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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB5436

Regular Session

Relating to an exception to the titling requirement for certain motor vehicles; creating a criminal offense; providing for a fee.

Government Affairs & Regulatory Compliance Analysis

HB5436: Government Affairs Overview

HB5436 creates a high-risk, high-reward operational lane for Used Automotive Parts Recyclers (UAPRs) to purchase vehicles older than 13 years without titles, provided they have been unregistered for 7 years. While this removes title bottlenecks, it imposes strict 24-hour reporting windows and introduces criminal liability (up to a State Jail Felony) for non-compliance. Due to a supermajority vote, these changes take effect immediately upon the Governor's signature, not in September.

Rep. Keith Bell·House Bill·Regular Session

Critical
Low Cost
Effective:2025-06-20
Business Impact

Who HB5436 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: critical

Significant regulatory changes (effective 2025-06-20). Review with your legal and compliance teams to understand implications.

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Transportation

Affected business types:

  • Trucking companies
  • Towing operators
  • Fleet operators
  • Logistics providers
View all transportation legislation

Key Operational Considerations

  • 1Intake Staff Training: Staff must be trained on the "13/7 Rule" (Vehicle >13 years old AND unregistered >7 years).
  • 2ID Verification: Front-line employees must be trained to scan/photocopy government IDs and record the license plate of the delivery vehicle (transporter) for every transaction.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB5436
Relating to an exception to the titling requirement for certain motor vehicles; creating a criminal offense; providing for a fee.
Critical Urgency
Unanimous Passage
House Vote136 - 0
YEA
100% in favor136 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
County Tax Assessor-CollectorsLocal Law Enforcement AgenciesTexas Department of Motor Vehicles
Primary Author: Rep. Keith Bell
89th Texas Legislature
jdkey.com
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Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 20, 2025 (Estimated). The bill text states September 1, but the supermajority vote (House 136-0, Senate 31-0) triggers immediate effect upon the Governor's signature.
  • Compliance Deadline: Immediate upon signature. You must begin collecting enhanced data and adhering to the 24-hour reporting window the moment the bill is signed to avoid criminal liability.
  • Agency Rulemaking: TxDMV must prescribe specific forms and reporting methods. Warning: There will be a "regulatory gray zone" between the effective date and when TxDMV updates their IT systems. You must document "good faith" compliance efforts during this gap.

Immediate Action Plan

  • 1. Update Intake Software: Configure your systems to flag any vehicle entered without a title for immediate (24-hour) NMVTIS upload.
  • 2. Draft the Affidavit: Create the Seller Certification Form immediately; do not wait for a TxDMV template.
  • 3. Establish the "Hold" Zone: Designate a physical area in your yard for the 48-hour (stolen check) and 21-day (lien found) hold periods to prevent premature crushing.
  • 4. Check Insurance: Contact your broker to ensure your Errors & Omissions (E&O) policy covers administrative errors in lien verification, as the law mandates civil restitution.

Operational Changes Required

Contracts

  • Data Consolidator Agreements: Review contracts with NMVTIS providers (e.g., Auto Data Direct). You must ensure they guarantee data submission to the DOJ database within the statutory 24-hour window. Standard "batch" processing is no longer compliant.
  • Purchase Agreements: Abandon standard Bills of Sale for these transactions. Implement a "Section 501.098 Seller Certification Form" requiring the seller to sign an affidavit acknowledging criminal penalties for falsification.

Hiring/Training

  • Intake Staff Training: Staff must be trained on the "13/7 Rule" (Vehicle >13 years old AND unregistered >7 years).
  • ID Verification: Front-line employees must be trained to scan/photocopy government IDs and record the license plate of the delivery vehicle (transporter) for every transaction.
  • Criminal Liability Awareness: Management must inform staff that *knowing* failure to obtain this data is a Class C misdemeanor, escalating to a felony for repeat offenses.

