H.B. No. 1422
 
 
 
 
AN ACT
  relating to the issuance of titles for certain motor vehicles that
  are the subject of insurance claims.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 501.092(a), (c), and (d),
  Transportation Code, are amended to read as follows:
         (a)  Except as provided by Section 501.0925, an [An]
  insurance company that is licensed to conduct business in this
  state and that acquires, through payment of a claim, ownership or
  possession of a salvage motor vehicle or nonrepairable motor
  vehicle covered by a certificate of title issued by this state or a
  manufacturer's certificate of origin shall surrender a properly
  assigned title or manufacturer's certificate of origin to the
  department, on a form prescribed by the department[, except that
  not earlier than the 46th day after the date of payment of the claim
  the insurance company may surrender a certificate of title, on a
  form prescribed by the department, and receive a salvage
  certificate of title or a nonrepairable certificate of title
  without obtaining a properly assigned certificate of title if the
  insurance company:
               [(1)     has obtained the release of all liens on the motor
  vehicle;
               [(2)     is unable to locate one or more owners of the
  motor vehicle; and
               [(3)     has provided notice to the last known address in
  the department's records to each owner that has not been located:
                     [(A)     by registered or certified mail, return
  receipt requested; or
                     [(B)     if a notice sent under Paragraph (A) is
  returned unclaimed, by publication in a newspaper of general
  circulation in the area where the unclaimed mail notice was sent].
         (c)  An insurance company may not sell a salvage motor
  vehicle or nonrepairable motor vehicle [to which this section
  applies] unless the department has issued a salvage vehicle title
  or a nonrepairable vehicle title, as appropriate, for the motor
  vehicle or a comparable ownership document has been issued by
  another state or jurisdiction for the motor vehicle.
         (d)  An insurance company may sell a salvage motor vehicle or
  nonrepairable motor vehicle [to which this section applies], or
  assign a salvage vehicle title or a nonrepairable vehicle title for
  a [the] motor vehicle, only to a salvage vehicle dealer, an
  out-of-state buyer, a buyer in a casual sale at auction, a metal
  recycler, or a used automotive parts recycler.  If a [the] motor
  vehicle is not a salvage motor vehicle or a nonrepairable motor
  vehicle, the insurance company is not required to surrender the
  regular certificate of title for the vehicle or to be issued a
  salvage vehicle title or a nonrepairable vehicle title for the
  motor vehicle.
         SECTION 2.  Subchapter E, Chapter 501, Transportation Code,
  is amended by adding Sections 501.0925 and 501.0935 to read as
  follows:
         Sec. 501.0925.  INSURANCE COMPANY NOT REQUIRED TO SURRENDER
  CERTIFICATES OF TITLE IN CERTAIN SITUATIONS. (a)  An insurance
  company that acquires, through payment of a claim, ownership or
  possession of a motor vehicle covered by a certificate of title that
  the company is unable to obtain may obtain from the department not
  earlier than the 30th day after the date of payment of the claim:
               (1)  a salvage vehicle title for a salvage motor
  vehicle;
               (2)  a nonrepairable vehicle title for a nonrepairable
  motor vehicle; or
               (3)  a regular certificate of title for a motor vehicle
  other than a salvage motor vehicle or a nonrepairable motor
  vehicle.
         (b)  An application for a title under Subsection (a) must be
  submitted to the department on a form prescribed by the department
  and include:
               (1)  a statement that the insurance company has
  provided at least two written notices attempting to obtain the
  certificate of title for the motor vehicle; and
               (2)  evidence acceptable to the department that the
  insurance company has made payment of a claim involving the motor
  vehicle.
         (c)  An insurance company that acquires, through payment of a
  claim, ownership or possession of a motor vehicle covered by a
  certificate of title for which the company is unable to obtain
  proper assignment of the certificate may obtain from the department
  not earlier than the 30th day after the date of payment of the
  claim:
               (1)  a salvage vehicle title for a salvage motor
  vehicle;
               (2)  a nonrepairable vehicle title for a nonrepairable
  motor vehicle; or
               (3)  a regular certificate of title for a motor vehicle
  other than a salvage motor vehicle or a nonrepairable motor
  vehicle.
         (d)  An application for a title under Subsection (c) must be
  submitted to the department on a form prescribed by the department
  and include:
               (1)  a statement that the insurance company has
  provided at least two written notices attempting to obtain a proper
  assignment of the certificate of title; and
               (2)  the certificate of title.
