BILL ANALYSIS Senate Research Center S.B. 2246 89R5547 MZM-F By: West Transportation 4/3/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Salvage auto dealers routinely purchase vehicles from law enforcement auctions and foreclosure sales held by lienholders. Many times, vehicle titles and other standard documents used to establish proof of ownership are not available. An auction sales receipt could be the only proof of legal ownership for buyers of salvage autos. Current law requires salvage vehicles obtained at auctions and foreclosure sales to go through the process of obtaining titles, when in fact, these vehicles are often nonrepairable and are not intended to return to operation on the road. Instead, salvage buyer's plans are to scrap or dismantle these vehicles for parts or sell them for their metal content. Allowing auction sales receipts to be used to establish ownership will allow salvage auto purchasers to avoid the time-consuming process of obtaining a title for a vehicle that ultimately, will be scrapped or destroyed. S.B. 2246 also improves operational efficiency for Texas Department of Motor Vehicles (TxDMV), as TxDMV will no longer be required to process title applications for salvage vehicles that will not return to the road. As proposed, S.B. 2246 amends current law relating to motor vehicle titles for salvage vehicles. RULEMAKING AUTHORITY Rulemaking authority previously granted to the Texas Department of Motor Vehicles is modified in SECTION 2 (Section 501.1003, Transportation Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 501.091, Transportation Code, by adding Subdivision (1-a) to define "auction sales receipt." SECTION 2. Amends Section 501.1003, Transportation Code, as follows: Sec. 501.1003. New heading: SALVAGE VEHICLE DEALER RESPONSIBILITIES. (a) Requires a salvage vehicle dealer to: (1) makes no changes to this subdivision; and (2) submit with a report stating that a vehicle will be dismantled, scrapped, or destroyed a properly assigned manufacturer's certificate of origin, title, rather than 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) Requires the Texas Department of Motor Vehicles (TxDMV), after receiving the report and title, manufacturer's certificate of origin, auction sales receipt, or document, to issue the salvage vehicle dealer a receipt for the manufacturer's certificate of origin, title, nonrepairable vehicle title, salvage vehicle title, auction sales receipt, or comparable out-of-state ownership document. Makes a conforming change. (c) Requires TxDMV to adopt rules to notify the salvage vehicle dealer if the vehicle was not issued a printed title, but has a record of title in TxDMV's titling system. SECTION 3. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2246
89R5547 MZM-F By: West
Transportation
4/3/2025
As Filed
Senate Research Center
S.B. 2246
89R5547 MZM-F
By: West
Transportation
4/3/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Salvage auto dealers routinely purchase vehicles from law enforcement auctions and foreclosure sales held by lienholders. Many times, vehicle titles and other standard documents used to establish proof of ownership are not available. An auction sales receipt could be the only proof of legal ownership for buyers of salvage autos.
Current law requires salvage vehicles obtained at auctions and foreclosure sales to go through the process of obtaining titles, when in fact, these vehicles are often nonrepairable and are not intended to return to operation on the road. Instead, salvage buyer's plans are to scrap or dismantle these vehicles for parts or sell them for their metal content.
Allowing auction sales receipts to be used to establish ownership will allow salvage auto purchasers to avoid the time-consuming process of obtaining a title for a vehicle that ultimately, will be scrapped or destroyed. S.B. 2246 also improves operational efficiency for Texas Department of Motor Vehicles (TxDMV), as TxDMV will no longer be required to process title applications for salvage vehicles that will not return to the road.
As proposed, S.B. 2246 amends current law relating to motor vehicle titles for salvage vehicles.
RULEMAKING AUTHORITY
Rulemaking authority previously granted to the Texas Department of Motor Vehicles is modified in SECTION 2 (Section 501.1003, Transportation Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 501.091, Transportation Code, by adding Subdivision (1-a) to define "auction sales receipt."
SECTION 2. Amends Section 501.1003, Transportation Code, as follows:
Sec. 501.1003. New heading: SALVAGE VEHICLE DEALER RESPONSIBILITIES. (a) Requires a salvage vehicle dealer to:
(1) makes no changes to this subdivision; and
(2) submit with a report stating that a vehicle will be dismantled, scrapped, or destroyed a properly assigned manufacturer's certificate of origin, title, rather than 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) Requires the Texas Department of Motor Vehicles (TxDMV), after receiving the report and title, manufacturer's certificate of origin, auction sales receipt, or document, to issue the salvage vehicle dealer a receipt for the manufacturer's certificate of origin, title, nonrepairable vehicle title, salvage vehicle title, auction sales receipt, or comparable out-of-state ownership document. Makes a conforming change.
(c) Requires TxDMV to adopt rules to notify the salvage vehicle dealer if the vehicle was not issued a printed title, but has a record of title in TxDMV's titling system.
SECTION 3. Effective date: September 1, 2025.