HBA-MSH H.B. 642 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 642
By: Flores
Transportation
7/25/2001
Enrolled



BACKGROUND AND PURPOSE 

All vehicles registered in Texas are issued a certificate of title by the
Texas Department of Transportation (TxDOT).  Prior to the 77th Legislature,
when borrowed funds were used to purchase a vehicle the original title was
sent to the first lienholder, typically a financial institution, and the
applicant was sent a duplicate original title.  Although duplicate titles
were used to show proof of ownership, such titles were rarely needed.  Both
a duplicate original title issued by TxDOT and a title receipt issued by a
county tax assessorcollector on application for a certificate of title were
sufficient to prove ownership.  TxDOT estimated that eliminating the
issuance of duplicate original titles and using registration and title
receipts would result in TxDOT realizing annual savings of approximately
$841,000.  House Bill 642 removes the requirement that TxDOT  issue
duplicate original titles, authorizes the use of a registration receipt or
certificate of title issued by another jurisdiction to prove ownership of a
vehicle, and authorizes TxDOT to issue titles valid for registration
purposes only. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Department of Transportation
in SECTION 4 (Section 501.029, Transportation Code) and in SECTION 8 of
this bill. 

ANALYSIS

House Bill 642 amends the Transportation Code to require Texas Department
of Transportation (TxDOT) to send a motor vehicle certificate of title to
the applicant or, if there is a lien on the vehicle, to the first
lienholder.  The bill authorizes TxDOT, by rule, to provide for the
issuance of a title valid for registration purposes only and sets forth the
application fee for such a title. The bill requires TxDOT to adopt rules to
account for the abolition of duplicate original certificates of title.  The
bill authorizes a person to use a registration receipt to evidence title to
a motor vehicle and not to transfer an interest in or establish a lien on
the vehicle.  The bill prohibits the owner of a motor vehicle registered in
Texas from operating or allowing to be operated the motor vehicle until the
owner obtains a certificate of title for the vehicle or a registration
receipt evidencing title to motor vehicle.  The bill prohibits TxDOT from
registering or renewing the registration of a motor vehicle for which a
certificate of title is required unless the owner obtains a certificate of
title for the vehicle or presents satisfactory evidence that a certificate
of title was previously issued to the owner by TxDOT or another
jurisdiction. 

EFFECTIVE DATE

September 1, 2001.