| 3 | 2 | | |
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| 4 | 3 | | |
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| 5 | 4 | | A BILL TO BE ENTITLED |
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| 6 | 5 | | AN ACT |
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| 7 | 6 | | relating to the liability of and issuance of titles and permits for |
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| 8 | 7 | | motor vehicles purchased from motor vehicle dealers that go out of |
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| 9 | 8 | | business. |
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| 10 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 10 | | SECTION 1. Subchapter B, Chapter 501, Transportation Code, |
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| 12 | 11 | | is amended by adding Section 501.0236 to read as follows: |
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| 13 | 12 | | Sec. 501.0236. ISSUANCE OF TITLE AND PERMITS WHEN DEALER |
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| 14 | 13 | | GOES OUT OF BUSINESS. (a) This section applies only to a person |
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| 15 | 14 | | who is the purchaser of a motor vehicle for which the dealer: |
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| 16 | 15 | | (1) is required to apply for a title for the vehicle |
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| 17 | 16 | | under Section 501.0234; and |
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| 18 | 17 | | (2) does not apply for the title because the dealer has |
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| 19 | 18 | | gone out of business. |
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| 20 | 19 | | (b) A purchaser to whom this section applies may apply for: |
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| 21 | 20 | | (1) a title in the manner prescribed by the department |
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| 22 | 21 | | by rule; and |
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| 23 | 22 | | (2) on expiration of the buyer's tag issued to the |
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| 24 | 23 | | purchaser under Section 503.063, a 30-day permit under Section |
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| 25 | 24 | | 502.095. |
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| 26 | 25 | | (c) An application for a title under this section must |
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| 27 | 26 | | include a release of any recorded lien on the motor vehicle unless |
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| 28 | 27 | | the only recorded lienholder is a dealer described by Subsection |
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| 29 | 28 | | (a). |
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| 30 | 29 | | (d) The department shall waive the payment of fees for: |
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| 31 | 30 | | (1) a title issued to a purchaser described by this |
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| 32 | 31 | | section, if the purchaser can show that fees for a title were paid |
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| 33 | 32 | | to the dealer; and |
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| 34 | 33 | | (2) one 30-day permit issued to a purchaser described |
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| 35 | 34 | | by this section. |
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| 36 | 35 | | (e) Notwithstanding Section 503.033(e), the department may |
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| 37 | 36 | | recover against the surety bond executed by the dealer under |
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| 38 | 37 | | Section 503.033 the amount of any fee waived for a title or permit |
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| 39 | 38 | | issued under this section. |
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| 40 | 39 | | (f) The department shall adopt the rules necessary to |
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| 41 | 40 | | implement this section. |
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| 42 | 41 | | SECTION 2. The heading to Section 503.033, Transportation |
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| 43 | 42 | | Code, is amended to read as follows: |
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| 44 | 43 | | Sec. 503.033. SURETY BOND REQUIRED; LIABILITY OF SURETY |
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| 45 | 44 | | [SECURITY REQUIREMENT]. |
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| 46 | 45 | | SECTION 3. Sections 503.033(a) and (d), Transportation |
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| 47 | 46 | | Code, are amended to read as follows: |
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| 48 | 47 | | (a) The department may not issue or renew a motor vehicle |
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| 49 | 48 | | dealer general distinguishing number or a wholesale motor vehicle |
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| 50 | 49 | | auction general distinguishing number unless the applicant |
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| 51 | 50 | | provides to the department[: |
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| 52 | 51 | | [(1)] satisfactory proof that the applicant has |
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| 53 | 52 | | purchased a properly executed surety bond in the amount of $50,000 |
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| 54 | 53 | | [$25,000] with a good and sufficient surety approved by the |
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| 55 | 54 | | department[; or |
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| 56 | 55 | | [(2) other security under Subsection (c)]. |
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| 57 | 56 | | (d) A person may recover against a surety bond [or other |
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| 58 | 57 | | security] if the person obtains against a person issued a motor |
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| 59 | 58 | | vehicle dealer general distinguishing number or a wholesale motor |
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| 60 | 59 | | vehicle auction general distinguishing number a judgment assessing |
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| 61 | 60 | | damages and reasonable attorney's fees based on an act or omission |
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| 62 | 61 | | on which the bond is conditioned that occurred during the term for |
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| 63 | 62 | | which the general distinguishing number was valid. |
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| 64 | 63 | | SECTION 4. This Act takes effect September 1, 2019. |
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