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


Office of House Bill AnalysisC.S.H.B. 642
By: Flores
Transportation
3/14/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, all vehicles registered in Texas are issued a certificate of
title by the Texas Department of Transportation (TxDOT).  When borrowed
funds are used to purchase a vehicle the original title is sent to the
first lienholder, typically a financial institution, and the applicant is
sent a duplicate original title.  Both a duplicate original title issued by
TxDOT and a title receipt issued by a county tax assessor-collector on
application for a certificate of title are sufficient to prove ownership.
Although duplicate titles are used to show proof of ownership, such titles
are rarely needed.  The title receipt issued by a county tax
assessorcollector is sufficient to prove ownership.  TxDOT estimates that
eliminating the issuance of duplicate original titles and using
registration and title receipts would result in TxDOT realizing significant
savings. C.S.H.B. 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

C.S.H.B. 642 amends the Transportation Code relating to the abolition of
the issuance of duplicate original titles for a motor vehicle by the Texas
Department of Transportation (TxDOT).  The bill requires that TxDOT send
the 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, removes references to duplicate original
certificates of title, and removes the provision relating to the renewal of
a title receipt.  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 for registration purposes only.  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.




 COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 642 differs from the original bill by adding a provision to
prohibit the operation of a motor vehicle registered in Texas until the
owner of the vehicle obtains a registration receipt evidencing title to a
motor vehicle for registration purposes only.  The substitute also adds a
provision to allow a certificate of title issued by another jurisdiction to
be used for purposes of registration or renewal of the registration of a
motor vehicle.