43 TAC §17.3
The Texas Department of Transportation (department) proposes
amendments to §17.3 concerning motor vehicle certificates of title.
EXPLANATION OF PROPOSED AMENDMENTS
Transportation Code, §520.023, provides that when a vehicle is sold,
the seller may submit a vehicle transfer notification form notifying the department
of the sale. Upon receipt, the department updates the motor vehicle record
to advise users of the record that the vehicle has been sold and the date
of sale. Once the record is marked, state law creates a rebuttable presumption
that the transferee is the current owner of the vehicle, and is subject to
civil and criminal liability arising out of use, operation, or abandonment
of the vehicle.
Until a new vehicle title changing ownership is applied for through a county
tax office, the department's motor vehicle records remain in the name of the
last recorded owner. If the vehicle is sold to a licensed motor vehicle dealer,
the dealer is not required to title the vehicle until it is sold to a retail
purchaser. In addition, the vehicle may be sold to other dealers through reassignment
of the title. In some cases, the vehicle may be operated under the prior owner's
name for months or even years. Each of these scenarios creates a problem when
the vehicle notification transfer has not been completed because it is the
prior owner who is notified when parking tickets or toll violations are issued
against the vehicle, if the vehicle is abandoned, or is used in criminal activity,
rather than the current owner of the vehicle.
An increasing number of sellers are receiving notification of violations
for vehicles they have sold resulting in an increased volume of inquiries
and complaints to the department. In part because of the $5 notification fee
charged by the department, many sellers of vehicles do not notify the department
of the vehicle transfer and therefore are not afforded the protection provided
under the law.
Subsection §17.3(f), Department notification of second hand vehicle
transfers, is amended to eliminate payment of the $5 fee for submission of
a vehicle transfer notification. When the $5 fee was adopted in 1996, the
costs associated with implementation of the legislation and processing the
notifications was significantly higher than it is today. In 1996, the implementation
costs included development, printing, and distribution costs for a new transfer
notification form, revisions to the certificate of title record to include
a transfer notice, and revision of department publications. Other costs included
manual processing, personnel costs and postage for incomplete forms, filing,
photocopy, and storage costs, and processing and collection of fees.
Since 1996, the cost to process transfer notifications has significantly
decreased. The department contracts with a private vendor for data extraction
and validation of transfer forms, data entry, some rejection functions for
incomplete or incorrect forms submitted, and scanning or imaging the transfer
notifications. The electronic capture of the form eliminates the need to maintain
and file hard copies of the forms, storage space, and the time involved to
retrieve copies on request.
Elimination of the fee may encourage more sellers to notify the department,
and a motor vehicle dealer to provide or submit notifications to the department
for their customers, thus improving the integrity of the motor vehicle ownership
records. Elimination of the fee will also reduce staff processing times for
collection of the fee or rejection of the form when the fee is not submitted.
FISCAL NOTE
James Bass, Chief Financial Officer, has determined that for each of the
first five years the amendments as proposed are in effect, there will be fiscal
implications for state government as a result of enforcing or administering
the amendments. The additional cost to the state is estimated to be $13,944
in FY 2008, $15,617 in FY 2009, $17,491 in FY 2010, $19,590 in FY 2011, and
$21,941 in FY 2012. The loss in state revenue is estimated to be $560,000
in FY 2008, $627,200 in FY 2009, $702,464 in FY 2010, $786,760 in FY 2011,
and $881,171 in FY 2012. There will be no fiscal implications for local governments
as a result of enforcing or administering the amendments. There are no anticipated
economic costs for persons required to comply with the section as proposed.
Rebecca Davio, Director, Vehicle Titles and Registration has certified
that there will be no significant impact on local economies or overall employment
as a result of enforcing or administering the amendments.
PUBLIC BENEFIT
Ms. Davio has also determined that for each year of the first five years
the section is in effect, the public benefit anticipated as a result of enforcing
or administering the amendments will be to allow motor vehicle sellers to
notify the department of the sale without requiring payment of a fee, lessen
notifications of tickets and fines received by persons who no longer own the
vehicle, and improve the integrity of the certificate of title records maintained
by the department, providing more accurate ownership information. There will
be no adverse economic effect on small businesses.
SUBMITTAL OF COMMENTS
Written comments on the proposed amendments to §17.3 may be submitted
to Rebecca Davio, Director, Vehicle Titles and Registration, Texas Department
of Transportation, 125 East 11th Street, Austin, Texas 78701-2483. The deadline
for receipt of comments is 5:00 p.m. on April 16, 2007.
STATUTORY AUTHORITY
The amendments are proposed under Transportation Code, §201.101, which
provides the Texas Transportation Commission with the authority to establish
rules for the conduct of the work of the department, and more specifically,
Transportation Code, §501.131, which governs the titling of motor vehicles,
and Transportation Code, §520.023 which allows the department to adopt
a fee for filing a notice of transfer.
CROSS REFERENCE TO STATUTE
Transportation Code, Chapter 501, and Transportation Code, Chapter 520.
§17.3.Motor Vehicle Certificates of Title.
(a) - (e)
(No change.)
(f)
Department notification of second hand vehicle transfers.
A transferor of a motor vehicle may voluntarily make written notification
to the department of the sale of the vehicle, in accordance with Transportation
Code, Chapter 520, Subchapter C, and this subsection.
(1)
Notification form. The department will provide a form for
written notice of transfer. The form will include the:
(A)
vehicle identification number of the vehicle;
(B)
license plate number issued to the vehicle, if any;
(C)
full name and address of the transferor;
(D)
full name and address of the transferee;
(E)
date the transferor delivered possession of the vehicle
to the transferee;
(F)
signature of the transferor; and
(G)
date the transferor signed the form.
(2)
Records. On receipt of written notice of transfer [
and a $5.00 fee
] from the transferor of a motor vehicle, the department
will mark its records to indicate the date of transfer and will maintain a
record of the information provided on the written notice of transfer.
(3)
Ownership of transferred vehicle. After the date of the
transfer of the vehicle as shown in the department records, the transferee
of the vehicle is rebuttably presumed to be:
(A)
the owner of the vehicle; and
(B)
subject to civil and criminal liability arising out of
the use, operation, or abandonment of the vehicle, to the extent that ownership
of the vehicle subjects the owner of the vehicle to criminal or civil liability
under another provision of the law.
(4)
Certificate of title issuance. A certificate of title will
not be issued in the name of a transferee until the transferee files an application
for the certificate of title as described in this section.
(g) - (h)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on March 1, 2007.
TRD-200700814
Bob Jackson
General Counsel
Texas Department of Transportation
Earliest possible date of adoption: April 15, 2007
For further information, please call: (512) 463-8683