PART 10. TEXAS DEPARTMENT OF MOTOR VEHICLES
CHAPTER 206. MANAGEMENT
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Chapter 206, Subchapter A, Organization and Responsibilities, §206.1 and §206.2; Subchapter B, Public Meetings and Hearings, §206.22 and §206.23; Subchapter C, Procedure for Petition to Adopt Rules, §206.41; Subchapter E, Advisory Committees, §206.92 and §206.93; Subchapter F, Department Vehicle Fleet Management, §206.111; Subchapter G, Electronic Signatures, §206.131; and Subchapter H, Risk-Based Monitoring and Preventing Fraudulent Activity, §206.151. The department proposes new Subchapter E, Advisory Committees, §206.101. The department is also adopting the repeal of Subchapter D, Procedures in Contested Cases, §§206.61 - 206.73. The proposed amendments and proposed new section in Chapter 206 would bring the rules into alignment with statute; remove language that is redundant with statute; clarify existing requirements; modernize language; improve readability through the use of consistent terminology; clarify or delete unused, archaic, or inaccurate definitions, terms, and references; and more specifically describe the department's methods and procedures, including its process for internal risk monitoring regarding the department's internal users of the department's Registration and Title System (RTS).The proposed repeal of Subchapter D of Chapter 206 would enable the board of the Texas Department of Motor Vehicles (board) to consolidate all of the department's contested case rules into proposed new Chapter 224, Adjudicative Practice and Procedure. In this issue of the Texas Register, the department proposes new Chapter 224, which would include all of the department's adjudicative practice and procedure rules in one chapter.
EXPLANATION. The department is conducting a review of its rules in Chapter 206 in compliance with Government Code, §2001.039. Notice of the department's plan to review Chapter 206 is published in this issue of the Texas Register. As a part of the rule review, the department is adopting necessary amendments and repeals, as detailed in the following paragraphs.
Subchapter A. Organization and Responsibilities
The proposed amendments to Subchapter A would clarify the authority of the executive director and remove rules that are redundant with statute. The proposed amendments to §206.1 would cite to the statutory provision under which the executive director receives authority to delegate certain duties or responsibilities to department staff and would clarify that such delegation must be consistent with applicable law.
The proposed amendments to §206.2(a) would clarify that the executive director hires and oversees the department's general counsel, to align the rule with Transportation Code, §1001.041 and §1001.0411. The proposed amendment to §206.2(a)(3) would remove unnecessary limitations on the executive director's powers to delegate to staff. The proposed amendment to §206.2(b) would remove unnecessary language regarding the Texas Open Meetings Act because the subsection already references Government Code, Chapter 551. A proposed amendment to §206.2 would strike §206.2(c) because it is duplicative of Transportation Code, §1001.004.
Subchapter B. Public Meetings and Hearings
In Subchapter B, proposed amendments to §206.22 would delete subsection (f) and remove a cross-reference to subsection (f) because its provisions on contested cases would be combined with the department's other rules on contested cases in proposed new Chapter 224, Adjudicative Practice and Procedure. Proposed amendments to §206.22(b) and (c) would simplify and clarify the language, in addition to revising existing terminology for consistency with other department rules and with current practice. For example, when closed session is expected to last at least an hour, the board chairman allows open comments prior to going into closed session, instead of taking open comments at the end of the posted agenda. A proposed amendment to §206.22(c) would delete the words "with disabilities" because anyone who has special communication or accommodation needs who plans to attend a board meeting may request auxiliary aids or services. Proposed amendments to §206.22(d) would clarify that the public is authorized to make public comments, rather than presentations, at board meetings.
Proposed amendments to §206.23(b) would clarify and streamline the language without changing its meaning. Proposed amendments to §206.23(c) and (d) would provide that the executive director or the executive director's designee may represent the department in a public hearing as well as the board chair or presiding officer. Proposed amendments to §206.23(d) would remove the term "with disabilities" to clarify that anyone with special communication or accommodation needs who plans to attend board hearings may contact the department to request auxiliary aids or services. The proposed amendments to §206.23(d) would also specify that if a hearing is conducted by the department's executive director or designee rather than the board, persons requesting auxiliary aids or services may contact the department's public affairs officer.
Subchapter C. Procedure for Petition to Adopt Rules
Proposed amendments to Subchapter C, §206.41 would clarify the procedure for submitting to the department a petition to adopt rules under Texas Government Code, §2001.021, and the required content of a petition. Proposed amendments to §206.41 would also remove unnecessary language.
Subchapter D. Procedures in Contested Cases
The proposed repeal of Subchapter D, Procedures in Contested Cases, would delete the subchapter to enable the consolidation of all the department's contested case rules into proposed new Chapter 224, Adjudicative Practice and Procedure. Chapter 224 would contain modified portions of Subchapter D, as applicable. Due to the proposed repeal of Subchapter D, the remaining subchapters in Chapter 206 would be re-lettered.
Subchapter E. Advisory Committees
This subchapter is proposed to be re-lettered as Subchapter D as current Subchapter D is proposed for repeal and the subsequent subchapters are proposed to be re-lettered accordingly.
Proposed amendments to §206.92 would the delete the definition of "division director" because the term is not used elsewhere in the subchapter, and would renumber the subsequent paragraphs in §206.92 accordingly. A proposed amendment would move the language from §206.93(c) to §206.93(b) regarding the prohibition against board members serving as advisory committee members. Proposed amendments to §206.93(b) and the proposed deletion of §206.93(c) would streamline and clarify the qualifications and appointment requirements for advisory committee members into one subsection. The proposed deletion of §206.93(c) would also remove language that is redundant with Transportation Code, §1001.031(b). Proposed amendments to §206.93 would re-letter the remaining subsections of §206.93 due to the proposed deletion of §206.93(c). Proposed amendments to §206.93(g) and (h), which are proposed to be re-lettered to subsections (f) and (g), would remove unnecessary statutory titles. A proposed amendment would delete §206.93(i) because proposed new §206.101 would clarify the requirements and parameters for public comment during advisory committee meetings. Proposed amendments to §206.93(k), which is proposed to be re-lettered to subsection (i), would clarify that both the executive director and the board shall consider an advisory committee's written recommendations in developing policy, and would remove redundant language describing advisory committee communications. The proposed deletion of §206.93(m) would remove unnecessary language that is duplicative of Texas Government Code, §2110.008.
Proposed new §206.101 would clarify the requirements and parameters for public comment during advisory committee meetings. Proposed new §206.101 would closely parallel the requirements for public comments during board meetings in existing §206.93(i) and §206.22 (relating to Public Access to Board Meetings). Proposed new §206.101 would allow each public commenter three minutes to comment on any advisory committee agenda item or in an open comment period on any topic within the scope of the specific advisory committee. Proposed new §206.101(c) would set out the procedures for a member of the public to request a disability accommodation for an advisory committee meeting with the same process described in §206.22(c) for board meetings. Proposed new §206.101(d) would set requirements for conduct and decorum at advisory committee meetings to assist the acting advisory committee chair in maintaining order, which would be the same as the requirements for conduct and decorum at board meetings under §206.22(d). Proposed new §206.101(e) would allow the acting advisory committee chair to waive any requirements of §206.101 as necessary to allow the advisory committee or the department to perform their responsibilities. It would thereby allow the acting advisory committee chairs to remain responsive to the need for public comment while preventing proposed new §206.101 from unnecessarily encumbering the public comment process. Proposed new §206.101 does not include written public comment for advisory committee meetings to streamline the process and provide a consistent method of receiving comments, and to ensure that advisory committee members are able to ask follow-up questions of the commenters.
Subchapter F. Department Vehicle Fleet Management
This subchapter is proposed to be re-lettered as Subchapter E as current Subchapter D is proposed for repeal and the subsequent subchapters are proposed to be re-lettered accordingly.
An amendment to §206.111 is proposed to clarify that a written documented finding must be signed by the executive director to support an assignment of a department vehicle to an individual employee on an everyday basis.
Subchapter G. Electronic Signatures
This subchapter is proposed to be re-lettered as Subchapter F as current Subchapter D is proposed for repeal and the subsequent subchapters are proposed to be re-lettered accordingly.
Amendments to §206.131 are proposed to rename the title of the subchapter from "Electronic Signatures" to "Digital Certificates" for accuracy and consistency. A proposed amendment to §206.131(d)(2)(A) would clarify that one form of acceptable identity verification is an unexpired personal identification certificate with a photograph. A proposed amendment to §206.131(d)(2)(B) would delete a concealed handgun license as an acceptable form of identification because such license is no longer required by law. Proposed amendments to §206.131(d)(2)(E) and (G) would correct the name of the federal agency that issues a form I-94. A proposed amendment to §206.131(g) would clarify that the rule refers to digital certificates. Proposed amendments to §206.131(i) would substitute the word "certificate" for "signature" to increase consistency and accuracy.
Subchapter H. Risk-Based Monitoring and Preventing Fraudulent Activity
This subchapter is proposed to be re-lettered as Subchapter G because current Subchapter D is proposed for repeal and the subsequent subchapters are proposed to be re-lettered accordingly.
Amendments to §206.151 are proposed to clarify and specify the division's internal risk-based monitoring system required by Transportation Code, §520.004(4). The proposed amendments would subject the department's internal users of RTS to periodic examination to determine whether to assign the RTS user a classification of priority or non-priority. Priority levels determine the minimum number of inspections the department would like to conduct on the internal RTS user each year. The inspections are conducted to determine whether there is evidence of fraud by the RTS user. The proposed amendments would base the classification of priority or non-priority on certain factors, including the RTS user's transaction volume, the RTS user's past violations of department rules and procedures within the past five years, title error investigations performed by the department on titles issued by the RTS user, public complaints received against the RTS user, and discrepancies in data reflecting the RTS user's transactions. The proposed amendments would also provide that RTS users who are classified as a priority shall be inspected not less than twice per year, and a RTS user classified as a non-priority shall be inspected not less than once per year. The proposed amendments further provide that the inspections may be virtual, on premises at the RTS user's location, or a combination of both.
Additional non-substantive amendments are proposed throughout Chapter 206 to correct punctuation, grammar, and capitalization.
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments and repeals as proposed are in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposed amendments or repeals.
Executive Director Daniel Avitia has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Mr. Avitia has also determined that for each year of the first five years the proposed amended sections and repeals are in effect, the anticipated public benefit as a result of enforcing or administering the amendments and repeals will be the simplification, clarification, and streamlining of agency rules.
Anticipated Cost to Comply with the Proposal. Mr. Avitia anticipates that there will be no costs to comply with the proposed amendments and repeals.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendments and repeals will not have an adverse economic impact on small businesses, micro-businesses, and rural communities because there are no anticipated economic costs for persons required to comply with the proposed amendments and repeals. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments and repeals are in effect, no government program would be created or eliminated. Implementation of the proposed amendments and repeals would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed amendments and repeals do not create a new regulation; however, they expand an existing regulation regarding the department's internal risk-based monitoring system of internal users of RTS. While the repeal of Subchapter D of Chapter 206 is proposed, proposed new Chapter 224, Adjudicative Practice and Procedure, would contain modified portions of Subchapter D, as applicable. Lastly, the proposed amendments and repeals do not affect the number of individuals subject to Chapter 206's applicability and will not affect this state's economy.
REQUEST FOR PUBLIC COMMENT. If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
SUBCHAPTER A. ORGANIZATION AND RESPONSIBILITIES
STATUTORY AUTHORITY. The department proposes amendments to Chapter 206 under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; Transportation Code, §1001.041, which requires the executive director to appoint deputies, assistants and other personnel, including a general counsel; Transportation Code, §1001.0411(b), which allows the executive director to delegate duties or responsibilities; Transportation Code, §1001.0411(c), which requires the executive director to hire and oversee a general counsel to advise the department; and Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.
CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.1.Delegation.
The Board of the Texas Department of Motor Vehicles (board)
may, consistent with applicable law, delegate any agency function
to the executive director. The executive director may, consistent
with applicable law, [further] delegate duties
or responsibilities pursuant to Transportation Code, §1001.0411 [such functions to one or more employees of the
department].
§206.2.Texas Department of Motor Vehicles.
(a) Executive director.
(1) To assist in discharging the duties and responsibilities of the executive director, the executive director may organize, appoint, and retain administrative staff.
(2) The executive director shall:
(A) serve the board in an advisory capacity, without vote;
(B) submit to the board quarterly, annually, and biennially, detailed reports of the progress of the divisions and a detailed statement of expenditures;
(C) hire, promote, assign, reassign, transfer, and, consistent with applicable law and policy, terminate staff necessary to accomplish the roles and missions of the department; and
(D) hire and oversee a general counsel to advise the department; and
(E) [(D)] perform other responsibilities
as required by law or assigned by the board.
(3) The executive director may, consistent with applicable
law, delegate one or more of the functions listed under paragraph (2)
[(2)(B- (D)] of this subsection to the staff of
the department.
(b) Department staff. The staff of the department, under the direction of the executive director, is responsible for:
(1) implementing the policies and programs of the board by:
(A) formulating and applying operating procedures; and
(B) prescribing such other operating policies and procedures as may be consistent with and in furtherance of the roles and missions of the department;
(2) providing the chair and board members administrative support necessary to perform their respective duties and responsibilities;
(3) preparing an agenda under the direction of the
chair and providing notice of board meetings and hearings as required
by [the Texas Open Meetings Act,] Government Code, Chapter
551; and
(4) performing all other duties as prescribed by law or as assigned by the board.
[(c) Divisions. The executive director
shall organize the department into divisions reflecting the various
functions and duties assigned to the department.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304739
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes amendments to Chapter 206 under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; Transportation Code, §1001.0411(b), which allows the executive director to delegate duties or responsibilities; Transportation Code, §1004.002, which requires the board and the department to develop and implement policies that provide the public with a reasonable opportunity to appear before the board or the department and to speak on any issue under the jurisdiction of the board or the department; and Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.
CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.22.Public Access to Board Meetings.
(a) Posted agenda items. A person may speak before the board on any matter on a posted agenda by submitting a request, in a form and manner as prescribed by the department, prior to the matter being taken up by the board. A person speaking before the board on an agenda item will be allowed an opportunity to speak:
(1) prior to a vote by the board on the item; and
(2) for a maximum of three minutes, except as provided
in subsections (d)(6)[,] and (e)[, and
(f)] of this section.
(b) Open comment period.
(1) At [the conclusion of the posted agenda of]
each regular board [business] meeting, the board
shall allow an open comment period[, not to exceed one hour,]
to receive public comment on any other matter that is under the jurisdiction
of the board.
(2) A person wanting [desiring]
to speak to the board [appear] under this subsection
shall complete a registration form, as provided by the department,
prior to the beginning of the open comment period.
(3) Except as provided in subsections (d)(6) and (e)
of this section, each person shall be allowed to speak for a maximum
of three minutes [for each presentation] in the order in
which requests to speak were received [the speaker
is registered].
(c) Disability accommodation. Persons [with disabilities,
] who have special communication or accommodation needs and
who plan to attend a meeting, may contact the department in Austin
to request auxiliary aids or services. Requests shall be made at least
two days before a meeting. The department shall make every reasonable
effort to accommodate these needs.
(d) Conduct and decorum. The board shall receive public input as authorized by this section, subject to the following guidelines.
(1) Questioning of speakers [those
making presentations] shall be reserved to board members and
the department's administrative staff.
(2) Organizations, associations, or groups are encouraged to present their commonly held views, and same or similar comments, through a representative member where possible.
(3) Comments [Presentations]
shall remain pertinent to the issue being discussed.
(4) A person who disrupts a meeting shall leave the meeting room and the premises if ordered to do so by the chair.
(5) Time allotted to one speaker may not be reassigned to another speaker.
(6) The time allotted for [presentations or]
comments under this section may be increased or decreased by the chair,
or in the chair's absence, the vice chair, as may be appropriate to
assure opportunity for the maximum number of persons to appear.
(e) Waiver. Subject to the approval of the chair, a requirement of this section may be waived in the public interest if necessary for the performance of the responsibilities of the board or the department.
[(f) Contested Cases. The parties
to a contested case under review by the board shall be allowed an
opportunity to provide an oral presentation to the board, subject
to the following limitations and conditions.]
[(1) Each party shall be allowed a maximum of 15 minutes for their oral presentation.]
[(2) No party is allowed to provide a rebuttal or a closing statement.]
[(3) Any party that is intervening in support of another party shall share that party's time; however, this provision is limited to intervenors of record from the State Office of Administrative Hearings proceeding.]
[(4) Time spent by a party responding to any board questions is not counted against their time.]
[(5) The parties to a contested case under review by the board shall limit their oral presentation and discussion to evidence in the State Office of Administrative Hearings' administrative record.]
[(6) During an oral presentation, a party to a contested case before the board may orally claim that a presenting party talked about evidence that is not contained in the State Office of Administrative Hearing's administrative record; time spent discussing such claims is not counted against the objecting party's time.]
[(7) A party must timely comply with the requirements of §215.59 of this title (relating to Request for Oral Presentation) before it is authorized to provide an oral presentation to the board.]
§206.23.Public Hearings.
(a) The board may hold public hearings:
(1) to consider adoption of rules;
(2) in accordance with the programs operated by the department; and
(3) to provide, when deemed appropriate by the board or when otherwise required by law, for public input regarding any other issue under the jurisdiction of the board.
(b) The executive director or designee may hold [conduct] public hearings [held] under subsection
(a)(2) and (3) of this section.
(c) Public hearings shall be conducted in a manner that maximizes public access and input while maintaining proper decorum and orderliness, and shall be governed by the following guidelines:
(1) Questioning of those making presentations shall be reserved to board members, the executive director, the executive director's designee, or if applicable, the presiding officer.
(2) Organizations, associations, or groups are encouraged to present their commonly held views and same or similar comments through a representative member where possible.
(3) Presentations shall remain pertinent to the issue being discussed.
(4) A person who disrupts a public hearing shall leave the hearing room and the premises if ordered to do so by the chair, the executive director, the executive director's designee, or, if applicable, the presiding officer.
(5) Time allotted to one speaker may not be assigned to another speaker.
(d) Persons [with disabilities,] who have
special communication or accommodation needs and who plan to attend
a hearing to be held by the board, may contact the department in Austin to request auxiliary aids or services. For [In
the case of] a hearing conducted by the executive director
or designee, [department,] those persons may contact
the public affairs officer, whose address and telephone number appear
in the public notice for the [that] hearing,
to request auxiliary aids or services. Requests shall be made at least
two days before the hearing. The department shall make every reasonable
effort to accommodate these needs.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304740
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes amendments to Chapter 206 under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Government Code, §2001.021(b), which requires state agencies to adopt rules that prescribe the form and procedures for a petition for rulemaking.
CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.41.Petition.
Any interested person may petition the department requesting
the adoption of a rule. The [Such] petition
must be in writing [directed] to the executive director
[at the department's headquarters building in Austin] and
[shall] contain the person's physical address in Texas, [and] a clear and concise statement of the substance of the requested
[proposed] rule, and [together with]
a brief explanation of the purpose of the requested rule [to be accomplished through such adoption]. Within 60 days after
receipt, the department will either deny the petition in writing,
stating its reasons therefore, or will initiate rulemaking proceedings
in accordance with [the Administrative Procedure Act (]
Government Code, Chapter 2001, Subchapter B[)]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304741
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes repeals to Chapter 206 under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.
CROSS REFERENCE TO STATUTE. The proposed repeals would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.61.Scope and Purpose.
§206.62.Definitions.
§206.63.Filing of Petition.
§206.64.Content of Petition.
§206.65.Examination by Executive Director.
§206.66.Initiation of Contested Cases, Service of Notice of Hearing, Standard of Review, and Burden of Proof.
§206.67.Discovery.
§206.68.Evidence.
§206.69.Withdrawal or Amendment of Proposal for Decision.
§206.70.Filing of Exceptions and Replies.
§206.71.Form of Exceptions and Replies.
§206.72.Motions for Rehearing.
§206.73.Extension of Time for Final Order.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304742
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§206.92, 206.93, 206.101
STATUTORY AUTHORITY.
The department proposes new and amendments to Chapter 206 and proposed new §206.101 under Transportation Code, §643.155, which authorizes the department to adopt rules to create a rules advisory committee consisting of the public, the department, and representatives of motor carriers transporting household goods using small, medium, and large equipment; Transportation Code, §1001.031, which requires the board to establish advisory committees; Transportation Code, §1001.0411(b), which allows the executive director to delegate duties or responsibilities; Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; Transportation Code, §1004.002, which requires the board and the department to develop and implement policies that provide the public with a reasonable opportunity to appear before the board or the department and to speak on any issue under the jurisdiction of the board or the department; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.021(b), which requires state agencies to adopt rules that prescribe the form and procedures for a petition for rulemaking; and Government Code, Chapter 2110, which sets out the requirements for advisory committees and requires that the agency make rules to establish the purpose and tasks of the committee and the manner in which the committee will report to the agency.
CROSS REFERENCE TO STATUTE. The proposed new and amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.92.Definitions.
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Advisory committee--Any committee created by the board to make recommendations to the board or to the executive director pursuant to Transportation Code, §1001.031 and §643.155.
(2) Board--The board of the Texas Department of Motor Vehicles.
(3) Department--The Texas Department of Motor Vehicles.
[(4) Division director--The chief
administrative officer in charge of a division of the department.]
(4) [(5)] Executive director--The
chief executive officer of the Texas Department of Motor Vehicles.
(5) [(6)] Member--An appointed
member of an advisory committee created under this subchapter.
(6) [(7)] Presiding officer--The
presiding officer of an advisory committee elected by the membership
of the advisory committee created under this subchapter.
§206.93.Advisory Committee Operations and Procedures.
(a) Role of advisory committee. The role of an advisory committee under this subchapter is to provide advice and recommendations to the board or executive director. Advisory committees shall meet and carry out their functions upon a request from the department or board for advice and recommendations on any issues.
(b) Appointment and qualifications of advisory committee members. The board shall appoint members to an advisory committee in accordance with Transportation Code, §643.155 and §1001.031(b) by selecting potential members from a list provided to the board by the executive director. Board members shall not serve as advisory committee members. Each advisory committee shall elect from its members a presiding officer, who shall report the advisory committee's recommendations to the board or the executive director in accordance with subsection (i) of this section. The executive director may designate a division or divisions of the department to participate with, or to provide subject-matter expertise, guidance, or administrative support to the advisory committee as necessary.
[(c) Member qualifications. Members
shall have knowledge about and interests in, and represent a broad
range of viewpoints about, the work of the committee or applicable
division(s). Board members shall not serve as advisory committee members.]
(c) [(d)] Composition of advisory
committees. In making appointments to the advisory committees, the
board shall, to the extent practical, ensure representation of members
from diverse geographical regions of the state.
(d) [(e)] Committee size and
quorum requirements. An advisory committee shall be composed of a
reasonable number of members not to exceed 24 as determined by the
board. A simple majority of advisory committee members will constitute
a quorum. An advisory committee may only deliberate on issues within
the jurisdiction of the department or any public business when a quorum
is present.
(e) [(f)] Terms of service. Advisory
committee members will serve terms of four years. A member will serve
on the committee until the member resigns, is dismissed or replaced
by the board, or the member's term expires.
(f) [(g)] Member training requirements.
Each member of an advisory committee must receive training regarding
[the Open Meetings Act,] Government Code, Chapter 551;
and [the Public Information Act,] Government Code, Chapter 552.
(g) [(h)] Compliance with Open
Meetings [Act]. The advisory committee shall comply with
[the Open Meetings Act,] Government Code, Chapter 551.
[(i) Public input and participation.
The advisory committee shall accept public comments made in person
at advisory committee meetings or submitted in writing. Public comments
made in writing should be submitted to the advisory committee five
business days in advance of the advisory committee meeting with sufficient
copies for all members.]
(h) [(j)] Reporting recommendations.
Recommendations of the advisory committee shall be reported to the
board at a board meeting prior to board action on issues related to
the recommendations. The recommendations shall be in writing and include
any necessary supporting materials. The presiding officer of the advisory
committee or the presiding officer's designee may appear before the
board to present the committee's advice and recommendations. This
subsection does not limit the ability of the advisory committee to
provide advice and recommendations to the executive director as necessary.
(i) [(k)] Board and executive
director use of advisory committee recommendations. In developing
department policies, the board and the executive director shall
consider the written recommendations [and reports] submitted
by advisory committees.
(j) [(l)] Reimbursement. The
department may, if authorized by law and the executive director, reimburse
advisory committee members for reasonable and necessary travel expenses.
[(m) Expiration dates for advisory
committees. Unless a different expiration date is established by the
board for the advisory committee, each advisory committee is abolished
on the fourth anniversary of its creation by the board.]
§206.101.Public Access to Advisory Committee Meetings.
(a) Posted agenda items. A person may speak before an advisory committee on any matter on a posted agenda by submitting a request, in a form and manner as prescribed by the department, prior to the matter being taken up by the advisory committee. A person speaking before an advisory committee on an agenda item will be allowed an opportunity to speak:
(1) prior to a vote by the advisory committee on the item; and
(2) for a maximum of three minutes, except as provided in subsections (d)(6) and (e) of this section.
(b) Open comment period.
(1) At each regular advisory committee meeting, the advisory committee shall allow an open comment period, not to exceed one hour, to receive public comment on any other matter that is within the scope of the specific advisory committee under §206.94(a) of this title (relating to Motor Vehicle Industry Regulation Advisory Committee (MVIRAC)), §206.95(a) of this title (relating to Motor Carrier Regulation Advisory Committee (MCRAC)), §206.96(a) of this title (relating to Vehicle Titles and Registration Advisory Committee (VTRAC)), §206.97(a) of this title (relating to Customer Service and Protection Advisory Committee (CSPAC)), or §206.98(a) of this title (relating to Household Goods Rules Advisory Committee (HGRAC)).
(2) A person wanting to make a comment under this subsection shall complete a registration form, as provided by the department, prior to the beginning of the open comment period.
(3) Except as provided in subsections (d)(6) and (e) of this section, each person shall be allowed to speak for a maximum of three minutes for each comment in the order in which the requests to speak were received.
(c) Disability accommodation. Persons who have special communication or accommodation needs and who plan to attend a meeting, may contact the department in Austin to request auxiliary aids or services. Requests shall be made at least two days before a meeting. The department shall make every reasonable effort to accommodate these needs.
(d) Conduct and decorum. An advisory committee shall receive public input as authorized by this section, subject to the following guidelines:
(1) questioning of speakers shall be reserved to advisory committee members and the department's administrative staff;
(2) organizations, associations, or groups are encouraged to present their commonly held views, and same or similar comments, through a representative member where possible;
(3) comments shall remain pertinent to the issue being discussed;
(4) a person who disrupts an advisory committee meeting shall leave the meeting room and the premises if ordered to do so by the acting advisory committee chair;
(5) time allotted to one speaker may not be reassigned to another speaker; and
(6) the time allotted for comments under this section may be increased or decreased by the acting advisory committee chair, as may be appropriate to assure opportunity for the maximum number of persons to appear.
(e) Waiver. Subject to the approval of the acting advisory committee chair, a requirement of this section may be waived in the public interest if necessary for the performance of the responsibilities of the advisory committee or the department.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304743
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes amendments to Chapter 206 under Transportation Code, §1001.0411(b), which allows the executive director to delegate duties or responsibilities; Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.
CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.111.Restrictions on Assignment of Vehicles.
(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Department--The Texas Department of Motor Vehicles.
(2) Division director--The chief administrative officer in charge of a division of the department.
(3) Executive Director--The executive director of the Texas Department of Motor Vehicles or the executive director's designee not below the level of division director.
(b) Motor pool. Each department vehicle, with the exception of a vehicle assigned to a field employee, shall be assigned to the department's motor pool and be available for checkout.
(c) Regular vehicle assignment. The department may assign a vehicle to an individual administrative or executive employee on a regular or everyday basis only if the executive director makes a signed, written documented finding that the assignment is critical to the needs and mission of the department.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304746
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes amendments to Chapter 206 under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.
CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.131.Digital Certificates.
(a) General. This section prescribes the requirements that govern the issuance, use, and revocation of digital certificates issued by the Texas Department of Motor Vehicles (department) for electronic commerce in eligible department programs. The provisions of 1 TAC Chapter 203, Subchapter B govern this section in the event of a conflict between that subchapter and a provision of this section.
(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Business entity--An entity recognized by law through which business is conducted with the department, including a sole proprietorship, partnership, limited liability company, corporation, joint venture, educational institution, governmental agency, or non-profit organization.
(2) Certificate holder--An individual to whom a digital certificate is issued.
(3) Digital certificate--A certificate, as defined by 1 TAC §203.1, issued by the department for purposes of electronic commerce.
(4) Digital signature--Has the same meaning assigned by 1 TAC §203.1.
(5) Division director--The chief administrative officer of a division of the department.
(c) Program authorization. A division director may authorize the use of digital signatures for a particular program based on whether the applicable industries or organizations are using such technology, the frequency of document submission, and the appropriateness for the program. The solicitation documentation for eligible programs will include the information that digital signatures may be used.
(d) Application and issuance of digital certificate.
(1) A request for a digital certificate shall be in writing and shall be signed by the individual authorized by the business entity to request a digital certificate.
(2) The department may request information necessary to verify the identity of the individual requestor or the identity of the individual to whom the certificate is to be issued. To verify identity under this paragraph a person shall present:
(A) an unexpired Texas driver's license or unexpired personal identification certificate with a photograph;
(B) an unexpired [concealed handgun license or]
license to carry a handgun issued by the Texas Department of Public
Safety under Government Code, Chapter 411, Subchapter H;
(C) an unexpired United States passport;
(D) a United States citizenship (naturalization) certificate with identifiable photograph;
(E) an unexpired United States Customs and Border
Protection [Bureau of Citizenship and Immigration Services]
document that:
(i) was issued for a period of at least one year;
(ii) is valid for not less than six months from the date it is presented to the department with a completed application; and
(iii) contains verifiable data and an identifiable photograph;
(F) an unexpired United States military identification card for active duty, reserve, or retired personnel with an identifiable photograph; or
(G) a foreign passport with a valid or expired visa
issued by the United States Department of State with an unexpired
United States Customs and Border Protection [Bureau
of Citizenship and Immigration Services] Form I-94:
(i) that was issued for a period of at least one year, is marked valid for a fixed duration, and is valid for not less than six months from the date it is presented to the department with a completed application; or
(ii) that is marked valid for the duration of the person's stay and is accompanied by appropriate documentation.
(3) The department may take actions necessary to confirm that the individual who signed the request is authorized to act on behalf of the business entity, including requiring the individual requestor or the person authorizing the request to personally appear at the department location responsible for the issuing of the certificate.
(4) The department shall issue a digital certificate only to an individual. Information identifying the business entity that authorized the issuance of the certificate may be embedded in the digital certificate.
(e) Refusal to issue a digital certificate. The department shall not issue a digital certificate if the identity of the individual to whom the certificate is to be issued, or the identity of the individual requesting the certificate on behalf of a business entity, cannot be established. The department will not issue a digital certificate if the business entity on whose behalf the request is allegedly being made does not authorize its issuance.
(f) Responsibilities of certificate holder. A certificate holder shall:
(1) maintain the security of the digital certificate;
(2) use the certificate solely for the purpose for which it was issued; and
(3) renew the certificate in a timely manner, if continued use is intended.
(g) Responsibilities of business entity. A business entity is responsible for:
(1) determining what individual may request a certificate for the business entity;
(2) determining to what individual a certificate is to be issued; and
(3) requesting within a reasonable time the revocation of the business entity's digital certificate if the security of the certificate has been compromised or if the business entity is changing its certificate holder.
(h) Revocation of certificate. The department shall revoke a digital certificate:
(1) upon receipt of a written request for revocation of the business entity's digital certificate, signed by an individual authorized to act on behalf of the business entity for which it was issued;
(2) for suspension or debarment of the individual or business entity; or
(3) if the department has reason to believe that continued use of the digital certificate would present a security risk.
(i) Use of digital certificate.
(1) A digital certificate [signature]
issued by the department shall only be used for the purpose of digitally
signing electronic documents filed with the department. Use of
a [A] digital certificate [signature]
is binding on the individual to whom the certificate was issued and
the represented business entity, as if the document were signed manually.
(2) The department may use the digital certificate to identify the certificate holder when granting or verifying access to secure computer systems used for electronic commerce.
(j) Forms. The department may prescribe forms to request, modify, or revoke a digital certificate.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304747
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes amendments to Chapter 206 under Transportation Code, §520.004, which requires the department by rule to establish a risk-based system of monitoring and preventing fraudulent activity related to vehicle registration and titling in order to efficiently allocate resources and personnel; Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.
CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, §2001.021(b) and Chapter 2110; and Transportation Code, §520.004 and Chapters 643, 1001, 1002, 1003, and 1004.
§206.151.Internal Risk-Based Monitoring System.
(a) All users of the Registration and Title System (RTS) at the Texas Department of Motor Vehicles (department) are subject to periodic examination by the department. As a result of the examination, the department will assign each RTS user a classification of priority or non-priority for the purposes of prioritizing inspections to determine whether there is evidence of fraud by the user. In classifying an RTS user, the department may consider factors including, but not limited to:
(1) the RTS user's transaction volume;
(2) the RTS user's past violations of the department's rules and procedures within the last five years;
(3) title error investigations performed by the department on titles issued by the RTS user;
(4) public complaints received by the department against the RTS user; and
(5) discrepancies in data reflecting the RTS user's transactions.
(b) It is the department's goal to inspect each RTS user as follows:
(1) if the RTS user is classified as priority, the RTS user will be inspected not less than twice per year; or
(2) if the RTS user is classified as non-priority, the RTS user will be inspected not less than once per year.
(c) Inspections under this section may be virtual, on premises at the RTS user's location, or a combination of both.
[The department shall establish a risk-based system of monitoring and preventing fraudulent activity related to vehicle registration and titling in order to efficiently allocate resources and personnel, including:]
[(1) establishing a risk-based system of monitoring the department's regional service centers;]
[(2) developing criteria to determine varying risk levels for the department's internal fraud monitoring functions to strategically allocate resources and personnel;]
[(3) reviewing the department's methods for collecting and evaluating related information; and]
[(4) developing and providing training to department staff.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304748
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Subchapter A, General Provisions, §215.1 and §215.2; repeal of Subchapter B, Adjudicative Practice and Procedure, §§215.21 - 215.24, 215.27, 215.29, 215.30, 215.32, 215.35 - 215.49, 215.55, 215.56, 215.58 - 215.63; amendments to Subchapter C. Licenses, Generally, §§215.82, 215.83, 215.87, and 215.89; in Subchapter D. Franchised Dealers, Manufacturers, Distributors, and Converters, amendments to §§215.101, 215.103 - 215.111, 215.113, 215.115 - 215.217, and 215.119, repeal of §215.112, and new proposed §§215.102, 215.120, and §215.121; in Subchapter E. General Distinguishing Numbers, proposes amendments to §§215.131 - 215.133; 215.135 -215.142; 215.144, 215.145, 215.147 - 215.152, 215.154, 215.155, 215.160, and 215.161, repeal of §215.146, and new §215.134 and §215.143; proposes amendments to Subchapter F. Lessors and Lease Facilitators, §§215.171 - 215.180; proposes repeal of Subchapter G. Warranty Performance Obligations, §§215.201 - 215.210; proposes amendments to Subchapter H. Advertising, §§215.242, 215.244, 215.249, 215.250, 215.257, 215.261, 215.268, and 215.270; proposes repeal of Subchapter I. Practice and Procedure for Hearings Conducted by The State Office of Administrative Hearings, §§215.301 - 215.303, 215.305 - 215.308, 215.310, 215.311, 215.314 - 215.317; and in Subchapter J. Administrative Sanctions, proposes amendments and partial repeal of §215.500, and repeal of §§215.501, 215.502, and 215.505.
