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.