Relating to an exception to the titling requirement for certain motor vehicles; creating a criminal offense; providing for a fee, the official text

H.B. No. 5436

AN ACT

relating to an exception to the titling requirement for certain

motor vehicles; creating a criminal offense; providing for a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter E, Chapter 501, Transportation Code,

is amended by adding Section 501.098 to read as follows:

Sec. 501.098. EXCEPTION TO TITLE REQUIREMENT FOR CERTAIN

VEHICLES. (a) Notwithstanding any other law, a used automotive

parts recycler may purchase a motor vehicle without obtaining a

title to the vehicle if:

(1) the vehicle is at least 13 years old and is

purchased solely for parts, dismantling, or scrap;

(2) the vehicle has not been registered for at least

seven years;

(3) the recycler complies with Subsections (b), (c),

and (g); and

(4) either:

(A) the recycler does not dismantle, crush, or

shred the vehicle before the close of business on the third business

day after the date the recycler submitted to the department the

information required under Subsection (c), if the vehicle is:

(i) not subject to a recorded security

interest or lien; or

(ii) subject only to recorded security

interests or liens:

(a) for which a release of each

recorded security interest or lien on the vehicle is provided; or

(b) that were recorded on the

certificate of title more than six years before the date of purchase

under this section; or

(B) the recycler does not dismantle, crush, or

shred the vehicle before the date stated in the written statement

required by Subsection (h)(4), if the recycler determined under

Subsection (g) that the vehicle is subject to a recorded security

interest or lien, other than a security interest or lien described

by Paragraph (A)(ii).

(b) A used automotive parts recycler who purchases a motor

vehicle under this section shall compile the following information

in the manner prescribed by the department:

(1) the name, address, and National Motor Vehicle

Title Information System identification number of the recycler;

(2) the name, initials, or other identification of the

individual recording the information required by this subsection;

(3) the date of the transaction;

(4) a description of the vehicle, including the make

and model to the extent practicable;

(5) the vehicle identification number of the vehicle;

(6) the license plate number of any vehicle

transporting the vehicle being sold;

(7) the amount of consideration given for the vehicle;

(8) a written statement signed by the seller or an

agent acting on behalf of the seller:

(A) certifying that the seller or agent has the

lawful right to sell the vehicle; and

(B) acknowledging that a person who falsifies

information contained in the written statement is subject to

criminal penalties and restitution for losses incurred as a result

of the sale of the vehicle based on falsified information contained

in the statement;

(9) the name and address of the seller, and the

seller's agent if applicable;

(10) a photocopy or electronic scan of:

(A) a valid driver's license of the seller or the

seller's agent; or

(B) any other photographic identification card

of the seller or the seller's agent issued by any state or federal

agency; and

(11) proof demonstrating that the recycler has

reported the vehicle to the department as provided by Subsection

(c).

(c) A used automotive parts recycler who purchases a motor

vehicle under this section shall submit to the department, in the

manner prescribed by the department, and to the National Motor

Vehicle Title Information System information necessary to satisfy

any applicable requirement for reporting information to the

National Motor Vehicle Title Information System in accordance with

rules adopted under 28 C.F.R. Section 25.56. The information must

be submitted not later than 24 hours, not counting weekends or

official state holidays, after the close of business on the day the

vehicle is received. The department may report information

received under this subsection to the National Motor Vehicle Title

Information System on the recycler's behalf. A used automotive

parts recycler is not required to report information to the

National Motor Vehicle Title Information System if the department

reports the information on behalf of the recycler under this

subsection.

(d) Not later than 48 hours after receiving motor vehicle

information from a used automotive parts recycler under Subsection

(c), the department shall notify the recycler whether the vehicle

has been reported stolen.

(e) If the department notifies a used automotive parts

recycler under Subsection (d) that a motor vehicle has been

reported stolen, the recycler shall notify the appropriate local

law enforcement agency of the vehicle's current location and

provide to the agency identifying information of the person who

sold the vehicle to the recycler.

(f) On receipt of motor vehicle information under

Subsection (c), the department shall:

(1) add a notation to the motor vehicle record of the

vehicle indicating that the vehicle has been dismantled, scrapped,

or destroyed; and

(2) cancel the title of the vehicle.