The proposed amendments are necessary to modify language to be consistent with statutes and other chapters in Title 43 of the Texas Administrative Code; to delete language describing actions for which the department does not have rulemaking authority; to clarify the purpose of a rule by amending the rule title and language; to modify language to be consistent with current practice including use of records or electronic systems; to amend certain application requirements consistent with regulatory best practices; to increase temporary tag allocations for new franchised dealers based on department experience; to improve readability through the use of consistent terminology; to clarify or delete unused, archaic, or inaccurate definitions, terms, references or other language; to implement statutory changes; to deter fraud or abuse by expanding fingerprint requirements to other license types issued under Transportation Code, Chapter 503; to clarify existing requirements, and to modernize language and improve readability. Amendments are proposed to implement SB 422, 88th Legislature, Regular Session (2023), which amended Occupations Code, §§55.004, 55.0041, and 55.005 affecting licensing of military service members.
New sections are proposed to document and clarify current licensing application requirements, procedures for issuing industry license plates, and sanctions relating to manufacturers, distributors, converters, franchised dealers, and to document and clarify application requirements and procedures for issuing industry license plates to drive-away operators.
Repeals are proposed to move an existing rule to the designated subchapter for that license type; to move adjudicative rules to proposed new Chapter 224, which is proposed to include all department adjudicative practice and procedure rules; and to implement statutory changes in Senate Bill (SB) 604, 86th Legislature, Regular Session (2019). Certain subchapters are proposed for relettering because preceding subchapters are being proposed for repeal. The title of one subchapter is proposed to be amended to describe the types of licenses to which the subchapter applies. Proposed new Chapter 224 is also published in this issue of the Texas Register.
In 2019, the Sunset Commission recommended the board establish advisory committees and adopt rules regarding standard advisory committee structure and operating criteria. The board adopted rules in 2019 and advisory committees have since provided valuable input on rule proposals considered by the board for proposal or adoption. In September 2023, the department provided an early draft of these rules to two department advisory committees, the Motor Vehicle Industry Regulation Advisory Committee (MVIRAC) and the Customer Service and Protection Advisory Committee (CSPAC). Committee members voted on formal motions and provided informal comments on other provisions. Input from both committees was incorporated in proposed §§215.83, 215.102, 215.103, 215.132, 215.144, 215.244, and 215.250.
EXPLANATION. The department is conducting a review of its rules under Chapter 215 in compliance with Government Code, §2001.039. Notice of the department's plan to review is also published in this issue of the Texas Register. As a part of the review, the department is proposing necessary amendments and repeals, as detailed in the following paragraphs.
Subchapter A. General Provisions
A proposed amendment to §215.1 and §215.2(a) would delete a stray reference to Transportation Code, Chapter 1000, which does not exist. Proposed amendments to §215.1 would delete an incomplete list of license types regulated by the department, delete the word "motor" from the phrase "motor vehicle," and add the word "industry" to more accurately reflect the scope of the department's responsibility to encompass all vehicles including trailers and all license types under Occupations Code, Chapter 2301, and Transportation Code, Chapter 503. A proposed amendment to §215.1 would clarify the scope of the rules in Chapter 215, which is to describe licensing requirements and rules governing the operation of license holders, recognizing that other chapters also prescribe policies and procedures that apply to the motor vehicle industry.
Proposed amendments to §215.2(b) would delete definitions for terms used in contested cases because rules that use these terms are proposed for repeal in this chapter and are included in proposed new Chapter 224, Adjudicative Practice and Procedure, which is published in this same issue of the Texas Register. The definitions proposed for deletion include the terms ALJ, executive director, final order authority, hearing officer, motion for rehearing authority, and SOAH, and the remaining definitions would be renumbered accordingly. Proposed amendments in renumbered §215.2(b)(1) would clarify that only a board member or a person employed by the department may be authorized to serve as a board delegate as provided under Occupations Code, §2301.154. A proposed amendment to renumbered §215.2(b)(2) would add a definition for "day" and is necessary for standardization and consistency throughout the chapter. Proposed amendments to §215.2(b)(3) would substitute the term "division" for "department" to correctly refer to the responsible organizational unit in the department and would substitute the term "department staff" for "personnel" for clarity and consistency. A proposed amendment to renumbered §215.2(b)(4) would add a reference to Transportation Code, Chapter 503, which defines the types of general distinguishing numbers that the department may issue. A proposed amendment to renumbered §215.2(b)(5) would clarify that any state agency other than the department is included in the definition of a governmental agency. A proposed amendment to renumbered §215.2(b)(6) would add a new definition for standard license plate. This definition is necessary to differentiate a standard license plate issued to a dealer under Transportation Code, §503.061 from a personalized prestige license plate issued to a dealer under Transportation Code, §503.0615, recognizing that each plate has a different term and cost prescribed in statute and is obtained from the department through a different process.
Subchapter B. Adjudicative Practice and Procedure
All sections of Subchapter B, Adjudicative Practice and Procedure, are proposed for repeal because the substance of each rule and any proposed amendments would be incorporated into proposed new Chapter 224. Adjudicative Practice and Procedure. The proposed repeal includes §§215.21 - 215.24, 215.27, 215.29, 215.30, 215.32, 215.35 - 215.49, 215.55, 215.56, 215.58 - 215.63.
Subchapter C. Licenses, Generally
This subchapter is proposed to be relettered as Subchapter B as the current Subchapter B is proposed for repeal.
Proposed amendments would delete §215.82(a) and (b) and reletter the remaining subsections as necessary, because §215.82(a) and (b) refer to an archaic process that the department no longer follows. A license holder is not required to request a duplicate license from the department; rather, a license holder may print a license copy on demand in the electronic system designated by the department for licensing. Proposed amendments to §215.82(c) would delete the subsection designation and substitute "standard" for "metal" to identify which plate type applies to the replacement process. Proposed amendments to §215.82(c) would also clarify that the same process applies for obtaining a replacement sticker, and that a request for a replacement license plate or sticker must be submitted electronically in the department-designated system.
Proposed amendments to §215.83(a)(1) and (d) would clarify that an application for a new license, a license amendment, or a license renewal must be filed electronically. A proposed amendment to §215.83(a)(3) would specify which electronic payment forms are accepted. Paper checks are no longer accepted because fee payment must be completed before an application may be submitted and processed. A proposed amendment to §215.83(b) would clarify that an authorized representative who files an application on behalf of an applicant or license holder may be required to provide written proof of authority to act. A proposed amendment to §215.83(c) would clarify that a pending new license number will not be released to a person who is not an applicant, license holder, or authorized representative, unless that person files a written request under Government Code, Chapter 552. Once a license is approved and issued, the license number may be published on the department's website or otherwise provided in response to an inquiry consistent with Government Code, §552.11765 and other requirements in Government Code, Chapter 552.
A proposed amendment to §215.83(d)(2) would delete an archaic reference to an envelope postmark for a renewal application to comport with §215.133(c), which requires a license application be submitted electronically in the department's designated licensing system.
Proposed amendments to §215.83(e) would delete redundant language and combine the language in §215.83(e) and §215.83(f) for consistency and ease of understanding without changing the meaning. Other proposed amendments would reletter the remaining subsections and internal references accordingly.
Proposed amendments to relettered §215.83(i) would add the phrase "military service members or" in multiple places in subparagraphs (1), (2), and (3). These proposed amendments are necessary to implement SB 422, which added military service members who hold out-of-state licenses as persons eligible for special business or occupational authorization or licensing consideration. A proposed amendment to relettered §215.83(i) would clarify that the requirements and procedures authorized under Texas law do not modify or alter rights under federal law.
In relettered §215.83(i)(1), proposed amendments would delete two duplicative references to Occupations Code, §55.0041. Also, in relettered §215.83(i)(1), a proposed amendment would substitute the phrase "being stationed" for "residency" to clarify that eligibility for special licensing consideration for both the military member and military spouse is based on the military member being stationed in Texas, rather than on the spouse's residency.
Additional amendments to relettered §215.83(i)(3) are proposed to implement SB 422. Proposed amendments would change the word "may" to "shall" and would add the phrase "within 30 days" to set a deadline by which the department must issue a license to a military service member or spouse. This change is necessary to implement changes to Occupations Code, §55.005(a) from SB 422, which requires a state agency to issue a license no later than the 30th day after an application is filed. Issuing a license within 30 days would also fulfill the requirement of Occupations Code, §55.0041, as amended by SB 422, that the department provide confirmation within 30 days that the military service member or military spouse is authorized to engage in the licensed business or occupation. Another proposed amendment to relettered §215.83(i)(3) would add the phrase "modified or" to recognize that provisions of Occupations Code, Chapter 55 may require the department to modify standard licensing processes when processing an application for a military service member or military spouse and to clarify that the department's licensing process for military service members and military spouses will be in accordance with all Occupations Code, Chapter 55 requirements.
A proposed amendment to relettered §215.83(j) would add a reference to Government Code, §2001.054 for ease of reference. An amendment to relettered §215.83(k) increases the time from 10 to 15 days in which a license holder may dispute whether a renewal application was timely received by the department.
A proposed amendment to relettered §215.83(n) substitutes the term "standard" for "metal" to more accurately describe the type of dealer's license plate addressed in this subsection and adds the phrase "is canceled" to clarify that a standard dealer's license plate expires on the date a dealer's GDN is canceled under Transportation Code, §503.038.
A proposed amendment to §215.84(a) would insert an introductory paragraph with a statutory cite to Occupations Code, §2301.002 to enable a person to more easily determine whether the section applies and to clarify the basic statutory prohibition against brokering and would reletter the remaining subparagraphs accordingly. Proposed amendments to relettered §215.84(b) would add two clarifying phrases "in the definition of broker" and "acting as a" to clarify language related to the term broker and to be more consistent with the statute and delete duplicate phrasing to improve readability. Proposed amendments to relettered §215.84(c) would add the term "franchised" in §215.84(c)(3) to more accurately describe the type of dealer to which a buyer referral service, program, or club may refer a potential new vehicle buyer, would correct punctuation in relettered §215.84(c), and would move a requirement from §215.84(d) regarding compliance with advertising rules to relettered §215.84(c)(7) for completeness and ease of reference, and would update a reference to the relettered subchapter containing the advertising rules. Proposed amendments to relettered §215.84(d) would clarify that §215.84 does not apply to a person who is not a broker as defined in Occupations Code, §2301.002, and would delete a redundant phrase "or entity" as entities are included in the definition of "person" in Occupations Code, §2301.002. A proposed amendment would delete current §215.84(d) because the content of that the subsection is incorporated into proposed relettered §215.84(c)(7).
Proposed amendments to §215.85(b) would correct punctuation and move language from §215.85(c) to §215.85(b)(7) for completeness and clarity without changing the meaning. A proposed amendment to §215.85(c) would delete the redundant subsection moved to §215.85(b)(7). Proposed amendments to §215.85(d) would reletter the subsection to (c) and delete redundant terms "licensed" and "independent motor vehicle" from this subsection.
Proposed amendments to §215.87 would substitute the term "standard" for the phrase "metal dealer's" in the rule title and in §215.87(a) - (c) to more accurately describe the type of dealer's license plate addressed in this subsection. A proposed amendment to §215.87(a) would add a list of license types eligible to request a standard license plate for completeness and clarity. A proposed amendment to §215.87(b) would clarify that a standard license plate expires when the associated license is canceled. A proposed amendment to §215.87(c) would clarify that a license holder may be required to pay tax when ordering a standard plate as required under Tax Code, §152.027. Another proposed amendment would create new §215.87(d) to describe the process a dealer must use to apply for or renew a personalized prestige plate issued under Transportation Code, §501.0615.
Proposed amendments to §215.89(a) and (b) would delete the redundant "or department" because the word "board" is defined to include department staff to whom the board delegates a duty. A proposed amendment to §215.89(a)(2) would add a reference to Transportation Code, §503.034, which authorizes the department to deny a new or renewal application for a dealer general distinguishing number or a Wholesale Motor Vehicle Auction general distinguishing number if the applicant is guilty of conduct that would result in the cancellation of the general distinguishing number under Transportation Code, §503.038. A proposed amendment to §215.89(b)(6) would add the phrase "or other legal entity" for completeness because legal entities other than a corporation can fail to maintain authority to conduct business in Texas. Proposed amendments to §215.89(b)(10) would add "final" and substitute the "after" for "through" for clarity and consistency with department contested case procedures.
Subchapter D. Franchised Dealers, Manufacturers, Distributors, and Converters
This subchapter is proposed to be relettered as Subchapter C as current Subchapter B is proposed for repeal and the subsequent subchapters are proposed to be relettered accordingly.
Proposed amendments to §215.101 would delete an incorrect reference to a non-existent Transportation Code, Chapter 1000 and add the license types to which this subchapter applies for clarity.
Proposed new §215.102 would describe application requirements for manufacturers, distributors, converters, and franchised dealers for new, renewal, and amendment license applications including the requirement to attach documents, pay required fees, and submit applications electronically on a prescribed form in the department's designated licensing system. Occupations Code, §2301.257 and §2301.258 authorize the department to prescribe the application form and require any information necessary to determine the applicant's qualifications to adequately serve the public. Occupations Code, §2301.651(b) gives the board authority to deny an application for an act or omission by an officer, director, partner, trustee, or other person acting in a representative capacity that would be cause for denying a license. Fees are prescribed by statute in Occupations Code, §2301.264. Proposed new §215.102(c) would require a license holder renewing or amending a license to review current license information, update information that has changed, provide related supporting information or documents for any change or new requirement, and allow the department to implement its responsibilities under Occupations Code §§2301.251, 2301.252, 2301.256-2301.260, 2301.303, and 2301.304. Proposed new §215.101(a-d) would include requirements that apply to all four license types. Proposed new §215.101(e)(1) would describe the information that must be submitted in the application, denoting any differences by license type. Proposed new §215.101(e)(2) would describe the documents that must be attached to the application, denoting any differences by license type. Proposed information and attachment requirements vary for each license type based on statutory requirements and related consumer fraud or public safety considerations resulting from the license holder's operation, business model including distribution methods, and the specific new products manufactured or offered for sale. These proposed requirements incorporate best practice recommendations from the American Association of Motor Vehicle Administrators (AAMVA) regarding internet sales. Proposed new §215.101(e)(3) would describe the fees that must be paid when an applicant applies online for a license. To prevent consumer fraud and abuse, proposed new §215.101(f) would state that a license applicant may not use a name or assumed name that could be confused with a governmental entity, or could be deceptive or misleading to the public. Proposed new §215.101(g) would set out the process through which a manufacturer or distributor may add a new line make to an existing license during the license period.
Proposed amendments to §215.103(a) would substitute "performs" for the phrase "will only perform" and add the phrase "and not new motor vehicle sales" to clarify that the franchised dealer activity that may not be performed at a service-only facility is new motor vehicle sales. The phrase "and nonwarranty" would be deleted because the department does not regulate non-warranty repair services. Similarly, the last sentence in §215.103(a) is proposed for deletion as Occupations Code, Chapter 2301 does not require warranty repair services to be performed only at a licensed dealer location. This proposed change would provide franchised dealers with more flexibility in performing warranty repair services. Proposed amendments to §215.103(b) would delete a redundant word and change the term "line" to "line-make" for consistency. A proposed amendment to §215.103(d) would delete the word "only" as the word is not required by statute and the franchised dealer may prefer to have contracting flexibility to obtain more attractive commercial terms.
Proposed amendments to §215.104(a) and §215.104(b)(3) would delete unnecessary words to improve readability without changing meaning. Proposed amendments throughout §215.104 would update and modernize the amendment process by requiring a franchised dealer to submit an amendment application electronically in the system designated for licensing. A proposed amendment in §215.104(a)(1) would clarify that amendment application attachments must be legible and accurate electronic images, and a proposed amendment in §215.104(a)(2) would add a reference to the new proposed Chapter 224, which would include procedures related to processing protests of a franchised dealer's application. A proposed amendment in §215.104(b)(3) would modernize and standardize the process through which a publicly held corporation informs the department of an ownership change by requiring that the corporation file an amendment application electronically when a person or entity acquires a 10% ownership share. A proposed amendment to §215.104(c)(5) would delete an archaic requirement for a franchised dealer to notify the department if the dealer's facsimile number has changed, and renumber accordingly. A proposed amendment to §215.104(d)(1) would replace "oversees" with "is in charge of" for consistency and clarity without a change to the meaning of the provision. Proposed amendments to §215.104(e) and §215.104(f) would add "franchised" and delete the phrase "licensed new motor vehicle," for consistency in describing a dealer under this subchapter and would add the word "amendment" to describe the type of application required to process the change described to the franchised dealer's license.
Proposed amendments to §215.105(b) and §215.105(c) would add "franchised" and delete the phrase "licensed new motor vehicle" for consistency in describing a dealer under this subchapter. A proposed amendment to §215.105(d) would clarify and modernize the process for a franchised dealer to file a protest by specifying that a franchised dealer with standing to protest must file a timely protest electronically in the department-designated system for licensing and pay the required fee.
A proposed amendment to §215.106(a)(1) would clarify that a notice of protest must be received by 5:00 p.m. Central Time, which will be either Central Standard Time or Central Daylight Time as applicable. A proposed amendment to §215.106(a)(2) would modernize the protest process by requiring the notice of protest to be filed in the department's designated electronic filing system, and a proposed amendment to §215.106(a)(3) would clarify that the fee must be paid at the time the application is submitted. A proposed amendment to §215.106(b)(2) would clarify that the protest will be rejected if payment is not made or is later dishonored.
A proposed amendment to §215.108 would add the word "franchised" and delete the phrase "licensed new motor vehicle," for consistency in describing a dealer under this subchapter.
A proposed amendment to §215.109 would add the word "franchised" and delete the phrase "licensed new motor vehicle," for consistency in describing a dealer under this subchapter. A proposed amendment to §215.109(4) would require a franchised dealer to submit a dealership replacement application electronically in the department system designated for licensing.
Proposed amendments to §215.110(a) would split the subsection into three separate sections lettered (a) through (c), would modify internal references in relettered (b) and (c) from "subsection" to "section" to reflect the new organization, and would reletter current subsection (b) to subsection (d) accordingly. Proposed amendments to §215.110(a) and relettered §215.110(d) would add the word "franchised" or "franchised dealer" and delete the phrase "licensed new motor vehicle," for consistency in describing a dealer under this subchapter. Proposed amendments in §215.110(a) would remove unnecessary language and clarify that the applicant must submit legible and accurate electronic images of the franchise agreement pages that identify the parties, the parties' signatures, each line-make listed in the application, and the address of the franchised dealership's physical location. A proposed amendment to relettered §215.110(b) would clarify that an applicant may submit temporary evidence of franchise electronically, and proposed amendments to relettered §215.110(c) would clarify that an applicant is required to provide the designated franchise agreement pages to the department before a license may be issued.
Proposed amendments to §215.111 would organize the existing language into two subsections to improve readability. A proposed amendment to new §215.111(a) clarifies that a manufacturer or distributor must provide notice of termination or discontinuation as required under Occupations Code, §2301.453 and would remove language that duplicates the statute. A proposed amendment to new §215.111(b) would require a franchised dealer to file a written notice of protest electronically in the department's designated system for licensing.
SB 604, 86th Legislature, Regular Session (2019), eliminated the department's authority to approve a vehicle show or exhibition under Occupations Code, §2301.358, effective September 1, 2019. As a result, §215.112 is proposed for repeal as the §215.112(a) expressly limits applicability of the rule to motor home shows that require department approval.
A proposed amendment to the title of §215.113 would correct the spelling of "Franchised" as the statutory term in Occupations Code, §2301.002 is "franchised dealer." Proposed amendments to §215.113(a) - (c) and (f) would add the word "franchised" and delete the phrase "new motor vehicle," for consistency in describing a dealer under this subchapter. Proposed amendments to §215.113(a), (d), and (e) would require the notice of protest to be filed electronically in the department's designated system for licensing. Proposed amendments to §215.113(c) would substitute the more general Occupations Code subchapter designation for the specific section series reference so any future statutory changes will not require a rule change and would add a reference to the subchapter in proposed new Chapter 224 which applies to this subsection. Proposed amendments to §215.113(f) would add a reference to the subchapter in proposed new Chapter 224, which applies to this subsection, would delete archaic language as contested case hearing scheduling is determined by the State Office of Administrative Hearings (SOAH) and its procedural rules, and would substitute the word "issued" for "rendered" for consistency.
A proposed amendment to the title of §215.115 adds the phrase "Vehicle Sales" to describe the scope of the section more accurately. Proposed amendments to §215.115(a), (b), (d) and (f) would delete the phrase "a representative of" as the phrase is unnecessary. Proposed amendments to §215.115(a), (b), and (f) would add language to allow a record to be submitted to the department electronically upon request. Proposed amendments to §215.115(b) would correct preposition use to improve readability without changing the meaning.
A proposed amendment to title of §215.116 would add the term "Franchised Dealership" to describe the scope of this section more accurately. A proposed amendment to §215.116(a) would add the descriptor "franchised" to the term dealer and delete duplicate language without changing meaning.
Proposed amendments to §215.117 would improve the readability of the section without changing the meaning.
Proposed new §215.120 would set out the requirements for manufacturers, distributors and converters using license plates issued by the department. Proposed new §215.120(a) would specify when a manufacturer, distributor, or converter may apply for a standard license plate and proposed new §215.120(a) and (b) would specify the type of vehicle and purposes for which a license plate may be used. Proposed new §215.120(c) would explain where the license plate is to be placed on the vehicle. Proposed new §215.120(d) would contain the record requirements for these plates. Proposed new §215.120(e) and (f) would explain what a manufacturer, distributor or converter is required to do if a license plate is lost, stolen, or damaged. Proposed new §215.120(g) would require license plate records be available for inspection or review if requested by the department. Proposed new §215.120(h) would specify the criteria the department will use to evaluate a request for additional standard license plates. Proposed new §215.120(i) would require a manufacturer, distributor, or converter to return department-issued license plates to the department within 10 days of the associated license being closed, canceled, or revoked.
Proposed new §215.121 would set out the powers of the board and department to sanction a manufacturer, distributor, or converter. Proposed new §215.121(a) would describe existing administrative sanctions that the board or department may take if a manufacturer, distributor, or converter violates a law or rule enforced by the department. Proposed new §215.121(b) would describe which actions may result in a sanction.
Subchapter E. General Distinguishing Numbers
This subchapter is proposed to be relettered as Subchapter D as current Subchapter B is proposed for repeal and the subsequent subchapters are proposed to be relettered accordingly. An amendment to the title of this subchapter is proposed to reflect that the scope of the chapter also includes in-transit licenses issued to drive-a-way operators under Transportation Code, §503.023.
Proposed amendments to §215.131 would add a reference to Transportation Code, Chapters 1001-1005 and would clarify that provisions in this subchapter apply to general distinguishing numbers and drive-a-way operator in-transit licenses issued by the department.
Proposed amendments to §215.132 would delete an unused definition for charitable organization, delete an unnecessary definition for license, and add a definition for municipality, which is defined by reference to Local Government Code, Chapter 1. Proposed amendments would renumber the remaining provisions accordingly.
A proposed amendment to §215.133 would retitle the section to "Application Requirements for a Dealer or a Wholesale Motor Auction" to accurately reflect the scope of the section. A proposed amendment to §215.133(a) would add a reference to a wholesale motor vehicle auction and delete a redundant word. Proposed amendments to §215.133(c) would add multiple references to wholesale motor vehicle auction throughout, add a reference to §215.83, and clarify an existing requirement for a license holder to pay any outstanding civil penalties owed the department under a final order before renewing a GDN. Proposed amendments to §215.133(c)(1) would clarify existing application requirements in §215.133(c)(1)(C); add new §215.133(c)(1)(D), which requires an applicant to provide a contact name and contact details for a person who can provide business information about the applicant so the department knows who to contact for related questions; reletter the remaining subparagraphs; add in §215.133(c)(1)(I) the requirement for a telephone number for a dealer's temporary tag database account administrator; and correct in §215.133(c)(1)(O) the name of a form. Proposed amendments to §215.133(c)(2) would clarify in §215.133(c)(2)(D) by adding "unexpired" and deleting "current" in the related clauses and substituting the modern phrase "military identification card" for armed forces identification and would add the word "business" in §215.133(c)(2)(G) to clarify the phrase premises photos. Proposed amendments to §215.133(c)(3) would delete a redundant phrase in §215.133(c)(3)(A), add a reference in §215.133(c)(3)(B) to applicable taxes, and substitute "standard" for "metal" for a more precise description of a dealer plate. In §215.133(d), proposed amendments would add a fingerprint requirement for wholesale motor vehicle auction GDNs to allow the department to evaluate the criminal histories of applicants and update the title of a §211.6. Proposed amendments to §215.133(e) would delete "dealer" to clarify that all GDNs must follow the assumed name requirements in that subsection and would add the phrase "a name or" to denote that an applicant cannot use either a business name or an assumed name that is confusing, deceptive, or otherwise misleading to the public. Proposed new §215.133(j) would clarify that a person holding an independent motor vehicle GDN and performing salvage activities must apply for a National Motor Vehicle Title Information System (NMVTIS) Identification number and provide that number to the department in the application, to allow the department to verify that the applicant meets federal registration requirements and is qualified to perform salvage activities; the next subsection is proposed to be relettered accordingly.
Proposed new §215.134 would define the application requirements for a drive-a-way operator in-transit license. Proposed new §215.134(a) would set out the requirement for a license. Proposed new §215.134(b) would require an applicant to complete an application form prescribed by the department and submit it through the department's designated electronic system. Proposed new §215.134(c) would requires a license holder renewing or amending a license to verify current information and provide related information and documents for any changes to the license, as well as pay required fees. Proposed new §215.134(d) would instruct a new applicant how to register in the department-designated licensing system. Proposed new §215.134(e)(1) would describe the information that must be submitted in the application for a drive-a-way operator in-transit license. Proposed new §215.134(e)(2) would describe the documents that must be attached to the application based on statutory requirements and related consumer fraud or public safety considerations resulting from the license holder's operation or business model. Proposed new §215.134(e)(3) would describe the fees that must be paid when an applicant applies for a license. Proposed new §215.134(f) would require a license applicant to comply with fingerprint requirements to allow the department to confirm an applicant's identity and perform a more comprehensive review of the applicant's criminal record. Proposed new §215.134(g) would protect the public by requiring an in-transit license holder to not use a business name or assumed name that would be confusing, deceptive, or misleading to prevent consumer fraud and abuse.
Proposed amendments to §215.135(a) and (b) would substitute "municipality" for "city" as municipality is a defined term in the Local Government Code, Chapter 1, and is proposed to be a defined term in §215.132. A proposed amendment to §215.135(a) would update a reference to the title of §215.140. Proposed amendments to §§215.135(b) and (c) would correct punctuation. A proposed amendment to §215.135(d) would require a GDN holder to notify the department of a new, closed or relocated business location by filing an amendment electronically in the system designated by the department for licensing.
Proposed amendments to §215.137(a) would substitute "GDN" for "license" and delete "dealership" for consistency in terminology. Proposed amendments to §215.137(c) would rephrase a sentence for clarity and consistency without changing the meaning.
Proposed amendments to the title of §215.138 and throughout the section would delete "metal" or "assigned metal dealer's" to describe a dealer license plate for specificity and consistency. A proposed amendment to §215.138(a) would delete the requirement to attach a plate to a license plate holder and would instead refer a license holder to §217.27 for plate placement requirements. Minor edits are proposed in §215.138(b) for clarity and would not change the meaning. Proposed amendments would combine the definition of light truck in §215.138(e) and rule language in §215.138(f) into relettered §215.138(e) for clarity, and the remaining sections would be relettered accordingly. Proposed amendments to relettered §215.138(h) would clarify that a dealer must keep records of all license plates issued by the department for dealer use, including both standard and personalized prestige plates. Proposed amendments to relettered §215.138(i) and (j) would clarify the procedures for reporting a license plate that is lost, stolen, or damaged. Proposed new §215.138(k) would require that a dealer's license plate record be available for inspection or to submit to the department electronically upon request to allow the department to inspect dealers for potential misuse of license plates. Proposed new §215.138(l) would require a dealer to return to the department all plates, stickers, and related receipts within 10 days, consistent with the requirements of Transportation Code §503.038.
Proposed amendments to the title of §215.139 and throughout the section and attached graphics would delete "metal" and add "standard" to describe a dealer plate more accurately and consistently. In §215.139(d) and in §215.139(f)(2), proposed minor edits would improve readability without changing meaning. In the attached graphic to §215.139(f)(1), proposed amendments would correct the number of plates that a dealer selling 50 to 99 vehicles during the previous 12 months is eligible to request and add a missing category for a dealer selling 100 to 200 vehicles during the previous 12 months. These proposed amendments would correct inadvertent errors made when the graphic was last published. The proposed amendments would delete §215.139(h) as an unnecessary disclaimer because other proposed amendments to §215.87(d) and §215.138(h) would explicitly address procedures relating to personalized prestige dealer plates.
A proposed amendment to §215.140 would add a subsection letter (a) to distinguish premises requirements for GDN dealers from premises requirements for wholesale motor vehicle auctions, which are proposed in new subsection (b). Proposed amendments to §215.140(a)(1)(B) and §215.140(a)(2) would clarify that the dealer's business hours must be posted in a manner and location that is accessible to the public to meet the requirements of Transportation Code, §503.032. Proposed amendments to §215.140(a)(5)(F) would clarify that an established and permanent location must be capable of receiving U.S. mail and must have an assigned emergency services property address to allow the department to verify the physical location. A proposed amendments to §215.140(a)(5)(F) would delete "metal" to describe the dealer's license plate more consistently. A proposed amendment to §215.140(a)(11)(B)(ii) would clarify that a display area must be reserved exclusively for the dealer's inventory. Proposed amendments to §215.140(a)(11)(B)(iv) and (vii) would clarify that a barrier that cannot be readily removed is one that cannot be easily moved by one person and typically weighs more than 50 pounds. This weight guideline is consistent with Occupation Health and Safety Administration guidelines for the maximum weight that one person may safely lift without assistance. Proposed amendments to §215.140(a)(11)(C) would clarify by replacing "dealer" with "GDN holder" and would add a requirement for a GDN holder to disclose in an application or license amendment the location of a storage lot, if the lot is not located at the licensed business address. The department must be able to determine where a storage lot is located, so the department can inspect the lot to ensure compliance with department rules. The proposed changes in §215.140(11) are necessary to prevent fraud and consumer abuse and to protect public health and safety. A proposed amendment to §215.140(a)(12) would delete an exclusion for salvage pool operators as this exclusion is not consistent with public welfare and to ensure that no member of the public is misled about the status or condition of a salvage vehicle. If a dealer is selling both motor vehicles and salvage vehicles, each salvage vehicle should be clearly and conspicuously marked. A proposed amendment to §215.140(a)(14) would move the requirement to post a dealer's GDN and bond notice in each location to the end of the paragraph to improve clarity without changing meaning. Proposed new §215.140(b) would add premises requirements for wholesale motor vehicle auctions consistent with the requirements of Transportation Code, §503.032.
Proposed amendments to §215.141(a) would reorder language for consistency with §215.141(b) and add a reference to a cease-and-desist order, which is an action the board is authorized to take under Occupations Code, §2301.153 and §2301.802. Proposed amendments to §215.141(b)(1) would add a reference to the relevant statute and a reference to the requirement to post a bond notice and would delete an archaic reference to a bond amount. Proposed new §215.141(b)(2) would address the fact that the failure of a license holder to meet or maintain the established and permanent place of business premises requirements is one of the most common violations requiring a sanction under this subchapter; the remaining paragraphs would be renumbered accordingly. Proposed amendments to relettered §215.141(b)(4) would clarify that a license holder under this subchapter may be sanctioned for either failing to provide electronic records, or for refusing or failing to comply with a department request to review records at the licensed business location. Proposed new §215.141(b)(4)(D) would add the Certificate of Occupancy, Certificate of Compliance, business license or permit, or other official documentation confirming compliance with county and municipal laws or ordinances for a vehicle business at the licensed physical location as records the department may request to confirm compliance with Transportation Code requirements. Proposed amendments would reletter the remaining subsections to accommodate proposed new §215.141(b)(4)(D). A proposed amendment to relettered §215.141(b)(6) would delete a redundant reference to §215.140 as a reference to that section is proposed in §215.141(b)(2) and would remove subsection delineations within §215.141(b)(6) because they would be unnecessary. Proposed amendments to relettered §215.141(b)(8) would clarify that a license holder under this subchapter may be sanctioned if the license holder fails to submit a license amendment in the electronic system designated by the department to change an address, including the address of a storage lot, within 10 days of the change. A proposed amendment to relettered §215.141(b)(9) would clarify that a license holder under this subchapter may be sanctioned if a person fails to submit a license amendment in the electronic system designated by the department to notify the department of a change in name or change in management or ownership within 10 days of the change. The proposed amendments to §§215.141(b)(8) and (9) would incentivize licensees to make timely updates to their information through the department's electronic system. Proposed amendments to relettered §215.141(b)(12) and (13) would delete "metal" from the description of license plate consistent with statutory language in Transportation Code, Chapter 503. A proposed amendment to relettered §215.141(b)(16) would delete an incorrect reference to non-existent Transportation Code, Chapter 1000. A proposed amendment to relettered §215.141(b)(17) would clarify by adding a reference to §211.3. A proposed amendment to relettered §215.141(b)(20) would clarify that providing a false or forged document to the department may result in a sanction. A proposed amendment to relettered §215.141(b)(22) would clarify that providing a false or forged identity document, photograph, image, or document to the department is a material misrepresentation and may result in a sanction. Proposed new §215.141(b)(25) would clarify that a license holder's failure to comply with the requirements for dealer's issuance of temporary tags under §215.150 may result in a sanction. Proposed amendments to relettered §215.141(b)(28) would delete an archaic effective date and clarify by adding the title of the statutory provision referenced. Proposed new §215.141(b)(29) adds failure to issue a refund as ordered by the board or department as an action that may result in a sanction, to ensure that the board is able to enforce its refund orders. Proposed new §215.141(b)(30) would add failure to acquire or maintain a certificate, business license, permit, or other documents confirming compliance with county or municipal laws or ordinances for a vehicle business as an action that may result in a sanction, as a license holder must comply with county and local laws to have and maintain an established and permanent place of business. An established and permanent place of business is a requirement for GDN holders under Transportation Code §503.032 and wholesale motor vehicle auctions under Transportation Code §503.030.
