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 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!

Texas Dealer License

Delus Johnson-Lead Instructor
Automobile Dealer Training Association