(g) Not later than 48 hours after a used automotive parts

recycler purchases a motor vehicle under this section, the recycler

shall, in the manner prescribed by the department, verify whether

the vehicle is subject to any recorded security interest or lien.

If the recycler determines that the vehicle is subject to a recorded

security interest or lien, other than a security interest or lien

described by Subsection (a)(4)(A)(ii), the recycler shall provide

notice, in accordance with Subsection (h), to the county

assessor-collector of the county in which the recycler is located

of the recycler's purchase of the vehicle.

(h) Notice provided to the county assessor-collector under

Subsection (g) must include:

(1) the information described by Subsections

(b)(1)-(5);

(2) the contact information of the lienholder

identified by the used automotive parts recycler under Subsection

(g);

(3) the date on which the notice is provided to the

county assessor-collector;

(4) a written statement signed by the recycler or the

recycler's agent that the vehicle will not be dismantled or

scrapped on or before the 21st day after the date described by

Subdivision (3); and

(5) a $25 administrative fee.

(i) Not later than the fifth day after the date a used

automotive parts recycler provides notice to a county

assessor-collector under Subsection (g), the county

assessor-collector shall notify the lienholder and the last

registered owner of the vehicle, if the recycler did not purchase

the vehicle from the last registered owner, of the recycler's

purchase of the motor vehicle, which must include the contact

information of the recycler provided under Subsection (h)(1) and a

copy of the written statement provided under Subsection (h)(4).

(j) Not later than the 14th day after the date a county

assessor-collector provides notice to a lienholder or a last

registered owner under Subsection (i), the lienholder or last

registered owner may retrieve the vehicle from the recycler at no

cost.

(k) A person who purchases a motor vehicle under this

section that is later determined by the department or another

governmental entity to have been reported stolen is not criminally

or civilly liable unless the person had knowledge that the vehicle

was a stolen vehicle or failed to comply with the requirements of

Subsection (b) or (c).

(l) A court shall order a person who sells a motor vehicle

under this section to pay restitution, including attorney's fees,

to the owner or lienholder of the vehicle or to a used automotive

parts recycler in an amount equal to the amount of any damage or

loss caused by an offense committed by the seller related to the

vehicle.

(m) Records required to be maintained under this section

must be open to inspection by a representative of the department or

a law enforcement officer during reasonable business hours.

(n) A contract with a United States Department of Justice

approved third-party data consolidator, pursuant to 28 C.F.R. Part

25, may be used to satisfy:

(1) the responsibilities of the department under this

section; and

(2) the reporting responsibilities of a used

automotive parts recycler under Subsection (c).

(o) This section preempts all requirements that are

inconsistent with specific provisions of this section relating to

the purchase and dismantling, crushing, or shredding of a motor

vehicle without obtaining the title to the vehicle.

SECTION 2. Section 501.109, Transportation Code, is amended

by adding Subsections (c-1) and (i) and amending Subsections (d)

and (e) to read as follows:

(c-1) A person commits an offense if the person knowingly:

(1) fails to obtain or falsifies information required

under Section 501.098(c);

(2) falsifies the information required under Section

501.098(b) or (h);

(3) falsifies the statement required under Section

501.098(b)(8) or (h)(4);

(4) sells a vehicle under Section 501.098 that is the

subject of a security interest or lien other than a security

interest or lien described by Section 501.098(a)(4)(A)(ii); or

(5) otherwise violates Section 501.098.

(d) Except as provided by Subsection (e), an offense under

Subsection (a), (b), [or] (c), or (c-1) is a Class C misdemeanor.

(e) If it is shown on the trial of an offense under

Subsection (a), (b), [or] (c), or (c-1) that the defendant has been

previously convicted of:

(1) one offense under Subsection (a), (b), [or] (c),

or (c-1), the offense is a Class B misdemeanor; or

(2) two or more offenses under Subsection (a), (b),

[or] (c), or (c-1), the offense is a state jail felony.

(i) Money generated from penalties collected for offenses

under Subsection (c-1) may be used only for enforcement,

investigation, prosecution, and training activities related to

motor vehicle related offenses.

SECTION 3. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 5436 was passed by the House on May

14, 2025, by the following vote: Yeas 136, Nays 0, 4 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 5436 was passed by the Senate on May

25, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor