89R8973 GP-D
By: Paul H.B. No. 4368
A BILL TO BE ENTITLED
AN ACT
relating to title requirements, identification number inspections,
and evidence of ownership for certain vehicles.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 501.032, Transportation Code, is amended
by amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) A [In addition to any requirement established by
department rule, a] motor vehicle, trailer, or semitrailer must
have an identification number inspection under Section 501.0321 if:
(1) the department does not have a motor vehicle
record for the motor vehicle, trailer, or semitrailer in the
department's registration and title system, and the owner of the
motor vehicle, trailer, or semitrailer is filing a bond with the
department under Section 501.053;
(2) the motor vehicle, trailer, or semitrailer was
last titled or registered outside of the United States and imported
into the United States; or
(3) the owner or person claiming ownership requires an
assigned or reassigned identification number under Section
501.033.
(a-1) The department by rule may establish additional
categories of motor vehicles, trailers, or semitrailers not
specified in Subsection (a) that are required to have vehicle
identification number inspections under Section 501.0321.
SECTION 2. Section 501.0321(a), Transportation Code, is
amended to read as follows:
(a) An inspection required under Section 501.032 or a rule
adopted under that section must verify, as applicable, the identity
of:
(1) a motor vehicle;
(2) a trailer or semitrailer;
(3) a frame, body, or motor of a motor vehicle; or
(4) an item of equipment not required to be titled but
that may be registered under Chapter 502 or issued licensed plates
under Chapter 504.
SECTION 3. Section 501.053, Transportation Code, is amended
by amending Subsections (a) and (c) and adding Subsections (b-1)
and (b-2) to read as follows:
(a) As an alternative to the procedure provided by Section
501.052, the person may obtain a title by filing a bond with the
department if the vehicle is in the possession of the applicant and:
(1) there is no security interest on the vehicle;
(2) any lien on the vehicle is at least 10 years old;
[or]
(3) the person provides a release of all liens less
than 10 years old; or
(4) the lienholder of any lien less than 10 years old
has gone out of business, the security interest on the vehicle was
not transferred to or otherwise acquired by another person, and the
applicant provides sufficient evidence of those facts in the form
and manner prescribed by department rule [with bond].
(b-1) On receipt of a bond filing under this section, the
department shall notify any recorded owner or lienholder of the
vehicle of the bond filing.
(b-2) If a person who files a bond under this section does
not hold a general distinguishing number issued under Subchapter B,
Chapter 503, the department:
(1) may only issue title on or after the 30th day after
the date on which the person submits an application for title under
Section 501.023; and
(2) may not issue title if any recorded owner or
lienholder with an interest in the vehicle objects to the issuance
of the title.
(c) An interested person has a right of action to recover on
the bond for a breach of the bond's condition. The aggregate
liability of the surety to all persons may not exceed the amount of
the bond. Failure to object to the issuance of title under
Subsection (b-2)(2) does not waive the right of an interested
person to bring an action to recover on the bond filed under this
section.
SECTION 4. Section 501.091, Transportation Code, is amended
by adding Subdivision (1-a) to read as follows:
(1-a) "Auction sales receipt" means a document
certifying the sale of a motor vehicle at auction by a law
enforcement agency or public sale for a lien foreclosure.
SECTION 5. The heading to Section 501.0925, Transportation
Code, is amended to read as follows:
Sec. 501.0925. INSURANCE COMPANY NOT REQUIRED TO SURRENDER
EVIDENCE OF OWNERSHIP [CERTIFICATES OF TITLE] IN CERTAIN
SITUATIONS.
SECTION 6. Sections 501.0925(a), (b), (c), (d), and (f),
Transportation Code, are amended to read as follows:
(a) An insurance company that acquires, through payment of a
claim, ownership or possession of a motor vehicle covered by a
[certificate of] title or a manufacturer's certificate of origin
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
evidence of ownership [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 or a manufacturer's certificate of origin
for which the company is unable to obtain proper assignment of the
title or manufacturer's certificate of origin [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 evidence of ownership [certificate of title]; and
(2) the evidence of ownership [certificate of title].
(f) An insurance company that acquires, through payment of a
claim, ownership or possession of a motor vehicle, salvage motor
vehicle, or nonrepairable motor vehicle covered by an out-of-state
title or out-of-state ownership document may obtain from the
department a title, salvage vehicle title, or nonrepairable vehicle
title, as appropriate, 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.
SECTION 7. The heading to Section 501.100, Transportation
Code, is amended to read as follows:
Sec. 501.100. APPLICATION FOR [REGULAR CERTIFICATE OF]
TITLE FOR SALVAGE VEHICLE.
SECTION 8. Sections 501.100(a) and (f), Transportation
Code, are amended to read as follows:
(a) The owner of a motor vehicle for which a nonrepairable
vehicle title was issued prior to September 1, 2003, [or] for which
a salvage vehicle title or salvage record of title has been issued,
or for which a comparable out-of-state ownership document for a
salvage motor vehicle has been issued, may apply for a title under
Section 501.023 after the motor vehicle has been repaired, rebuilt,
or reconstructed and, in addition to any other requirement of law,
only if the application:
(1) describes each major component part used to
repair, rebuild, or reconstruct the motor vehicle;
(2) states the name of each person from whom the parts
used in repairing, rebuilding, or reconstructing [assembling] the
vehicle were obtained; and
(3) shows the identification number required by
federal law to be affixed to or inscribed on the part.
(f) The department may not issue a [regular] title for a
motor vehicle based on a:
(1) nonrepairable vehicle title issued on or after
September 1, 2003, or comparable out-of-state ownership document or
record, or evidence of a notation described by Section
501.09113(a)(2) on an out-of-state ownership document or record in
the National Motor Vehicle Title Information System;
(2) receipt issued under Section 501.1003(b); or
(3) certificate of authority issued under Chapter 683.
SECTION 9. Section 501.1003, Transportation Code, is
amended to read as follows:
Sec. 501.1003. SALVAGE VEHICLE DEALER RESPONSIBILITIES.
(a) If a salvage vehicle dealer acquires ownership of a
nonrepairable motor vehicle or salvage motor vehicle for the
purpose of dismantling, scrapping, or destroying the motor vehicle,
the dealer shall, before the 31st day after the date the dealer
acquires the motor vehicle, submit to the department a report
stating that the motor vehicle will be dismantled, scrapped, or
destroyed. The dealer shall:
(1) make the report in a manner prescribed by the
department; and
(2) submit with the report a properly assigned
manufacturer's certificate of origin, [regular certificate of]
title, nonrepairable vehicle title, salvage vehicle title, auction
sales receipt, or comparable out-of-state ownership document for
the motor vehicle.
(b) After receiving the report and title, manufacturer's
certificate of origin, auction sales receipt, or document, the
department shall issue the salvage vehicle dealer a receipt for the
manufacturer's certificate of origin, [regular certificate of]
title, nonrepairable vehicle title, salvage vehicle title, auction
sales receipt, or comparable out-of-state ownership document.
(c) The department shall adopt rules to notify the salvage
vehicle dealer if the vehicle was not issued a printed title, but
has a record of title in the department's titling system.
SECTION 10. Section 501.053, Transportation Code, as
amended by this Act, applies only to a bond for a motor vehicle
title that is filed on or after the effective date of this Act.
SECTION 11. This Act takes effect September 1, 2025.