By: Miles S.B. No. 2184
A BILL TO BE ENTITLED
AN ACT
relating to new capital investment in the state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Title 2, Tax Code, is amended by
amending Section 152.0411 and adding Section 152.0413 to read as
follows:
Sec. 152.0411. COLLECTION BY SELLERS. (a) Except as
provided by this section, a seller who makes a sale subject to the
sales tax imposed by Section 152.021 shall add the amount of the tax
to the sales price, and when the amount of the tax is added:
(1) it is a debt of the purchaser to the seller until
paid; and
(2) if unpaid, it is recoverable at law in the same
manner as the original sales price.
(b) The seller shall collect the tax from the purchaser and
remit it to the tax assessor-collector in the time and manner
provided by law.
(c) This section applies only to the sale of a vehicle that
is to be titled and registered in Texas. If a purchaser intends to
register a vehicle outside Texas, the purchaser shall comply with
the terms of Section 152.092.
(d) This section does not apply to a seller-financed sale.
(e) This section applies only to a sale in which the seller
is a motor vehicle dealer who holds a dealer license issued under
Chapter 503, Transportation Code, or Chapter 2301, Occupations
Code, except as provided by Section 152.0413.
(f) This section does not apply to the sale of a motor
vehicle with a gross weight in excess of 11,000 pounds. The seller
of a motor vehicle with a gross weight in excess of 11,000 pounds
shall maintain records of the sale in the manner and form, and
containing the information, required by the comptroller.
Sec. 152.0413. COLLECTION BY VERIFIED INVESTED SELLERS.
(a) This section applies to the sale of a motor vehicle by an
entity that is :
(1) in good standing under the laws of the state in
which the entity was formed or organized, as evidenced by a
certificate issued by the secretary of state or the state official
having custody of the records pertaining to entities or other
organizations formed under the laws of that state; and
(2) owes no delinquent taxes to a taxing unit of this
state;
(3) made a new capital investment in this state
including a place of business and a facility for the servicing,
including warranty servicing, that shall be furnished with all the
equipment required to service;
(4) generates more than 100 jobs in this state;
(5) intends to remain regularly and actively engaged
in the business at a location specified; and
(6) intends that a bona fide employee will be at the
location to buy, sell, lease, or exchange vehicles during
reasonable and lawful business hours.
(b) This section does not apply to:
(1) a franchised dealer as defined by section
2301.002(16), Occupations Code; or
(2) a manufacturer that has granted a franchise the
right to sell and service new motor vehicles manufactured or
distributed by the manufacturer.
(c) After receiving verification from the Comptroller that
an entity meets the requirements of this section, an entity to which
this section applies is exempt from Subchapter B of Chapter 503,
Transportation Code, and Chapter 2301, Occupations Code.
(d) The owner of a motor vehicle or the owner's designated
agent may make a complaint concerning the purchase of the vehicle or
a defect in a motor vehicle that is covered by a manufacturer’s
warranty agreement applicable to the vehicle. The complaint must be
made in writing to the applicable entity and must specify each
defect in the vehicle that is covered by the warranty.
Notwithstanding any other law the attorney general may enforce this
subsection.
(e) The comptroller shall adopt rules and promulgate forms
necessary to implement this section.
SECTION 2. Section 503.001, 503,062, 503.0626, 503.063, and
503.0631, Transportation Code, are amended to read as follows:
Sec. 503.001. DEFINITIONS. In this chapter:(1) "Board"
has the meaning assigned by Chapter 2301, Occupations Code.
(2) "Commission" means the board of the Texas Department of
Motor Vehicles.
(3) "Converter" has the meaning assigned by Chapter 2301,
Occupations Code.
(4) "Dealer" means a person who regularly and actively buys,
sells, or exchanges vehicles at an established and permanent
location. The term includes a franchised motor vehicle dealer, an
independent motor vehicle dealer, an independent mobility motor
vehicle dealer, and a wholesale motor vehicle dealer.
(5) "Department" means the Texas Department of Motor
Vehicles.
(6) "Drive-a-way operator" means a person who transports
and delivers a vehicle in this state from the manufacturer or
another point of origin to a location in this state using the
vehicle's own power or using the full-mount method, the
saddle-mount method, the tow-bar method, or a combination of those
methods.
(6-a) “Verified Invested Seller” has the meaning assigned
by Chapter 152, Tax Code.
(7) "Franchise" has the meaning assigned by Chapter 2301,
Occupations Code.
