20 | | record maintained on a certificate of title. The department may |
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| 21 | 21 | | establish categories of lienholders that may participate in the |
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| 22 | 22 | | system and, except as provided by this section, may require a |
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| 23 | 23 | | lienholder to participate in the system [Participation by a |
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| 24 | 24 | | lienholder in the system is voluntary]. |
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| 25 | 25 | | (d) The department may not require a depository |
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| 26 | 26 | | institution, as defined by Section 180.002, Finance Code, to |
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| 27 | 27 | | participate in the system if the department has issued fewer than |
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| 28 | 28 | | 100 notifications of security interests in motor vehicles to the |
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| 29 | 29 | | depository institution during a calendar year. |
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| 30 | 30 | | (d-1) The department may not require a depository |
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| 31 | 31 | | institution, as defined by Section 180.002, Finance Code, to |
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| 32 | 32 | | participate in the system: |
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| 33 | 33 | | (1) during 2011, if the department issues fewer than |
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| 34 | 34 | | 200 notifications of security interests in motor vehicles to the |
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| 35 | 35 | | depository institution between September 1, 2011, and December 31, |
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| 36 | 36 | | 2011; and |
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| 37 | 37 | | (2) during 2012, if the depository institution was |
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| 38 | 38 | | exempt under Subdivision (1) and the department issues fewer than |
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| 39 | 39 | | 200 notifications of security interests in motor vehicles to the |
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| 40 | 40 | | depository institution in 2012. |
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| 41 | 41 | | (d-2) This subsection and Subsection (d-1) expire January |
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| 42 | 42 | | 1, 2013. |
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| 43 | 43 | | (e) The department by rule shall establish a reasonable |
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| 44 | 44 | | schedule for compliance with the requirements of Subsection (a) for |
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| 45 | 45 | | each category of lienholder that the department requires to |
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| 46 | 46 | | participate in the system. |
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| 47 | 47 | | (f) The department may not: |
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| 48 | 48 | | (1) prohibit a lienholder from using an intermediary |
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| 49 | 49 | | to access the system; or |
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| 50 | 50 | | (2) require a lienholder to use an intermediary to |
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| 51 | 51 | | access the system. |
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| 52 | 52 | | SECTION 2. This Act takes effect September 1, 2011. |
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| 53 | 53 | | * * * * * |
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