Brand New September 2021 Texas
Dealer Laws.
The Legislature of the State
of Texas, operating under what is called a biennial
system, convenes in January of odd-numbered years. The
governor is given authority under the state constitution
to convene the legislature at other times such as what
you saw this year when the governor called 2 special
sessions which are each limited to 30 days.
The
state of Texas has 150 State Representatives and 31
State Senators. Each House district has about 113,000
people and each Senate district is much larger and has
about 547,000 people.
Every law that is passed
during session normally goes into effect on September 1
the same year as session. Any law that was passed in the
2021 legislative session went into effect on September
1, 2021. These brand-new laws should remain unchanged
for 2 years. So, the laws that I am getting ready to
discuss that went into effect on September 1, 2021
should not change at all until at September 1, 2023,
although they will more than likely be in effect for
much longer than 2 years.
Your
State Representative and State Senator normally go into
session every other year and the laws they passed in
2021 should remain in effect until at least 2023.
House Bill 3533 Changes Texas Dealer
Surety Bond Requirements
House Bill 3533 changed Texas’s
dealer surety bond requirements in a couple of ways, first
it increased the dealer surety bond requirement from $25,000
to $50,000.
If you are selling motor vehicles,
motorcycles, independent mobility motor vehicles, are a
wholesale, or wholesale dealer auction you must carry a
$50,000 dealer surety bond.
If you are only selling
trailers or semi-trailers, you are not required to have a
$50,000 dealer surety bond. If you are obtaining your Texas
dealers license for the first time you must obtain a $50,000
bond, or, if you are a currently licensed dealer in the
State of Texas, you must provide proof that you now have a
$50,000.
House Bill 3533 also created a brand-new
dealer surety bond posting requirement. Texas dealers are
now required by law to post, what is known as bond claimant
information right next to your dealer license. So what is
bond claimant information? Well, the Texas Department of
Motor Vehicles has created a new dealer surety bond claimant
form, so how do you find this form? With that being said, there are some
slightly different requirements required by the State of
Texas when it comes to obtaining a retail dealer license
versus a wholesale.
Here is a link to your
Dealer Surety Bond Claimant Form
As a reminder your dealer surety bond must be issued for
2 years and must start on the first day of the month and end
on the last day of the month corresponding to the license
term for example. 9/1/2021-8/31/2023. You must maintain your
bond during entire licensure period. The bond must be signed
by both the owner AND the bond company representative. This
is one of the most common mistakes and causes delays in
license approval. The bond must include a proper Power of
Attorney from the bonding company. Your bond pricing is
based on your credit score so you can visit txdealerbond.com
to get a quote for your $50,000 dealer surety bond.
House Bill 3927 Changes Texas Dealer
Temporary Tag Guidelines.
House Bill 3927 changes some buyer temporary tag guidelines
and the number of temporary tags that may be issued to Texas
dealers.
A vehicle may be now be issued a buyer's
temporary tag without an inspection if the buyer of the
vehicle is not a resident of Texas; and the vehicle, at the
time of purchase, is not located or required to be titled or
registered in Texas and will be titled and registered in the
buyer's state of residence; and will be inspected in
accordance with the law of the buyer's state of residence,
if the laws of that state require inspection.
A
buyers temporary tag may only be placed on a vehicle that
has been sold to a BUYER. You can never place a buyer
temporary tag on a demo or agent specific vehicle, and I am
sure you already know this if you have taken any of our
State approved Texas dealer license training courses you
already know this
Another part of the bill changes
the number of temporary tags that can be issued by a Texas
dealership.
Now the Texas Department of Motor
Vehicles can establish the maximum number of temporary tags
that a dealer or may obtain in a calendar year
The maximum number of temporary tags that
the department determines a dealer may obtain must be based
on the dealer's anticipated need for temporary tags, taking
into consideration the dealer's time in operation, sales
data; expected growth;
As dealer can now request
additional temporary tags based on sales growth and
anticipated needs.
The law also allows the Department
of Motor Vehicles monitor the number of temporary tags
obtained by a dealer. If the DMV determines that a dealer
fraudulently obtaining temporary tags from the temporary tag
database, the DMV may deny access to a temporary tag
database to the dealer or converter. So please be aware of
this new law as well.
We are approved by the Texas
Department of Motor vehicles to provide you mandatory 6 hour
dealer pre-license course, so when you are ready to make the
move, click on blue
Enroll Now button.
We are here to help you start your
Texas motor vehicle dealership!
Delus Johnson-Lead Instructor
Automobile Dealer
Training Association