         (e)  A title issued under Subsection (a) or (c) must be
  issued in the name of the insurance company.
         (f)  An insurance company that acquires, through payment of a
  claim, ownership or possession of a salvage motor vehicle or
  nonrepairable motor vehicle covered by an out-of-state ownership
  document may obtain from the department a salvage vehicle title or
  nonrepairable vehicle title if:
               (1)  the motor vehicle was damaged, stolen, or
  recovered in this state;
               (2)  the motor vehicle owner from whom the company
  acquired ownership resides in this state; or
               (3)  otherwise allowed by department rule.
         (g)  A title may be issued under Subsection (f) if the
  insurance company:
               (1)  surrenders a properly assigned title on a form
  prescribed by the department; or
               (2)  complies with the application process for a title
  issued under Subsection (a) or (c).
         (h)  The department shall issue the appropriate title to a
  person authorized to apply for the title under this section if the
  department determines that the application is complete and complies
  with applicable law.
         (i)  The department by rule may provide that a person
  required by this section to provide notice may provide the notice
  electronically, including through the use of e-mail or an
  interactive website established by the department for that purpose.
         (j)  Sections 501.092(c), (d), and (e) apply to a motor
  vehicle acquired by an insurance company as described in Subsection
  (a), (c), or (f).
         (k)  The department may adopt rules to implement this
  section.
         Sec. 501.0935.  ISSUANCE OF TITLE TO SALVAGE POOL OPERATOR.
  (a)  In this section, "salvage pool operator" has the meaning
  assigned by Section 2302.001, Occupations Code.
         (b)  This section applies only to a salvage pool operator
  who, on request of an insurance company, takes possession of a motor
  vehicle that is the subject of an insurance claim and the insurance
  company subsequently:
               (1)  denies coverage with respect to the motor vehicle;
  or
               (2)  does not otherwise take ownership of the motor
  vehicle.
         (b-1)  An insurance company described by Subsection (b)
  shall notify the salvage pool operator of the denial of the claim
  regarding the motor vehicle or other disposition of the motor
  vehicle.  The insurance company must include in the notice the name
  and address of the owner of the motor vehicle and the lienholder, if
  any.
         (c)  Before the 31st day after receiving notice under
  Subsection (b-1), a salvage pool operator shall notify the owner of
  the motor vehicle and any lienholder that:
               (1)  the owner or lienholder must remove the motor
  vehicle from the salvage pool operator's possession at the location
  specified in the notice to the owner and any lienholder not later
  than the 30th day after the date the notice is mailed; and
               (2)  if the motor vehicle is not removed within the time
  specified in the notice, the salvage pool operator will sell the
  motor vehicle and retain from the proceeds any costs actually
  incurred by the operator in obtaining, handling, and disposing of
  the motor vehicle as described by Subsection (d).
         (d)  The salvage pool operator may include in the costs
  described by Subsection (c)(2) only costs actually incurred by the
  salvage pool operator that have not been reimbursed by a third party
  or are not subject to being reimbursed by a third party, such as
  costs of notices, title searches, and towing and other costs
  incurred with respect to the motor vehicle.  The costs described by
  Subsection (c)(2):
               (1)  may not include charges for storage or impoundment
  of the motor vehicle; and
               (2)  may be deducted only from the proceeds of a sale of
  the motor vehicle.
         (e)  The notice required of a salvage pool operator under
  this section must be sent by registered or certified mail, return
  receipt requested.
         (f)  If a motor vehicle is not removed from a salvage pool
  operator's possession before the 31st day after the date notice is
  mailed to the motor vehicle's owner and any lienholder under
  Subsection (c), the salvage pool operator may obtain from the
  department:
               (1)  a salvage vehicle title for a salvage motor
  vehicle; or
               (2)  a nonrepairable vehicle title for a nonrepairable
  motor vehicle.
         (g)  An application for a title under Subsection (f) must:
               (1)  be submitted to the department on a form
  prescribed by the department; and
               (2)  include evidence that the notice was mailed as
  required by Subsection (c) to the motor vehicle owner and any
  lienholder.
         (h)  A title issued under this section must be issued in the
  name of the salvage pool operator.
         (i)  The department shall issue the appropriate title to a
  person authorized to apply for the title under this section if the
  department determines that the application is complete and complies
  with applicable law.