Reporting & Record-Keeping

  • 24-Hour Reporting: You must report the transaction to TxDMV and NMVTIS within 24 hours (excluding weekends/holidays).
  • 48-Hour Lien Verification: You must verify liens within 48 hours of purchase.
  • The "Compliance File": For every title-less vehicle, retain:
  • 1. Seller’s ID scan.
  • 2. Signed Seller Affidavit.
  • 3. Transporter’s license plate number.
  • 4. Proof of NMVTIS upload.
  • 5. Proof of Lien Search results.

Fees & Costs

  • Lien Administrative Fee: $25.00 per vehicle. This fee applies *only* if you discover a recorded lien and must notify the County Tax Assessor-Collector.
  • Hold Costs: If a lien is found, you must hold the vehicle for 21 days, impacting yard space utilization.

Strategic Ambiguities & Considerations

  • The "Manner Prescribed" Gap: The statute requires reporting in a "manner prescribed by the department." The Fiscal Note indicates TxDMV needs $504,900 for IT updates in FY2026, yet the law is effective immediately. Expect the TxDMV portal to be unready on Day 1. Retain hard copies of all data to prove intent to comply until the digital portal is active.
  • Proving the "7-Year" Negative: The law requires the vehicle to be unregistered for 7 years. Private recyclers lack direct access to full TxDMV history to definitively prove a vehicle *was not* registered. Document your VIN search results from commercial databases to establish a "reasonable belief" of eligibility.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 14, 2025
Passed House
May 14, 2025
Passed Senate
May 25, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsVehicles & TrafficVehicles & Traffic--generalEnvironmentEnvironment--recyclingAbandoned & Junked VehiclesCounty Tax Assessor-collectorsSecondhand MetalMotor Vehicles, Texas Department ofCourtsCourts--generalCrimesCrimes--miscellaneousRecords ManagementVehicles & Traffic--vehicle Registration
03

House Authors

Rep. Keith BellRepublican · Primary Author
Joint Authors

Senate Sponsor

Sen. Royce WestDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Rep. Keith Bell

View all bills by Rep. Keith Bell

Related by Topic

View more Vehicles & Traffic legislation
Quick Reference

Frequently Asked Questions

Common questions about HB5436

Q

What does Texas HB5436 do?

HB5436 creates a high-risk, high-reward operational lane for Used Automotive Parts Recyclers (UAPRs) to purchase vehicles older than 13 years without titles, provided they have been unregistered for 7 years. While this removes title bottlenecks, it imposes strict 24-hour reporting windows and introduces criminal liability (up to a State Jail Felony) for non-compliance. Due to a supermajority vote, these changes take effect immediately upon the Governor's signature, not in September.

Q

Who authored HB5436?

HB5436 was authored by Texas Representative Keith Bell during the Regular Session.

Q

When was HB5436 signed into law?

HB5436 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB5436?

HB5436 is enforced by County Tax Assessor-Collectors, Local Law Enforcement Agencies and Texas Department of Motor Vehicles (TxDMV).

Q

How significant are the changes in HB5436?

The regulatory priority for HB5436 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB5436?

The cost impact of HB5436 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB5436 address?

HB5436 addresses topics including vehicles & traffic, vehicles & traffic--general, environment, environment--recycling and abandoned & junked vehicles.

Q

What are the key dates for HB5436?

Key dates for HB5436: Effective date is 2025-06-20. Rulemaking: Must prescribe the manner and forms for Recyclers to compile transaction information, submit data to NMVTIS, and verify liens. (Immediate/Ongoing). Consult with legal counsel regarding applicability.

Q

What are the penalties under HB5436?

HB5436 establishes the following penalties: Criminal (Class C Misdemeanor) penalty of Standard Class C fine for Knowingly failing to obtain/falsifying required information, falsifying seller statements, or selling a vehicle with an undisclosed lien.; Criminal (Class B Misdemeanor) penalty of Standard Class B fine/jail time for Second conviction of the offenses listed above.; Criminal (State Jail Felony) penalty of State Jail Felony penalties for Third or subsequent conviction of the offenses listed above.. Consult with legal counsel for specific applicability to your situation.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026