Proposed new §215.143 would set out the requirements for drive-away operator in-transit license plates. Proposed new §215.143(a) would specify when a drive-a-way operator may apply for an in-transit standard license plate. Proposed new §215.143(b) would explain when and where the license plate is to be placed on the vehicle. Proposed new §215.143(c) would contains the record requirements for these plates. Proposed §215.143(d) and (e) would explain what a drive-a-way operator is required to do if a license plate is lost, stolen, or damaged. Proposed new §215.143(f) would require that license plate records be available for inspection or review if requested by the department. Proposed new §215.143(g) would specify the criteria the department will use to evaluate a request for additional in-transit standard license plates. Proposed new §215.143(h) would require a drive-a-way operator to return department-issued license plates to the department within 10 days of the associated license being closed, canceled, or revoked.
A proposed amendment to the title of §215.144 would add "Vehicle" to the title to describe the scope more accurately as pertaining to vehicle records. Proposed amendments to §215.144(a) would add a reference to a wholesale motor vehicle auction and delete a redundant phrase. A proposed amendment to §215.144(b) would add a reference to records that must be kept by an independent mobility motor vehicle dealer for ease of reference. A proposed amendment to §215.144(c) would delete unnecessary punctuation. Proposed amendments to §215.144(d) would simplify the language for the requirement that a dealer must reply within 15 days of receiving a department records request regardless of the method in which the department makes the request and would correct a reference from division to department for consistency. Proposed amendments to §215.144(e)(7) would delete an archaic reference to the title of a tax receipt form and substitute the general phrase "county tax assessor-collector receipt marked paid," as the form of the receipt may vary by county. Proposed amendments to §215.144(e)(8) would add clarity by improving sentence structure, clarifying that records must be kept for both the purchase and the sale of a vehicle, deleting a reference to an archaic form, and adding requirements to keep a copy of the purchaser's photo identification, the odometer disclosure statement signed by the buyer, and the rebuilt salvage disclosure, if applicable. These additional record requirements §§215.144(e)(8)(L) - (N) are necessary to prevent consumer harm and reduce potential for fraud. Proposed amendments to §215.144(e)(9) would rephrase the existing requirement for readability without changing the meaning. Proposed amendments to §215.144(f)(2) would add a reference to a statutory exemption and update the language consistent with current statutory requirements that any willing county tax-assessor-collector may process a title or registration request. Proposed amendments to §215.144(f)(3) would change the presumed reasonable time for a dealer to apply for a title and registration from 20 working days to 30 days and add references to title processing to clarify that the same presumed time limit applies to both titling and registration dealer responsibilities. A proposed amendment to §215.144(g)(1) changes the presumed reasonable time for a dealer to act for out-of-state sales from 20 working days to 30 days; "days" is proposed to be defined under §215.2(b)(2) as calendar days. Proposed amendments to §215.144(h) would update the language consistent with current statutory requirements that any willing county tax-assessor-collector may process a title or registration request. Proposed amendments to §215.144(j) would delete the unnecessary phrase "a representative of" to describe the department, would simplify the language in §215.144(j)(2) regarding the requirement that a wholesale motor vehicle auction must reply within 15 days of receiving a department records request regardless of the method in which the department makes the request, and would update a citation to the federal odometer disclosure requirements in §215.144(j)(3)(F). A proposed amendment to §215.144(k) would delete the unnecessary phrase "a representative of" in describing the department. Proposed amendments to §215.144(l) would update the subsection title to refer to the department's electronic titling and registration system for clarity and delete unnecessary punctuation.
A proposed amendment to §215.145(a) would delete a duplicative word. Proposed amendments to §215.145(b) would clarify that a dealer must submit a license amendment electronically in the department's designated licensing system. Proposed amendments to §215.145(c) - (f) would remove redundant language or restate language to improve readability without changing the meaning. Another proposed amendment to §215.145(f) would modernize the provision by adding a reference to filing a GDN application electronically in the department's designated licensing system. A proposed amendment to §215.145(g) would delete unnecessary punctuation and correct the title of a referenced statute.
The entirety of §215.146 is proposed for repeal as this rule would be incorporated into new proposed §215.120, relating to License Plates.
Proposed amendments to §215.147(a) would correct a reference to the driver license and delete an archaic reference to a concealed handgun license. A proposed amendment to §215.147(b) would substitute "dealer's" for "license holder's" for consistency in terminology and does not change the meaning. A proposed amendment to §215.147(c) would add "Vehicle" for consistency with a proposed title change to §215.144, relating to Vehicle Records.
Proposed amendments to §215.148 would add references to Transportation Code, Chapter 503, and proposed new Chapter 224, Adjudicative Practice and Procedure, would update a proposed title change to §215.144, and would remove redundant and unnecessary words and punctuation.
Proposed amendments to §215.149 would change the title to "Sales of New Mobility Motor Vehicles" to reflect the section scope and add references to "new" mobility motor vehicles for clarity.
A proposed amendment to §215.150(a) would add "or lease" to clarify that a dealer may issue a temporary tag for a vehicle leased to a customer. A proposed amendment to §215.150(b)(1) would update a reference to proposed new Chapter 224, Adjudicative Practice and Procedure. Proposed amendments to §215.150(c) would change word order to "buyer's temporary tag" for consistency.
A proposed amendment to §215.151(a) would add "governmental agency" to the list of entities that must display temporary tags on the rear of a vehicle in operation. As a result, §215.151(b) is proposed for deletion and the remaining subsections are proposed to be relettered accordingly. Proposed amendments to relettered §215.151(c) would delete duplicate language from a referenced statute and add a statutory reference for allowed uses of a converter's temporary tag for completeness and ease of reference.
Proposed amendments to §215.152(a) and (b) would delete an unnecessary phrase as a governmental agency is defined in §215.2 to include federal, state, and local agencies. Proposed amendments in §215.152(f) would increase the allotment of temporary tags for a franchised dealer from 600 to 1,000 based on the department's historical experience. Since maximum tag limits were put in place, the department has been monitoring temporary tag usage and processing requests for additional temporary tags. The one dealer category that has consistently required more temporary tags to be allocated is a new franchised dealer, so increasing the initial amount allocated to this dealer type is necessary to ensure a new franchise dealer has the requisite number of tags necessary to support daily operations. Proposed amendments in §215.152(i) would clarify the process and procedure for requesting additional temporary tags and for appealing a denial of a request, but do not change existing process or procedure. Another amendment to §215.152(i) would clarify that temporary tag allotments do not carry over to subsequent years.
A proposed amendment to §215.154(a) would add "or lease" to clarify that a dealer may issue a dealer's temporary tag for a vehicle the dealer is authorized to lease. A proposed amendment to §215.154(c) would deletes "metal" and adds "standard or personalized prestige" to accurately describe the plate types the dealer may use. A proposed amendment to §215.154(d)(2)(B) would add a reference to §215.138(d) for clarity and ease of reference. Proposed amendments to §215.154(e) and (g) would delete these two subsections as the language in these subsections duplicates §215.138, which is proposed to be added for reference in §215.154(d)(2)(B), and the remaining subsections would be relettered accordingly.
Proposed amendments to §215.155(a) would clarify that a buyer's temporary tag may only be displayed on a vehicle from the selling dealer's inventory, would reorganize and combine the content in §215.155(a) and (b) in a numbered list for clarity and readability, and would add "or lease" to clarify that a dealer may issue a dealer's temporary tag for a vehicle the dealer is authorized to lease. Proposed new §215.155(b) would clarify that in accordance with Texas Transportation Code §503.063, a buyer's temporary tag must be issued and provided to a buyer of a vehicle that is to be titled but not registered and would clarify that the temporary tag must not be displayed on the vehicle in these circumstances. This clarification is necessary to facilitate title-only vehicle sales for vehicles that will not be driven on Texas roads. A proposed amendment to §215.155(c) would delete "metal" for consistency. Proposed amendments to §215.155(e) would delete unnecessary punctuation and phrasing without changing the meaning. Proposed amendments to §215.155(f) and proposed new §215.155(g) would reorganize and rephrase language in §215.155(f) to improve clarity and readability without changing the meaning.
A proposed amendment to §215.160(b) would increase the required font size from 11 pt to 14 pt in the rebuilt vehicle acknowledgment or vehicle disclosure form to increase legibility. A proposed amendment in §215.160(c) would require a separate signature on the acknowledgment or disclosure form. Proposed amendments in §215.160(d) would reorder language to improve clarity and would update a referenced section title. The proposed amendments increasing the required font size and requiring a signature are necessary to protect consumers and prevent consumer harm.
Proposed amendments to §215.161 would update the title to add "Provider" as the requirements in this section relate to motor vehicle licensing education course providers. Proposed new §215.161(f) would clarify that the department does not offer an approved licensing education course.
Subchapter F. Lessors and Lease Facilitators
This subchapter is proposed to be relettered as Subchapter E as current Subchapter B is proposed for repeal and the following subchapters are proposed to be relettered accordingly.
Proposed amendments to §215.171 would update statutory references including references to relevant Transportation Code chapters.
Proposed amendments to §215.173(a) would edit language and provide a statutory reference for clarity and to improve readability.
The proposed amendments to §215.174 would modernize the provision by implementing the requirements necessary for the department's electronic licensing system. Proposed amendments to §215.174(a) would add a reference to §215.83 and clarify that applications, including supporting documentation and fees, are to be submitted electronically in the department's licensing system. Proposed new §215.174(b) would require a license holder renewing or amending a license to verify current information and provide related information and documents for any changes to the license as well as pay required fees, to ensure that licensees provide the department with updated information through the electronic licensing system. Proposed new §215.174(c) would instruct a new applicant how to register in the department-designated licensing system. Proposed new §215.174(d) would describe the information that must be submitted in the application, and the remaining subsections would be relettered accordingly. Proposed amendments to relettered §215.174(e) would specify the supporting documentation that an applicant for a vehicle lessor's license must provide to allow the department to thoroughly investigate the applicant and its business practices. The proposed amendments to relettered §215.174(e) would clarify that a document submitted as part of a vehicle lessor's license application must be a legible and accurate electronic image, describe the business organization documents required, add current identity document requirements, and require a vehicle lessor not located in Texas to provide a list of vehicle lessor licenses in other states, if applicable, and any other information required to evaluate the application under current law. Proposed amendments to relettered §215.174(f) would specify the supporting documentation that an applicant for a vehicle lease facilitator's license must provide to allow the department to thoroughly investigate the applicant and its business practices. The proposed amendments to relettered §215.174(f) would clarify that a document submitted as part of a vehicle lease facilitator's license application must be a legible and accurate electronic image, describe the business organization documents required, add current identity document requirements, delete a requirement for a vehicle lease facilitator to update a vehicle lessor list, and require a vehicle lease facilitator to provide any other information required to evaluate the application under current law. Proposed new §215.174(g) would protect the public by prohibiting a vehicle lessor or vehicle lease facilitator from using a business name or assumed name that would be confusing, deceptive, or misleading to prevent consumer fraud and abuse. Proposed new §215.174(h) would clarify an existing requirement that during the license term, a vehicle lessor or vehicle lease facilitator must update the list of authorized vehicle lease facilitators or vehicle lessors, as applicable, and notify the department within 10 days of a change by electronically submitting a license amendment in the system designated by the department for licensing.
Proposed amendments to §215.175(b)(5) and (6) would clarify that a vehicle lessor or vehicle lease facilitator must notify the department of a change in address, name, assumed name, or change in management or ownership by electronically submitting a license amendment in the system designated by the department for licensing. A proposed amendment to §215.175(b)(7) would update a statutory reference. A proposed amendment to §215.175(b)(8) would update a subchapter designation to match the proposed relettering. Proposed amendments to §215.175(b)(13) would delete the term "willfully" to make any omission of material information sanctionable conduct and would clarify that a material misrepresentation includes providing a false or forged identity document or a false or forged photograph, electronic image, or document. Proposed amendments to §215.175(c) and (d) would clarify that the vehicle lessor and the vehicle lease facilitator must notify the department by electronically submitting a license amendment in the system designated by the department for licensing.
A proposed amendment to §215.176 would add "business" to the title of the section and a proposed amendment in §215.176(b) would substitute "municipality" for "city" for consistency with the term proposed to be defined in §215.132.
A proposed amendment to the title of §215.177 would add "Premises Requirements" to describe the scope of the section. A proposed amendment to §215.177(a) would remove unnecessary words. A proposed amendment to §215.177(a)(1)(A) would enhance a license holder's responsiveness to the public by adding a requirement that the business telephone be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine, and that a caller must be able to speak to a natural person or leave a message during these hours. Proposed amendments to §215.177(a)(1)(B) would clarify that "chairs" is interpreted as two chairs and by clarifying that a vehicle lessor or vehicle facilitator's office must have internet access to ensure a license holder has the minimum level of facilities necessary to provide adequate service the public. Proposed amendments to §215.177(a)(1)(C) would further ensure facilities for the public by requiring that a vehicle lessor or vehicle facilitator's office have a permanent roof, requiring the office to be in a building open to the public, requiring the physical address to have an assigned emergency services property address, and stating that the office may not be virtual or provided by a subscription for office space or office services. Proposed amendments to §215.177(a)(1)(E) and (F) would make minor editing changes that do not change the meaning of the subparagraph. Proposed amendments to §215.177(a)(2) would protect the public from being misled or confused by a licensee's signage by adding "business" to clarify that the requirements are for a business sign, requiring that the business name used on the sign be substantially similar to the name of the licensed entity, and adding criteria to determine whether the sign is conspicuous and permanent. Proposed amendments to §215.177(a)(3) clarify premises lease requirements and modernize the language. The proposed amendments in §215.177(a) are consistent with the minimum requirements for a retail dealer, deter fraud, and protect consumers. A proposed amendment would delete the requirements in §215.177(b) for out-of-state vehicle lessors who do not deal directly with the public as these requirements are unnecessary and unenforceable, and the remaining following subsections would be relettered accordingly.
Proposed amendments to §215.178(a)(1) would add "complete" to describe records for consistency, delete an archaic requirement to keep records for prior periods at a location in the same county or within 25 miles of the license location, and simplify the language regarding the requirement that a dealer must reply within 15 days of receiving a request for records from the department regardless of the method in which the department makes the request. Proposed amendments to §215.178(b) would make multiple edits throughout the subsection to improve clarity and readability and would revise the requirement to provide a vehicle lease facilitator's employees' home addresses to a more relevant requirement to provide a work address. Proposed new §215.178(c) would be added to describe the vehicle lessor's record requirements if a leased vehicle is later sold, and the following subsections are relettered accordingly. Proposed amendments to relettered §215.178(d) would consist of minor edits throughout to improve clarity and readability and would not change the meaning. Proposed amendments to relettered §215.178(f) would delete redundant language and clarify that a letter of representation or appointment between a vehicle lessor and a vehicle lease facilitator must be executed and maintained by each party. Proposed amendments to relettered §215.178(g) would modernize the rule by adding the option for a vehicle lessor or a vehicle lease facilitator to send records to the department electronically and would make minor edits to improve readability.
Proposed amendments throughout §215.179 would modernize the rule by specifying that a vehicle lessor or vehicle facilitator must submit a notice of a change to a license electronically in the system designated by the department for licensing, would remove redundant or unnecessary language, and would update the title of a referenced section of this chapter.
A proposed amendment to §215.180 would substitute a subchapter designation for a list of sections so a future statutory change will not require a rule change.
Subchapter G. Warranty Performance Obligations
All sections of Subchapter G. Warranty Performance Obligations are proposed for repeal because the substance of each rule and any proposed amendments are incorporated into proposed new Chapter 224, Adjudicative Practice and Procedure. The proposed repeal includes §§215.201 - 215.210.
Subchapter H. Advertising
This subchapter is proposed to be relettered as Subchapter F as current Subchapters B and G are proposed for repeal and the remaining subchapters are proposed to be relettered accordingly.
A proposed amendment to §215.242 would substitute "deemed" for "considered" for consistency.
Proposed amendments to §215.244(11) would delete an unnecessary definition for a license holder and renumber the remaining definitions. A proposed amendment to renumbered §215.244(17) would clarify and specify that the communication referred to in the rule is a notice of opportunity to cure.
A proposed amendment to the title of §215.249 would substitutes "or" for "/" for clarity. A proposed amendment to §215.249(c) would delete "the State of" for consistency.
Proposed amendments to §215.250(a) would delete "new or used" as unnecessary and add a requirement for a dealer to disclose a market adjustment if one is added to the sales price so that the public is aware of the pricing. Proposed amendments to §215.250(b) would rephrase for clarity that fees and charges expressly allowed by law do not have to be included in a featured sales price.
A proposed amendment to §215.257 would clarify that the term "authorized dealer" or similar term may not be used unless a dealer holds both a franchised dealer license and a franchised dealer GDN.
Proposed amendments to the title and text of §215.261 would substitute "or" for "/" for clarity and style consistency.
A proposed amendment to §215.264(c) would substitute "other disclosure or deal term" for the lengthy list of disclosures and deal terms in this section for clarity and brevity. Proposed amendments to §215.264(f) and (h) would delete references to specific paragraphs within a referenced subsection as the paragraph references are unnecessary.
Proposed amendments to §215.268 would delete language and substitute terms for consistency and would not change the meaning of the rule.
Proposed amendments to §215.270(b) would identify the referenced notice as an opportunity to cure for clarity and update a reference to the proposed new Notice of Department Decision section in proposed new Chapter 224.
Subchapter I. Practice and Procedure for Hearings Conducted by The State Office of Administrative Hearings
All sections of Subchapter I, Practice and Procedure for Hearings Conducted by The State Office of Administrative Hearings, are proposed for repeal because the substance of each rule and any proposed amendments are incorporated into proposed new Chapter 224 Adjudicative Practice and Procedure. The proposed repeal includes §§215.301 - 215.303, 215.305 - 215.308, 215.310, 215.311, 215.314 - 215.317.
Subchapter J. Administrative Sanctions
This subchapter is proposed to be relettered as Subchapter G, because current Subchapters B, G, and I are proposed for repeal and the remaining subchapter is being proposed to be relettered accordingly.
A proposed amendment to the title of §215.500 would delete "and Procedures" as the procedures from this section are proposed for repeal and are proposed to be included in new Chapter 224, Adjudicative Practice and Procedure. Proposed amendments to §215.500(a) would delete the (a) designation and correct a reference to a referenced rule section. The remaining subsections are proposed for repeal and are proposed to be included in proposed new Chapter 224: §§215.501, 215.502, and §215.505.
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the proposal will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Monique Johnston, Director of the Motor Vehicle Division (MVD), has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Ms. Johnston also determined that, for each year of the first five years the proposal is in effect, several significant public benefits are anticipated, and certain applicants and license holders may incur costs to comply with the proposal. The department prioritized the public benefits associated with reducing fraud and related crime and improving public health and safety, while carefully considering potential costs to GDN dealers consistent with board and department responsibilities.
Proposed amendments to §§215.102, 215.133, 215.134, and 215.174 may require applicants and license holders to provide more information in the application. While some applicants may be required to spend more time completing an application or providing additional information Ms. Johnston has determined these costs will be offset by the reduced risk of applicants and holders incurring financial penalties due to noncompliance with applicable federal, state, or local statutes or property owner requirements which will benefit both license holders and the public. Importantly, this information allows the department to investigate an applicant more thoroughly and is consistent with the department's obligations to detect and deter fraud in the application process to prevent consumer harm.
In proposed amendments to §§215.102, 215.133, 215.134, and 215.174, an applicant or license holder may not use a name or assumed name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public. Ms. Johnston estimates that a small number of current license holders may have to change a confusing, deceptive, or misleading business name or assumed name and may incur related secretary of state or county filing fees or signage cost. The Secretary of State filing fee to amend a business name is $150. Department research suggests the cost for an exterior sign will vary between $30 to $167, with an average expected cost of about $80. The department recognizes that these costs may vary widely based on business owner style and design preferences. The department's civil penalty guidelines for license holders who violate statutory provisions range $500 to $10,000 per violation. Ms. Johnston has determined that the signage cost will be offset by the reduced risk of these license holders incurring financial penalties due to noncompliance with laws and regulations and will benefit the public by informing the public and preventing consumer harm.
Proposed amendments to §§215.120, 215.138, and 215.143 require license holders that purchase industry license plates to return plates, stickers, and receipts when the associated license is closed. In Fiscal Year 2019, license holders started returning industry plates when a license was closed. Since then, more than 10,150 industry plates have been returned to the department, significantly reducing the potential for fraudulent plate use. Department research suggest that the average cost to mail a plate is §9.65. Ms. Johnston has determined that the cost for a license holder to mail or return a plate to the department after the associated license is closed is reasonable and necessary to reduce potential fraud.
Proposed amendments to §215.133 and §215.134 add fingerprint requirements for wholesale motor vehicle auction GDN and drive-a-way operator in-transit license applicants and holders. Fingerprint requirements allow the department to verify the identity of license applicants, preventing fraudulent applications under false or stolen identities, while giving the department access to more accurate and comprehensive criminal history record information to use in evaluating fitness for licensure under its criminal offense guidelines in §211.3. These new fingerprint requirements benefit the public by preventing bad actors with a history of criminal offenses that directly relate to the duties and responsibilities of a license holder from obtaining licenses from the department and using those licenses to perpetrate fraudulent and criminal actions, or otherwise taking advantage of the position of trust created by the license. Ms. Johnston anticipates that there will be no additional costs on regulated persons to comply with the fingerprint requirements under this proposal as the new section does not establish fees for fingerprinting or processing criminal background checks. Fees for fingerprinting and access to criminal history reports are established by DPS under the authority of Texas Government Code Chapter 411.
Proposed amendments to §215.144 require a dealer to keep copies of the purchaser's photo identification, the odometer disclosure statement signed by the buyer, and the rebuilt salvage disclosure, if applicable in the vehicle sales file. Ms. Johnston anticipates that while most bona fide dealers already comply with these requirements, a few dealers may have to add two to three additional pages to the sales file. Department research suggests that the cost of a copy ranges from $0.14 to $0.22 per page. She has determined that these costs are necessary to prevent fraud and protect consumers.
Proposed amendments to §215.160 require a dealer offering a rebuilt vehicle for sale to use a minimum 14-point font size in the disclosure statement and for the disclosure statement to have a separate buyer signature. Ms. Johnston anticipates that many bona fide dealers already comply with these requirements, however, some dealers may have to adjust existing forms. These formatting changes may be performed easily at little or no cost using available free word processing software or at a print shop. Department research suggests that the cost of reformatting this disclosure ranges from $10 to $48. Ms. Johnston has determined that these costs are necessary to prevent fraud and protect consumers.
Proposed changes to §215.177 require a vehicle lessor or vehicle lease facilitator to ensure that the business telephone is answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine, and requires that the office have internet access. Ms. Johnston anticipates that while most bona fide vehicle lessors or vehicle lease facilitators already comply with these requirements, a few vehicle lessors or vehicle lease facilitators may have to purchase a mobile phone with a data plan to comply. Department research suggests that this cost ranges from $15 to $90 per month. Ms. Johnston has determined that these requirements are reasonable minimum standards as the department and the public must be able to communicate with a license holder, and these requirements are necessary to prevent fraud and consumer harm.
Proposed amendments to §215.140 require GDN applicants and holders to disclose the physical address of a storage lot if the address is different than the physical address of the licensed location. Applicants for a new GDN will not incur an additional fee. Current dealer GDN holders will incur a $25 statutorily required license amendment fee to add or change the physical address of a storage lot. Ms. Johnston has determined that the public benefit derived from the department's more thorough fitness for licensure investigation, reduction in fraud, and enforcement of department statutes and rules substantially outweighs this cost and are necessary.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code §2006.002, the department has determined that this proposal may have an adverse economic effect or disproportionate economic impact on small or micro businesses. The department has determined that the proposed amendments will not have an adverse economic effect on rural communities because rural communities are exempt from the requirement to hold a GDN under Transportation Code §503.024.
The cost analysis in the Public Benefit and Cost Note section of this proposal determined that proposed amendments may result in additional costs for certain license holders. Based on data from the Comptroller and the Texas Workforce Commission, the department estimates that most license holders are small or micro-businesses. The department has tried to minimize costs to license holders. The new proposed requirements are designed to be the minimum standards that will prevent fraud in the application process, prevent consumer abuse, and protect public health and safety. These requirements do not include requirements that will cause a license holder to incur unnecessary or burdensome costs, such as employing additional persons.
Under Government Code §2006.002, the department must perform a regulatory flexibility analysis. The department considered the alternatives of not adopting amendments, exempting small and micro-business license holders from these amendments, and adopting a limited version of these amendments for small and micro-business applicants and license holders. The department rejects all three options. The department reviewed licensing records, including records for license holders who have been denied access to the temporary tag system, and determined that small and micro-business license holders are largely the bad actors perpetrating fraud in the application process. The department, after considering the purpose of the authorizing statutes, does not believe it is feasible to waive or limit the requirements of the proposed amendments for small or micro-business GDN dealers. Also, Government Code §2006.002(c-1) does not require the department to consider alternatives that might minimize possible adverse impacts on small businesses and micro-businesses if the alternatives would not be protective of the health and safety of the state.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed repeal and amendments are in effect the amendments will not create or eliminate a government program; will not require the creation of new employee positions and will not require the elimination of existing employee positions; will not require an increase or decrease in future legislative appropriations to the department; will require an increase in fees paid to the department by certain license holders who are required to file a license amendment to add an address; will expand existing regulations, delete some existing regulations, and make other existing regulations more flexible as described in the explanation section of this proposal; will repeal existing regulations to improve overall organization of department rules in conjunction with the proposal of new Chapter 224 published in this issue of the Texas Register; will not increase or decrease the number of individuals subject to the rule's applicability; and will positively affect the Texas economy by deterring fraud and preventing consumer harm.
REQUEST FOR PUBLIC COMMENT.
If you want to comment on the proposal, submit your written comments by 5:00 p.m. Central Time on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
SUBCHAPTER A. GENERAL PROVISIONS
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 503 and 1002.
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.1.Purpose and Scope.
Occupations Code, Chapter 2301 and Transportation Code, Chapters
503 and 1001 [1000]-1005 require the Texas Department
of Motor Vehicles to license and regulate the [motor ]vehicle industry [dealers, manufacturers, distributors, converters,
representatives, vehicle lessors and vehicle lease facilitators, in
order] to ensure a sound system of distributing and selling
[motor] vehicles; provide for compliance with manufacturers'
warranties; and to prevent fraud, unfair practices, discrimination,
impositions, and other abuses of the people of this state in connection
with the distribution and sale of [motor] vehicles. This
chapter describes licensing requirements and the rules governing. [prescribes the policies and procedures for the regulation of the motor vehicle industry.]
§215.2.Definitions; Conformity with Statutory Requirements.
(a) The definitions contained in Occupations Code,
Chapter 2301 and Transportation Code, Chapters 503 and 1001 [1000]-1005 govern this chapter. In the event of a conflict,
the definition or procedure referenced in Occupations Code, Chapter
2301 controls.
(b) The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
[(1) ALJ--An Administrative Law Judge
of the State Office of Administrative Hearings.]
(1) [(2)] Board--The Board of
the Texas Department of Motor Vehicles, including department
staff [any personnel] to whom the board delegates a
[any] duty [assigned].
(2) Day--The word "day" refers to a calendar day.
(3) Director--The director of the division [department] that regulates the distribution and sale of motor
vehicles, including any department staff [personnel]
to whom the director delegates a [any] duty
assigned under this chapter.
[(4) Executive director--The executive
director of the Texas Department of Motor Vehicles.]
[(5) Final order authority--The person(s) with authority under Occupations Code, Chapter 2301; Transportation Code, Chapters 503 and 1000 - 1005; or board rules to issue a final order.]
(4) [(6)] GDN--General distinguishing
number, a license issued under Transportation Code, Chapter 503.
(5) [(7)] Governmental agency--A state agency other than the department, all [All other
state and] local governmental agencies, and all agencies
of the United States government, whether executive, legislative, or judicial.
(6) Standard license plate--A motor vehicle license plate issued by the department to a license holder for use by the license holder that is not a personalized prestige dealer's license plate issued under Transportation Code §503.0615.
[(8) Hearing officer--An ALJ, a hearings
examiner, or any other person designated, employed, or appointed by
the department to hold hearings, administer oaths, receive pleadings
and evidence, issue subpoenas to compel the attendance of witnesses,
compel the production of papers and documents, issue interlocutory
orders and temporary injunctions, make findings of fact and conclusions
of law, issue proposals for decision, and recommend or issue final orders.]
[(9) Motion for rehearing authority--The person(s) with authority under Occupations Code, Chapter 2301; Transportation Code, Chapters 503 and 1000 - 1005; or board rules to decide a motion for rehearing.]
[(10) SOAH--The State Office of Administrative Hearings.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304782
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes repeals to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes repeals under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These repeals would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.21.Purpose and Scope.
§215.22.Prohibited Communications.
§215.23.Appearances.
§215.24.Petitions.
§215.27.Complaints.
§215.29.Computing Time.
§215.30.Filing of Documents.
§215.32.Extension of Time.
§215.34.Notice of Hearing in Contested Cases.
§215.35.Reply.
§215.36.Hearings To Be Public.
§215.37.Recording and Transcriptions of Hearing Cost.
§215.38.Consolidation of Proceedings.
§215.39.Waiver of Hearing.
§215.40.Continuance of Hearing.
§215.41.Presiding Officials.
§215.42.Conduct of Hearing.
§215.43.Conduct and Decorum.
§215.44.Evidence.
§215.45.Stipulation of Evidence.
§215.46.Objections and Exceptions.
§215.47.Motions.
§215.48.Briefs.
§215.49.Service of Pleading, Petitions, Briefs, and Other Documents.
§215.55.Final Decision.
§215.56.Submission of Amicus Briefs.
§215.58.Delegation of Final Order Authority.
§215.59.Request for Oral Presentation.
§215.60.Written Materials and Evidence.
§215.61.Limiting Oral Presentation and Discussion to Evidence in the Administrative Record.
§215.62.Order of Presentations to the Board for Review of a Contested Case.
§215.63.Board Conduct and Discussion When Reviewing a Contested Case.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304783
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§215.82 - 215.85, 215.87, 215.89
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters Occupations Code, Chapters 53, 55, 2301, and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.82.Duplicate [Licenses and] Plates and Stickers.
[(a) A request for a duplicate license must:]
[(1) be made on a department-approved form;]
[(2) state the reason for the duplicate license; and]
[(3) be accompanied by the required duplicate license fee.]
[(b) A license holder may receive one duplicate license at no charge if the license holder:]
[(1) did not receive the original license; and]
[(2) makes the request within 45 days of the date the license was mailed to the license holder.]
[(c)] A license holder may receive a replacement standard [metal] dealer's, converter's, drive-a-way
in-transit, or manufacturer's license plate or assigned
sticker, as[if] applicable, at no charge
if the license holder:
(1) did not receive the applicable standard [metal dealer's] license plate or sticker; [and]
(2) makes the request within 45 days of the date the applicable standard[ metal dealer's] license plate or sticker was mailed to the license holder; and
[on a department approved form.]
(3) submits a request electronically in the system designated by the department for licensing.
§215.83.License Applications, Amendments, or Renewals.
(a) An application for a new license, license amendment, or license renewal filed with the department must be:
(1) filed electronically in the department-designated licensing system on a form approved by the department;
(2) completed by the applicant, license holder, or authorized representative who is an employee, a licensed attorney, or a certified public accountant;
(3) accompanied by the required fee, paid by [check,]
credit card[,] or by electronic funds transfer, drawn from
an account held by the applicant or license holder, or drawn from
a trust account of the applicant's attorney or certified public accountant; and
(4) accompanied by proof of a surety bond, if required.
(b) An authorized representative of the applicant or license holder who files an application with the department on behalf of an applicant or license holder may be required to provide written proof of authority to act on behalf of the applicant or license holder.
(c) The department will not provide information regarding the status of an application, application deficiencies, or pending new license numbers to a person other than a person listed in subsection (a)(2) of this section, unless that person files a written request under Government Code, Chapter 552.
(d) Prior to the expiration of a license, a license
holder or authorized representative must electronically file
with the department a sufficient license renewal application. Failure
to receive notice of license expiration from the department does not
relieve the license holder from the responsibility to timely file
a sufficient license renewal application. A license renewal application
is timely filed if[:]
[(1)] the department receives a sufficient
license renewal application on or before the date the license expires[; or].
[(2) a legible postmark on the envelope
transmitting the sufficient license renewal application clearly indicates
that the license holder or authorized representative mailed the license
renewal application on or before the date the license expires.]
(e) An application for a new license, [or]
license amendment, or license renewal filed with the department
must be sufficient. An application is sufficient if the application:
(1) includes all information and documentation required by the department; and
(2) is filed in accordance with subsection (a) of this section.
[(f) A license renewal application
received by the department is sufficient if:
(1) the renewal application form is completed by the license holder or authorized representative of the license holder who is an employee, an unpaid agent, a licensed attorney, or certified public accountant;
(2) accompanied by the required license renewal application fee payment; and
(3) accompanied by proof of a surety bond, if required.]
(f) [(g)] If an applicant, license
holder, or authorized representative does not provide the information
or documentation required by the department, the department will issue
a written notice of deficiency. The information or documentation requested
in the written notice of deficiency must be received by the department
within 20 calendar days of the date of the notice of deficiency, unless
the department issues a written extension of time. If an applicant,
license holder, or authorized representative fails to respond or fully
comply with all deficiencies listed in the written notice of deficiency
within the time prescribed by this subsection, the application will
be deemed withdrawn and will be administratively closed.
(g) [(h)] The department will
evaluate a sufficient application for a new license, license amendment,
or license renewal in accordance with applicable rules and statutes
to determine whether to approve or deny the application. If the department
determines that there are grounds for denial of the application, the
department may pursue denial of the application in accordance with
Subchapter G [J] of this chapter (relating to
Administrative Sanctions).
(h)
[(i)] The department will
process an application for a new license, license amendment, or license
renewal filed by a military service member, military spouse, or military
veteran in accordance with Occupations Code, Chapter 55. A license
holder who fails to timely file a sufficient application for a license
renewal because that license holder was on active duty is exempt from
any increased fee or penalty imposed by the department for failing
to renew the license in a timely manner.
(i) [(j)] A military service
member or military spouse may engage in a business or occupation
for which a department issued license is required if the military
service member or military spouse meets the requirements of
Occupations Code, §55.0041 and this section. This section
establishes requirements and procedures authorized or required by
Occupations Code, Chapter 55, and does not modify or alter rights
that may be provided under federal law.
(1) [To meet the requirements of Occupations Code, §55.0041,
a] A military service member or military spouse must
submit to the department:
(A) notice of the military service member or military spouse's intent to engage in a business or occupation in Texas for which a department issued license is required;
(B) proof of the military service member or military
spouse's being stationed [residency ] in Texas
and a copy of the military service member or military spouse's
military identification card[, as required by Occupations Code, §55.0041(b)(2)
]; and
(C) documentation demonstrating that the military service member or military spouse is licensed and in good standing in another jurisdiction for the relevant business or occupation.
(2) Upon receipt of the notice and documentation required by paragraphs (1)(B) and (1)(C) of this subsection, the department shall:
(A) confirm with the other licensing jurisdiction that the military service member or military spouse is currently licensed and in good standing for the relevant business or occupation; and
(B) conduct a comparison of the other jurisdiction's license requirements, statutes, and rules with the department's licensing requirements to determine if the requirements are substantially equivalent.
(3) If the department confirms that a military
service member or military spouse is currently licensed in good
standing in another jurisdiction with substantially equivalent licensing
requirements, the department shall [may] issue
a license to the military service member or military spouse
for the relevant business or occupation within 30 days.
The license is subject to requirements in Chapter 215 of this title
and Occupations Code, Chapter 2301 in the same manner as a license
issued under the standard application process, unless modified
or exempted under Occupations Code, Chapter 55.
(j) [(k)] A license holder who
timely files a sufficient license renewal application in accordance
with subsection (d) of this section may continue to operate under
the expired license until the license renewal application is determined in accordance with Government Code §2001.054.
(k) [(l)] A license holder who
fails to timely file a sufficient license renewal application in accordance
with subsection (d) of this section is not authorized to continue
licensed activities after the date the license expires. A license
holder may dispute a decision that a license renewal application was
not timely or sufficient by submitting evidence to the department
demonstrating that the license renewal application was timely and
sufficient. Such evidence must be received by the department within 15 [10 calendar ] days of the date the department
issues notice that a timely or sufficient license renewal application
was not received by the department.
(l) [(m)] The department shall
accept a late license renewal application up to 90 days after the
date the license expires. In accordance with subsection (k) [(l)] of this section, the license holder is not authorized to
continue licensed activities after the date the license expires until
the department approves the late license renewal application. If the
department grants a license renewal under this section, the licensing
period begins on the date the department issues the renewed license.
The license holder may resume licensed activities upon receipt of
the department's written verification or upon receipt of the renewed license.
(m) [(n)] If the department has
not received a late license renewal application within 90 days after
the date the license expires, the department will close the license.
A person must apply for and receive a new license before that person
is authorized to resume activities requiring a license.
(n) [(o)] A [metal]
dealer's standard license plate issued in accordance with
Transportation Code, Chapter 503, Subchapter C expires on the date
the associated license expires, is canceled, or when a
license renewal application is determined, whichever is later.
§215.84.Brokering, New Motor Vehicles.
(a) Unless excluded from the definition of "Broker" in Occupations Code, §2301.002, a person may not act, offer to act, or claim to be a broker.
(b) [(a)] For purposes of this chapter [subchapter], the phrase "arranges or offers
to arrange a transaction," as used in the definition of broker in
Occupations Code, §2301.002, includes the practice of arranging
or offering to arrange a transaction involving the sale of a new motor
vehicle for a fee, commission, or other valuable consideration. Advertising
is not acting as a broker [brokering], provided
the person's business primarily is [includes the business
of] broadcasting, printing, publishing, or advertising for others
in their own names.
(c) [(b)] A buyer referral service,
program, plan, club, or any other entity that accepts a fee for arranging
a transaction involving the sale of a new motor vehicle is a broker.
The payment of a fee to such entity is aiding and abetting brokering.
However, a referral service, program, plan, club, or other entity
that forwards a referral to a franchised dealership may
lawfully operate in a manner that includes all of the following conditions:
[.]
(1) There is no exclusive market area offered to a dealer by the program. All dealers are allowed to participate in the program on equal terms.
(2) Participation by a dealer in the program is not restricted by conditions, such as limiting the number of line-makes or discrimination by size of dealership or location. The total number of participants in the program may be restricted if the program is offered to all dealers at the same time, with no regard to the line-make.
(3) All participants pay the same fee for participation in the program. The program fee shall be a weekly, monthly, or annual fee, regardless of the size, location, or line-makes sold by the franchised dealer.
(4) A person is not to be charged a fee on a per referral fee basis or any other basis that could be considered a transaction-related fee.
(5) The program does not set or suggest to the dealer any price of a motor vehicle or a trade-in.
(6) The program does not advertise or promote its plan in a manner that implies that the buyer, as a customer of that program, receives a special discounted price that cannot be obtained unless the customer is referred through that program.
(7) A program must comply with Subchapter F of this chapter (related to Advertising).
(d) [(c) Subsections (a)-(c) of this] This
section does [do] not apply to a [any] person [or entity] who is not a [exempt
from the] broker as defined [definition]
in Occupations Code, §2301.002.
[(d) All programs must comply with
Subchapter H of this chapter (relating to Advertising).]
§215.85.Brokering, Used Motor Vehicles.
(a) Transportation Code, §503.021 prohibits a person from engaging in business as a dealer, directly or indirectly, including by consignment without a GDN. Except as provided by this section, "directly or indirectly" includes the practice of arranging or offering to arrange a transaction involving the sale of a used motor vehicle for a fee, commission, or other valuable consideration. A person who is a bona fide employee of a dealer holding a GDN and acts for the dealer is not a broker for the purposes of this section.
(b) A buyer referral service, program, plan, club,
or any other entity that accepts a fee for arranging a transaction
involving the sale of a used motor vehicle is required to meet the
requirements for and obtain a GDN, unless the referral service, program,
plan, or club is operated in the following manner: [.]
(1) There is no exclusive market area offered to a dealer by the program. All dealers are allowed to participate in the program on equal terms.
(2) Participation by a dealer in the program is not
restricted by conditions, such as limiting the number of line-makes
or discrimination by size of dealer [ship] or location.
The total number of participants in the program may be restricted
if the program is offered to all dealers at the same time, with no
regard to the line-make.
(3) All participants pay the same fee for participation in the program. The program fee shall be a weekly, monthly, or annual fee, regardless of the size, location, or line-makes sold by the dealer.
(4) A person is not to be charged a fee on a per referral fee basis or any other basis that could be considered a transaction-related fee.
(5) The program does not set or suggest to the dealer any price of a motor vehicle or a trade-in.
(6) The program does not advertise or promote its plan in a manner that implies that the buyer, as a customer of that program, receives a special discounted price that cannot be obtained unless the customer is referred through that program.
(7) A program complies with Subchapter F of this chapter (relating to Advertising).
[(c) All programs must comply with
Subchapter H of this chapter (relating to Advertising).]
(c) [(d)] A [licensed]
dealer holding a GDN pursuant to Transportation Code, §503.029(a)(6)(B),
may pay a referral fee in cash or value to an individual who has purchased
a vehicle from the [licensed] dealer within the four-year
period preceding the referral. The fee may be paid contingent upon
either the new referred individual:
(1) purchasing a vehicle from the [independent
motor vehicle] dealer; or
(2) the referral of a new potential purchaser.
§215.87.License and Standard [Metal Dealer's] License Plate Terms and Fees.
(a) Except as provided by other law, the term of a
license or standard [metal dealer's] license
plate issued by the department to a dealer, converter, drive-a-way
operator, distributor, or manufacturer under Occupations Code,
Chapter 2301 or Transportation Code, Chapter 503 is two years.
(b) A standard [metal dealer's]
license plate issued by the department expires on the date the associated
license expires or is canceled.
(c) The fee for a license or standard [metal
dealer's] license plate is computed by multiplying the applicable
annual fee by the number of years of the license term. The entire
[amount of the] fee including any tax owed under Tax
Code §152.027 is due at the time of application for the
license or license renewal.
(d) A dealer may apply for a personalized prestige plate issued under Transportation Code §503.0615 by completing a department form, providing a copy of a department-issued license, and submitting payment to a county tax assessor-collector. A personalized prestige plate may be renewed in an electronic system designated by the department.
§215.89.Fitness.
(a) In determining a person's fitness for a license
issued or to be issued by the department under Transportation Code,
Chapter 503 or Occupations Code, Chapter 2301, the board [or
department] will consider:
(1) the requirements of Occupations Code, Chapter 53;
(2) the provisions of Occupations Code, §2301.651 and Transportation Code §503.034;
(3) any specific statutory licensing criteria or requirements;
(4) mitigating factors; and
(5) other evidence of a person's fitness, as allowed by law, including the standards identified in subsection (b) of this section.
(b) The board [or department] may determine
that a person is unfit to perform the duties and discharge the responsibilities
of a license holder and may, following notice and an opportunity for
hearing, deny a person's license application or revoke or suspend
a license if the person:
(1) fails to meet or maintain the qualifications and requirements of licensure;
(2) is convicted, or considered convicted under Occupations Code §53.021(d), by any local, state, federal, or foreign authority of an offense that directly relates to the duties or responsibilities of the licensed occupation as described in §211.3 of this title (relating to Criminal Offense Guidelines) or is convicted, or considered convicted under Occupations Code §53.021(d), of an offense that is independently disqualifying under Occupations Code §53.021;
(3) omits information or provides false, misleading, or incomplete information on an initial application, renewal application, or application attachment, for a license or other authorization issued by the department or by any local, state, or federal regulatory authority;
(4) is found to have violated an administrative or regulatory requirement based on action taken on a license, permit, or other authorization, including disciplinary action, revocation, suspension, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment, by the board, department, or any local, state, or federal regulatory authority;
(5) is insolvent or fails to obtain or maintain financial resources sufficient to meet the financial obligations of the license holder;
(6) is a corporation or other legal entity that fails to maintain its charter, certificate, registration, or other authority to conduct business in Texas;
(7) is assessed a civil penalty, administrative fine, fee, or similar assessment, by the board, department, or a local, state, or federal regulatory authority, for violation of a requirement governing or impacting the distribution or sale of a vehicle or a motor vehicle, or the acquisition, sale, repair, rebuild, reconstruction, or other dealing of a salvage motor vehicle or nonrepairable motor vehicle, and fails to comply with the terms of a final order or fails to pay the penalty pursuant to the terms of a final order;
(8) was or is a person described in §211.2 of this title (relating to Application of Subchapter) whose actions or omissions could be considered unfit, who is ineligible for licensure, or whose current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority has been subject to disciplinary action including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment;
(9) has an ownership, organizational, managerial, or other business arrangement, that would allow a person the power to direct or cause the direction of the management, policies, and activities, of an applicant or license holder, whether directly or indirectly, when the person could be considered unfit, ineligible for licensure, or whose current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority, has been subject to disciplinary action, including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment, by the board, department, or any local, state, or federal regulatory authority;
(10) is found in a [an] final order
issued after [through] a contested case hearing
to be unfit or acting in a manner detrimental to the system of distribution
or sale of motor vehicles in Texas, the economy of the state, the
public interest, or the welfare of Texas residents [citizens].
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304784
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§215.101 - 215.106, 215.108 - 215.111, 215.113, 215.115 - 215.117, 215.120, 215.121
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters Occupations Code, Chapters 53, 55, 2301, and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.101.Purpose and Scope.
This subchapter implements Occupations Code, Chapter 2301 and
Transportation Code, Chapters 503 and 1001 [1000]
- 1005, and applies to franchised dealers, manufacturers, distributors,
and converters.
§215.102.Application Requirements.
(a) No person may engage in business, serve in the capacity of, or act as a manufacturer, distributor, converter, or franchised dealer in Texas unless that person holds a license.
(b) A license application shall be on a form prescribed by the department and properly completed by the applicant. A license application shall include all required information, supporting documents, and fees and shall be submitted to the department electronically in a system designated by the department for licensing.
(c) A license holder renewing or amending its license must verify current license information, provide related information and documents for any new license requirements or changes to the license, and pay required fees including any outstanding civil penalties owed the department under a final order.
(d) An applicant for a new license must register for an account in the department-designated licensing system by selecting the licensing system icon on the dealer page of the department website. An applicant must designate the account administrator and provide the name and email address for that person, and provide the business telephone number, name, business type, and social security number or employer identification number, as applicable. The applicant's licensing account administrator must be an owner, officer, manager, or bona fide employee.
(e) Once registered, an applicant may apply for a new license and must provide the following:
(1) Required information:
(A) type of license requested;
(B) business information, including the name, physical and mailing addresses, telephone number, Secretary of State file number (if applicable), and website address (if applicable);
(C) contact name, email address, and telephone number of the person submitting the application;
(D) contact name, email address, and telephone number of a person who can provide information about business operations and the motor vehicle products or services offered;
(E) the name, social security number, date of birth, identity document information, and ownership percentage for each owner, partner, member, beneficiary, or principal if the applicant is not a publicly traded company;
(F) the name, social security number, date of birth, and identity document information for each officer, director, manager, trustee, or other representative authorized to act on behalf of the applicant if the applicant is owned in full or in part by a legal entity;
(G) the name, employer identification number, ownership percentage, and non-profit or publicly traded status for each legal entity that owns the applicant in full or in part;
(H) criminal history record information under the laws of Texas, another state in the United States, the United States, and any foreign jurisdiction for each person listed in the application, including offense description, date, and location;
(I) military service status;
(J) licensing history required to evaluate fitness for licensure under §215.89 of this title (relating to Fitness);
(K) if applying for a manufacturer, distributor, or converter license:
(i) financial resources, business integrity and experience, facilities and personnel for serving franchised dealers;
(ii) a description of the business model or business process and product and services used or offered sufficient to allow the department to determine if the license type applied for is appropriate under Texas law; and
(iii) number of standard license plates requested.
(L) if applying for a manufacturer or distributor license:
(i) if the applicant or any entity controlled by the applicant owns an interest in a Texas motor vehicle dealer or dealership, controls a Texas dealer or dealership, or acts in the capacity of a Texas dealer;
(ii) a statement regarding the manufacturer's compliance with Occupations Code Chapter 2301, Subchapter I and §§2301.451-2301.476;
(iii) if a franchise agreement for each line-make being applied for exists which states the obligations of a Texas franchised dealer to the applicant and the obligations of the applicant to the Texas franchised dealer; and
(iv) the terms of the contract under which the distributor will act for the manufacturer.
(M) if applying for a manufacturer license, the line-make information including the world manufacturer identifier assigned by the National Highway Traffic Safety Administration, line-make name, and vehicle type;
(N) if applying for a distributor license:
(i) the manufacturer for whom the distributor will act;
(ii) whether the manufacturer is licensed in Texas;
(iii) the person in this state who is responsible for compliance with the warranty covering the motor vehicles to be sold; and
(iv) whether a franchise agreement for each line-make being applied for exists which states the obligations of a Texas franchised dealer to the applicant and the obligations of the applicant to the Texas franchised dealer.
(O) if applying for a converter license:
(i) a name and description for each conversion package; and
(ii) the manufacturer or distributor and line-make of the underlying new motor vehicle chassis to be converted.
(P) if applying for a franchised dealer license:
(i) reason for the new application;
(ii) dealership location on a system-generated map;
(iii) if the dealership is under construction and expected completion date;
(iv) information about the performance of sales or warranty services at the location; and
(v) information necessary to obtain a franchised dealer GDN under §215.133 of this title (relating to General Distinguishing Number).
(Q) signed Certificate of Responsibility, which is a form provided by the department; and
(R) any other information required by the department to evaluate the application under current law and board rules.
(2) A legible and accurate electronic image of each applicable required document:
(A) the certificate of filing, certificate of incorporation, or certificate of registration on file with the Secretary of State, if applicable;
(B) each assumed name certificate on file with the Secretary of State or county clerk;
(C) at least one of the following unexpired identity documents for each natural person listed in the application:
(i) driver license;
(ii) Texas Identification Card issued by the Texas Department of Public Safety under Transportation Code, Chapter 521, Subchapter E;
(iii) license to carry a handgun issued by the Texas Department of Public Safety under Government Code, Chapter 411, Subchapter H;
(iv) passport; or
(v) United States armed forces identification.
(D) if applying for a manufacturer, distributor, or converter license, a written description of the business model or business process and brochures, photos, or other documents describing products and services sufficient to allow the department to identify a motor vehicle product type and the appropriate license required under Texas law;
(E) if applying for a manufacturer or distributor license:
(i) a list of each franchised dealer in Texas including the dealer's name and physical address, or if offers for sale or sales of motor vehicle in Texas will solely be over the internet, a list of each out-of-state dealer authorized by the manufacturer or distributor to sell a product online to a Texas resident including the dealer's name, physical address, and dealer license number issued by the state in which the dealer is located; and
(ii) a list of motor vehicle product line-makes manufactured or distributed for sale;
(F) if applying for a manufacturer license:
(i) a list of authorized distributors or representatives; and
(ii) a franchised dealer's preparation and delivery obligations before delivery of a new vehicle to a retail purchaser and the schedule of compensation to be paid to the franchised dealer;
(G) if applying for a distributor license, either:
(i) a copy of the distribution agreement between a manufacturer and distributor; or
(ii) a completed department-provided questionnaire containing the information required under Occupations Code, §2301.260, and signed by the applicant as true and complete.
(H) if applying for a franchise dealer license, pages of the executed franchise agreement containing at minimum the following:
(i) the legal business name of each party;
(ii) authorized signature of each party;
(iii) authorized dealership location;
(iv) list of motor vehicle line-makes and vehicle types to be sold or serviced; and
(v) a department Evidence of Relocation form signed by the manufacturer or distributor (if applicable); and
(I) any other documents required by the department to evaluate the application under current law and board rules.
(3) Required fees:
(A) the license fee as prescribed by law; and
(B) the fee as prescribed by law for each plate requested by the applicant.
(f) An applicant operating under a name other than the applicant shall use the name under which the applicant is authorized to do business, as filed with the Secretary of State or county clerk, and the assumed name of such legal entity shall be recorded by the applicant on the application using the letters "DBA." The applicant may not use a name or assumed name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public.
(g) A manufacturer or distributor may add a new line-make to an existing license during the license period by submitting a license amendment application and providing brochures, photos, or other documents describing the new line-make sufficient to allow the department to identify the line-make and vehicle product type. A license amendment to add a line-make to a manufacturer or distributor license must be approved by the department before the new line-make may be added to a franchised dealer's license.
§215.103.Service-only Facility.
(a) A service-only facility is a location occupied
and operated by a franchised dealer that is a completely separate,
noncontiguous site, from the franchised dealer's new motor vehicle
sales and service or sales only location, where the franchised dealer performs [will only perform] warranty [and nonwarranty
] repair services and not new motor vehicle sales.
[Except as allowed in subsection (d) of this section, warranty
repair services may only be performed at either a licensed dealership
or a licensed service-only facility.]
(b) A franchised dealer must obtain a license to operate
a service-only facility. A dealer may not obtain a service-only facility
license to service a [particular] line-make [line
] of new motor vehicles, unless that dealer is franchised and
licensed to sell that line-make.
(c) A service-only facility is a dealership subject to protest under Occupations Code, Chapter 2301.
(d) Upon the manufacturer's or distributor's prior
written approval, which cannot be unreasonably withheld, [only]
a franchised dealer of the manufacturer or distributor may contract
with another person as a subcontractor to perform warranty repair
services that the dealer is authorized to perform under a franchise
agreement with a manufacturer or distributor. Payment shall be made
by the franchised dealer to the subcontractor and not by the manufacturer
or distributor to the subcontractor.
(e) A person with whom a franchised dealer contracts to perform warranty repair services is not eligible to obtain a service-only facility license and may not advertise the performance of warranty repair services in any manner to the public.
§215.104.Changes to Franchised Dealer's License.
(a) In accordance with Occupations Code, §2301.356,
a franchised dealer must file an application to amend the franchised
dealer's license [in order] to request [inclusion
of] an additional line-make at the dealer's currently licensed
showroom. The amendment application must be filed electronically
in a system designated by the department for licensing.
(1) In accordance with §215.110 of this title
(relating to Evidence of Franchise), the franchised dealer must attach
to the amendment application a legible and accurate electronic
image [copy] of:
(A) the executed franchise agreement;
(B) the required excerpt from the executed franchise agreement; or
(C) an evidence of franchise form completed by the manufacturer, distributor, or representative.
(2) The amendment application for an additional franchise at the showroom is considered an original application and is subject to protest, in accordance with Occupations Code, Chapter 2301, this chapter, and Chapter 224 of this title (relating to Adjudicative Practice and Procedure).
(b) A franchised dealer may propose to sell or assign to another any interest in the licensed entity, whether a corporation or otherwise, provided the physical location of the licensed entity remains the same.
(1) The franchised dealer shall notify the department in writing within 10 days of the sale or assignment of interest by filing an application to amend the franchised dealer's license electronically in a system designated by the department for licensing.
(2) If the sale or assignment of any portion of the business results in a change of business entity, then the purchasing entity or assignee must apply for and obtain a new license in the name of the new business entity.
(3) A publicly-held corporation must file an amendment
application [needs only to inform the department of a change
in ownership] if one person or entity acquires 10% or greater
interest in the licensed entity.
(c) A franchised dealer is required to file an amendment application electronically in a system designated by the department for licensing within 10 days of a license change, including:
(1) deletion of a line-make from the dealer's license;
(2) a change of assumed name on file with the Office of the Secretary of State or county clerk;
(3) a change of mailing address;
(4) a change of telephone number; or
[(5) a change of facsimile number; or]
(5) [(6)] a change of email address.
(d) A franchised dealer is required to file a business entity amendment application electronically in a system designated by the department for licensing within 10 days of an entity change, including:
(1) a change in management, dealer principal, or change
of other person who oversees [is in charge of]
a franchised dealer's business activities, including a managing partner,
officer, director of a corporation, or similar person; or
(2) a change of legal entity name on file with the Office of the Secretary of State.
(e) If a franchised [licensed new motor
vehicle] dealer changes or converts from one type of business
entity to another type of business entity without changing ownership
of the dealership, the submission of a franchise agreement in the
name of the new entity is not required in conjunction with an amendment
application. The franchise agreement on file with the department
prior to the change or conversion of the dealer's business entity
type applies to the successor entity until the parties agree to replace
the franchise agreement. This subsection does not apply to a sole
proprietorship or general partnership.
(f) If a franchised dealer adopts a plan
of conversion under a state or federal law that allows one legal entity
to be converted into another legal entity, only an amendment application
[to amend the license] is necessary to be filed with the
department. The franchise agreement on file with the department continues
to apply to the converted entity. If a license holder becomes another
legal entity by any means other than by conversion, a new application
is required, subject to subsection (e) of this section.
(g) In addition to obtaining permission from the manufacturer or distributor, a franchised dealer shall obtain department approval prior to opening a supplemental location or relocating an existing location by filing an amendment application electronically in a system designated by the department for licensing. A franchised dealer must notify the department electronically in a system designated by the department for licensing when closing an existing location.
§215.105.Notification of License Application; Protest Requirements.
(a) The provisions of this section are not applicable to an application filed with the department for a franchised dealer license as a result of the purchase or transfer of an existing entity holding a current franchised dealer's license that does not involve a physical relocation of the purchased or transferred line-makes.
(b) Upon receipt of an application for a franchised [new motor vehicle] dealer's license, including an application
filed with the department by reason of the relocation of an existing
dealership, the department shall give notice of the filing of the
application to each franchised dealer that may have standing to protest
the application.
(c) If it appears to the department that there are no franchised dealers with standing to protest, then no notice shall be given.
(d) A person holding a franchised dealer's license for the sale of the same line-make of a new motor vehicle as proposed for sale in the subject application and that has standing to protest the application may file with the department a notice of protest opposing the granting of a license by timely filing a protest electronically in the system designated by the department for licensing, and paying the required fee.
(e) A franchised dealer that wishes to protest the application shall give notice in accordance with Occupations Code, Chapter 2301.
(1) The notice of protest shall be in writing and shall be signed by an authorized officer or other official authorized to sign on behalf of the protesting dealer filing the notice.
(2) The notice of protest shall state the statutory basis upon which the protest is made and assert how the protesting dealer meets the standing requirements under §215.119 of this title (relating to Standing to Protest) to protest the application.
(3) The notice of protest shall state that the protest is not made for purposes of delay or for any other purpose except for justifiable cause.
(4) If a protest is filed against an application for the establishment of a dealership or for addition of a line-make at an existing dealership, the notice of protest shall state under which provision of Occupations Code, Chapter 2301 the protest is made.
§215.106.Time for Filing Protest.
(a) A notice of protest must be:
(1) received by the department not later than 5:00
p.m. Central [Standard] Time (CST or CDT, as applicable)
on the date 15 days from the date of mailing of the department's notification
to the license holder of the filing of the application;
(2) filed in [with the department by
United States mail, facsimile, hand delivery, or through] the
department's designated electronic filing system [when available;
however, a notice of protest may not be filed by email]; and
(3) [accompanied by the required filing fee] submitted with the filing fee paid. [If the filing fee
does not accompany the notice of protest, the fee must be received
by the department not later than 5:00 p.m. CST on the date 20 days
from the date of mailing of the department's notification to the license
holder of the filing of the application].
(b) The department will reject a notice of protestif:
(1) the complete notice of protest is not filed within 15 days from the date of mailing of the department's notification to the license holder of the filing of the application; or
(2) the required filing fee is not paid when the
protest is submitted in the department's designated electronic filing
system or is later dishonored [remitted within 20 days
from the date of mailing of the department's notification to the license
holder of the filing of the application.
§215.108.Addition or Relocation of Line-make.
An application to amend an existing franchised [new
motor vehicle] dealer's license for the addition of another
line-make at the existing dealership or for the relocation of a line-make
to the existing dealership shall be deemed an "application to establish
a dealership" insofar as the line-make to be added is concerned, and
shall be subject to the provisions of §215.105 of this title
(relating to Notification of License Application; Protest Requirements)
and §215.106 of this title (relating to Time for Filing Protest).
§215.109.Replacement Dealership.
An application for a franchised [new motor
vehicle] dealer's license for a dealership intended as a replacement
for a previously existing dealership shall be deemed an application
for a "replacement dealership" required to be established in accordance
with Occupations Code, §2301.453 and shall not be subject to
protest under the provisions of §215.105 of this title (relating
to Notification of License Application; Protest Requirements), provided that:
(1) the application states that the applicant is intended as a replacement dealership and identifies the prior dealership to be replaced;
(2) the manufacturer or distributor of the line-make gives notice to the department and to other dealers franchised for the same line-make that meet the provisions of Occupations Code, §2301.652(b) and (c);
(3) the notice under paragraph (2) of this subsection is given within 60 days following the closing of the prior dealership;
(4) the application is filed electronically in
the system designated by the department for licensing, [with
the department] not later than one year following the closing
of the prior dealership; and
(5) the location of the applicant's proposed dealership is not more than two miles from the location of the prior dealership.
§215.110.Evidence of Franchise.
(a) Upon application for a franchised [new
motor vehicle] dealer's license or an amendment of an existing franchised [new motor vehicle] dealer's license to
add a line-make, the applicant must submit a legible and accurate
electronic image [ photocopy] of the [pages
of the] franchise agreement [(s)] pages that reflect:
(1) the parties [to the agreement(s)],
(2) the authorized signatures of the parties
[to the agreement(s)],
[and]
(3) each line-make listed in the application, and
(4) the address of the franchised dealership's physical location.
(b) To meet this requirement temporarily
for the purpose of application processing, a form prescribed by the
department and completed by the manufacturer or distributor may be electronically
submitted with the application in lieu of the information described
in this [sub] section.
(c) The applicant must submit the required
[photocopies of the] franchise agreement [agreement(s)
] pages described in this [sub] section
immediately upon the applicant's receipt of the franchise agreement
[(s)] as the department will not issue a license without
verifying that the franchise agreement has been executed.
(d) [(b)] Upon application to
relocate a franchised [new motor vehicle] dealership,
the franchised dealer applicant must submit a form prescribed
by the department and completed by the manufacturer or distributor
that identifies the license holder and the new franchised dealership location.
§215.111.Notice of Termination or Discontinuance of Franchise and Time for Filing Protest.
(a) A manufacturer or distributor must give notice
of termination or discontinuance of a dealer's franchise to a
franchised dealer and the department [shall be given by
a manufacturer or distributor] in accordance with Occupations
Code, §2301.453 [not less than 60 days prior to the effective
date of the franchise termination or discontinuance].
(b) A dealer must file a written notice
of protest of the franchise termination or discontinuance [by
a dealer] pursuant to Occupations Code, §2301.453 [shall
be in writing and shall be filed with the department ] electronically
in the system designated by the department for licensing, prior
to the effective date of the franchise termination or discontinuance
stated in the notice from the manufacturer or distributor.
§215.113.Manufacturer Ownership of Franchised Dealer; Good Cause Extension; Dealer Development.
(a) In the absence of a showing of good cause, an application
for a franchised [new motor vehicle] dealer's
license of which a manufacturer or distributor owns any interest in
or has control of the dealership entity must be submitted to the department electronically in the system designated by the department for licensing no
later than 30 days before:
(1) the opening of the dealership;
(2) close of the buy-sell agreement; or
(3) the expiration of the current license.
(b) If a manufacturer or distributor applies for a franchised
[new motor vehicle] dealer's license of which the
manufacturer or distributor holds an ownership interest in or has
control of the dealership entity in accordance with Occupations Code, §2301.476(d)
- (f), the license application must contain a sworn statement from
the manufacturer or distributor that the dealership was purchased
from a franchised dealer and is for sale at a reasonable price and
under reasonable terms and conditions, and that the manufacturer or
distributor intends to sell the dealership to a person not controlled
or owned by the manufacturer or distributor within 12 months of acquiring
the dealership, except as provided by subsection (h) of this section.
(c) A request for an extension of the initial 12-month
[12 month] period for manufacturer or distributor
ownership or control of a franchised [new motor vehicle]
dealership, in accordance with Occupations Code, §2301.476(e),
must be submitted to the department in accordance with subsection
(a) of this section along with a sufficient application to renew the
new motor vehicle dealer's license. The request must contain a detailed
explanation, including appropriate documentary support, to show the
manufacturer's or distributor's good cause for failure to sell the
dealership within the initial 12-month [12 month]
period. The director will evaluate the request and determine whether
the license should be renewed for a period not to exceed 12 months
or deny the renewal application. If the renewal application is denied,
the manufacturer or distributor may request a hearing on the denial
in accordance with Occupations Code, Chapter 2301, Subchapter [§§2301.701 - 2301.713] and the matter will be
referred to SOAH for a hearing under Chapter 224, Subchapter C of
this title (relating to Motor Vehicle, Salvage Vehicle, and Trailer
Industry License Enforcement).
(d) Requests for extensions after the first extension
is granted, as provided by Occupations Code, §2301.476(e), must
be submitted at least 120 days before the expiration of the current
license electronically in the system designated by the department
for licensing. Upon receipt of a subsequent request, the department
[board] will initiate a hearing in accordance with
Occupations Code, Chapter 2301, Subchapter O [§§2301.701
- 2301.713], at which the manufacturer or distributor will be
required to show good cause for the failure to sell the dealership.
The manufacturer or distributor has the burden of proof and the burden
of going forward on the sole issue of good cause for the failure to
sell the dealership.
(e) The department will give notice of the hearing described in subsection (d) of this section to all other franchised dealers holding franchises for the sale and service or service only of the same line-make of new motor vehicles that are located in the same county in which the dealership owned or controlled by the manufacturer or distributor is located or in an area within 15 miles of the dealership owned or controlled by the manufacturer or distributor. Such dealers, if any, will be allowed to intervene and protest the granting of the subsequent extension. Notices of intervention by dealers afforded a right to protest under Occupations Code, §2301.476(e) must be filed with the department electronically in the system designated by the department within 15 days of the date of mailing of the notice of hearing, and a copy must be provided to the manufacturer or distributor. The department will reject a notice of intervention if the notice is not filed at least 30 days before:
(1) the opening of the dealership;
(2) close of the buy-sell agreement; or
(3) the expiration of the current license.
(f) A hearing under subsection (d) of this section
will be referred to SOAH for a hearing under Chapter 224, Subchapter
C of this title (relating to Contested Cases Between Motor Vehicle
Industry License Holders or Applicants). [conducted as
expeditiously as possible, but not later than 120 days after receipt
of the subsequent request for extension from the manufacturer or distributor.
An ALJ will prepare a written decision and proposed findings of fact
and conclusions of law as soon as possible, but not later than 60
calendar days after the hearing is closed.] The franchised [new motor vehicle] dealer's license that is the subject of the
hearing will continue in effect until a final decision on the request
for a subsequent extension is issued [rendered]
by the board.
(g) The procedures described in subsections (d) - (f) of this section will be followed for all extensions requested by the manufacturer or distributor after the initial extension.
(h) An application for a new motor vehicle dealer's license of which a manufacturer or distributor owns any interest in the dealership entity in accordance with Occupations Code, §2301.476(g) must contain sufficient documentation to show that the applicant meets the requirements of Occupations Code, §2301.476(g).
§215.115.Manufacturer, Distributor, and Converter Vehicle Sales Records.
(a) A manufacturer or distributor must maintain, for
a minimum period of 48 months, a record of each vehicle sold to any
person in this state. The manufacturer or distributor shall make the
record available during business hours for inspection and copying
by [a representative of] the department or be available
to submit electronically to the department upon request.
(b) A converter must maintain, for a minimum period
of 48 months, a record of each vehicle converted for [to] a [any] person in this state, including [to]
a Texas franchised dealer. The converter shall make the record available
during business hours for inspection and copying by [a representative
of ] the department or be available to submit electronically
to the department upon request.
(c) A manufacturer, distributor, or converter is required to maintain at its licensed location a record reflecting each purchase, sale, or conversion for a minimum period of 24 months. Records for prior time periods may be kept off-site.
(d) Within 15 days of receipt of a request sent by
mail or electronic document transfer from [a representative of]
the department, a manufacturer, distributor, or converter must submit
a copy of specified records to the address listed in the request.
(e) Records required to be maintained and made available to the department must include the following:
(1) the date of sale or conversion of the motor vehicle;
(2) the VIN;
(3) the name and address of the person purchasing
the motor vehicle [dealer or converter];
(4) a copy of or a record with the information contained in the manufacturer's certificate of origin or title;
(5) information regarding the prior status of the motor vehicle such as the Reacquired Vehicle Disclosure Statement;
(6) the repair history of any motor vehicle subject to a warranty complaint;
(7) technical service bulletin or equivalent advisory; and
(8) any audit of a franchised dealership.
(f) Any record required by the department may be maintained
in an electronic format, if the electronic record can be printed at
the licensed location upon request [for the record] by
[a representative of] the department or be available
to submit electronically to the department upon request.
§215.116.Franchised Dealership Lease or Sublease Listing.
A franchised dealer that lists its dealership for
lease or sublease to mitigate damages in accordance with Occupations
Code, §2301.4651(e) is required to list [for lease or sublease]:
(1) the entire real property if the termination or discontinuance effectively terminates all line-makes and all franchises for the entire dealership; or
(2) only that portion of the real property associated with the terminated line-make or franchise, if the termination or discontinuance does not affect all line-makes and all franchises of the dealership.
§215.117.Market Value Property Appraisal.
(a) An appraiser performing a [A]
market value property appraisal [assessment made] in accordance
with Occupations Code, §2301.482(c) must be a Texas- [requires three general] certified real estate appraiser [appraisers certified by the State of Texas].
(b) Necessary real estate and necessary construction are each determined by the applicable property use agreement.
(c) The [To determine ] market
value of property in accordance with Occupations Code, §2301.482(c), is the [an] average of the market value property
appraisals [will be calculated from the independent market value
property assessment determinations] of the three [general ]
certified real estate appraisers.
