PURPOSE
Provides the interim procedures for processing title transactions involving manufacturer buyback vehicles until programming is accomplished to implement a “Manufacturer Buyback” title remark. 

DETAILS
The Motor Vehicle Division (MVD) has the authority to administer the lemon law statutes.  These statutes were established to address new vehicle owner complaints and warranty claims.

For approximately the last five years, the provisions of these statutes required manufacturers to reacquire vehicles in order to resolve lemon law complaints or warranty claims.  Upon subsequent sale of these vehicles, manufacturers were required to disclose this information and to provide MVD the original disclosure within 60 days of the retail sale.  However, there was no consumer protection mechanism to alert subsequent owners and lienholders of such vehicles of the prior complaints or warranty claims and manufacturer buybacks.

In October 2002, the Vehicle Titles and Registration Division (VTR), in conjunction with MVD, began placing “LEGAL RESTRAINT” remarks indicating a “90000 CR file number series” on all motor vehicle records involving vehicles reacquired by manufacturers to resolve lemon law complaints or warranty claims.  Additionally, letters advising of the remark are being sent to the current owner and lienholder if applicable.  If a vehicle is transferred and the motor vehicle record reflects the “LEGAL RESTRAINT CR90000” remark, it will be necessary for VTR to manually place the remark on the new motor vehicle record.  This manual process will continue until programming can be accomplished to add a “MANUFACTURER BUYBACK” title remark to the automated Registration and Title System.

A rule amendment was recently adopted by the Texas Motor Vehicle Board to require the manufacturer, converter, or distributor to re-title vehicles subject to the Texas Lemon Law proceedings prior to resale.  This amendment would also include the prior-to-resale re-titling of reacquired vehicles brought into Texas to resolve a warranty claim in another jurisdiction.  These rules became effective October 30, 2002.

All Texas licensed manufacturers, converters, and distributors will receive a notification from MVD and VTR regarding this rule amendment.  In addition to explaining the re-titling requirement, the letter will address the following:

1. The title transaction must consist of a completed Application for Texas Certificate of Title (Form 130-U), a Request to Issue Negotiable Certificate of Title without Registration (Form VTR-131), the properly assigned certificate of title, and $13.00 title fee.
2. No motor vehicle sales tax is due.
3. In order to distinguish these types of title transactions, the box for “Exemption claimed under the Motor Vehicle Sales and Use Tax Law because” (Form 130-U, block number 21) must be checked and indicate “MANUFACTURER BUYBACK.”

You may visit the TxDOT website www.dot.state.tx.us to obtain the Form 130-U, County Tax Assessor-Collector listings, or VTR Regional Office locations.  Please contact the VTR Customer Help Desk at 512/465-7611 for additional assistance.

COUNTY ACTION
Please process all title transactions involving lemon law proceedings as follows:

Motor Vehicle Record Found Indicates “LEGAL RESTRAINT CR90000”

1. If possible, inform the title applicant that the vehicle has been involved in lemon law complaints or warranty claims.
2. Contact your local VTR Regional Office for an authorization override.
3. Continue to process the title transfer.
4. Place these transactions in an envelope marked “LEMON LAW” and send along with the Title Package Report to the Title Control Systems (TCS) Branch at Austin Headquarters.     

NOTE:  These title transactions must receive special handling, because it will be necessary for VTR to manually place the “LEGAL RESTRAINT CR90000” remark on the new motor vehicle record, until the “MANUFACTURER BUYBACK” title remark can be implemented.

Title Transactions Supported by out-of-state titles or out-of-state title and Registration Verifications Indicating “LEMON LAW” Title Remarks

1. Process as usual.
2. Place in an envelope marked “LEMON LAW.”
3. Send with the Title Package Report to the TCS Branch at Austin Headquarters.

NOTE:  Attached is a listing of states and their “LEMON LAW” brands/notations.

Title Transactions with Block Number 21 of the Form 130-U Indicating “MANUFACTURER BUYBACK”

1. Process as usual.
2. Do not collect motor vehicle sales tax.
3. Place in an envelope marked “LEMON LAW.”
4. Send with the Title Package Report to the TCS Branch at Austin Headquarters.

DEPARTMENT ACTION
We will include this interim procedure in the Vehicle Title Manual.  Directions for VTR processing will be forwarded in a separate directive.

CONTACT
If you have any questions regarding this bulletin, please contact your local Texas Department of Transportation, Vehicle Titles and Registration Division Regional Office.  Thank you very much.

In some cases the Registration and Title Bulletins (RTB) contain attachments. If you require a copy of the original signed RTB and the attachments, please email your request with the RTB number to VTR Info Request/Open Records. Repeat requests are subject to charges in accordance with Open Record policies. A subscription service is also available for an annual fee of $250. Subscribers will automatically receive all RTB mailings as they are issued.