(8) "Franchised motor vehicle dealer" means a person
engaged in the business of buying, selling, or exchanging new motor
vehicles at an established and permanent place of business under a
franchise in effect with a motor vehicle manufacturer or
distributor.
(8-a) "Independent mobility motor vehicle dealer" has the
meaning assigned by Section 2301.002, Occupations Code.
(9) "Independent motor vehicle dealer" means a dealer other
than a franchised motor vehicle dealer, an independent mobility
motor vehicle dealer, or a wholesale motor vehicle dealer.
(10) "Manufacturer" means a person who manufactures,
distributes, or assembles new vehicles.
(11) "Motorcycle" has the meaning assigned by Section
502.001.
(12) "Motor vehicle" has the meaning assigned by Section
502.001.
(13) "Semitrailer" has the meaning assigned by Section
502.001.
(14) "Trailer" has the meaning assigned by Section 502.001.
(15) "Vehicle" means a motor vehicle, motorcycle, house
trailer, trailer, or semitrailer.
(16) "Wholesale motor vehicle auction" means the offering
of a motor vehicle for sale to the highest bidder during a
transaction that is one of a series of regular periodic
transactions that occur at a permanent location.
(17) "Wholesale motor vehicle dealer" means a dealer who
sells motor vehicles only to a person who is:
(A) the holder of a dealer's general distinguishing
number; or
(B) a foreign dealer authorized by a law of this state
or interstate reciprocity agreement to purchase a vehicle in this
state without remitting the motor vehicle sales tax.
Sec. 503.062. [DEALER’S] TEMPORARY TAGS. (a) A dealer or
verified invested seller may issue a temporary tag for use on an
unregistered vehicle by the dealer, or the dealer's employees, the
verified invested seller, or the invited seller’s employees only
to:
(1) demonstrate or cause to be demonstrated to a
prospective buyer the vehicle for sale purposes only;
(2) convey or cause to be conveyed the vehicle:
(A) from one of the dealer's places of business
or the place of business of a verified invested seller in this state
to another of the dealer's places of business or the place of
business of a verified invested seller in this state;
(B) from the dealer's place of business or the
place of business of a verified invested seller to a place the
vehicle is to be repaired, reconditioned, or serviced;
(C) from the state line or a location in this
state where the vehicle is unloaded to the dealer's place of
business or the place of business of a verified invested seller;
(D) from the dealer's place of business or the
place of business of a verified invested seller to a place of
business of another dealer or a verified invested seller;
(E) from the point of purchase by the dealer or a
verified invested seller to the dealer's place of business or the
place of business of a verified invested seller; or
(F) to road test the vehicle; or
(3) use the vehicle for or allow its use by a
charitable organization.
(b) Subsection (a)(1) does not prohibit a dealer or a
verified invested seller from permitting:
(1) a prospective buyer to operate a vehicle while the
vehicle is being demonstrated; or
(2) a customer to operate a vehicle temporarily while
the customer's vehicle is being repaired.
(c) A vehicle being conveyed under this section is exempt
from the inspection requirements of Chapter 548.
(d) The department may not issue a dealer or a verified
invested seller temporary tag or contract for the issuance of a
dealer or the place of business of a verified invested seller
temporary tag but shall prescribe:
(1) the specifications, form, and color of a [dealer]
temporary tag;
(2) procedures [for a dealer] to generate a
vehicle-specific number using the database developed under Section
503.0626 and assign it to each tag;
(3) procedures to clearly display the
vehicle-specific number on the tag; and
(4) the period for which a tag may be used for or by a
charitable organization.
(e) For purposes of this section, "charitable organization"
means an organization organized to relieve poverty, to advance
education, religion, or science, to promote health, governmental,
or municipal purposes, or for other purposes beneficial to the
community without financial gain.
Sec. 503.0626. [DEALER’S AND CONVERTER’S] TEMPORARY TAG
DATABASE.
(a) The department shall develop and maintain a secure,
real-time database of information on vehicles to which dealers, a
verified invested seller and converters have affixed temporary
tags. The database shall be managed by the vehicle titles and
registration division of the department.
(b) The database must allow law enforcement agencies to use
the vehicle-specific number assigned to and displayed on the tag as
required by Section 503.062(d) or Section 503.0625(e) to obtain
information about the dealer, a verified invested seller or
converter that owns the vehicle.