§215.120.License Plates.
(a) A manufacturer, distributor, or converter may apply for a manufacturer or converter standard license plate for use on a new unregistered vehicle of the same vehicle type assembled or modified in accordance with Transportation Code §503.064 or §503.0618, as applicable:
(1) when applying for a new or renewal license, or
(2) by submitting a plate request application electronically in the system designated by the department.
(b) A manufacturer may use a manufacturer's standard plate to test a prototype motor vehicle on a public street or highway including a commercial motor vehicle prototype designed to carry a load. A manufacturer's standard plate may not be used on a commercial motor vehicle prototype or new commercial motor vehicle to carry a load for which the manufacturer or other person receives compensation.
(c) A manufacturer, distributor, or converter shall attach a license plate to the rear of a vehicle in accordance with §217.27 of this title (relating to Vehicle Registration Insignia).
(d) A manufacturer, distributor, or converter shall maintain a record of each license plate issued to the manufacturer, distributor, or converter by the department. The record of each license plate issued must contain:
(1) the license plate number;
(2) the year and make of the vehicle to which the license plate is affixed;
(3) the VIN of the vehicle; and
(4) the name of the person in control of the vehicle to which the license plate is affixed.
(e) If a manufacturer, distributor, or converter cannot account for a license plate or a license plate is damaged, the manufacturer, distributor, or converter must:
(1) document the license plate as "void" in plate record in subsection (c); and
(2) within three days of discovering that the license plate is missing or damaged, report the license plate as lost, stolen, or damaged electronically in the system designated by the department; and
(3) if found after reported missing, cease use of the license plate.
(f) A license plate is no longer valid for use after the manufacturer, distributor, or converter reports to the department that the plate is lost, stolen, or damaged. A manufacturer, distributor, or converter must render a void plate unusable by permanently marking the front of the plate with the word "VOID" or a large "X" and once marked, must destroy or recycle the license plate, or return the license plate to the department within 10 days.
(g) The license holder's license plate record must be available for inspection and copying by the department during normal business hours or be available to submit electronically to the department upon request.
(h) In evaluating requests for additional standard license plates, the department will consider the business justification provided by a license holder including the following:
(1) the number of vehicles assembled or modified;
(2) the highest number of motor vehicles in inventory in the prior 12 months;
(3) the size and type of business;
(4) how the license holder typically uses the plates;
(5) the license holder's record of tracking and reporting missing or damaged plates to the department; and
(6) any other factor the Department in its discretion deems necessary to support the number of plates requested.
(i) a license holder must return a department-issued license plate to the department within 10 days of the license holder closing the associated license or the associated license being revoked, canceled, or closed by the department.
§215.121.Sanctions.
(a) The board or department may take the following actions against a license applicant, a license holder, or a person engaged in business for which a license is required:
(1) deny an application;
(2) revoke a license;
(3) suspend a license;
(4) assess a civil penalty;
(5) issue a cease and desist order; or
(6) take other authorized action.
(b) The board or department may take action described in subsection (a) of this section if a license applicant, a license holder, or a person engaged in business for which a license is required:
(1) fails to maintain records required under this chapter;
(2) refuses or fails to timely comply with a request for records made by a representative of the department;
(3) sells or offers to sell a motor vehicle to a retail purchaser other than through a licensed or authorized dealer;
(4) fails to submit a license amendment application in the electronic system designated by the department for licensing to notify the department of a change of the license holder's physical address, mailing address, telephone number, or email address within 10 days of the change;
(5) fails to timely submit a license amendment application in the electronic system designated by the department for licensing to notify the department of a license holder's business or assumed name change, deletion of a line-make, or management or ownership change;
(6) fails to notify the department or pay or reimburse a franchised dealer as required by law;
(7) misuses or fails to display a license plate as required by law;
(8) is a manufacturer or distributor and fails to provide a manufacturer's certificate for a new vehicle;
(9) fails to remain regularly and actively engaged in the business of manufacturing, assembling, or modifying a new motor vehicle of the type and line make for which a license has been issued by the department;
(10) violates a provision of Occupations Code, Chapter 2301; Transportation Code Chapters 501-503 or 1001-1005; a board order or rule; or a regulation of the department relating to the manufacture, assembly, sale, lease, distribution, financing, or insuring of vehicles, including advertising rules under Subchapter H of this chapter (relating to Advertising);
(11) is convicted of an offense that directly relates to the duties or responsibilities of the occupation in accordance with §211.3 of this title (relating to Criminal Offense Guidelines);
(12) is determined by the board or department, in accordance with §215.89 of this title (relating to Fitness), to be unfit to hold a license;
(13) omits information or makes a material misrepresentation in any application or other documentation filed with the department including providing a false or forged identity document or a false or forged photograph, electronic image, or other document;
(14) fails to remit payment as ordered for a civil penalty assessed by the board or department;
(15) violates any state or federal law or regulation relating to the manufacture, distribution, modification, or sale of a motor vehicle;
(16) fails to issue a refund as ordered by the board or department; or
(17) fails to participate in statutorily required mediation without good cause.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304785
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes a repeal to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, § §503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes repeals under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. This repeal would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.112.Motor Home Show Limitations and Restrictions.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304786
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE.These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters Occupations Code, Chapters 53, 55, 2301, and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.131.Purpose and Scope.
This subchapter implements Transportation Code, Chapters [Chapter] 503 and 1001-1005, and Occupations Code,
Chapter 2301, and applies to general distinguishing numbers and
drive-a-way operator in-transit licenses issued by the department.
§215.132.Definitions.
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Barrier--A material object or set of objects that separates or demarcates.
[(2)
Charitable organization--Has
the meaning assigned by Transportation Code, §503.062(e).]
(2) [(3)] Consignment sale--The
owner-authorized sale of a motor vehicle by a person other than the owner.
(3) [(4)] House trailer--A nonmotorized
vehicle designed for human habitation and for carrying persons and
property on its own structure and for being drawn by a motor vehicle.
A house trailer does not include manufactured housing. A towable recreational
vehicle, as defined by Occupations Code, §2301.002, is included
in the terms "house trailer" or "travel trailer."
(4) Municipality--As defined according to the Local Government Code, Chapter 1.
[(5) License--A dealer's GDN assigned
by the department identifying the type of business for a specified
location from which the person engages in business.]
(5) [(6)] Person--Has the meaning
assigned by Occupations Code, §2301.002.
(6) [(7)] Sale--With regard to
a specific vehicle, the transfer of possession of that vehicle to
a purchaser for consideration.
(7) [(8)] Temporary tag--A buyer's
temporary tag, converter's temporary tag, or dealer's temporary tag
as described under Transportation Code, Chapter 503.
(8) [(9)] Towable recreational
vehicle--Has the same meaning as "house trailer" defined by this section.
(9) [(10)] Travel Trailer--Has
the same meaning as "house trailer" defined by this section.
(10) [(11)] Vehicle--Has the
meaning assigned by Transportation Code, §503.001.
(11) [(12)] VIN--Vehicle identification number.
§215.133.GDN [General
Distinguishing Number] Application Requirements for a Dealer
or a Wholesale Motor Vehicle Auction.
(a) No person may engage in business as a dealer or
as a wholesale motor vehicle auction unless that person has
a [currently] valid GDN assigned by the department for
each location from which the person engages in business. A dealer
must also hold a GDN for a consignment location, unless the consignment
location is a wholesale motor vehicle auction.
(b) Subsection (a) of this section does not apply to a person exempt from the requirement to obtain a GDN under Transportation Code §503.024.
(c) A GDN dealer or wholesale motor vehicle auction application shall be on a form prescribed by the department and properly completed by the applicant as required under §215.83 of this title (relating to License Applications, Amendments, or Renewals). A GDN dealer or wholesale motor vehicle auction application shall include all required information, required supporting documents, and required fees and shall be submitted to the department electronically in a system designated by the department for licensing. A GDN dealer or wholesale motor vehicle auction GDN holder renewing or amending its GDN must verify current license information, provide related information and documents for any new requirements or changes to the GDN, and pay required fees including any outstanding civil penalties owed the department under a final order. An applicant for a new dealer or wholesale motor vehicle auction GDN must provide the following:
(1) Required information:
(A) type of GDN requested;
(B) business information, including the name, physical and mailing addresses, telephone number, Secretary of State file number (if applicable), and website address (if applicable);
(C) [application contact name, email address,
and telephone number] contact name, email address, and
telephone number of the person submitting the application;
(D) contact name, email address, and telephone number of a person who can provide information about business operations and the motor vehicle products or services offered;
(E) [(D)] the name, social security
number, date of birth, identity document information, and ownership
percentage for each owner, partner, member, or principal if the applicant
is not a publicly traded company;
(F) [(E)] the name, social security
number, date of birth, and identity document information for each
officer, director, manager, trustee, or other representative authorized
to act on behalf of the applicant if the applicant is owned in full
or in part by a legal entity;
(G) [(F)] the name, employer
identification number, ownership percentage, and non-profit or publicly
traded status for each legal entity that owns the applicant in full
or in part;
(H) [(G)] the name, social security
number, date of birth, and identity document information of at least
one manager or other bona fide employee who will be present at the
established and permanent place of business if the owner is out of
state or will not be present during business hours at the established
and permanent place of business in Texas;
(I) [(H)] if a dealer, the
name, telephone number, and business email address of the
temporary tag database account administrator designated by the applicant
who must be an owner or representative listed in the application;
(J) [(I)] criminal history record
information under the laws of Texas, another state in the United States,
the United States, and any foreign jurisdiction for each person listed
in the application, including offense description, date, and location;
(K) [(J)] military service status;
(L) [(K)] licensing history required
to evaluate fitness for licensure under §215.89 of this title
(relating to Fitness);
(M) [(L)] information about the
business location and business premises, including whether the applicant
will operate as a salvage vehicle dealer at the location;
(N) [(M)] history of insolvency,
including outstanding or unpaid debts, judgments, or liens, unless
the debt was discharged under 11 U.S.C. §§101 et seq. (Bankruptcy
Act) or is pending resolution under a case filed under the Bankruptcy Act;
(O) [(N)] signed Certification [Certificate] of Responsibility, which is a form provided by
the department; and
(P) [(O)] any other information
required by the department to evaluate the application under current
law and board rules.
(2) A legible and accurate electronic image of each applicable required document:
(A) proof of a surety bond if required under §215.137 of this title (relating to Surety Bond);
(B) the certificate of filing, certificate of incorporation, or certificate of registration on file with the Secretary of State, if applicable;
(C) each assumed name certificate on file with the Secretary of State or county clerk;
(D) at least one of the following unexpired identity documents for each natural person listed in the application:
(i) [current] driver license;
(ii) [current] Texas Identification Card
issued by the Texas Department of Public Safety under Transportation
Code, Chapter 521, Subchapter E;
(iii) [current] license to carry a handgun
issued by the Texas Department of Public Safety under Government Code,
Chapter 411, Subchapter H;
(iv) [current] passport; or
(v) [current ] United States military
identification card [armed forces identification].
(E) a certificate of occupancy, certificate of compliance, or other official documentation confirming the business location complies with municipal ordinances, including zoning, occupancy, or other requirements for a vehicle business;
(F) documents proving business premises ownership, or lease or sublease agreement for the license period;
(G) business premises photos and a notarized affidavit certifying that all premises requirements in §215.140 of this title (relating to Established and Permanent Place of Business Premises Requirements) are met and will be maintained during the license period;
(H) evidence of franchise if applying for a franchised motor vehicle dealer GDN;
(I) proof of completion of the dealer education and training required under Transportation Code §503.0296, if applicable; and
(J) any other documents required by the department to evaluate the application under current law and board rules.
(3) Required fees:
(A) the fee [for the GDN] for each type
of license requested as prescribed by law; and
(B) the fee, including applicable taxes, for
each standard [metal] dealer plate requested
by the applicant as prescribed by law.
(d) An applicant for a dealer or wholesale auction GDN
must also comply with fingerprint requirements in §211.6 of this
title (relating to Fingerprint Requirements for Designated License
Types [General Distinguishing Numbers] ), if applicable.
(e) An applicant for a [dealer] GDN operating
under a name other than the applicant's business name [applicant
] shall use the assumed name under which the applicant
is authorized to do business, as filed with the Secretary of State
or county clerk, and the assumed name of such legal entity shall be
recorded by the applicant on the application using the letters "DBA."
The applicant may not use a name or [an] assumed
name that may be confused with or is similar to that of a governmental
entity or that is otherwise deceptive or misleading to the public.
(f) A wholesale motor vehicle dealer GDN holder may sell or exchange vehicles with licensed or authorized dealers only. A wholesale motor vehicle dealer GDN holder may not sell or exchange vehicles at retail.
(g) An independent mobility motor vehicle dealer shall retain and produce for inspection all records relating to the license requirements under Occupations Code, §2301.002(17-b) and all information and records required under Transportation Code §503.0295.
(h) In evaluating a new or renewal [dealer]
GDN application or an application for a new GDN location, the department
may require a site visit to determine if the business location meets
the requirements in §215.140. The department will require the
applicant or GDN holder to provide a notarized affidavit confirming
that all premises requirements are met and will be maintained during
the license period.
(i) A person holding an independent motor vehicle GDN does not have to hold a salvage vehicle dealer license to:
(1) act as a salvage vehicle dealer or rebuilder; or
(2) store or display a motor vehicle as an agent or escrow agent of an insurance company.
(j) A person holding an independent motor vehicle GDN and performing salvage activities under subsection (i) must apply for a National Motor Vehicle Title Information System (NMVTIS) identification number and provide the number to the department in the GDN application.
(k) [(j)] To be eligible for
an independent motor vehicle GDN, a person must complete dealer education
and training specified by the department, except as provided in this subsection:
(1) once a person has completed the required dealer education and training, the person will not have to retake the dealer education and training for subsequent GDN renewals, but may be required to provide proof of dealer education and training completion as part of the GDN renewal process;
(2) a person holding an independent motor vehicle GDN for at least 10 years as of September 1, 2019, is exempt from the dealer education and training requirement; and.
(3) a military service member, military spouse, or military veteran will receive appropriate credit for prior training, education, and professional experience and may be exempted from the dealer education and training requirement.
§215.134.Requirements for a Drive-a-way Operator In-Transit License.
(a) No drive-a-way operator may engage in business in Texas unless that person has a currently valid drive-a-way operator in-transit license issued by the department.
(b) A drive-a-way operator in-transit application shall be on a form prescribed by the department and properly completed by the applicant as required under §215.83 of this title (relating to License Applications, Amendments, or Renewals). A drive-a-way operator in-transit application shall include all required information, required supporting documents, and required fees, and shall be submitted to the department electronically in a system designated by the department for licensing.
(c) A drive-a-way operator in-transit license holder renewing or amending its license must verify current license information, provide related information and documents for any new requirements or changes to the license, and pay required fees.
(d) An applicant for a new license must register for an account in the department-designated licensing system by selecting the licensing system icon on the dealer page of the department website. An applicant must designate the account administrator and provide the name and email address for that person, and provide the business telephone number, name, business type, and social security number or employer identification number, as applicable. The applicant's licensing account administrator must be an owner, officer, manager, or bona fide employee.
(e) Once registered, an applicant may apply for a new license and must provide the following:
(1) Required information:
(A) type of license requested;
(B) business information, including the name, physical and mailing addresses, telephone number, Secretary of State file number (if applicable), and website address (if applicable);
(C) contact name, email address, and telephone number of the person submitting the application;
(D) contact name, email address, and telephone number of a person who can provide information about business operations and the motor vehicle services offered;
(E) the name, social security number, date of birth, identity document information, and ownership percentage for each owner, partner, member, beneficiary, or principal if the applicant is not a publicly traded company;
(F) the name, social security number, date of birth, and identity document information for each officer, director, manager, trustee, or other representative authorized to act on behalf of the applicant if the applicant is owned in full or in part by a legal entity;
(G) the name, employer identification number, ownership percentage, and non-profit or publicly traded status for each legal entity that owns the applicant in full or in part;
(H) criminal history record information under the laws of Texas, another state in the United States, the United States, and any foreign jurisdiction for each person listed in the application, including offense description, date, and location;
(I) military service status;
(J) licensing history required to evaluate fitness for licensure under §215.89 of this title (relating to Fitness);
(K) signed Certification of Responsibility, which is a form provided by the department; and
(L) any other information required by the department to evaluate the application under current law and board rules.
(2) A legible and accurate electronic image of each applicable required document:
(A) the certificate of filing, certificate of incorporation, or certificate of registration on file with the Secretary of State, if applicable;
(B) each assumed name certificate on file with the Secretary of State or county clerk;
(C) at least one of the following unexpired identity documents for each natural person listed in the application:
(i) driver license;
(ii) Texas Identification Card issued by the Texas Department of Public Safety under Transportation Code, Chapter 521, Subchapter E;
(iii) license to carry a handgun issued by the Texas Department of Public Safety under Government Code, Chapter 411, Subchapter H;
(iv) passport; or
(v) United States military identification card;
(D) a list of manufacturers, distributors, dealers, or auctions for which the applicant provides drive-a-way services;
(E) a description of the business model or business process, transportation methods, compensation agreements, products, and services used or offered sufficient to allow department to determine if the license type applied for is appropriate under Texas law; and
(F) any other documents required by the department to evaluate the application under current law and board rules.
(3) Required fees:
(A) the license fee as prescribed by law; and
(B) the fee, including any taxes, for each standard drive-a-way in-transit license plate requested by the applicant as prescribed by law.
(f) An applicant for a drive-a-way operator in-transit license must also comply with fingerprint requirements in §211.6 of this title (relating to Fingerprint Requirements for Designated License Types).
(g) An applicant operating under a name other than the applicant's business name shall use the name under which the applicant is authorized to do business, as filed with the Secretary of State or county clerk, and the assumed name of such legal entity shall be recorded by the applicant on the application using the letters "DBA." The applicant may not use a name or assumed name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public.
§215.135.More than One Location.
(a) A dealer that holds a GDN for a particular type
of vehicle may operate from more than one location within the limits
of a municipality [city], provided each location
is operated by the same legal entity and meets the requirements of §215.140
of this title (relating to Established and Permanent Place of Business Premises Requirements).
(b) Additional locations not located within the limits
of the same municipality [city] of the initial
dealership are required to:
(1) obtain a new GDN; and
(2) provide a new surety bond reflecting the additional
location [,] unless the licensed location is exempt by
statute from the surety requirement.
(c) A dealer that relocates from a point outside the limits of a city or relocates to a point not within the limits of the same city of the initial location is required to:
(1) obtain a new GDN; and
(2) provide a new surety bond reflecting the new address
[,] unless the licensed location is exempt by statute from
the surety requirement.
(d) A dealer shall notify the department in writing
within 10 days of opening, closing, or relocating a [any]
licensed location by filing an amendment application electronically
in the system designated by the department for licensing. Each
location must meet and maintain the requirements of §215.140.
(e) A dealer may not commence business at any location until the department issues a license specific to that location.
§215.137.Surety Bond.
(a) The surety bond required by Transportation Code, §503.033
shall be in the legal business name in which the dealer's GDN [license] will be issued and shall contain the complete physical
address of each [dealership] location licensed under the
GDN that the surety bond is intended to cover.
(b) A surety bond executed by an agent representing a bonding company or surety must be supported by an original power of attorney from the bonding company or surety.
(c) The identity of the obligee on a surety bond or
a rider to a surety bond must be approved by the department. An
obligee may be identified as [A surety bond or rider to
a surety bond may be identified as]:
(1) a person who obtains a court judgment assessing damages and attorney's fees for an act or omission on which the bond is conditioned; or
(2) unknown.
(d) A bonding company that pays any claim against a surety bond shall immediately report the payment to the department.
(e) A bonding company shall give written notice to the department 30 days prior to canceling any surety bond.
(f) The surety bond required by this section does not apply to a:
(1) franchised motor vehicle dealer licensed by the department;
(2) franchised motorcycle dealer licensed by the department;
(3) franchised house trailer or travel trailer dealer licensed by the department; or
(4) trailer or semitrailer dealer licensed by the department.
§215.138.Use of [Metal ] Dealer's License Plates.
(a) A [metal] dealer's license plate shall
be attached to the rear [license plate holder] of a vehicle
in accordance with §217.27 of this title (relating to Vehicle
Registration Insignia) [Transportation Code, §503.061].
(b) A copy of the receipt for a [the
metal] dealer's standard license plate issued by the department
should be carried in the vehicle to present [so that
the receipt can be presented] to law enforcement personnel upon request.
(c) A [metal] dealer's license plate may
not be displayed on:
(1) a laden commercial vehicle being operated or moved on the public streets or highways; or
(2) the dealer's service or work vehicle, except as provided by Transportation Code, §503.068(b-1).
(d) For purposes of this section, a dealer's service or work vehicle includes:
(1) a vehicle used for towing or transporting another vehicle;
(2) a vehicle, including a light truck, used in connection with the operation of the dealer's shops or parts department;
(3) a courtesy car on which a courtesy car sign is displayed;
(4) a rental or lease vehicle; and
(5) a boat trailer owned by a dealer or manufacturer that is used to transport more than one boat.
[(e) As used in this section,
"light truck" has the meaning assigned by Transportation Code, §541.201.
(e) (f)] For purposes of this
section, a light truck as defined by Transportation Code, §541.201,
is not considered a laden commercial vehicle when it is:
(1) mounted with a camper unit; or
(2) towing a trailer for recreational purposes.
(f) [(g)] A [metal]
dealer's license plate may be displayed only on the type of vehicle
for which the GDN is issued and for which a dealer is licensed to
sell. A nonfranchised dealer may not display a [metal]
dealer's license plate on a new motor vehicle.
(g) [(h)] A [metal]
dealer's license plate may be displayed only on a vehicle that has
a valid inspection in accordance with Transportation Code, Chapter 548.
(h) [(i)] A dealer shall maintain
a record of each [metal dealer's] license plate issued by
the department to that dealer including standard and personalized
prestige plates. The record must contain:
(1) the [assigned metal dealer's] license
plate number;
(2) the year and make of the vehicle to which the [metal
] dealer's license plate is affixed;
(3) the VIN of the vehicle; and
(4) the name of the person in control of the vehicle.
(i) [(j)] If a dealer cannot
account for a [metal] dealer's license plate that the department
issued to that dealer, the dealer must:
(1) document the [metal] dealer's license
plate as "void" in the [metal] dealer's license plate record;
(2) within three days of discovering that the [metal]
dealer's license plate is missing [,] or damaged,
report the dealer's license plate as lost, stolen, or damaged in the
electronic system designated by the department [report
to the department in writing that the metal dealer's license plate
is lost or stolen]; and
(3) if found, cease use of the [metal ]
dealer's license plate.
(j) [(k)] A [metal]
dealer's license plate is no longer valid for use after the dealer
reports to the department that the [metal] dealer's license
plate is lost, stolen, or damaged [missing]. A
dealer must render a void plate unusable by permanently marking the
front of the plate with the word "VOID" or a large "X" and once marked,
must destroy or recycle the license plate, or return the license plate
to the department for recycling within 10 days.
(k) A dealer's license plate record must be available for inspection and copying by the department during normal business hours or be available to submit electronically to the department upon request.
(l) A dealer must return a department-issued license plate, sticker, or receipt to the department within 10 days of the license holder closing the associated license or the department revoking or canceling the license.
§215.139. [Metal] Dealer's Standard
License Plate Allocation.
(a) The number of [metal ] dealer's standard
license plates a dealer may order for business use is based
on the type of license for which the dealer applied and the number
of vehicles the dealer sold during the previous year.
(b) A new license applicant is allotted a predetermined
number of [metal] dealer's standard license
plates for the duration of the dealer's first license term.
(c) Unless otherwise qualified under this section,
the maximum number of [metal ] dealer's standard license
plates the department will issue to a new license applicant during
the applicant's first license term is indicated in the following table.
Figure: 43 TAC §215.139(c) (.pdf)
(d) A dealer applying [that submits
an application to the department ] for a license is not subject
to the initial allotment limits described in this section and may
rely on that dealer's existing allocation of [metal] dealer's standard license plates if that dealer is:
(1) a franchised dealership subject to a buy-sell agreement, regardless of a change in the entity or ownership;
(2) any type of dealer that is relocating and has been licensed by the department for a period of one year or longer; or
(3) any type of dealer that is changing its business entity type and has been licensed by the department for a period of one year or longer.
(e) The maximum number of [metal] dealer's standard license plates the department will issue to a vehicle
dealer per license term is indicated in the following table.
Figure: 43 TAC §215.139(e) (.pdf)
(f) A dealer may obtain more than the maximum number
of [metal] dealer's standard license plates
provided by this section by submitting to the department proof of
sales for the previous 12-month period that justifies additional allocation.
(1) The number of additional [metal] dealer's standard license plates the department will issue to a dealer
that demonstrates a need through proof of sales is indicated in the
following table.
Figure: 43 TAC §215.139(f)(1) (.pdf)
(2) For purposes of this section, proof of sales for
the previous 12-month period may consist of a copy of the most recent
vehicle inventory tax declaration or monthly statements filed with
the taxing authority in the county of the dealer's licensed location.
Each copy must be stamped as received by the taxing authority. The
department will consider a [A] franchised dealer's
license renewal application that indicates sales of more than 200
units [is considered ] to be proof of sales of more than
200 units and no additional proof is required.
(3) The department may not issue more than two [metal
] dealer's standard license plates to a wholesale
motor vehicle dealer. For purposes of this section, a wholesale motor
vehicle dealer's proof of sales may be demonstrated to the department
by submitting:
(A) evidence of the wholesale motor vehicle dealer's sales for the previous 12-month period, if the wholesale motor vehicle dealer has been licensed during those 12 months; or
(B) other documentation approved by the department demonstrating the wholesale motor vehicle dealer's transactions.
(g) The director may waive the [metal ]
dealer's standard license plate issuance restrictions if
the waiver is essential for the continuation of the business. The
director will determine the number of [metal ] dealer's standard
license plates the department will issue based on the dealer's
past sales, dealer's inventory, and any other factor the director
determines pertinent.
(1) A request for a waiver must be submitted to the director in writing and specifically state why the additional plate is necessary for the continuation of the applicant's business.
(2) A request for a waiver must be accompanied by proof of the dealer's sales for the previous 12-month period, if applicable.
(3) A wholesale motor vehicle dealer may not apply
for a waiver of the [metal] dealer's standard license
plate issuance restrictions.
(4) A waiver granted by the director under this section
for a specific number of [metal] dealer's standard license
plates is valid for four years.
[(h) This section does not apply
to a personalized prestige dealer's license plate issued in accordance
with Transportation Code, §503.0615.]
§215.140.Established and Permanent Place of Business Premises Requirements.
(a) A dealer must meet the following requirements at each licensed location and maintain the requirements during the term of the license. If multiple dealers are licensed at a location, each dealer must maintain the following requirements during the entire term of the license.
(1) Business hours for retail dealers.
(A) A retail dealer's office shall be open at least four days per week for at least four consecutive hours per day and may not be open solely by appointment.
(B) The retail dealer's business hours for each day of the week must be posted at the main entrance of the retail dealer's office in a manner and location that is accessible to the public. The owner or a bona fide employee of the retail dealer shall be at the retail dealer's licensed location during the posted business hours for the purposes of buying, selling, exchanging, or leasing vehicles. If the owner or a bona fide employee is not available to conduct business during the retail dealer's posted business hours due to special circumstances or emergencies, a separate sign must be posted indicating the date and time the retail dealer will resume operations. Regardless of the retail dealer's business hours, the retail dealer's telephone must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine. A caller must be able to speak to a natural person or leave a message during these hours.
(2) Business hours for wholesale motor vehicle dealers. A dealer that holds only a wholesale motor vehicle dealer's GDN must post its business hours at the main entrance of the wholesale motor vehicle dealer's office in a manner and location that is accessible to the public. A wholesale motor vehicle dealer or bona fide employee shall be at the wholesale motor vehicle dealer's licensed location at least two weekdays per week for at least two consecutive hours per day. A wholesale motor vehicle dealer may not be open solely by appointment. Regardless of the wholesale motor vehicle dealer's business hours, the wholesale motor vehicle dealer's telephone must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine. A caller must be able to speak to a natural person or leave a message during these hours.
(3) Business sign requirements for retail dealers.
(A) A retail dealer must display a conspicuous, permanent sign with letters at least six inches in height showing the retail dealer's business name or assumed name substantially similar to the name reflected on the retail dealer's GDN under which the retail dealer conducts business. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.
(B) The sign must be permanently mounted at the physical address listed on the application for the retail dealer's GDN. A business sign is considered permanently mounted if bolted to an exterior building wall or bolted or welded to a dedicated sign pole or sign support permanently installed in the ground.
(C) A retail dealer may use a temporary sign or banner if that retail dealer can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.
(D) A retail dealer is responsible for ensuring that the business sign complies with municipal ordinances, and that any lease signage requirements are consistent with the signage requirements in this paragraph.
(4) Business sign requirements for wholesale motor vehicle dealers.
(A) Exterior Sign
(i) A wholesale motor vehicle dealer must display a conspicuous, permanent sign with letters at least six inches in height showing the wholesale motor vehicle dealer's business name or assumed name substantially similar to the name reflected on the wholesale motor vehicle dealer's GDN under which the wholesale motor vehicle dealer conducts business. Effective September 1, 2023, the sign must also include the statement that "Purchasers must be Licensed Dealers" in letters at least three inches in height. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.
(ii) The sign must be permanently mounted on the business property at the physical address listed on the application. A business sign is considered permanently mounted if bolted to an exterior building wall or bolted or welded to a dedicated sign pole or sign support permanently installed in the ground. A wholesale motor vehicle dealer may use a temporary exterior sign or banner if the wholesale motor vehicle dealer can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.
(B) Interior Sign
(i) If the wholesale motor vehicle dealer's office is located in an office building with one or more other businesses and an outside sign is not permitted by the property owner, a conspicuous permanent business sign permanently mounted on or beside the main door to the wholesale motor vehicle dealer's office with letters at least two inches in height is acceptable. Effective September 1, 2023, the sign must also include the statement that "Purchasers must be Licensed Dealers" in letters at least one inch in height.
(ii) An interior business sign is considered conspicuous if it is easily visible to the public within 10 feet of the main entrance of the wholesale motor vehicle dealer's office. An interior sign is considered permanent if made from durable material and has lettering that cannot be changed. An interior sign is considered permanently mounted if bolted or otherwise permanently affixed to the main door or nearby wall. A wholesale motor vehicle dealer may use a temporary interior sign or banner if the wholesale motor vehicle dealer can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.
(C) A wholesale motor vehicle dealer is responsible for ensuring that the business sign complies with municipal ordinances and that any lease signage requirements are consistent with the signage requirements in this paragraph.
(5) Office requirements for a retail dealer and a wholesale motor vehicle dealer.
(A) A dealer's office must be located in a building with a permanent roof and connecting exterior walls on all sides.
(B) A dealer's office must comply with all applicable municipal ordinances, including municipal zoning ordinances. The dealer is responsible for obtaining a certificate of occupancy, certificate of compliance, or other required document issued by a municipal government to show compliance, including a new certificate or document when the building is altered or remodeled, or when the building use changes.
(C) A dealer's office may not be located in a residence, apartment, hotel, motel, rooming house, or any room or building not open to the public.
(D) A dealer's office may not be located in a restaurant, gas station, or convenience store, unless the office has a separate entrance door that does not require a dealer's customer to pass through the other business.
(E) A dealer's office may not be virtual or provided by a subscription for office space or office services. Access to an office space or office services is not considered an established and permanent location.
(F) The physical address of the dealer's office must
be in Texas and recognized by the U.S. Postal Service, be [or] capable of receiving U.S. mail, and have an assigned
emergency services property address. The department will not
mail a [metal] dealer's license plate to an out-of-state address.
(G) A portable-type office building may qualify as an office only if the building meets the requirements of this section and is not a readily moveable trailer or other vehicle.
(H) The dealer's office space must:
(i) include at least 100 square feet of interior floor space, exclusive of hallways, closets, or restrooms;
(ii) have a minimum seven-foot-high ceiling;
(iii) accommodate required office equipment; and
(iv) allow a dealer and customer to safely access the office and conduct business in private while seated.
(6) Required office equipment for a retail dealer and a wholesale motor vehicle dealer. At a minimum, a dealer's office must be equipped with:
(A) a desk;
(B) two chairs;
(C) internet access; and
(D) a working telephone number listed in the business name or assumed name under which the dealer conducts business.
(7) Number of retail dealers in one building. Not more than four retail dealers may be located in the same building. Each retail dealer located in the same building must meet the requirements of this section.
(8) Number of wholesale motor vehicle dealers in one office building. Not more than eight wholesale motor vehicle dealers may be located in the same office building. Each wholesale motor vehicle dealer located in the same office building must meet the requirements of this section.
(9) Office sharing prohibition for retail dealers and wholesale motor vehicle dealers. Unless otherwise authorized by the Transportation Code, a retail dealer and a wholesale motor vehicle dealer licensed after September 1, 1999, may not be located in the same building.
(10) Dealer housed with other business.
(A) If a person conducts business as a dealer in conjunction with another business owned by the same person and under the same name as the other business, the same telephone number may be used for both businesses. If the name of the dealer differs from the name of the other business, a separate telephone listing and a separate sign for each business are required.
(B) A person may conduct business as a dealer in conjunction with another business not owned by that person only if the dealer owns the property on which business is conducted or has a separate lease agreement from the owner of that property that meets the requirements of this section. The same telephone number may not be used by both businesses. The dealer must have separate business signs, telephone listings, and office equipment required under this section.
(C) A dealer's office must have permanent interior walls on all sides and be separate from any public area used by another business.
(11) Display area and storage lot requirements.
(A) A wholesale motor vehicle dealer is not required to have display space at the wholesale motor vehicle dealer's business premises.
(B) A retail dealer must have an area designated as display space for the retail dealer's inventory. A retail dealer's designated display area must comply with the following requirements.
(i) The display area must be located at the retail dealer's physical business address or contiguous to the retail dealer's physical address. The display area may not be in a storage lot.
(ii) The display area must be of sufficient size to
display at least five vehicles of the type for which the GDN is issued. The display area [Those spaces ] must be reserved
exclusively for the retail dealer's inventory and may not be used
for customer parking, employee parking, general storage, or shared
or intermingled with another business or a public parking area, a
driveway to the office, or another dealer's display area.
(iii) The display area may not be on a public easement, right-of-way, or driveway unless the governing body having jurisdiction of the easement, right-of-way, or driveway expressly consents in writing to use as a display area. If the easement, right-of-way, or driveway is a part of the state highway system, use as a display area may only be authorized by a lease agreement.
(iv) If a retail dealer shares a display or parking area with another business, including another dealer, the dealer's vehicle inventory must be separated from the other business's display or parking area by a material object or barrier that cannot be readily removed. A barrier that cannot be readily removed is one that cannot be easily moved by one person and typically weighs more than 50 pounds. A material object or barrier must be in place on all sides except for the space necessary to allow for entry and exit of vehicle inventory.
