HB 5436

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
(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
(3)  the recycler complies with Subsections (b), (c),
(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
(ii)  subject only to recorded security
(a)  for which a release of each
recorded security interest or lien on the vehicle is provided; or
certificate of title more than six years before the date of purchase
(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
(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
(9)  the name and address of the seller, and the
(10)  a photocopy or electronic scan of:
(A)  a valid driver's license of the seller or the
(B)  any other photographic identification card
of the seller or the seller's agent issued by any state or federal
(11)  proof demonstrating that the recycler has
reported the vehicle to the department as provided by Subsection
(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
(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
(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,
(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
(1)  the information described by Subsections
(2)  the contact information of the lienholder
identified by the used automotive parts recycler under Subsection
(3)  the date on which the notice is provided to the
(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
(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
(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
(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
(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
(1)  the responsibilities of the department under this
(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)
(c-1)  A person commits an offense if the person knowingly:
(1)  fails to obtain or falsifies information required
(2)  falsifies the information required under Section
(3)  falsifies the statement required under Section
(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
(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.