(c) Before a dealer’s, a verified invested seller’s or
converter's temporary tag may be displayed on a vehicle, the
dealer, a verified invested seller or converter must enter into the
database through the Internet information on the vehicle and
information about the dealer, a verified invested seller or
converter as prescribed by the department. The department may not
deny access to the database to any dealer who holds a general
distinguishing number issued under this chapter or who is licensed
under Chapter 2301, Occupations Code, [or] to any converter
licensed under Chapter 2301, Occupations Code, or to any verified
invested seller.
(d) The department shall adopt rules and prescribe
procedures as necessary to implement this section.
Sec. 503.063. BUYER'S TEMPORARY TAGS. (a) Except as
provided by this section, a dealer or a verified invested seller
shall issue to a person who buys a vehicle one temporary buyer's tag
for the vehicle.
(b) Except as provided by this section, the buyer's tag is
valid for the operation of the vehicle until the earlier of:
(1) the date on which the vehicle is registered; or
(2) the 60th day after the date of purchase.
(c) The dealer:
(1) must show in ink on the buyer's tag the actual date
of sale and any other required information; and
(2) is responsible for displaying the tag.
(d) The dealer or a verified invested seller is responsible
for the safekeeping and distribution of each buyer's tag the dealer
or a verified invested seller obtains.
(e) The department may not issue a buyer's tag or contract
for the issuance of a buyer's tag but shall prescribe:
(1) the specifications, color, and form of a buyer's
tag; and
(2) procedures for a dealer or a verified invested
seller to:
(A) generate a vehicle-specific number using the
database developed under Section 503.0631 and assign it to each
tag;
(B) generate a vehicle-specific number using the
database developed under Section 503.0631 for future use for when a
dealer or a verified invested seller is unable to access the
Internet at the time of sale; and
(C) clearly display the vehicle-specific number
on the tag.
(f) The department shall ensure that a dealer or a verified
invested seller may generate in advance a sufficient amount of
vehicle-specific numbers under Subsection (e)(2)(B) in order to
continue selling vehicles for a period of up to one week in which a
dealer or a verified invested seller is unable to access the
Internet due to an emergency. The department shall establish an
expedited procedure to allow affected dealers or a verified
invested sellers to apply for additional vehicle-specific numbers
so they may remain in business during an emergency.
(g) For each buyer's temporary tag, a dealer or a verified
invested seller shall charge the buyer a registration fee of not
more than $5 as prescribed by the department to be sent to the
comptroller for deposit to the credit of the Texas Department of
Motor Vehicles fund.
Sec. 503.0631. BUYER'S TEMPORARY TAG DATABASE. (a) The
department shall develop and maintain a secure, real-time database
of information on persons to whom temporary buyer's tags are issued
that may be used by a law enforcement agency in the same manner that
the agency uses vehicle registration information. The database
shall be managed by the vehicle titles and registration division of
the department.
(b) The database must allow law enforcement agencies to use
a vehicle-specific number assigned to and displayed on the tag as
required by Section 503.063(e)(2) to obtain information about the
person to whom the tag was issued.
(c) Except as provided by Subsection (d), before a buyer's
temporary tag may be displayed on a vehicle, a dealer or a verified
invested seller must enter into the database through the Internet
information about the buyer of the vehicle for which the tag was
issued as prescribed by the department and generate a
vehicle-specific number for the tag as required by Section
503.063(e). The department may not deny access to the database to a
a verified invested seller or to any dealer who holds a general
distinguishing number issued under this chapter or who is licensed
under Chapter 2301, Occupations Code.
(d) A dealer or a verified invested seller shall obtain
24-hour Internet access at its place of business, but if the dealer
or a verified invested seller is unable to access the Internet at
the time of the sale of a vehicle, the dealer or a verified invested
seller shall complete and sign a form, as prescribed by the
department, that states the dealer or a verified invested seller
has Internet access, but was unable to access the Internet at the
time of sale. The buyer shall keep the original copy of the form in
the vehicle until the vehicle is registered to the buyer. Not later
than the next business day after the time of sale, the dealer shall
submit the information required under Subsection (c).
(e) The department shall adopt rules and prescribe
procedures as necessary to implement this section.
(f) The dealer or verified invested seller may charge a
reasonable fee not to exceed $20 for costs associated with
complying with this section.
SECTION 3. Not later than September 1, 2017, the
comptroller shall adopt or modify any rules necessary to implement
the changes in law made by this Act.
SECTION 4. Not later than September 1, 2017, the Department
of Motor Vehicles shall adopt or modify any rules necessary to
implement the changes in law made by this Act.
SECTION 5. EFFECTIVE DATE. This Act takes effect September
1, 2017.