HBA-MPA H.B. 2578 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2578 By: Hamric Transportation 3/29/1999 Introduced BACKGROUND AND PURPOSE Currently, a county tax assessor-collector is prohibited from registering a motor vehicle until the owner shows "evidence of financial responsibility," most often known as the "proof of insurance" requirement. Current law does not place the same requirement on a person transfering title to a motor vehicle. Although there is a proof of insurance requirement on registering a vehicle, there is no such requirement on obtaining title for the vehicle. Nevertheless, the registration and titling functions, by accretion of custom, are treated as one. As currently practiced, when an application to change registration fails because the owner has not yet been able to secure insurance, the title transfer fails as well. A very common consequence of this is that in many cases, the official title records do not reflect the actual ownership of the vehicle, causing problems downstream for lenders as well as law enforcement. H.B. 2578 clarifies the distinction in the law between registering a motor vehicle and obtaining title for a vehicle as it relates to the insurance requirement. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 501.051, Transportation Code, by creating a new Subsection (a) from existing text and adding Subsection (b), to provide that failure to comply with Section 502.153 (Evidence of Financial Responsibility) is not grounds for refusal to issue a certificate of title. SECTION 2. Amends Section 502.153, Transportation Code, by adding Subsection (j), to provide that this section does not prohibit the issuance of a certificate of title to a vehicle to a person who is otherwise entitled to obtain one as provided by Chapter 501 (Certificate of Title Act). SECTION 3. Amends Section 503.063(f), Transportation Code, to prohibit a dealer from issuing an additional temporary cardboard buyer's tag (tag) after it expires unless certain conditions are met. Provides that an additional tag is valid for a maximum of 21 days. Authorizes a dealer to issue a tag to a person if the dealer has been unable to obtain the necessary documents to obtain permanent metal license plates because necessary documents are in the possession of the lienholder, or the purchaser has failed to comply with the terms of Section 502.153. Makes conforming and nonsubstantive changes. SECTION 4.Emergency clause. Effective date: upon passage.