HB5436

HB5436 lets a licensed used automotive parts recycler buy a vehicle without obtaining its title only if it is at least 13 years old, has not been registered for at least seven years, and is bought solely for parts, dismantling or scrap. The recycler must follow the new documentation, reporting, lien-check and holding requirements. This is not a title-free route for putting a vehicle back on the road or for any private buyer to use. Final law, new Transportation Code 501.098(a); recycler definition, Occupations Code 2309.002(6).

The recycler must record its identity and national reporting-system number, the employee recording the transaction, transaction date, vehicle description and identification number, transporting vehicle’s plate number, price, seller/agent names and addresses, a copy of government-issued photo identification and proof of reporting. The seller or agent must sign a statement certifying the lawful right to sell and acknowledging criminal penalties and restitution for false information. Required information goes to the Texas Department of Motor Vehicles (TxDMV) and the National Motor Vehicle Title Information System within 24 hours after close of business on the receipt day, excluding weekends and official state holidays from that 24-hour period. TxDMV may make the national report for the recycler. Final law, 501.098(b)–(c).

TxDMV must tell the recycler within 48 hours after receiving the report whether the vehicle has been reported stolen. If so, the recycler must give local law enforcement the vehicle’s location and seller-identifying information. On receiving the report, TxDMV must also mark the vehicle record as dismantled, scrapped or destroyed and cancel its title. Final law, 501.098(d)–(f).

The recycler must check recorded liens within 48 hours after purchase. For a vehicle without a recorded lien, or with only liens whose releases are provided or that were recorded on its title more than six years before purchase, dismantling, crushing or shredding cannot occur before close of business on the third business day after the report to TxDMV. Other recorded liens trigger a longer notice process: the recycler sends information and a $25 administrative fee to its county assessor-collector and signs a promise not to dismantle or scrap the vehicle on or before the 21st day after that notice. The holding restriction also reaches crushing and shredding through subsection (a)(4)(B). The county must notify the lienholder and, if different from the seller, the last registered owner within five days. They may retrieve the vehicle at no cost within 14 days after the county’s notice. These are separate clocks; a lien notice does not make an otherwise unlawful sale lawful. Final law, 501.098(a)(4), (g)–(j).

The law provides limited protection from criminal or civil liability for buying a vehicle later found to have been reported stolen, unless the buyer knew it was stolen or failed the documentation or reporting requirements in (b) or (c). A court must order a seller who commits a vehicle-related offense to pay restitution for resulting damage or loss, including attorney’s fees, to the owner, lienholder or recycler. Records must be available to TxDMV or law enforcement during reasonable business hours. Approved third-party data consolidators may handle specified agency and recycler reporting duties. Inconsistent requirements concerning title-free purchase and dismantling, crushing or shredding are preempted only as specified in the new section. Final law, 501.098(k)–(o).

New criminal offenses cover knowing failures or falsifications concerning required information and statements, knowing sale subject to a lien other than the released/older-lien exceptions, and other knowing violations of the section. The new offense generally is a Class C misdemeanor, rising to Class B with one qualifying prior conviction and a state jail felony with two or more. Qualifying priors include the existing offenses in 501.109(a)–(c), not just the new offense. Penalty receipts from the new offense are restricted to enforcement, investigation, prosecution and training for motor-vehicle-related offenses. The bill does not repeal other offenses, including existing document-fraud provisions. Final law, Section 2; statutory context, 501.109.

The governor signed HB5436 June 20, 2025. It took effect September 1, 2025. Official history; final law, Section 3.