         (j)  On receipt of a title under this section, the salvage
  pool operator shall sell the motor vehicle and retain from the
  proceeds of the sale the costs incurred by the salvage pool operator
  as permitted by Subsection (d) along with the cost of titling and
  selling the motor vehicle. The salvage pool operator shall pay any
  excess proceeds from the sale to the previous owner of the motor
  vehicle and the lienholder, if any.  The excess proceeds must be
  mailed to the lienholder.
         (k)  If the previous owner of the motor vehicle and the
  lienholder, if any, cannot be identified or located, any excess
  proceeds from the sale of the motor vehicle under Subsection (j)
  shall escheat to the State of Texas. The proceeds shall be
  administered by the comptroller and shall be disposed of in the
  manner provided by Chapter 74, Property Code.
         SECTION 3.
    Section 501.093(a), Transportation Code, is
  amended to read as follows:
         (a)  If an insurance company pays a claim on a nonrepairable
  motor vehicle or salvage motor vehicle and the insurance company
  does not acquire ownership of the motor vehicle, the insurance
  company shall:
               (1)  submit to the department, before the 31st day
  after the date of the payment of the claim, on the form prescribed
  by the department, a report stating that the insurance company:
                     (A) [(1)]  has paid a claim on the motor vehicle;
  and
                     (B) [(2)]  has not acquired ownership of the motor
  vehicle; and
               (2)  provide notice to the owner of the motor vehicle
  of:
                     (A)  the report required under Subdivision (1);
  and
                     (B)  the requirements for operation or transfer of
  ownership of the motor vehicle under Subsection (b).
         SECTION 4.  Sections 501.097(a) and (b), Transportation
  Code, are amended to read as follows:
         (a)  An application for a nonrepairable vehicle title or
  salvage vehicle title must:
               (1)  be made on a form prescribed by the department and
  accompanied by a $8 application fee;
               (2)  include, in addition to any other information
  required by the department:
                     (A)  the name and current address of the owner;
                     (B)  a description of the motor vehicle, including
  the make, style of body, model year, and vehicle identification
  number; and
                     (C)  a statement describing whether the motor
  vehicle:
                           (i)  was the subject of a total loss claim
  paid by an insurance company under Section 501.092, 501.0925, or
  501.093;
                           (ii)  is a self-insured motor vehicle under
  Section 501.094;
                           (iii)  is an export-only motor vehicle under
  Section 501.099; [or]
                           (iv)  was sold, transferred, or released to
  the owner or former owner of the motor vehicle or a buyer at a casual
  sale; or
                           (v)  is a motor vehicle for which an
  insurance company does not take ownership under Section 501.0935; 
  and
               (3)  include the name and address of:
                     (A)  any currently recorded lienholder, if the
  motor vehicle is a nonrepairable motor vehicle; or
                     (B)  any currently recorded lienholder or a new
  lienholder, if the motor vehicle is a salvage motor vehicle.
         (b)  Except as provided by Sections 501.0925 and 501.0935, on
  [On] receipt of a complete application, the properly assigned title
  or manufacturer's certificate of origin, and the application fee,
  the department shall, before the sixth business day after the date
  the department receives the application, issue the applicant the
  appropriate title for the motor vehicle.
         SECTION 5.  Section 501.102, Transportation Code, is amended
  by adding Subsection (f) to read as follows:
         (f)  Subsection (c) does not apply to an applicant for a
  title under Sections 501.0925 and 501.0935.
         SECTION 6.  Section 2302.201(a), Occupations Code, is
  amended to read as follows:
         (a)  Except as provided by Section 501.0935, Transportation
  Code, a [A] salvage vehicle dealer who acquires ownership of a
  salvage motor vehicle from an owner must receive from the owner a
  properly assigned title.
         SECTION 7.  The change in law made by this Act to Section
  501.102, Transportation Code, applies only to an offense committed
  on or after the effective date of this Act. An offense committed
  before the effective date of this Act is governed by the law in
  effect on the date the offense was committed, and the former law is
  continued in effect for that purpose. For purposes of this section,
  an offense was committed before the effective date of this Act if
  any element of the offense occurred before that date.
         SECTION 8.  This Act takes effect September 1, 2011.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1422 was passed by the House on April
  12, 2011, by the following vote:  Yeas 147, Nays 0, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1422 on May 23, 2011, by the following vote:  Yeas 144, Nays 0,
  3 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1422 was passed by the Senate, with
  amendments, on May 21, 2011, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor