86R11685 BEE-F
By: Flores S.B. No. 1193
A BILL TO BE ENTITLED
AN ACT
relating to the liability of and issuance of titles and permits for
motor vehicles purchased from motor vehicle dealers that go out of
business.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 501, Transportation Code,
is amended by adding Section 501.0236 to read as follows:
Sec. 501.0236. ISSUANCE OF TITLE AND PERMITS WHEN DEALER
GOES OUT OF BUSINESS. (a) This section applies only to a person who
is the purchaser of a motor vehicle for which the dealer:
(1) is required to apply for a title for the vehicle
under Section 501.0234; and
(2) does not apply for the title because the dealer has
gone out of business.
(b) A purchaser to whom this section applies may apply for:
(1) a title in the manner prescribed by the department
by rule; and
(2) on expiration of the buyer's tag issued to the
purchaser under Section 503.063, a 30-day permit under Section
502.095.
(c) An application for a title under this section must
include a release of any recorded lien on the motor vehicle unless
the only recorded lienholder is a dealer described by Subsection
(a).
(d) The department shall waive the payment of fees for:
(1) a title issued to a purchaser described by this
section, if the purchaser can show that fees for a title were paid
to the dealer; and
(2) one 30-day permit issued to a purchaser described
by this section.
(e) Notwithstanding Section 503.033(e), the department may
recover against the surety bond executed by the dealer under
Section 503.033 the amount of any fee waived for a title or permit
issued under this section.
(f) The department shall adopt the rules necessary to
implement this section.
SECTION 2. The heading to Section 503.033, Transportation
Code, is amended to read as follows:
Sec. 503.033. SURETY BOND REQUIRED; LIABILITY OF SURETY
[SECURITY REQUIREMENT].
SECTION 3. Sections 503.033(a) and (d), 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 $50,000
[$25,000] with a good and sufficient surety approved by the
department [; or
[(2) other security under Subsection (c)].
(d) A person may recover against a surety bond [or other
security] if the person obtains against a person issued a motor
vehicle dealer general distinguishing number or a wholesale motor
vehicle auction general distinguishing number a judgment assessing
damages and reasonable attorney's fees based on an act or omission
on which the bond is conditioned that occurred during the term for
which the general distinguishing number was valid.
SECTION 4. This Act takes effect September 1, 2019.