(v) If a dealer's business location includes gasoline pumps or a charging station or includes another business that sells gasoline or has a charging station, the dealer's display area may not be part of the parking area for fuel or charging station customers and may not interfere with access to or from the gasoline pumps, fuel tanks, charging station, or fire prevention equipment.
(vi) The display area must be adequately illuminated if the retail dealer is open at night so that a vehicle for sale can be properly inspected by a potential buyer.
(vii) The display area may be located inside a building; however, if multiple dealers are displaying vehicles inside a building, each dealer's display area must be separated by a material object or barrier that cannot be readily removed. A barrier that cannot be readily removed is one that cannot be easily moved by one person and typically weighs more than 50 pounds. A material object or barrier must be in place on all sides except for the space necessary to allow for entry and exit of vehicle inventory.
(C) A GDN holder [dealer] may
maintain a storage lot only if the storage lot is not accessible to
the public and no sales activity occurs at the storage lot. A sign
stating the license holder's [dealer's] name,
contact information, and the fact the property is a storage lot is
permissible. A storage lot must be fenced or in an access-controlled
location to be considered not accessible to the public. An applicant
must include the physical address of a storage lot in an application
for a new license if the storage lot is located at a different physical
address than the licensed business. If a storage lot is established
after a license is issued and is located at a different physical address
than the licensed business, the dealer must submit a license amendment
to add the physical address of the storage lot within 10 days of the
storage lot being established.
(12) Dealers authorized to sell salvage motor vehicles.
If an independent motor vehicle dealer offers a salvage motor vehicle
for sale on the dealer's premises, the vehicle must be clearly and
conspicuously marked with a sign informing a potential buyer that
the vehicle is a salvage motor vehicle. [This requirement does
not apply to a licensed salvage pool operator.]
(13) Lease requirements. If the premises from which a dealer conducts business, including any display area, is not owned by the dealer, the dealer must maintain a lease that is continuous during the period of time for which the dealer's license will be issued. The lease agreement must be on a properly executed form containing at a minimum:
(A) the name of the property owner as the lessor of the premises and the name of the dealer as the tenant or lessee of the premises;
(B) the period of time for which the lease is valid;
(C) the street address or legal description of the property, provided that if only a legal description of the property is included, a dealer must attach a statement verifying that the property description in the lease agreement is the physical street address identified on the application as the physical address for the established and permanent place of business;
(D) the signature of the property owner as the lessor and the signature of the dealer as the tenant or lessee; and
(E) if the lease agreement is a sublease in which the property owner is not the lessor, the dealer must also obtain a signed and notarized statement from the property owner including the following information:
(i) property owner's full name, email address, mailing address, and phone number; and
(ii) property owner's statement confirming that the dealer is authorized to sublease the location and may operate a vehicle sales business from the location.
(14) Dealer must display GDN and bond notice. A dealer
must display the dealer's GDN issued by the department at all times
in a manner that makes the GDN easily readable by the public and in
a conspicuous place at each place of business for which the dealer's
GDN is issued. [If the dealer's GDN applies to more than one
location, a copy of the GDN and bond notice must be displayed in each
supplemental location.] A dealer required to obtain a surety
bond must post a bond notice adjacent to and in the same manner as
the dealer's GDN is displayed. The notice must include the bond company
name, bond identification number, and procedure by which a claimant
can recover under the bond. The notice must also include the department's
website address and notify a consumer that a dealer's surety bond
information may be obtained by submitting a request to the department. If the dealer's GDN applies to more than one location, a copy of the
GDN and bond notice must be displayed in each supplemental location.
(b) Wholesale motor vehicle auction premises requirements. A wholesale motor vehicle auction must comply with the following premises requirements:
(1) a wholesale motor vehicle auction GDN holder must hold a motor vehicle auction on a regular periodic basis at the licensed location, and an owner or bona fide employee must be available at the business location during each auction and during posted business hours. If the owner or a bona fide employee is not available to conduct business during the posted business hours due to special circumstances or emergencies, a separate sign must be posted indicating the date and time operations will resume.
(2) the business telephone must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine. A caller must be able to speak to a natural person or leave a message during these hours.
(3) a wholesale motor vehicle auction GDN holder must display a business sign that meets the following requirements:
(A) The sign must be a conspicuous, permanent sign with letters at least six inches in height showing the business name or assumed name substantially similar to the name reflected on the GDN under which the GDN holder conducts business. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.
(B) The sign must be permanently mounted at the physical address listed on the application for the wholesale motor vehicle auction GDN. A business sign is considered permanently mounted if bolted to an exterior building wall or bolted or welded to a dedicated sign pole or sign support permanently installed in the ground.
(C) An applicant may use a temporary sign or banner if the applicant can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.
(D) An applicant or holder is responsible for ensuring that the business sign complies with municipal ordinances, and that any lease signage requirements are consistent with the signage requirements in this paragraph.
(4) The business office of a wholesale motor vehicle auction GDN applicant and holder must meet the following requirements:
(A) The office must be located in a building with a permanent roof and connecting exterior walls on all sides.
(B) The office must comply with all applicable municipal ordinances, including municipal zoning ordinances. The wholesale motor vehicle auction is responsible for obtaining a certificate of occupancy, certificate of compliance, or other required document issued by a municipal government to show compliance, including a new certificate or document when the building is altered or remodeled, or when the building use changes.
(C) The office may not be located in a residence, apartment, hotel, motel, rooming house, or any room or building not open to the public.
(D) The office may not be located in a restaurant, gas station, or convenience store, unless the office has a separate entrance door that does not require a customer to pass through the other business.
(E) The office may not be virtual or provided by a subscription for office space or office services. Access to office space or office services is not considered an established and permanent location.
(F) The physical address of the office must be in Texas and recognized by the U.S. Postal Service, capable of receiving U.S. mail, and have an assigned emergency services property address.
(G) A portable-type office building may qualify as an office only if the building meets the requirements of this section and is not a readily moveable trailer or other vehicle.
(5) A wholesale motor vehicle auction GDN applicant and holder must have the following office equipment:
(A) a desk;
(B) a chair;
(C) internet access; and
(D) a working telephone number listed in the business name or assumed name under which business is conducted.
(6) A wholesale motor vehicle auction must meet the following display area and storage lot requirements:
(A) The area designated as display space for inventory must be located at the physical business address or contiguous to the physical address. The display area may not be in a storage lot.
(B) The display area must be of sufficient size to display at least five vehicles. Those spaces must be reserved exclusively for inventory and may not be used for customer parking, employee parking, general storage, or shared or intermingled with another business or a public parking area, or a driveway to the office.
(C) The display area may not be on a public easement, right-of-way, or driveway unless the governing body having jurisdiction of the easement, right-of-way, or driveway expressly consents in writing to use as a display area. If the easement, right-of-way, or driveway is a part of the state highway system, use as a display area may only be authorized by a lease agreement.
(D) If the business location includes gasoline pumps or a charging station or includes another business that sells gasoline or has a charging station, the display area may not be part of the parking area for fuel or charging station customers and may not interfere with access to or from the gasoline pumps, fuel tanks, charging station, or fire prevention equipment.
(E) The display area must be adequately illuminated if open at night so that a vehicle for sale can be properly inspected by a potential buyer.
(F) The display area may be located inside a building.
(G) A wholesale motor vehicle auction may maintain a storage lot only if the storage lot is not accessible to the public and no sales activity occurs at the storage lot. A sign stating the business name, contact information, and the fact the property is a storage lot is permissible. A storage lot must be fenced or in an access-controlled location to be considered not accessible to the public. An applicant must include the physical address of a storage lot in an application for a new license if the storage lot is located at a different physical address. If a storage lot is established after a license is issued and is located at a different physical address, the dealer must submit a license amendment to add the physical address of the storage lot within 10 days of the storage lot being established.
(7) A wholesale motor vehicle auction must meet the following lease requirements if the business premises, including any display area, is not owned by the wholesale motor vehicle auction:
(A) the applicant or holder must maintain a lease that is continuous during the period of time for which the GDN will be issued;
(B) The lease agreement must be on a properly executed form containing at a minimum:
(i) the name of the property owner as the lessor of the premises and the name of the GDN applicant or holder as the tenant or lessee of the premises;
(ii) the period of time for which the lease is valid;
(iii) the street address or legal description of the property, provided that if only a legal description of the property is included, a wholesale motor vehicle auction must attach a statement verifying that the property description in the lease agreement is the physical street address identified on the application as the physical address for the established and permanent place of business;
(iv) the signature of the property owner as the lessor and the signature of the applicant or holder as the tenant or lessee; and
(C) if the lease agreement is a sublease in which the property owner is not the lessor, the wholesale motor vehicle auction must also obtain a signed and notarized statement from the property owner including the following information:
(i) property owner's full name, email address, mailing address, and phone number; and
(ii) property owner's statement confirming that the dealer is authorized to sublease the location and may operate a wholesale motor vehicle auction business from the location.
§215.141.Sanctions.
(a) The board or department may take the following actions against a license applicant, a license holder, or a person engaged in business for which a license is required:
(1) deny an application;
(2) revoke a license;
(3) suspend a license; [and]
(4) assess a civil penalty; [or other
action against a license applicant, a license holder, or a person
engaged in business for which a license is required.]
(5) issue a cease and desist order; or
(6) or take other authorized action.
(b) The board or department may take action described in subsection (a) of this section if a license applicant, a license holder, or a person engaged in business for which a license is required:
(1) fails to maintain a good and sufficient bond or
post the required bond notice [in the amount of $25,000]
if required under Transportation Code §503.033 (relating
to Security Requirement);
(2) fails to meet or maintain the requirements of §215.140 (relating to Established and Permanent Place of Business Premises Requirements);
(3) [(2)] fails to maintain records
required under this chapter;
(4) [(3)] refuses or fails to
comply with a request by [a representative of ] the department for electronic records or to examine and copy during the license
holder's business hours at the licensed business location:
(A) sales records required to be maintained by §215.144 of this title (relating to Records);
(B) ownership papers for a vehicle owned by that dealer or under that dealer's control;
(C) evidence of ownership or a current lease agreement for the property on which the business is located; or
(D) the Certificate of Occupancy, Certificate of Compliance, business license or permit, or other official documentation confirming compliance with county and municipal laws or ordinances for a vehicle business at the licensed physical location.
(5) [(4)] refuses or fails to
timely comply with a request for records made by a representative
of the department;
(6) [(5)] holds a wholesale motor
vehicle dealer's license and sells or offers to sell a motor
vehicle to a person other than a licensed or authorized dealer;
[:]
[(A) fails to meet the requirements
of §215.140 of this title (relating to Established and Permanent
Place of Business); or]
[(B) sells or offers to sell a motor vehicle to a person other than a licensed dealer;]
(7) [(6)] sells or offers to
sell a type of vehicle that the person is not licensed to sell;
(8) [(7)] fails to submit
a license amendment application in the electronic system designated
by the department for licensing to notify the department of
a change of the license holder's physical address, mailing address,
telephone number, or email address within 10 days of the change,
including a change in the physical address of a storage lot;
(9) [(8)] fails to submit
a license amendment application in the electronic system designated
by the department for licensing to notify the department of
a license holder's name change, or management or ownership
change within 10 days of the change;
(10) [(9)] except as provided
by law, issues more than one buyer's temporary tag for the purpose
of extending the purchaser's operating privileges for more than 60 days;
(11) [(10)] fails to remove a
license plate or registration insignia from a vehicle that is displayed
for sale;
(12) [(11)] misuses a [metal]
dealer's license plate or a temporary tag;
(13) [(12)] fails to display
a [metal] dealer's license plate or temporary tag, as required by law;
(14) [(13)] holds open a title
or fails to take assignment of a certificate of title, manufacturer's
certificate, or other basic evidence of ownership for a vehicle acquired
by the dealer, or fails to assign the certificate of title, manufacturer's
certificate, or other basic evidence of ownership for a vehicle sold;
(15) [(14)] fails to remain regularly
and actively engaged in the business of buying, selling, or exchanging
vehicles of the type for which the GDN is issued by the department;
(16) [(15)] violates a provision
of Occupations Code, Chapter 2301; Transportation Code Chapters 503
and 1001 [1000] -1005; a board order or rule;
or a regulation of the department relating to the sale, lease, distribution,
financing, or insuring of vehicles, including advertising rules under
Subchapter F [H] of this chapter (relating to Advertising);
(17) [(16)] is convicted of an
offense that directly relates to the duties or responsibilities of
the occupation in accordance with §211.3 of this title (relating
to Criminal Offense Guidelines);
(18) [(17)] is determined by
the board or department, in accordance with §215.89 of this title
(relating to Fitness), to be unfit to hold a license;
(19) [(18)] has not assigned
at least five vehicles in the prior 12 months, provided the dealer
has been licensed more than 12 months;
(20) [(19)] files or provides a
false or forged:
(A) title document, including an affidavit making application for a certified copy of a title; or
(B) tax document, including a sales tax statement or affidavit;
(21) [(20)] uses or allows use
of that dealer's license or location for the purpose of avoiding a
provision of Occupations Code, Chapter 2301; Transportation Code,
Chapters 503 and 1000 - 1005; or other laws;
(22) [(21)] omits information
or makes a material misrepresentation in any application or other
documentation filed with the department including providing a
false or forged identity document or a false or forged photograph,
electronic image, or other document;
(23) [(22)] fails to remit payment
as ordered for a civil penalty assessed by the board or department;
(24) [(23)] sells a new motor
vehicle without a franchised dealer's license issued by the department;
(25) [(24)] fails to comply
with a dealer responsibility under §215.150 of this title (relating
to Authorization to Issue Temporary Tags);
(26) utilizes a temporary tag that fails to meet the requirements of §215.153 of this title (relating to Specifications for All Temporary Tags);
(27) [(25)] violates any state
or federal law or regulation relating to the sale of a motor vehicle;
[or]
(28) [(26) effective January 1, 2017,]
knowingly fails to disclose that a motor vehicle has been repaired,
rebuilt, or reconstructed and issued a title under Transportation
Code, §501.100 (relating to Application for Regular Certificate
of Title for Salvage Vehicle);.
(29) fails to issue a refund as ordered by the board or department; or
(30) fails to acquire or maintain a required certificate of occupancy, certificate of compliance, business license or permit, or other official documentation for the licensed location confirming compliance with county or municipal laws or ordinances or other local requirements for a vehicle business.
§215.143.Drive-a-way Operator In-Transit License Plates.
(a) A drive-a-way operator may apply for a drive-a-way in-transit standard license plate:
(1) when applying for a new or renewal in-transit license, or
(2) by submitting a plate request application electronically in the system designated by the department.
(b) A drive-a-way operator must display an in-transit license plate in the rear of each transported motor vehicle from the vehicle's point of origin to its point of destination in Texas in accordance with §217.27 of this title (relating to Vehicle Registration Insignia).
(c) A drive-a-way operator shall maintain a record of each license plate issued to the operator by the department. The record of each license plate issued must contain:
(1) the license plate number;
(2) the year and make of the vehicle to which the license plate is affixed;
(3) the VIN of the vehicle; and
(4) the name of the person in control of the vehicle.
(d) If a drive-a-way operator cannot account for a license plate or a license plate is damaged, the operator must:
(1) document the license plate as "void" in the operator's plate record;
(2) within three days of discovering that the license plate is missing or damaged, report the license plate as lost, stolen, or damaged in the electronic system designated by the department;and
(3) if found once reported, cease use of the license plate.
(e) A license plate is no longer valid for use after the drive-a-way operator reports to the department that the plate is lost, stolen, or damaged. A drive-a-way operator must render a void plate unusable by permanently marking the front of the plate with the word "VOID" or a large "X" and once marked, may destroy or recycle the license plate, or return the license plate to the department for recycling within 10 days.
(f) The drive-a-way operator's license plate record must be available for inspection and copying by the department during normal business hours or be available to submit electronically to the department upon request.
(g) In evaluating requests for additional license plates, the department will consider the business justification provided by a drive-a-way operator including the following:
(1) the number of vehicles currently being transported to a location in Texas;
(2) the highest number of motor vehicles transported in the prior 12 months;
(3) the size and type of business; and
(4) the operator's record of tracking and reporting missing or damaged plates to the department.
(h) If a drive-a-way operator closes the associated license or the associated license is revoked or canceled by the department, the operator must return a license plate to the department within 10 days.
§215.144.Vehicle Records.
(a) Purchases and sales records. A dealer and
wholesale motor vehicle auction must maintain a complete record
of all vehicle purchases and sales for a minimum period of 48 months
and make the record available for inspection and copying by [a
representative ] of the department during business hours.
(b) Independent mobility motor vehicle dealers. An independent mobility motor vehicle dealer must keep a complete written record of each vehicle purchase, vehicle sale, and any adaptive work performed on each vehicle for a minimum period of 36 months after the date the adaptive work is performed on the vehicle. An independent mobility motor vehicle dealer shall also retain and produce for inspection all records relating to the license requirements under Occupations Code, §2301.002(17-b) and all information and records required under Transportation Code §503.0295.
(c) Location of records. A dealer's record reflecting
purchases and sales for the preceding 13 months must be maintained
at the dealer's licensed location. Original titles are not required
to be kept at the licensed location [,] but must be made
available to the agency upon reasonable request. A dealer's record
for prior time periods may be kept off-site.
(d) Request for records. Within 15 days of receiving
a request [receipt of a request sent by mail or electronic
document transfer] from the department, a dealer must deliver
a copy of the specified records to the address listed in the request.
If a dealer has a concern about the origin of a records request, the
dealer may verify that request with the department [division
] prior to submitting its records.
(e) Content of records. A dealer's complete record for each vehicle purchase or vehicle sale must contain:
(1) the date of the purchase;
(2) the date of the sale;
(3) the VIN;
(4) the name and address of the person selling the vehicle to the dealer;
(5) the name and address of the person purchasing the vehicle from the dealer;
(6) the name and address of the consignor if the vehicle is offered for sale by consignment;
(7) except for a purchase or sale where the Tax Code
does not require payment of motor vehicle sales tax, a county
tax assessor-collector receipt marked paid [copy of the
receipt, titled "Tax Collector's Receipt for Texas Title Application/Registration/Motor
Vehicle Tax"];
(8) a copy of all documents, forms, and agreements applicable to a particular sale, including a copy of:
(A) the title application;
(B) the work-up sheet;
(C) the front and back of the manufacturer's certificate
of origin or manufacturer's statement of origin, unless the dealer
obtains the title [is obtained ] through the electronic
title system;
(D) the front and back of the title for the purchase
and the sale, unless the dealer enters or obtains the title
[is obtained] through the electronic title system;
(E) the factory invoice, if applicable;
(F) the sales contract;
(G) the retail installment agreement;
(H) the buyer's order;
(I) the bill of sale;
(J) any waiver;
(K) any other agreement between the seller and purchaser;
[and]
(L) the purchaser's photo identification; [Form VTR-136, relating to County of Title Issuance, completed and
signed by the buyer;]
(M) the odometer disclosure statement signed by the buyer; and
(N) the rebuilt salvage disclosure, if applicable.
(9) the original manufacturer's certificate of origin, original manufacturer's statement of origin, or original title for a new motor vehicle [vehicles] offered for sale by a dealer which must be [, and a] properly stamped [original manufacturer's certificate of origin, original manufacturer's statement of origin, or original title for motor vehicles sold by a dealer] if the title transaction is entered into the electronic titling system by the dealer;
(10) the dealer's monthly Motor Vehicle Seller Financed Sales Returns, if any; and
(11) if the vehicle sold is a motor home or a towable recreational vehicle subject to inspection under Transportation Code, Chapter 548, a copy of the written notice provided to the buyer at the time of the sale, notifying the buyer that the vehicle is subject to inspection requirements.
(f) Title assignments.
(1) For each vehicle a dealer acquires or offers for sale, the dealer must properly take assignment in the dealer's name of any:
(A) title;
(B) manufacturer's statement of origin;
(C) manufacturer's certificate of origin; or
(D) other evidence of ownership.
(2) Unless not required by Transportation Code, §501.0234(b),
a [A] dealer must apply in the name of the purchaser
of a vehicle for the title and registration, if applicable,
of the vehicle with a [the appropriate]
county tax assessor-collector [as selected by the purchaser].
(3) To comply with Transportation Code, §501.0234(f), a registration is considered filed within a reasonable time if the registration is filed within:
(A) 30 [20 working] days of the
date of sale of the vehicle for a vehicle titled or registered
in Texas; or
(B) 45 days of the date of sale of the vehicle for a dealer-financed transaction involving a vehicle that is titled or registered in Texas.
(4) The dealer is required to provide to the purchaser the receipt for the title and registration application.
(5) The dealer is required to maintain a copy of the receipt for the title and registration application in the dealer's sales file.
(g) Out-of-state sales. For a sale
[sales transaction ] involving a vehicle to be transferred
out of state, the dealer must:
(1) within 30 [20 working] days
of the date of sale, either file the application for certificate of
title on behalf of the purchaser or deliver the properly assigned
evidence of ownership to the purchaser; and
(2) maintain in the dealer's record at the dealer's licensed location a photocopy of the completed sales tax exemption form for out of state sales approved by the Texas Comptroller of Public Accounts.
(h) Consignment sales. A dealer offering a vehicle
for sale by consignment shall have a written consignment agreement
or a power of attorney for the vehicle, and shall, after the sale
of the vehicle, take assignment of the vehicle in the dealer's name
and, pursuant to subsection (f), apply in the name of the purchaser
for transfer of title and registration, if the vehicle is to be registered,
with a [the appropriate] county tax assessor-collector
[as selected by the purchaser]. The dealer must, for a
minimum of 48 months, maintain a record of each vehicle offered for
sale by consignment, including the VIN and the name of the owner of
the vehicle offered for sale by consignment.
(i) Public motor vehicle auctions.
(1) A GDN holder that acts as a public motor vehicle auction must comply with subsection (h) of this section.
(2) A public motor vehicle auction:
(A) is not required to take assignment of title of a vehicle it offers for sale;
(B) must take assignment of title of a vehicle from a consignor prior to making application for title on behalf of the buyer; and
(C) must make application for title on behalf of the purchaser and remit motor vehicle sales tax within 20 working days of the sale of the vehicle.
(3) A GDN holder may not sell another GDN holder's vehicle at a public motor vehicle auction.
(j) Wholesale motor vehicle auction records. A wholesale
motor vehicle auction license holder must maintain, for a minimum
of 48 months, a complete record of each vehicle purchase and sale
occurring through the wholesale motor vehicle auction. The wholesale
motor vehicle auction license holder shall make the record available
for inspection and copying by [a representative of] the
department during business hours.
(1) A wholesale motor vehicle auction license holder must maintain at the licensed location a record reflecting each purchase and sale for at least the preceding 24 months. Records for prior time periods may be kept off-site.
(2) Within 15 days of receiving a department request [receipt of a request sent by mail or by electronic document transfer
from a representative of the department], a wholesale motor
vehicle auction license holder must deliver a copy of the specified
records to the address listed in the request.
(3) A wholesale motor vehicle auction license holder's complete record of each vehicle purchase and sale shall, at a minimum, contain:
(A) the date of sale;
(B) the VIN;
(C) the name and address of the person selling the vehicle;
(D) the name and address of the person purchasing the vehicle;
(E) the dealer license number of both the selling dealer and the purchasing dealer, unless either is exempt from holding a license;
(F) all information necessary to comply with the federal
odometer disclosure requirements in 49 CFR Part 580 [Truth
in Mileage Act];
(G) auction access documents, including the written authorization and revocation of authorization for an agent or employee, in accordance with §215.148 of this title (relating to Dealer Agents);
(H) invoices, bills of sale, checks, drafts, or other documents that identify the vehicle, the parties, or the purchase price;
(I) any information regarding the prior status of the vehicle such as the Reacquired Vehicle Disclosure Statement or other lemon law disclosures; and
(J) a copy of any written authorization allowing an agent of a dealer to enter the auction.
(k) Electronic records. A license holder may maintain
a record in an electronic format if the license holder can print the
record at the licensed location upon request by [a representative
of ] the department, except as provided by subsection (l) of
this section.
(l) Use of department electronic titling and registration
systems [webDEALER]. A license holder utilizing the
department's web-based title application known as webDEALER, as defined
in §217.71 of this title (relating to Automated and Web-Based
Vehicle Registration and Title Systems), must comply with §217.74
of this title (relating to Access to and Use of webDEALER). Original
hard copy titles are not required to be kept at the licensed location
[,] but must be made available to the department upon request.
§215.145.Change of Dealer's Status.
(a) A dealer's name change requires a new bond or a
rider to the existing bond reflecting the new [dealer]
name, unless the dealer is not otherwise required to purchase a bond.
(b) A dealer shall notify the department in writing within 10 days of a change of ownership by submitting a license amendment application in the department-designated electronic system for licensing. A licensed dealer that proposes to sell or assign to another any interest in the licensed entity, whether a corporation or otherwise, and provided the physical location of the licensed entity remains the same, shall notify the department in writing within 10 days of the change by filing an application to amend the license in the department-designated electronic system for licensing. If the sale or assignment of any portion of the business results in a change of entity, then the new entity must apply for and obtain a new license. A publicly held corporation only needs to inform the department of a change in ownership if one person or entity acquires a 10% or greater interest in the licensed entity.
(c) Upon the death of a dealer operating [of a dealership operated] as a sole proprietor [proprietorship
], either the surviving spouse of the deceased dealer or other
individual deemed qualified by the department shall submit to the
department a bond rider adding the name of the surviving spouse or
other qualifying person to the bond for the remainder of the bond
and license term. The surviving spouse or other qualifying person
may continue operating [dealership operations]
under the current dealer license until the end of the license term.
(d) For purposes of subsection (c) of this section,
[if the qualifying person is] the sole proprietor's surviving
spouse [,then the surviving spouse] may change the ownership
of the dealership at the time the license is renewed without applying
for a new GDN. At the time the renewal application is filed, the sole
proprietor's surviving spouse must [is required to]
submit to the department:
(1) an application to amend the business entity;
(2) a copy of the sole proprietor's certificate of death, naming the surviving spouse;
(3) the required ownership information; and
(4) if applicable, a bond in the name of the surviving spouse.
(e) For purposes of subsection (c) of this section, a
[if the qualifying person is not the surviving spouse,
then the] qualifying person who is not the surviving spouse may
operate the sole proprietorship business during the term of the license.
The qualifying person must file with the department:
(1) an application to amend the business entity, identifying the qualifying person as the manager;
(2) an ownership information form, indicating that the qualifying person has no ownership interest in the business; and
(3) a bond rider adding the qualified person's [individual's] name to the existing bond.
(f) For purposes of subsection (c) of this section, a
[if the qualifying person is not the surviving spouse,
then at the time the license is due to be renewed, the] qualifying
person who is not the surviving spouse must file with the
department an application for a new GDN on or before the expiration
of the license term in the department-designated electronic system
for licensing.
(g) A determination made under this section does not
impact a decision made by the board under Occupations Code, §2301.462
[,] (relating to Succession Following Death
of Franchised Dealer).
§215.147.Export Sales.
(a) Before selling a motor vehicle for export from the United States to another country, a dealer must obtain a legible photocopy of the buyer's government-issued photo identification document. The photo identification document must be issued by the jurisdiction where the buyer resides and be:
(1) a passport;
(2) a driver [driver's] license;
(3) a [concealed handgun license or] license
to carry a handgun issued by the Texas Department of Public Safety
under Government Code, Chapter 411, Subchapter H;
(4) a national identification certificate or identity document; or
(5) other identification document containing the:
(A) name of the issuing jurisdiction;
(B) buyer's full name;
(C) buyer's foreign address;
(D) buyer's date of birth;
(E) buyer's photograph; and
(F) buyer's signature.
(b) A dealer that sells a vehicle for export from the
United States shall place a stamp on the title that includes the words
"For Export Only" and includes the dealer's [license
holder's] GDN. The stamp must be legible, in black ink, at least
two inches wide, and placed on the:
(1) back of the title in all unused dealer reassignment spaces; and
(2) front of the title in a manner that does not obscure any names, dates, mileage statements, or other information printed on the title.
(c) In addition to the records required to be maintained by §215.144 of this title (relating to Vehicle Records), a dealer shall maintain, for each motor vehicle sold for export, a sales file record. The sales file record shall be made available for inspection and copying upon request by the department. The sales file record of each vehicle sold for export shall contain:
(1) a completed copy of the Texas Motor Vehicle Sales Tax Exemption Certificate for Vehicles Taken Out of State, indicating that the vehicle has been purchased for export to a foreign country;
(2) a copy of the front and back of the title of the vehicle, showing the "For Export Only" stamp and the GDN of the dealer; and
(3) if applicable, an Export-only Sales Record Form, listing each motor vehicle sold for export only.
(d) A dealer, at the time of sale of a vehicle for export, shall:
(1) enter the information required by Transportation Code, §503.061 in the temporary tag database;
(2) designate the sale as "For Export Only"; and
(3) issue a buyer's temporary tag, in accordance with Transportation Code, §503.063.
§215.148.Dealer Agents.
(a) A dealer must provide written authorization to each person with whom the dealer's agent or employee will conduct business on behalf of the dealer, including to a person that:
(1) buys and sells motor vehicles for resale; or
(2) operates a licensed auction.
(b) If a dealer's agent or employee that conducts business on behalf of the dealer commits an act or omission that would be cause for denial, revocation, or suspension of a license in accordance with Occupations Code, Chapter 2301 or Transportation Code, Chapter 503, the board may:
(1) deny an application for a license; or
(2) revoke or suspend a license.
(c) The board may take action described in subsection (b) of this section after notice and an opportunity for hearing, in accordance with Occupations Code, Chapter 2301 and Chapter 224 of this title (relating to Adjudicative Practice and Procedure).
(d) A dealer's authorization to an agent or employee shall:
(1) be in writing;
(2) be signed by the dealer principal or person in charge of daily activities of the dealership;
(3) include the agent's or employee's name, current mailing address, and telephone number;
(4) include the dealer's business name, address, and dealer license number or numbers;
(5) expressly authorize buying or selling by the specified agent or employee;
(6) state that the dealer is liable for any act or omission regarding a duty or obligation of the dealer that is caused by that agent or employee, including any financial considerations to be paid for the vehicle;
(7) state that the dealer's authorization remains in effect until the recipient of the written authorization is notified in writing of the revocation of the authority; and
(8) be maintained as a required dealer's record and made available upon request by a representative of the department, in accordance with the requirements of §215.144 of this title (relating to Vehicle Records).
(e) A license holder, including a wholesale motor vehicle
auction [license holder] that buys and sells vehicles on
a wholesale basis, including by sealed bid, is required to verify
the authority of any person claiming to be an agent or employee of
a licensed dealer who purports to be buying or selling a motor vehicle:
(1) on behalf of a licensed dealer; or
(2) under the written authority of a licensed dealer.
(f) A title to a vehicle bought by an agent or employee of a dealer shall be:
(1) reassigned to the dealer by the seller or by the auction; and
(2) shall not be delivered to the agent or employee
[,] but delivered only to the dealer or the dealer's financial institution.
(g) Notwithstanding the prohibitions in this section, an authorized agent or employee may sign a required odometer statement.
(h) In a wholesale transaction for the purchase of a motor vehicle, the seller may accept as consideration only:
(1) a check or a draft drawn on the purchasing dealer's account;
(2) a cashier's check in the name of the purchasing dealer; or
(3) a wire transfer from the purchasing dealer's bank account.
§215.149.Sales of New Mobility Motor
Vehicles [Independent Mobility Motor Vehicle Dealers].
In accordance with Occupations Code, §2301.361, a transaction
occurs through or by a franchised dealer of the motor vehicle's chassis
line-make if the franchised dealer applies for title and registration
of a new [the] mobility motor vehicle in the
name of the purchaser. An independent mobility motor vehicle dealer
may prepare the documentation necessary for a franchised dealer to
comply with the requirements of Transportation Code, §501.0234
in connection with the sale of a new mobility motor vehicle.
§215.150.Authorization to Issue Temporary Tags.
(a) A dealer that holds a GDN may issue a dealer's temporary tag, buyer's temporary tag, or a preprinted Internet-down temporary tag for authorized purposes only for each type of vehicle the dealer is licensed to sell or lease. A converter that holds a converter's license under Occupations Code, Chapter 2301 may issue a converter's temporary tag for authorized purposes only.
(b) A license holder may issue an applicable dealer's temporary tag, buyer's temporary tag, or converter's temporary tag until:
(1) the department denies access to the temporary tag
database under Transportation Code §503.0632(f) and §224.58
[§215.505] of this title (relating to Denial
of Dealer or Converter Access to Temporary Tag System);
(2) the license holder issues the maximum number of temporary tags authorized under Transportation Code §503.0632(a)-(d); or
(3) the license is canceled, revoked, or suspended.
(c) A federal, state, or local governmental agency
that is exempt under Section 503.024 from the requirement to obtain
a dealer general distinguishing number may issue one [temporary]
buyer's temporary tag, or one preprinted Internet-down
temporary tag, in accordance with Transportation Code §503.063.
A governmental agency that issues a [temporary] buyer's temporary
tag, or preprinted Internet-down temporary tag, under this subsection:
(1) is subject to the provisions of Transportation Code §503.0631 and §503.067 applicable to a dealer; and
(2) is not required to charge the registration fee under Transportation Code §503.063(g).
(d) A dealer or converter is responsible for all use of and access to the applicable temporary tag database under the dealer's or converter's account, including access by any user or unauthorized person. Dealer and converter duties include monitoring temporary tag usage, managing account access, and taking timely and appropriate actions to maintain system security, including:
(1) establishing and following reasonable password policies, including preventing the sharing of passwords;
(2) limiting authorized users to owners and bona fide employees with a business need to access the database;
(3) removing users who no longer have a legitimate business need to access the system;
(4) securing printed tags and destroying expired tags, by means such as storing printed tags in locked areas and shredding or defacing expired tags; and
(5) securing equipment used to access the temporary tag database and print temporary tags.
§215.151.Temporary Tags, General Use Requirements, and Prohibitions.
(a) A dealer, governmental agency, or converter shall secure a temporary tag to a vehicle in the license plate display area located at the rear of the vehicle, so that the entire temporary tag is visible and legible at all times, including when the vehicle is being operated.
[(b) A federal, state, or local governmental agency shall secure a temporary buyer's tag or preprinted Internet-down temporary tag issued under 215.150(c) of this title (relating to Authorization to Issue Temporary Tags) to a vehicle in the license plate display area located at the rear of the vehicle, so that the entire temporary tag is visible and legible at all times, regardless of whether the vehicle is being operated.]
(b) [(c)] All printed information on a temporary tag must be visible and may not be covered or obstructed by any plate holder or other device or material.
(c) [(d)] A motor vehicle that is being transported [using the full mount method, the saddle
mount method, the tow bar method, or any combination of those methods]
in accordance with Transportation Code, §503.068(d) or §503.0625
, must have a dealer's temporary tag, a converter's temporary
tag, or a buyer's temporary tag, whichever is applicable, affixed
to the motor vehicle being transported.
§215.152.Obtaining Numbers for Issuance of Temporary Tags.
(a) A dealer, a [federal, state, or local]
governmental agency, or a converter is required to have internet access
to connect to the temporary tag databases maintained by the department.
