HB 4368 updates Texas vehicle-title procedures for certain motor vehicles, trailers, semitrailers, salvage vehicles, and nonrepairable vehicles. The bill narrows the statutory circumstances in which a vehicle identification number inspection is expressly required, while allowing the Texas Department of Motor Vehicles to adopt rules requiring inspections for additional categories of vehicles. It also updates the inspection statute so that inspections required by department rule are treated the same as inspections required directly by statute.

The bill revises the bonded-title process. It allows a person in possession of a vehicle to obtain title through a bond when a lien less than 10 years old is held by a lienholder that has gone out of business, if the security interest was not transferred and the applicant provides evidence in the form and manner required by department rule. It also requires the department to notify any recorded owner or lienholder when a bond is filed. For applicants who do not hold a general distinguishing number as a dealer, the department may not issue title until at least the 30th day after application and may not issue title if a recorded owner or lienholder objects.

The bill also updates salvage and insurance-title procedures. It defines “auction sales receipt” as a document certifying the sale of a vehicle at auction by a law enforcement agency or public sale for lien foreclosure. It replaces several references to “certificate of title” with broader “evidence of ownership” language, allows insurance companies in certain situations to obtain title based on out-of-state title or ownership documents, and allows salvage vehicle dealers to submit an auction sales receipt when reporting a vehicle acquired for dismantling, scrapping, or destruction.

The bonded-title changes apply only to bonds filed on or after the bill’s effective date.