(a) Except as provided by Subsection (c) and Subdivision (5) of this subsection, a vehicle retired under an accelerated vehicle retirement program authorized by § 382.209 may not be resold or reused in its entirety in this or another state. Subject to the provisions of Subsection (i), the automobile dealer who takes possession of the vehicle must submit to the program administrator proof, in a manner adopted by the commission, that the vehicle has been retired. The vehicle must be:
(1) destroyed;
(2) recycled;
(3) dismantled and its parts sold as used parts or used in the program;
(4) placed in a storage facility of a program established under § 382.209 and subsequently destroyed, recycled, or dismantled and its parts sold or used in the program; or
(5) repaired, brought into compliance, and used as a replacement vehicle under § 382.209(d)(2).
(a-1) The commission shall establish a partnership with representatives of the steel industry, automobile dismantlers, and the scrap metal recycling industry to ensure that:
(1) vehicles retired under § 382.209 are scrapped or recycled; and
(2) proof of scrapping or recycling is provided to the commission.

(b) Not more than 10 percent of all vehicles eligible for retirement under this section may be used as replacement vehicles under Subsection (a)(5).
(c) A vehicle identified by a local advisory panel as an existing or future collectible vehicle under § 382.211 may be sold to an individual if the vehicle:
(1) is repaired and brought into compliance;
(2) is removed from the state;
(3) is removed from an affected county; or
(4) is stored for future restoration and cannot be registered in an affected county except under § 504.501 or 504.502, Transportation Code.
(d) Notwithstanding Subsection (a)(3), the dismantler of a vehicle shall scrap the emissions control equipment and engine. The dismantler shall certify that the equipment and engine have been scrapped and not resold into the marketplace. A person who causes, suffers, allows, or permits a violation of this subsection or of a rule adopted under this section is subject to a civil penalty under Subchapter D, Chapter 7, Water Code, for each violation. For purposes of this subsection, a separate violation occurs with each fraudulent certification or prohibited resale.
(e) Notwithstanding Subsection (d), vehicle parts not related to emissions control equipment or the engine may be resold in any state. The only cost to be paid by a recycler for the residual scrap metal of a vehicle retired under this section shall be the cost of transportation of the residual scrap metal to the recycling facility.
(f) Any dismantling of vehicles or salvaging of steel under this section must be performed at a facility located in this state.
(g) In dismantling a vehicle under this section, the dismantler shall remove any mercury switches in accordance with state and federal law.
(h) The commission shall adopt rules:
(1) defining “emissions control equipment” and “engine” for the purposes of this section; and
(2) providing a procedure for certifying that emissions control equipment and vehicle engines have been scrapped or recycled.
(i) Notwithstanding any other provision of this section, and except as provided by this subsection, a dealer is in compliance with this section and incurs no civil or criminal liability as a result of the disposal of a replaced vehicle if the dealer produces proof of transfer of the replaced vehicle by the dealer to a dismantler. The defense provided by this subsection is not available to a dealer who knowingly and intentionally conspires with another person to violate this section.