(b) Except as provided by §215.157 of this title
(relating to Advance Numbers, Preprinted Internet-down Temporary Tags),
before a temporary tag may be issued and displayed on a vehicle, a
dealer, a [federal, state, or local ] governmental agency,
or converter must:
(1) enter in the temporary tag database true and accurate information about the vehicle, dealer, converter, or buyer, as appropriate; and
(2) obtain a specific number for the temporary tag.
(c) The department will inform each dealer annually of the maximum number of buyer's temporary tags the dealer is authorized to issue during the calendar year under Transportation Code §503.0632. The number of buyer's temporary tags allocated to each dealer by the department will be determined based on the following formula:
(1) Sales data determined from the department's systems from the previous three fiscal years. A dealer's base number will contain the sum of:
(A) the greater number of:
(i) in-state buyer's temporary tags issued in one fiscal year during the previous three fiscal years; or
(ii) title transactions processed through the Registration and Title System in one fiscal year during the previous three fiscal years; but
(iii) the amount will be limited to an amount that is not more than two times the number of title transactions identified in subparagraph (ii) of this paragraph; and
(B) the addition of the greatest number of out-of-state buyer's temporary tags issued in one fiscal year during the previous three fiscal years;
(2) the total value of paragraph (1) of this subsection will be increased by a multiplier based on the dealer's time in operation giving a 10 percent increase in tags for each year the dealer has been in operation up to 10 years;
(3) the total value of paragraph (2) of this subsection will be increased by a multiplier that is the greater of:
(A) the dealer's actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of title transactions processed through the Registration and Title System plus the growth of the number of out-of-state buyer's temporary tags issued, except that it may not exceed 200 percent; or
(B) the statewide actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of title transactions processed through the Registration and Title System plus the growth of the number of out-of-state buyer's temporary tags issued, not less than zero, to determine the buyer's temporary tag allotment; and
(4) the department may increase the determined allotment of buyer's temporary tags for dealers in the state, in a geographic or population area, or in a county, based on:
(A) changes in the market;
(B) temporary conditions that may affect sales; and
(C) any other information the department considers relevant.
(d) The department will inform each dealer annually of the maximum number of agent temporary tags and vehicle specific temporary tags the dealer is authorized to issue during the calendar year under Transportation Code §503.0632. The number of agent temporary tags and vehicle specific temporary tags allocated to each dealer by the department, for each tag type, will be determined based on the following formula:
(1) dealer temporary tag data for agent temporary tags and vehicle specific temporary tags determined from the department's systems from the previous three fiscal years. A dealer's base number will contain the maximum number of dealer temporary tags issued during the previous three fiscal years;
(2) the total value of paragraph (1) of this subsection will be increased by a multiplier based on the dealer's time in operation giving a 10 percent increase in tags for each year the dealer has been in operation up to 10 years; and
(3) the total value of paragraph (2) of this subsection will be increased by a multiplier that is the greater of:
(A) the dealer's actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of dealer's temporary tags issued, except that it may not exceed 200 percent; or
(B) the statewide actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of dealer's temporary tags issued, not less than zero, to determine the dealer's temporary tag allotment; and
(4) the department may increase a dealer's allotment of agent temporary tags and vehicle specific temporary tags for dealers in the state, in a geographic or population area, or in a county, based on:
(A) changes in the market;
(B) temporary conditions that may affect sales; and
(C) any other information the department considers relevant.
(e) The department will inform each converter annually of the maximum number of temporary tags the converter is authorized to issue during the calendar year under Transportation Code §503.0632. The number of temporary tags allocated to each converter by the department will be determined based on the following formula:
(1) converter temporary tag data determined from the department's systems from the previous three fiscal years. A converter's base number will contain the maximum number of converter temporary tags issued during the previous three fiscal years;
(2) the total value of paragraph (1) of this subsection will be increased by a multiplier based on the converter's time in operation giving a 10 percent increase in tags for each year the dealer has been in operation up to 10 years; and
(3) the total value of paragraph (2) of this subsection will be increased by a multiplier that is the greater of:
(A) the converter's actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of converter's temporary tags issued, except that it may not exceed 200 percent; or
(B) the statewide actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of converter's temporary tags issued, not less than zero, to determine the converter's temporary tag allotment;
(4) the department may increase a converter's allotment of converter temporary tags for converters in the state, in a geographic or population area, or in a county, based on:
(A) changes in the market;
(B) temporary conditions that may affect sales; and
(C) any other information the department considers relevant.
(f) A dealer or converter that is licensed after the commencement of a calendar year shall be authorized to issue the number of temporary tags allotted in this subsection prorated on all or part of the remaining months until the commencement of the calendar year after the dealer's or converter's initial license expires. The initial allocations shall be as determined by the department in granting the license, but not more than:
(1) 1,000 [600] temporary tags
for a franchised dealer per each tag type, buyer's temporary tags,
agent temporary tags, and vehicle specific tags, unless:
(A) the dealer provides credible information indicating that a greater number of tags is warranted based on anticipated sales, and growth, to include new and used vehicle sales, including information from the manufacturer or distributor, or as otherwise provided in this section; and
(B) if more than 1,000 [600]
temporary tags are determined to be needed based on anticipated sales
and growth, the total number of temporary tags needed, including the 1,000 [600], will be doubled;
(2) 300 temporary tags for a nonfranchised dealer per each tag type, buyer's temporary tags, agent temporary tags, and vehicle specific tags, unless the dealer provides credible information indicating that a greater number of tags is warranted based on anticipated sales as otherwise provided in this section; and
(3) A converter will be allocated 600 temporary tags, unless the converter provides credible information indicating that a greater number of tags is warranted based on anticipated sales, including information from the manufacturer or distributor, or as otherwise provided in this section.
(g) An existing dealer or converter that is:
(1) moving its operations from one location to a different location will continue with its allotment of temporary tags and not be allocated temporary tags under subsection (f) of this section;
(2) opening an additional location will receive a maximum allotment of temporary tags based on the greater of the allotment provided to existing locations, including franchised dealers opening additional locations for different line makes, or the amount under subsection (f) of this section;
(3) purchased as a buy-sell ownership agreement will receive the maximum allotment of temporary tags provided to the location being purchased and not be allocated temporary tags under subsection (f) of this section; and
(4) inherited by will or laws of descent will receive the maximum allotment of temporary tags provided to the location being inherited and not be allocated temporary tags under subsection (f) of this section.
(h) A new dealer or converter may also provide credible information supporting a request for additional temporary tags to the amount allocated under subsection (f) of this section based on:
(1) franchised dealer, manufacturer, or distributor sales expectations;
(2) a change in license required by death or retirement, except as provided in subsection (g) of this section;
(3) prior year's sales by a dealership moving into the state; or
(4) other similar change of location or ownership that indicates some continuity in existing operations.
(i) After using 50 percent of the allotted maximum number of temporary tags, a dealer or converter may request an increase in the number of temporary tags by submitting a request in the department's eLICENSING system.
(1) The dealer or converter must provide information demonstrating the need for additional temporary tags results from business operations, including anticipated needs, as required by §503.0632(c). Information may include documentation of sales and tax reports filed as required by law, information of anticipated need, or other information of the factors listed in §503.0632(b).
(2) The department shall consider the information presented and may consider information not presented that may weigh for or against granting the request that the department in its sole discretion determines to be relevant in making its determination. Other relevant information may include information of the factors listed in §503.0632(b), the timing of the request, and the applicant's temporary tag activity.
(3) The department may allocate a lesser or greater
number of additional temporary tags than the amount requested [by
the dealer or converter]. Allocation of a lesser or greater
number of additional temporary tags is not a denial of the request.
Allocation of additional temporary tags under this paragraph does
not limit the dealer's or converter's ability to submit additional
requests for more temporary tags.
(4) If a request is denied, the denial will be
sent to the dealer or converter by email to the requestor's email
address [a dealer or converter may appeal the denial to
the Director of the Motor Vehicle Division whose decision is final].
(A) A dealer or converter may appeal the denial
to the Motor Vehicle Division Director. [The denial will
be sent to the license holder by email to the email used by the license
holder in the request.]
(B) The appeal must be requested though the eLICENSING
system within 15 [10 business] days of
the date the department emailed the denial to the dealer or converter [the denial being sent to the department though the eLICENSING system].
(C) The appeal may discuss information provided in the request but may not include additional information.
(D) The Motor Vehicle Division Director will review
the submission and any additional statements concerning the information
submitted in the original request and render an opinion within 15 [10 business] days of receiving the appeal. The Motor Vehicle
Division Director may decide to deny the request and issue no additional
tags [,] or award an amount of additional temporary tags
that is lesser, equal to, or greater than the request.
(E) The requesting dealer or converter [license
holder] will be notified as follows:
(i) If the Motor Vehicle Division Director [director] decides [has decided] to deny
the appeal, the department will contact the license holder
[will be contacted] by email regarding the decision and
options to submit a new request with additional relevant credible
supporting documentation or to pursue a claim in district court; or
(ii) If the Motor Vehicle Division Director awards [has decided to award] an amount of additional temporary tags
that is lesser, equal to, or greater than the request, the additional
temporary tags will be added to the dealer's or converter's [license holders] account and the license holder will be contacted
by email regarding the decision, informed that the request has not
been denied, and options [the license holder has] to submit
a new request.
(5) The Motor Vehicle Division Director's decision on appeal is final.
(6) [(5)] Once a denial is final,
a dealer or converter may only submit a subsequent request for additional
temporary tags during that calendar year if the dealer or converter
is able to provide additional information not considered in a [the] prior request.
(j) A change in the allotment under subsection (i) of this section does not create a dealer or converter base for subsequent year calculations.
(k) The department may at any time initiate an enforcement action against a dealer or converter if temporary tag usage suggests that misuse or fraud has occurred as described in Transportation Code §§503.038, 503.0632(f), or 503.067.
(l) Unused temporary [dealer or converter]
tag allotments from a calendar year do not roll over to subsequent years.
§215.154.Dealer's Temporary Tags.
(a) A dealer's temporary tag may be displayed only on the type of vehicle for which the GDN is issued and for which the dealer is licensed by the department to sell or lease.
(b) A wholesale motor vehicle auction license holder that also holds a dealer GDN may display a dealer's temporary tag on a vehicle that is being transported to or from the licensed auction location.
(c) When an unregistered vehicle is sold to another
dealer, the selling dealer shall remove the selling dealer's temporary
tag. The purchasing dealer may display its dealer's [dealer
] temporary tag or its [metal] dealer's standard
or personalized prestige license plate on the vehicle.
(d) A dealer's temporary tag:
(1) may be displayed on a vehicle only as authorized in Transportation Code §503.062; and
(2) may not be displayed on:
(A) a laden commercial vehicle being operated or moved on the public streets or highways;
(B) on the dealer's service or work vehicles as described in §215.138(d) of this chapter (relating to Use of Dealer's License Plates);
(C) a golf cart as defined under Transportation Code Chapter 551; or
(D) an off-highway vehicle as defined under Transportation Code Chapter 551A.
[(e) For purposes of this section,
a dealer's service or work vehicle includes:]
[(1) a vehicle used for towing or transporting other vehicles;]
[(2) a vehicle, including a light truck, used in connection with the operation of the dealer's shops or parts department;]
[(3) a courtesy car on which a courtesy car sign is displayed;]
[(4) a rental or lease vehicle; and]
[(5) any boat trailer owned by a dealer or manufacturer that is used to transport more than one boat.]
(e) [(f)] For purposes of subsection (d)
of this section, a vehicle bearing a dealer's temporary tag is not
considered a laden commercial vehicle when the vehicle is:
(1) towing another vehicle bearing the same dealer's temporary tags; and
(2) both vehicles are being conveyed from the dealer's place of business to a licensed wholesale motor vehicle auction or from a licensed wholesale motor vehicle auction to the dealer's place of business.
[(g) As used in this section, "light
truck" has the meaning assigned by Transportation Code, §541.201.]
(f) [(h)] A dealer's temporary
tag may not be used to operate a vehicle for the personal use of a
dealer or a dealer's employee.
(g) [(i)] A dealer's temporary
tag must show its expiration date, which must not exceed 60 days after
the date the temporary tag was issued.
(h) [(j)] A dealer's temporary
tag may be issued by a dealer to a specific motor vehicle in the dealer's
inventory or to a dealer's agent who is authorized to operate a motor
vehicle owned by the dealer.
(i) [(k)] A dealer that issues
a dealer's temporary tag to a specific vehicle must ensure that the
following information is placed on the temporary tag:
(1) the vehicle-specific number from the temporary tag database;
(2) the year and make of the vehicle;
(3) the VIN of the vehicle;
(4) the month, day, and year of the temporary tag's expiration; and
(5) the name of the dealer.
(j) [(l)] A dealer that issues
a dealer's temporary tag to an agent must ensure that the following
information is placed on the temporary tag:
(1) the specific number from the temporary tag database;
(2) the month, day, and year of the temporary tag's expiration; and
(3) the name of the dealer.
§215.155.Buyer's Temporary Tags.
(a) A buyer's temporary tag may be displayed only on
a vehicle: [from the seller's inventory that can be
legally operated on the public streets and highways and for which
a sale has been consummated.]
(1) from the selling dealer's inventory; and
(2) that can be legally operated on the public streets and highways; and
(3) for which a sale or lease has been consummated; and
(4) that has a valid inspection in accordance with Transportation Code Chapter 548, unless:
(A) an inspection is not required under Transportation Code §503.063(i) or (j); or
(B) the vehicle is exempt from inspection under Chapter 548.
(b) A buyer's temporary tag must be issued and provided to the buyer of a vehicle that is to be titled but not registered but the temporary tag must not be displayed on the vehicle.
[(b) A buyer's temporary tag may be
displayed only on a vehicle that has a valid inspection in accordance
with Transportation Code Chapter 548, unless:]
[(1) an inspection is not required under Transportation Code §503.063(i) or (j); or]
[(2) the vehicle is exempt from inspection under Chapter 548.]
(c) For a wholesale transaction, the purchasing dealer places on the motor vehicle its own:
(1) dealer's temporary tag; or
(2) [metal] dealer's license plate.
(d) A buyer's temporary tag is valid until the earlier of:
(1) the date on which the vehicle is registered; or
(2) the 60th day after the date of purchase.
(e) The dealer [,] or [federal, state,
or local] governmental agency, must ensure that the following
information is placed on a buyer's temporary tag [that the dealer issues]:
(1) the vehicle-specific number obtained from the temporary tag database;
(2) the year and make of the vehicle;
(3) the VIN of the vehicle;
(4) the month, day, and year of the expiration of the buyer's temporary tag; and
(5) the name of the dealer or [federal, state,
or local] governmental agency.
(f) A dealer shall charge a buyer a fee of $5 for the
buyer's temporary tag or Internet-down buyer's temporary tag issued,
unless the vehicle is exempt from payment of registration fees under
Transportation Code, §502.453 or §502.456. [A federal,
state, or local governmental agency may charge a buyer a fee of $5
for the buyer's temporary tag or Internet-down buyer's temporary tag
issued, unless the vehicle is exempt from payment of registration
fees under Transportation Code, §502.453 or §502.456]. A dealer shall remit the fee [shall be remitted by a dealer]
to the county [in conjunction] with the title transfer application
[, and, if collected, by a federal, state, or local governmental
agency, to the county,] for deposit to the credit of the Texas
Department of Motor Vehicles fund. If [, unless]
the vehicle is sold by a dealer to an out-of-state resident [,
in which case]:
(1) the dealer shall remit the entire fee to the department for deposit to the credit of the Texas Department of Motor Vehicles fund if payment is made through the department's electronic title system; or
(2) the dealer shall remit the fee to the county for deposit to the credit of the Texas Department of Motor Vehicles fund.
(g) A governmental agency may charge a buyer a fee of $5 for the buyer's temporary tag or Internet-down buyer's temporary tag issued, unless the vehicle is exempt from payment of registration fees under Transportation Code, §502.453 or §502.456. If collected by a governmental agency, the fee must be sent to the county for deposit to the credit of the Texas Department of Motor Vehicles fund.
§215.160.Duty to Identify Motor Vehicles Offered for Sale as Rebuilt.
(a) For each motor vehicle a dealer displays or offers for retail sale and which the dealer knows has been a salvage motor vehicle as defined by Transportation Code, §501.091(15) and a regular title subsequently issued under Transportation Code, §501.100, a dealer shall disclose in writing that the motor vehicle has been repaired, rebuilt, or reconstructed and issued a title under Transportation Code, §501.100. The written disclosure must:
(1) be visible from outside of the motor vehicle; and
(2) contain lettering that is reasonable in size, stating as follows: "This motor vehicle has been repaired, rebuilt or, reconstructed after formerly being titled as a salvage motor vehicle."
(b) Upon the sale of a motor vehicle which has been
a salvage motor vehicle as defined by Transportation Code, §501.091(15)
and a regular title subsequently issued under Transportation Code, §501.100,
a dealer shall obtain the purchaser's signature on the vehicle disclosure
form or on an acknowledgement written in fourteen [eleven
] point or larger font that states as follows: "I, (name of
purchaser), acknowledge that at the time of purchase, I am aware that
this vehicle has been repaired, rebuilt, or reconstructed and was
formerly titled as a salvage motor vehicle."
(c) The purchaser's acknowledgement as required in
subsection (b) of this section may be incorporated in a Buyer's Order,
a Purchase Order, or other disclosure document. This disclosure requires
[does not require] a separate signature.
(d) An original signed acknowledgement or vehicle
disclosure form required by subsection (b) of this section [or
a signed vehicle disclosure form] shall be given to the purchaser
and a copy of the signed acknowledgement or vehicle disclosure form
shall be retained by the dealer in the records of motor vehicles sales
required by §215.144 of this title (relating to Vehicle Records).
If the acknowledgement is incorporated in a Buyer's Order, a Purchase
Order, or other disclosure document, a copy of that document must
be given to the purchaser and a copy retained in the dealer's records
in accordance with §215.144.
(e) This section does not apply to a wholesale motor vehicle auction.
§215.161.Licensing Education Course Provider Requirements.
(a) A motor vehicle dealer licensing education course provider must be a Texas institution of higher education, as defined by Education Code, §61.003, or a motor vehicle trade association domiciled in this state.
(b) The licensing education course must be approved by the department and must include information on the laws and rules applicable to motor vehicle dealers and the consequences of violating those laws and rules.
(c) The licensing education course must consist of at least 6 hours of online instruction for new applicants and 3 hours of online instruction for renewal applicants.
(d) The cost for the licensing education course must not exceed $150 per person. A trade association course provider may not charge a different rate to a nonmember.
(e) The course provider must issue a certificate of completion to each person who successfully completes the licensing education course.
(f) The dealer training provided by the department is not an approved licensing education course under this section.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304787
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes a repeal to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, § §503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes repeals under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. This repeal would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.146.Metal Converter's License Plates.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304788
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§215.171, 215.173 - 215.180
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, § §503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters Occupations Code, Chapters 53, 55, 2301, and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.171.Purpose and Scope.
This subchapter implements Occupations Code, Chapter 2301 [and
more ] specifically, §§2301.251, 2301.253, 2301.254,
2301.261, 2301.262, 2301.357, and Subchapter L. Vehicle Lessors
and Vehicle Lease Facilitators [2301.551 - 2301.556], and Transportation Code Chapters 1001 - 1005.
§215.173.License.
(a) No person may engage in business as a vehicle lessor
or a vehicle lease facilitator unless that person holds a valid license
issued by the department[,] or is [otherwise]
exempt [by law] from obtaining such a license under
Occupations Code §2301.254.
(b) Any person who facilitates vehicle leases on behalf of a vehicle lease facilitator must:
(1) be on the vehicle lease facilitator's payroll and receive compensation from which social security, federal unemployment tax, and all other appropriate taxes are withheld from the representative's paycheck and paid to the proper taxing authority; and
(2) have work details such as when, where, and how the final results are achieved, directed, and controlled by the vehicle lease facilitator.
§215.174.Application for a License.
(a) An applicant for a vehicle lessor's or vehicle
lease facilitator's license must submit a sufficient application to
the department as required under §215.83 of this title (relating
to License Applications, Amendments, or Renewals). To be sufficient,
the application must be on a form prescribed by the department, [ and
] accompanied by all required supporting documentation, and
required fees, and submitted to the department electronically in a
system designated by the department for licensing.
(b) A license holder renewing or amending a license must verify current license information, provide related information and documents for any new requirements or changes to the license, and pay required fees.
(c) An applicant for a new license must register for an account in the department-designated licensing system by selecting the licensing system icon on the dealer page of the department website. An applicant must designate the account administrator and provide the name and email address for that person, and provide the business telephone number, name, business type, and social security number or employer identification number, as applicable. The applicant's licensing account administrator must be an owner, officer, manager, or bona fide employee.
(d) Once registered, an applicant may apply for a new license and must provide the following:
(1) type of license requested;
(2) business information, including the name, physical and mailing addresses, telephone number, Secretary of State file number (if applicable), and website address (if applicable);
(3) contact name, email address, and telephone number of the person submitting the application;
(4) contact name, email address, and telephone number of a person who can provide information about business operations and the motor vehicle services offered;
(5) the name, social security number, date of birth, identity document information, and ownership percentage for each owner, partner, member, beneficiary, or principal if the applicant is not a publicly traded company;
(6) the name, social security number, date of birth, and identity document information for each officer, director, manager, trustee, or other representative authorized to act on behalf of the applicant if the applicant is owned in full or in part by a legal entity;
(7) the name, employer identification number, ownership percentage, and non-profit or publicly traded status for each legal entity that owns the applicant in full or in part;
(8) criminal history record information under the laws of Texas, another state in the United States, the United States, and any foreign jurisdiction for each person listed in the application, including offense description, date, and location;
(9) military service status;
(10) licensing history required to evaluate fitness for licensure under §215.89 of this title (relating to Fitness);
(11) signed Certification of Responsibility, which is a form provided by the department; and
(12) any other information required by the department to evaluate the application under current law and board rules.
(e) [(b)] The supporting documentation
for a vehicle lessor's license application shall include a legible
and accurate electronic image of each applicable required document:
(1) Certificate of incorporation, registration,
or formation filed with the Texas Secretary of State [verification
of the criminal background of each owner and officer of the applicant,
if applicable];
(2) at least one of the following current identity documents for each natural person listed in the application:
(A) driver license;
(B) Texas Identification Card issued by the Texas Department of Public Safety under Transportation Code Chapter 521, Subchapter E;
(C) license to carry a handgun issued by the Texas Department of Public Safety under Government Code Chapter 411, Subchapter H;
(D) passport; or
(E) United States military identification card
[(2) the fee required by law for each
type of license required];
(3) a copy of each assumed name certificate on file with the appropriate recording entity, such as the Office of the Secretary of State or the county clerk;
(4) a sample copy of the vehicle lease agreement between the vehicle lessor and a lessee;
(5) a sample copy of the required fee disclosure statement regarding fees paid by the vehicle lessor to a vehicle lease facilitator for the facilitation of a vehicle lease or a statement that no such fees were or will be paid;
(6) a list including the business name(s), DBA(s), and addresses of lease facilitators with whom the applicant conducts or intends to conduct business;
(7) a list of other satellite offices that conduct
business in the State of Texas that includes the address, phone number,
and name of the contact person for each location;[.]
(8) if a vehicle lessor does not deal directly with the public to execute vehicle leases and has a licensed location in another state, a vehicle lessor must provide the jurisdiction name, licensed business address, and license number for each location that leases a motor vehicle to a Texas resident; and
(9) any other information required by the department to evaluate the application under current law and board rules.
(f) [(c)] The supporting documentation
for a vehicle lease facilitator's license application shall include a
legible and accurate electronic image of each applicable required document:
(1) Certificate of incorporation, registration,
or formation filed with the Texas Secretary of State [verification
of the criminal background of each owner and officer of the applicant,
if applicable];
(2) at least one of the following current identity documents for each natural person listed in the application:
(A) driver license;
(B) Texas Identification Card issued by the Texas Department of Public Safety under Transportation Code Chapter 521, Subchapter E;
(C) license to carry a handgun issued by the Texas Department of Public Safety under Government Code Chapter 411, Subchapter H;
(D) passport; or
(E) United States military identification card
[(2) the fee required by law for each
type of license required];
(3) a copy of each assumed name certificate on file with the appropriate recording entity, such as the Office of the Secretary of State or the county clerk;
(4) a sample copy of the vehicle lease agreement between each of the lessors the lease facilitator represents, and the lessee;
(5) a sample copy of the required fee disclosure statement regarding fees paid by a vehicle lessor to the vehicle lease facilitator for the facilitation of a vehicle lease or a statement that no such fees were or will be paid;
(6) a list of all vehicle lessors, including names
and addresses, for whom any vehicle lease facilitator solicits or
procures a lessee; [. The vehicle lease facilitator
shall update the list upon renewal of a license and within 10 days
of the addition of any vehicle lessor to this list; and]
(7) a copy of the representation agreement between
the vehicle lease facilitators and each lessor; and [.]
(8) any other information required by the department to evaluate the application under current law and board rules.
(g) An applicant operating under a name other than the applicant's business name shall use the name under which the applicant is authorized to do business, as filed with the Secretary of State or county clerk, and the assumed name of such legal entity shall be recorded by the applicant on the application using the letters "DBA." The applicant may not use a name or assumed name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public.
(h) During the term of a license, a vehicle lessor must add, delete, or update the previously submitted list of lease facilitators and a lease facilitator must add, delete, or update the previously submitted list of new vehicle lessors within 10 days by electronically submitting a license amendment in the system designated by the department for licensing.
§215.175.Sanctions.
(a) The board or department may:
(1) deny a vehicle lessor or vehicle lease facilitator application;
(2) revoke or suspend a vehicle lessor or vehicle lease facilitator license; or
(3) assess a civil penalty or take other action on a vehicle lessor or vehicle lease facilitator applicant or license holder, or a person engaged in business for which a vehicle lessor or vehicle lease facilitator license is required.
(b) The board or department may take action described in subsection (a) of this section if a vehicle lessor or vehicle lease facilitator applicant or license holder, or a person engaged in business for which a vehicle lessor or vehicle lease facilitator license is required:
(1) fails to maintain an established and permanent place of business required by §215.177 of this title (relating to Established and Permanent Place of Business);
(2) fails to maintain records required under this subchapter;
(3) refuses or fails to comply with a request by a representative of the department to examine during the vehicle lessor's or vehicle lease facilitator's posted business hours at the vehicle lessor's or vehicle lease facilitator's licensed location:
(A) a vehicle leasing record required to be maintained by §215.178 of this title (relating to Records Required for Vehicle Lessors and Vehicle Lease Facilitators);
(B) ownership papers for a vehicle owned, leased, or under that vehicle lessor's or vehicle lease facilitator's control; or
(C) evidence of ownership or a current premises lease agreement for the property upon which the business is located;
(4) refuses or fails to timely comply with a request for records made by a representative of the department;
(5) fails to notify the department in writing by electronically submitting a license amendment in the system designated by the department for licensing within 10 days of a change of the vehicle lessor or vehicle lease facilitator license holder's:
(A) mailing address;
(B) physical address;
(C) telephone number; or
(D) email address;
(6) fails to notify the department in writing by electronically submitting a license amendment in the system designated by the department for licensing within 10 days of a change of the vehicle lessor or vehicle lease facilitator license holder's name, assumed name, management, or ownership;
(7) fails to comply with the fee restrictions or other
requirements under Occupations Code, §2301.357 or Chapter
2301, Subchapter L. Vehicle Lessors and Vehicle Lease Facilitators [§§2301.551 -
2301.556];
(8) fails to maintain advertisement records or otherwise fails to comply with the advertising requirements of:
(A) §215.178; or
(B) Subchapter F [H] of this
chapter (relating to Advertising);
(9) violates any law relating to the sale, lease, distribution, financing, or insuring of motor vehicles;
(10) is convicted of an offense that, in accordance with Occupations Code, Chapter 53 and with §215.88 of this title (relating to Criminal Offense and Action on License), directly relates to the duties or responsibilities of the licensed occupation;
(11) is determined by the board or department, in accordance with §215.89 of this title (relating to Fitness), to be unfit to hold a vehicle lessor or vehicle lease facilitator license;
(12) uses or allows use of a vehicle lessor or vehicle lease facilitator license in violation of any law or for the purpose of avoiding any provision of Occupations Code, Chapter 2301; or
(13) [willfully ]omits material information
or makes a material misrepresentation in any application or other
documentation filed with the department including providing a
false or forged identity document or a false or forged photograph,
electronic image, or other document.
(c) The board or department may take action on a vehicle lessor's license or assess civil penalties for the vehicle lessor's failure to notify the department in writing by electronically submitting a license amendment in the system designated by the department for licensing within 10 days of any change, addition, or deletion to the list of vehicle lease facilitators with whom the vehicle lessor conducts business, including any change to a vehicle lease facilitator's mailing address, physical address, telephone number, or email address.
(d) The board or department may take action on a vehicle lease facilitator's license or assess civil penalties for the failure to notify the department in writing within 10 days by electronically submitting a license amendment in the system designated by the department for licensing of any change, addition, or deletion to the list of vehicle lessors for whom the vehicle lease facilitator conducts business, including any change to a vehicle lessor's mailing address, physical address, telephone number, or email address.
(e) The board or department may take action on a vehicle lessor's or vehicle lease facilitator's license if the vehicle lessor or vehicle lease facilitator accepts a fee from a dealer, directly or indirectly, for referring a customer who purchases or considers purchasing a motor vehicle.
§215.176.More Than One Business Location.
(a) A vehicle lease facilitator must be licensed separately for each business location.
(b) A vehicle lessor or vehicle lease facilitator that
relocates from a point outside the limits of a municipality [city] or relocates to a point not within the limits of the same municipality [city] of the initial business location
is required to obtain a new license.
(c) A vehicle lessor is required to obtain a license for the vehicle lessor's primary location. A vehicle lessor must provide the address, telephone number, and the name of a contact person for all other satellite offices that conduct business in the state of Texas.
§215.177.Established and Permanent Place of Business Premises Requirements.
(a) A vehicle lessor or vehicle lease facilitator operating
within [the State of] Texas must meet the following requirements
at each location where vehicles are leased or offered for lease.
(1) Physical location requirements.
(A) A vehicle lessor or vehicle lease facilitator operating
within [the State of] Texas must be open to the public.
The vehicle lessor's or vehicle lease facilitator's business hours
for each day of the week must be posted at the main entrance of the
office. The business telephone must be answered from 8:00 a.m.
to 5:00 p.m. weekdays by a bona fide employee, owner, answering service,
voicemail service, or answering machine. A caller must be able to
speak to a natural person or leave a message during these hours. The
owner or an employee of the vehicle lessor or vehicle lease facilitator
must be at the location during the posted business hours for the purpose
of leasing vehicles. In the event the owner or an employee is not
available to conduct business during the posted business hours, a
separate sign must be posted indicating the date and time such owner
or employee will resume vehicle leasing operations.
(B) A vehicle lessor's or vehicle leasing facilitator's office structure must be of sufficient size to accommodate the following required equipment:
(i) a desk and two chairs from which the
vehicle lessor or vehicle lease facilitator transacts business;[ and]
(ii) a working telephone number listed in the business
name or assumed name under which the vehicle lessor or vehicle lease
facilitator conducts business; and [.]
(iii) internet access.
(C) A vehicle lessor or vehicle lease facilitator that files an application for a new license or a vehicle lessor that files an application for a satellite location must comply with the following requirements:
(i) The office must be located in a building with a permanent roof and connecting exterior walls on all sides.
(ii) The office must comply with all applicable local zoning ordinances and deed restrictions.
(iii) The office may not be located within a residence, apartment, hotel, motel, or rooming house or building not open to the public.
(iv) The physical address of the office must be recognized
by the U.S. Postal Service, [ and] capable of
receiving U.S. mail, and have an assigned emergency services
property address.
(v) The office may not be virtual or provided by a subscription for office space or office services. Access to office space or office services is not considered an established and permanent location.
(D) A portable-type office structure may qualify as an office only if the structure meets the requirements of this section and is not a readily moveable trailer or other vehicle.
(E) One or more licensed vehicle lessors or vehicle
lease facilitators, or a combination of one or more licensed vehicle
lessors and vehicle lease facilitators may occupy the same business
structure and conduct vehicle leasing operations in accordance with
the license held by the vehicle lessor or licensed vehicle lease facilitator.
Each [person engaged in business as a] vehicle lessor or
vehicle lease facilitator must have:
(i) a separate desk from which that vehicle lessor or vehicle lease facilitator transacts business;
(ii) a separate working telephone number listed in the vehicle lessor or vehicle lease facilitator's business name or assumed name;
(iii) a separate right of occupancy that meets the requirements of this section; and
(iv) a vehicle lessor or vehicle lease facilitator license issued by the department in the name of the vehicle lessor or vehicle lease facilitator.
(F) A vehicle lease facilitator's established and permanent
place of business must be physically located within [the State
of] Texas.
(2) Business Sign requirements. A vehicle lessor or vehicle lease facilitator shall display a conspicuous and permanent business sign at the licensed location showing the name under which the vehicle lessor or vehicle lease facilitator conducts business. Outdoor business signs must contain letters that are at least six inches in height. The business name or assumed name on the sign must be substantially similar to the name reflected on the license issued by the department. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.
(3) Premises lease requirements. If the premises from which a licensed vehicle lessor or vehicle lease facilitator conducts business is not owned by the license holder, the license holder must maintain for the licensed location a valid premises lease that is continuous during the period of time for which the vehicle lessor's or vehicle lease facilitator's license will be issued. The premises lease agreement must be on a properly executed form containing at a minimum:
(A) the name of the property owner [landlord
] of the premises and the name of the vehicle lease facilitator
as the tenant or lessee of the premises;
(B) the street address or legal description of the
property, provided that if only a legal description of the property
is included, the applicant must attach a statement that the property
description in the lease agreement is the street address identified
on the application as the physical address for the
established and permanent place of business; [and]
(C) the signature of the property owner as the lessor and the signature of the applicant or holder as the tenant or lessee;
(D) [(C)] the period of time
for which the premises lease is valid;[.] and
(E) if the lease agreement is a sublease in which the property owner is not the lessor, the applicant or holder must also obtain a signed and notarized statement from the property owner including the following information:
(i) property owner's full name, email address, mailing address, and phone number; and
(ii) property owner's statement confirming that the license holder is authorized to sublease the location and may operate a motor vehicle leasing business from the location.
[(b) A vehicle lessor that
does not deal directly with the public to execute vehicle leases and
whose licensed location is in another state must and meet the following
requirements at each location.]
[(1) Physical location requirements.]
[(A) The vehicle lessor's office structure must be of sufficient size to accommodate the following required equipment:]
[(i) a desk and chairs from which the vehicle lessor transacts business; and]
[(ii) a working telephone number listed in the business name or assumed name under which the vehicle lessor conducts business.]
[(B) A vehicle lessor that files an application for a new license or a satellite location with a primary licensed location in another state must conform to the following requirements:]
[(i) The office must be located in a building with connecting exterior walls on all sides.]
[(ii) The office must comply with all applicable local zoning ordinances and deed restrictions.]
[(iii) The office may not be located within a residence, apartment, hotel, motel, or rooming house.]
[(iv) The physical address of the office must be recognized by the U.S. Postal Service and capable of receiving U.S. mail.]
[(C) A portable-type office structure may qualify as an office only if the structure meets the requirements of this section and is not a readily moveable trailer or other vehicle.]
[(D) More than one licensed vehicle lessor may occupy the same business structure and conduct vehicle leasing operations under different names in accordance with the license held by each vehicle lessor. Each person engaged in business as a vehicle lessor must have:]
[(i) a separate desk from which that vehicle lessor transacts business;]
[(ii) a separate working telephone number listed in the vehicle lessor's business name or assumed name;]
[(iii) a separate right of occupancy that meets the requirements of this section; and]
[(iv) a vehicle lessor license issued by the department in the name of the vehicle lessor.]
[(2) Sign requirements. An out of state vehicle lessor shall display a conspicuous and permanent sign at the licensed location showing the name under which the vehicle lessor conducts business. Outdoor signs must contain letters at least six inches in height.]
[(3) Premises lease requirements. If the out of state premises from which a licensed vehicle lessor conducts business is not owned by the license holder, the license holder must maintain a valid premises lease for the property of the licensed location. The premises lease must be continuous during the period of time for which the license will be issued. The premises lease agreement must be on a properly executed form containing at a minimum:]
[(A) the name of the landlord of the premises and the name of the licensed lessor identified as the tenant of the premises;]
[(B) the street address or legal description of the property, provided that if only a legal description of the property is included, the applicant must attach a statement that the property description in the lease agreement is the street address identified on the application; and]
[(C) the period of time for which the premises lease is valid.]
(b) [(c)] A vehicle lessor or
vehicle lease facilitator shall be independent of financial institutions
and dealerships in location and in business activities, unless that
vehicle lessor or vehicle lease facilitator is an:
(1) employee or legal subsidiary of the financial institution or dealership; or
(2) entity wholly owned by the financial institution or dealership.
(c) [(d)] For purposes of this
section, an employee is a person who meets the requirements of §215.173(b)
of this title (relating to License).
§215.178.Records Required for Vehicle Lessors and Vehicle Lease Facilitators.
(a) Purchase and leasing records. A vehicle lessor or vehicle lease facilitator must maintain a complete record of all vehicle purchases and sales for at least one year after the expiration of the vehicle lease.
(1) Complete records [Records]
reflecting vehicle lease transactions that occurred within the preceding
24 months must be maintained at the licensed location. Records for
prior time periods may be kept off-site [at a location within
the same county or within 25 miles of the licensed location].
(2) Within 15 days of receipt of a request [sent
by mail or by electronic document transfer] from a representative
of the department, a vehicle lessor or vehicle lease facilitator must
deliver a copy of the specified records to the address listed in the request.
(b) Content of records for lease transaction. A complete record for a vehicle lease transaction must contain:
(1) the name, address, and telephone number of the vehicle
lessor [of the vehicle subject to the transaction];
(2) the name, mailing address, physical address, and
telephone number of each vehicle lessee [of the vehicle
subject to the transaction];
(3) the name, address, telephone number, and license
number of the lease facilitator [of the vehicle subject to the
transaction];
(4) the name, work [home ]address,
and telephone number of each employee of the vehicle lease facilitator
that handled the transaction;
(5) a complete description of the vehicle involved in the transaction, including the VIN;
(6) the name, address, telephone number, and GDN of
the dealer selling the vehicle, as well as the franchised dealer license
number [of the dealer] if the vehicle [involved in
the transaction] is a new motor vehicle;
(7) the amount of fee paid to the vehicle lease facilitator or a statement that no fee was paid;
(8) a copy of the buyer's order and sales contract for the vehicle;
(9) a copy of the vehicle lease contract;
(10) a copy of all other contracts, agreements, or disclosures between the vehicle lease facilitator and the consumer lessee; and
(11) a copy of the front and back of the manufacturer's
statement of origin, manufacturer's certificate of origin, or the
title of the vehicle, as applicable [if the vehicle
involved in the transaction is a new motor vehicle.
(c) Content of records for sale of leased vehicle. A vehicle lessor's complete record for each vehicle sold at the end of a lease to a lessee, a dealer, or at a wholesale motor vehicle auction must contain:
(1) the date of the purchase;
(2) the date of the sale;
(3) the VIN;
(4) the name and address of the person selling the vehicle to the vehicle lessor;
(5) the name and address of the person purchasing the vehicle from the vehicle lessor;
(6) except for a purchase or sale where the Tax Code does not require payment of motor vehicle sales tax, a tax assessor-collector receipt marked paid;
(7) a copy of all documents, forms, and agreements applicable to a particular sale, including a copy of:
(A) the title application;
(B) the work-up sheet;
(C) the front and back of manufacturer's certificate of origin or manufacturer's statement of origin, unless the title is obtained through the electronic title system;
(D) the front and back of the title, unless the title is obtained through the electronic title system;
(E) the factory invoice;
(F) the sales contract;
(G) the retail installment agreement;
(H) the buyer's order;
(I) the bill of sale;
(J) any waiver;
(K) any other agreement between the seller and purchaser; and
(L) the purchaser's photo identification if sold to a lessee;
(8) a copy of the original manufacturer's certificate of origin, original manufacturer's statement of origin, or title for motor vehicle offered for sale, or a properly stamped original manufacturer's certificate of origin, original manufacturer's statement of origin, or original title for a title transaction entered into the electronic titling system by a dealer;
(9) the monthly Motor Vehicle Seller Financed Sales Returns, if any; and
(10) if the vehicle sold is a motor home or a towable recreational vehicle subject to inspection under Transportation Code, Chapter 548, a copy of the written notice provided to the buyer at the time of the sale, notifying the buyer that the vehicle is subject to inspection requirements.
(d) [(c)] Records of advertising.
A vehicle lessor or vehicle lease facilitator must maintain a copy
of all advertisements, brochures, scripts, or an electronically reproduced
copy in whatever medium appropriate, of promotional materials for
a period of at least 18 months. Each copy is subject to inspection
upon request by [a representative of] the department at
the business [of the licenseholder] location during
posted business hours.
(1) A vehicle lessor and a vehicle lease facilitator
[Vehicle Lessors and vehicle lease facilitators] must comply
with all federal and state advertising laws and regulations, including
Subchapter F [H] of this chapter (relating to Advertising).
(2) A vehicle lessor's [lessor]
or vehicle lease facilitator's advertising or promotional materials [facilitator] may not state or infer [in any advertisement],
either directly or indirectly, that the business involves the sale
of new motor vehicles.
(e) [(d)] Title assignments.
Each certificate of title, manufacturer's certificate of origin, or
other evidence of ownership for a vehicle that has been acquired by
a vehicle lessor for lease must be properly assigned from the seller
in the vehicle lessor's name.
(f) [(e)] Letters of representation
or appointment. A letter of representation or appointment
between a vehicle lessor and a vehicle lease facilitator [with
whom the vehicle lessor conducts business] must be executed
by both parties and maintained by each party.
(g) [(f)] Electronic records.
Any record required to be maintained by a vehicle lessor or vehicle
lease facilitator may be maintained in an electronic format, provided
the electronic record can be printed at the licensed location or
sent electronically upon department request [for
the record by a representative of the department].
§215.179.Change of Vehicle Lessor or Vehicle Lease Facilitator Status.
(a) Change of ownership. A vehicle lessor or vehicle
lease facilitator that [proposes to sell] sells or assigns [assign] to another any interest in the licensed
entity, whether a corporation or otherwise, provided the physical
location of the licensed entity remains the same, shall notify the
department in writing within 10 days by filing an application to amend
the license in the electronic system designated by the department
for licensing. If the sale or assignment of any portion of the
business results in a change of entity, then the purchasing or assignee
entity must apply for and obtain a new license by submitting
a new license application in the electronic system designated by the
department for licensing. A publicly held corporation licensed
as a vehicle lessor or vehicle lease facilitator needs only inform
the department of a change in ownership if one person or entity acquires
10% or greater interest in the licensed entity by submitting
a license amendment application in the electronic system designated
by the department for licensing.
(b) Change of operating status of business location. A license holder shall obtain department approval prior to opening a satellite location or relocating an existing location, in accordance with §215.176 of this title (relating to More than One Business Location) by electronically submitting a new license application in the system designated by the department for licensing and receiving electronic notice of approval prior to relocating or opening a satellite location. A license holder must notify the department when closing an existing location or a satellite location by electronically submitting a license amendment to close the license or close the satellite location in the system designated by the department for licensing.
§215.180.Required Notices to Lessees.
Vehicle lessors and vehicle lease facilitators shall provide
notice of the complaint procedures provided by Occupations Code, §
[§] 2301.204 and Subchapter M (relating to Warranties:
Rights of Vehicle Owners), [2301.601 - 2301.613]
to each lessee of a new motor vehicle with whom they enter into a
vehicle lease.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304789
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§215.242, 215.244, 215.249, 215.250, 215.257, 215.261, 215.264, 215.268, 215.270
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, § §503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.242.General Prohibition.
A person advertising motor vehicles shall not use false, deceptive,
unfair, or misleading advertising. In addition to a violation of a
specific advertising rule, any other advertising or advertising practices
found by the department to be false, deceptive, or misleading, whether
herein described, shall be deemed a violation of Occupations Code,
Chapter 2301 and shall also be deemed [considered]
a violation of this rule.
§215.244.Definitions.
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Advertisement--
(A) An oral, written, graphic, or pictorial statement or representation made in the course of soliciting business, including, but not limited to a statement or representation:
(i) made in a newspaper, magazine, or other publication;
(ii) contained in a notice, sign, poster, display, circular, pamphlet, or letter;
(iii) aired on the radio;
(iv) broadcast on the internet or television; or
(v) streamed via an online service.
(B) Advertisement does not include direct communication between a person or person's representative and a prospective purchaser.
(2) Advertising provision--
(A) A provision of Occupations Code, Chapter 2301, relating to the regulation of advertising; or
(B) A rule relating to the regulation of advertising, adopted pursuant to the authority of Occupations Code, Chapter 2301.
(3) Bait advertisement--An alluring but insincere offer to sell or lease a product of which the primary purpose is to obtain a lead to a person interested in buying or leasing merchandise of the type advertised and to switch a consumer from buying or leasing the advertised product in order to sell or lease some other product at a higher price or on a basis more advantageous to the dealer.
(4) Balloon payment--Any scheduled payment made as required by a consumer credit transaction that is more than twice as large as the average of all prior scheduled payments except the down payment.
(5) Clear and conspicuous--The statement, representation, or term being disclosed is of such size, color, contrast, and audibility and is presented so as to be readily noticed and understood. All language and terms, including abbreviations, shall be used in accordance with their common or ordinary usage and meaning.
(6) Dealership addendum--A form that is displayed on
a window of a motor vehicle when a [the] dealership installs
special features, equipment, parts, or accessories, or charges for
services not already compensated by the manufacturer or distributor
for work required to prepare a motor vehicle for delivery to a buyer.
(A) The purpose of the addendum is to disclose:
(i) that it is supplemental;
(ii) any added feature, service, equipment, part, or accessory, including the retail price, charged and added by the dealership;
(iii) any additional charge to the selling price such as additional dealership markup; and
(iv) the total dealer selling price.
(B) The dealership addendum form shall not be deceptively
similar in appearance to the Monroney label, as defined by paragraph (13) [(14)] of this section.
(7) Demonstrator--A new motor vehicle that is currently in the inventory of the automobile dealership and used primarily for test drives by customers and for other purposes designated by the dealership.
(8) Disclosure--Required information that is clear, conspicuous, and accurate.
(9) Distributor Suggested Retail Price (DSRP)--means
the total price shown on the Monroney Label as specified by subparagraph
[sub-paragraph] (D) of paragraph (13) [(14)] of this section.
(10) Factory executive/official motor vehicle--A new motor vehicle that has been used exclusively by an executive or official of the dealer's franchising manufacturer, distributor, or their subsidiaries.
[(11) License holder--Any person required
to obtain a license from the department.]
(11) [(12)] Limited rebate--A
rebate that is not available to every consumer purchasing or leasing
a motor vehicle because qualification for receipt of the rebate is
conditioned or restricted in some manner. A rebate conditioned or
restricted to purchasers who are residents of the contiguous United
States is not a limited rebate.
(12) [(13)] Manufacturer's Suggested
Retail Price (MSRP)--means the total price shown on the Monroney Label
as specified by subparagraph [sub-paragraph]
(D) of paragraph (13) of this section.
(13) [(14)] Monroney Label--The
label required by the Automobile Information Disclosure Act, 15 U.S.C. §§1231
- 1233, to be affixed to the windshield or side window of certain
new motor vehicles delivered to the dealer and that contains information
about the motor vehicle, including, but not limited to:
(A) the retail price of the motor vehicle suggested by the manufacturer or distributor, as applicable;
(B) the retail delivered price suggested by the manufacturer or distributor, as applicable, for each accessory or item of optional equipment, physically attached to the motor vehicle at the time of its delivery to a dealer, which is not included within the price of the motor vehicle as stated in subparagraph (A) of this paragraph;
(C) the amount charged, if any, to a dealer for the transportation of the motor vehicle to the location at which it is delivered to the dealer; and
(D) the total of the amounts specified pursuant to subparagraphs (A), (B), and (C) of this paragraph.
(14) [(15)] Online service--A
network that connects computer users.
(15) [(16)] Rebate or cash back--A
sum of money applied to the purchase or lease of a motor vehicle or
refunded after full payment has been rendered for the benefit of the purchaser.
(16) [(17)] Savings claim or
discount--An offer to sell or lease a motor vehicle at a reduced price,
including, but not limited to, a manufacturer's or distributor's customer
rebate, a dealer discount, or a limited rebate.
(17) [(18)] Subsequent violation--Conduct
that is the same or substantially the same as conduct the department
has previously alleged in a notice of an opportunity to cure [an earlier communication ]to be a violation of an advertising
provision.
§215.249.Manufacturer's or /] Distributor's Suggested Retail Price.
(a) Except as provided by subsection (b) of this section, the suggested retail price of a new motor vehicle advertised by a manufacturer or distributor shall include all costs and charges for the motor vehicle advertised.
(b) The following costs and charges may be excluded if an advertisement described in subsection (a) of this section clearly and conspicuously states the costs and charges are excluded:
(1) destination and dealer preparation charges;
(2) registration, certificate of title, license fees, or an additional registration fee, if any;
(3) taxes; and
(4) other fees or charges that are allowed or prescribed by law.
(c) Except as provided by this subsection, if the price
of a motor vehicle is stated in an advertisement placed with local
media in [the State of] Texas by a manufacturer or distributor
and the names of the local dealers for the motor vehicles advertised
are included in that advertisement, then the price must include all
costs and charges for the motor vehicle advertised, including destination
and dealer preparation charges. The only costs and charges that may
be excluded from the price are:
(1) registration, certificate of title, license fees, or an additional registration fee, if any;
(2) taxes; and
(3) other fees or charges that are allowed or prescribed by law.
§215.250.Dealer Price Advertising; Savings Claims; Discounts.
(a) When featuring a sales price of a [new or
used] motor vehicle in an advertisement, the dealer must be
willing to sell the motor vehicle for that featured sales price to
any retail buyer. The featured sales price shall be the price before
the addition or subtraction of any other negotiated items. Destination
and dealer preparation charges and additional dealership markup,
if any must be included in the featured sales price.
(b) The only costs and charges that may be excluded from the featured sales price are:
(1) registration, certificate of title, or license fees;
(2) taxes; and
(3) other fees or charges that are expressly allowed
[or prescribed] by law.
(c) A qualification may not be used when featuring a sales price for a motor vehicle such as "with trade," "with acceptable trade," "with dealer-arranged financing," "rebate assigned to dealer," or "with down payment."
(d) Advertising an "internet price," "e-price," or using similar terms that indicate or create the impression that there is a different or unique sales price for an online or internet consumer or transaction is prohibited.
(e) A savings claim or discount offer is prohibited except to advertise a new motor vehicle. No person may advertise a savings claim or discount offer on a used motor vehicle.
(f) Statements such as "up to," "as much as," and "from" shall not be used by a dealer in connection with savings claims or discount offers.
(g) The savings claim or discount offer for a new motor vehicle, when advertised by a dealer, must be the savings claim or discount available to any and all members of the buying public.
(h) If an advertisement includes a savings claim or discount offer, the amount and type of each incentive that makes up the total amount of the savings claim or discount offer must be disclosed.
(1) If a savings claim or discount offer includes only a dealer discount, that incentive must be disclosed as a deduction from the MSRP/DSRP, as applicable. The following are acceptable formats for advertising a dealer discount with and without a sales price.
Figure: 43 TAC §215.250(h)(1) (No change.)
(2) If a savings claim or discount offer includes only a customer rebate, that incentive must be disclosed as a deduction from the MSRP/DSRP, as applicable. The following are acceptable formats for advertising a customer rebate with and without a sales price.
Figure: 43 TAC §215.250(h)(2) (No change.)
(3) If a savings claim or discount offer includes both a customer rebate and a dealer discount, the incentives must be disclosed as deductions from the MSRP/DSRP, as applicable. The following are acceptable formats for advertising both a customer rebate and a dealer discount with and without a sales price.
Figure: 43 TAC §215.250(h)(3) (No change.)
(i) If a savings claim or discount offer includes an option package discount, that discount should be disclosed above, or prior to, the MSRP/DSRP, as applicable, with a total sales price of the motor vehicle before option discounts. Any additional savings or discounts should then be disclosed below the MSRP/DSRP, as applicable. The following are acceptable formats for advertising an option package discount with and without a sales price.
Figure: 43 TAC §215.250(i) (No change.)
(j) Except as provided herein, the calculation of the featured sales price or featured savings claim or discount may not include a limited rebate. A limited rebate may be advertised by providing the amount of the limited rebate and explaining the conditions or restrictions on qualification for the limited rebate in a statement below the featured sales price or featured savings claim or discount.
Figure: 43 TAC §215.250(j) (No change.)
(k) In an internet advertisement with multiple limited rebates available on an advertised new motor vehicle, a dealer may display each limited rebate separately allowing a potential buyer to "click" on the limited rebate to view the sales price after deducting the applicable limited rebate or applicable multiple rebates.
Figure: 43 TAC §215.250(k) (No change.)
(l) If a dealer has added an option that was not obtained from the manufacturer or distributor of the motor vehicle, a dealer discount may not be advertised for that vehicle. If a dealer has added an option obtained from the manufacturer or distributor and disclosed that option and its suggested retail price on a dealership addendum, the dealer may advertise a dealer discount for that motor vehicle if the option is listed, and the difference is shown between the dealer's sales price and the MSRP/DSRP, as applicable, of the vehicle including the option obtained from the manufacturer or distributor.
Figure: 43 TAC §215.250(l) (No change.)
§215.257.Authorized Dealer.
The term "authorized dealer" or a similar term shall not be
used unless the advertising dealer holds both a franchised dealer
license and a franchised dealer GDN [dealer license]
to sell the motor vehicles the dealer identifies itself as "authorized"
to sell.
§215.261.Manufacturer or [/] Distributor Sales and Wholesale Prices.
A motor vehicle shall not be advertised for sale in any manner that creates the impression that it is being offered for sale by the manufacturer or distributor of the motor vehicle. An advertisement shall not:
(1) contain terms such as "factory sale," "fleet prices," "wholesale prices," "factory approved," "factory sponsored," "manufacturer sale," or "distributor sale";
(2) use a manufacturer's or [/]
distributor's name or abbreviation in any manner calculated or likely
to create an impression that the motor vehicle is being offered for
sale by the manufacturer or distributor; or
(3) use any other similar terms which indicate sales other than retail sales from the dealer.
§215.264.Payment Disclosure - Vehicle Lease.
(a) An advertisement that promotes a consumer lease and contains the amount of any payment or that contains either a statement of any capitalized cost reduction or other payment or a statement that no payment is required at consummation or prior to consummation or delivery, if delivery occurs after consummation, must clearly and conspicuously include the following:
(1) that the transaction advertised is a vehicle lease;
(2) the total amount due at consummation or prior to consummation or delivery, if delivery occurs after consummation;
(3) the number, amount, and due date or period of scheduled payments under the vehicle lease;
(4) a statement of whether a security deposit is required; and
(5) a statement that an extra charge may be imposed at the end of the vehicle lease term where the lessee's liability, if any, is based on the difference between the residual value of the leased property and its realized value at the end of the vehicle lease term.
(b) Except for a periodic payment, a reference to a charge described in subsection (a)(2) of this section cannot be more prominently advertised than the disclosure of the total amount due at vehicle lease signing or delivery.
(c) Except for disclosures of limitations on rate information,
if a percentage rate is advertised, that rate shall not be more prominently
advertised than any other disclosure or deal term [of
the following disclosures in the advertisement].
[(1) Description of payments.]
[(2) Amount due at vehicle lease signing or delivery.]
[(3) Payment schedule and total amount of periodic payments.]
[(4) Other itemized charges that are not included in the periodic payment. These charges include the amount of any liability that the vehicle lease imposes upon the lessee at the end of the vehicle lease term.]
[(5) Total number of payments.]
[(6) Payment calculation, including:]
[(A) gross capitalized cost;]
[(B) capitalized cost reduction;]
[(C) adjusted capitalized cost;]
[(D) residual value;]
[(E) depreciation and any amortized amounts;]
[(F) rent charge;]
[(G) total of base periodic payments;]
[(H) vehicle lease term;]
[(I) base periodic payment;]
[(J) itemization of other charges that are a part of the periodic payment; and]
[(K) total periodic payment.]
[(7) Early termination conditions and disclosure of charges.]
[(8) Maintenance responsibilities.]
[(9) Purchase option.]
[(10) Statement referencing nonsegregated disclosures.]
[(11) Liability between residual and realized values.]
[(12) Right of appraisal.]
[(13) Liability at the end of the vehicle lease term based on residual value.]
[(14) Fees and taxes.]
[(15) Insurance.]
[(16) Warranties or guarantees.]
[(17) Penalties and other charges for delinquency.]
[(18) Security interest.]
(d) If a vehicle lessor provides a percentage rate in an advertisement, a notice stating "this percentage may not measure the overall cost of financing this lease" shall accompany the rate disclosure. The vehicle lessor shall not use the terms "annual percentage rate," "annual lease rate," or any equivalent terms in any advertisement containing a percentage rate.
(e) A multi-page advertisement that provides a table or schedule of the required disclosures is considered a single advertisement, provided that for vehicle lease terms appearing without all of the required disclosures, the advertisement refers to the page or pages on which the table or schedule appears.
(f) A merchandise tag stating any item listed in subsection
(a) of this section must comply with subsection (a)[(1) - (5)]
of this section by referring to a sign or to a display prominently
posted in the vehicle lessor's place of business. The sign or display
must contain a table or schedule of the required disclosures under
subsection (a)[(1) - (5)].
(g) An advertisement made through television or radio stating any item listed in subsection (a) of this section, must include the following statements:
(1) that the transaction advertised is a vehicle lease;
(2) the total amount due at consummation or due prior to consummation or delivery, if delivery occurs after consummation; and
(3) the number, amount, and due date or period of scheduled payments under the vehicle lease.
(h) In addition to the requirements of subsection (g)[(1) - (3)] of this section, an advertisement made through television
or radio stating any item listed in subsection (a) of this section, must:
(1) provide a toll-free telephone number along with a statement that the telephone number may be used by consumers to obtain the information in subsection (a) of this section; or
(2) direct the consumer to a written advertisement in a publication of general circulation in the community served by the media station, including the name and the date of the publication, with a statement that the required disclosures in subsection (a) of this section are included in the advertisement.
(i) The toll-free telephone number required by subsection (h)(1) of this section shall be available for at least 10 days, beginning on the date of the broadcast. Upon request, the vehicle lessor shall provide the information in subsection (a) of this section orally or in writing.
(j) The written advertisement required by subsection (h)(2) of this section shall be published beginning at least three days before the broadcast and ending at least 10 days after the broadcast.
§215.268.Bankruptcy and Liquidation Sales.
A person who advertises a liquidation sale, auction sale, or
going out of business sale shall state the correct name and permanent
address of the [owner of the] business in the advertisement.
The phrases "going out of business," "closing out," "shutting doors
forever," "bankruptcy sale," "foreclosure," "bankruptcy," or similar
phrases or words indicating that a business [an enterprise
] is ceasing operation [business] shall
not be used unless the business is closing its operations and follows
the procedures required by Business and Commerce Code, Chapter 17,
Subchapter F.
§215.270.Enforcement.
(a) The department may file a Notice of Department Decision against a license holder alleging a violation of an advertising provision pursuant to Occupations Code, §2301.203, provided the department can show:
(1) that the license holder who allegedly violated an advertising provision has received from the department a notice of an opportunity to cure the violation by certified mail, return receipt requested, in compliance with subsection (b) of this section; and
(2) that the license holder committed a subsequent violation of the same advertising provision.
(b) An effective notice of an opportunity to cure issued under subsection (a)(1) of this section must:
(1) state that the department has reason to believe that the license holder violated an advertising provision and must identify the provision;
(2) set forth the facts upon which the department bases its allegation of a violation; and
(3) state that if the license holder commits a subsequent
violation of the same advertising provision, the department will [formally
] file a Notice of Department Decision under §224.56
of this title (relating to Notice of Department Decision).
(c) As a part of the cure procedure, the department may require a license holder who allegedly violated an advertising provision to publish a retraction notice to effect an adequate cure of the alleged violation. A retraction notice must:
(1) appear in a newspaper of general circulation in the area in which the alleged violation occurred;
(2) appear in the portion of the newspaper devoted to motor vehicle advertising, if any;
(3) identify the date and the medium of publication, print, electronic, or other, in which the advertising alleged to be a violation appeared; and
(4) identify the alleged violation of the advertising provision and contain a statement of correction.
(d) A cure is made solely for the purpose of settling an allegation and is not an admission of a violation of these rules; Occupations Code, Chapter 2301; or other law.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304791
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes repeals to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes repeals under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These repeals would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.201.Purpose and Scope.
§215.202.Filing of Complaints.
§215.203.Review of Complaints.
§215.204.Notification to Manufacturer, Converter, or Distributor.
§215.205.Mediation; Settlement.
§215.206.Hearings.
§215.207.Contested Cases: Final Orders.
§215.208.Lemon Law Relief Decisions.
§215.209.Incidental Expenses.
§215.210.Compliance with Order Granting Relief.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304790
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes amendments to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes amendments under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These amendments would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.500.Administrative Sanctions [and Procedures].
[(a)] An administrative sanction may include:
(1) denial of an application for a license;
(2) suspension of a license;
(3) revocation of a license;
(4) the imposition of civil penalties; or
(5) a refund under §215.504 of this title ( relating
to Buyer [concerning buyer] or Lessee Refund [lessee
refund]).
[(b) The department shall issue and
mail a Notice of Department Decision to a license applicant, license
holder, or other person by certified mail, return receipt requested,
to the last known address upon a determination under Occupations Code,
Chapters 2301 and 2302 or Transportation Code, Chapter 503 that:]
[(1) an application for a license should be denied; or]
[(2) administrative sanctions should be imposed.]
[(c) The last known address of a license applicant, license holder, or other person is the last mailing address provided to the department when the license applicant applies for its license, when a license holder renews its license, or when the license holder notifies the department of a change in the license holder's mailing address.]
[(d) The Notice of Department Decision shall include:]
[(1) a statement describing the department decision and the effective date;]
[(2) a description of each alleged violation;]
[(3) a description of each administrative sanction being adopted;]
[(4) a statement regarding the legal basis for each administrative sanction;]
[(5) a statement regarding the license applicant, license holder, or other person's right to request a hearing;]
[(6) the procedure to request a hearing, including the deadline for filing; and]
[(7) notice to the license applicant, license holder, or other person that the adopted decision and administrative sanctions in the Notice of Department Decision will become final on the date specified if the license applicant, license holder, or other person fails to timely request a hearing.]
[(e) The license applicant, license holder, or other person must submit, in writing, a request for a hearing under this section. The department must receive a request for a hearing within 26 days of the date of the Notice of Department Decision.]
[(f) If the department receives a timely request for a hearing, the department will set a hearing date and give notice to the license applicant, license holder, or other person of the date, time, and location of the hearing.]
[(g) If the license applicant, license holder, or other person does not make a timely request for a hearing or enter into a settlement agreement within 27 days of the date of the Notice of Department Decision, the department decision becomes final.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304793
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§215.301 - 215.303, 215.305 - 215.308, 215.310, 215.311, 215.314 - 215.317
STATUTORY AUTHORITY. The department proposes repeals to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, § §503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes repeals under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These repeals would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.301.Purpose and Scope.
§215.302.Conformity with Statutory Requirements.
§215.303.Application of Board and SOAH Rules.
§215.305.Filing of Complaints, Protests, and Petitions; Mediation.
§215.306.Referral to SOAH.
§215.307.Notice of Hearing.
§215.308.Reply to Notice of Hearing and Default Proceedings.
§215.310.Issuance of Proposals for Decision and Orders.
§215.311.Amicus Briefs.
§215.314.Cease and Desist Orders.
§215.315.Statutory Stay.
§215.316.Informal Disposition.
§215.317.Motion for Rehearing.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304792
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§215.501, 215.502, 215.505
STATUTORY AUTHORITY. The department proposes repeals to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, § §503.0626, 503.0631, and 503.0632 which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.
The department also proposes repeals under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These repeals would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§215.501.Final Decisions and Orders; Motions for Rehearing.
§215.502.Judicial Review of Final Order.
§215.505.Denial of Dealer or Converter Access to Temporary Tag System.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304794
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
SUBCHAPTER B. MOTOR VEHICLE REGISTRATION
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes to amend 43 Texas Administrative Code (TAC) Subchapter B, Motor Vehicle Registration, §217.56 concerning vehicle registration reciprocity agreements. The amendments are necessary to incorporate by reference the current edition of the International Registration Plan (IRP) dated January 1, 2022. The amendments are also necessary to clarify language, to make the terminology consistent with other department rules, to delete certain language regarding the process for an appeal under §217.56, and to refer to proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure) for an appeal of the department's decision against a vehicle registrant regarding an assessment, cancellation, or revocation under §217.56. In this issue of the Texas Register, the department is proposing new Chapter 224, which would include all department adjudicative practice and procedure rules.
EXPLANATION.
Proposed amendments to §217.56(c)(2)(B) would incorporate by reference the current edition of IRP dated January 1, 2022. Texas is bound by IRP, which is a vehicle registration reciprocity agreement between the 48 contiguous states, the District of Columbia, and the Canadian provinces. Section 217.56 must incorporate the latest edition of IRP because it contains language regarding the nature and requirements of vehicle registration under IRP. Texas is a member of IRP, as authorized by Transportation Code, §502.091 and 49 U.S.C. §31704, and must comply with the current edition of IRP. The jurisdictions that are members of IRP amended the January 1, 2021, edition of IRP as follows to create the January 1, 2022, edition: added Section 601 (Uploading Data to the Repository), amended Section 1505 (Amendment Introduction Process), amended Section 1515 (Ballot Process), and amended Section 1520 (Effective Date of Plan Amendments).
A proposed amendment to §217.56(c)(2)(J) would replace the current catch line for subparagraph (J) to provide a better description of the contents of subparagraph (J). A proposed amendment to §217.56(c)(2)(J)(ii) would change the word "ruling" to "decision" to be consistent with other department rules. Proposed amendments to §217.56(c)(2)(J)(iii) would reference proposed new §224.122 of this title (relating to Appeal of Decision Regarding Assessment, Cancellation, or Revocation Under §217.56), which would prescribe the requirements for a vehicle registrant that wants to appeal a decision against the registrant under subparagraph (J) of an assessment (a financial penalty under §217.56(c)(2)(G)) or a cancellation or revocation of the registrant's apportioned registration under IRP. Proposed amendments to §217.56(c)(2)(J)(iii) would also add a citation to Transportation Code, Chapter 502 and proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure), which would govern an appeal under subparagraph (J). In addition, proposed amendments would delete language regarding the procedure for an appeal under current subparagraph (J), including the procedures under Chapter 206, Subchapter D of this title (relating to Procedures in Contested Cases). In this issue of the Texas Register, the department is proposing amendments that would repeal Subchapter D of Chapter 206 and replace it with provisions in proposed new Chapter 224.
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Jimmy Archer, Director of the Motor Carrier Division (MCD), has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Mr. Archer has also determined that, for each year of the first five years the amended section is in effect, there are two anticipated public benefits regarding the amendments.
Anticipated Public Benefits. One public benefit anticipated as a result of the proposal is an updated rule that references the current edition of IRP. IRP governs the department's issuance of apportioned registration under IRP, so the public might need to know the current edition of IRP to review the provisions in IRP. Another public benefit is the deletion of language regarding the procedure for an appeal under current §217.56(c)(2)(J). The department's proposed new Chapter 224 would contain language regarding the adjudicative practice and procedure for all of the department's contested cases, including an appeal under §217.56(c)(2)(J). Chapter 224 would provide more information for a registrant who wants to file an appeal under §217.56(c)(2)(J), in addition to providing more clarity and consistency regarding the department's adjudicative practice and procedure for all contested cases.
Anticipated Costs To Comply With The Proposal. Mr. Archer anticipates that there will be no costs to comply with these amendments.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendments will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the amendments to the January 1, 2022, edition of IRP do not directly impact registrants under IRP.
Also, the amendments regarding an appeal under §217.56(c)(2)(J) only apply if the registrant chooses to appeal an assessment or a proposed cancellation or revocation of the registrant's apportioned registration under IRP. In addition, the proposed amendments would not change the fact that the contested case procedures and requirements are primarily governed by Government Code, Chapter 2001 and 1 TAC Chapter 155, which are the rules of procedure for the State Office of Administrative Hearings (SOAH). Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed amendments do not create a new regulation; however, they technically enable the expansion of an existing regulation regarding the department's adjudicative practice and procedure. The proposed amendments to §217.56(c)(2)(J) enable the department's proposed new Chapter 224 to govern the adjudicative practice and procedure under §217.56(c)(2)(J), which results in more detailed requirements and clarity. Lastly, the proposed amendments do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.
REQUEST FOR PUBLIC COMMENT.
If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
STATUTORY AUTHORITY.
The department proposes amendments to §217.56 under Transportation Code, §§502.091(b), 502.0021, and 1002.001; and Government Code, §2001.004 and §2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §502.091(b) authorizes the department to adopt and enforce rules to carry out IRP. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §1002.001 authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These proposed revisions would implement Transportation Code, Chapter 502, and Government Code, Chapter 2001.
§217.56.Registration Reciprocity Agreements.
(a) Purpose. To promote and encourage the fullest possible use of the highway system and contribute to the economic development and growth of the State of Texas and its residents, the department is authorized by Transportation Code, §502.091 to enter into agreements with duly authorized officials of other jurisdictions, including any state of the United States, the District of Columbia, a foreign country, a state or province of a foreign country, or a territory or possession of either the United States or of a foreign country, and to provide for the registration of vehicles by Texas residents and nonresidents on an allocation or distance apportionment basis, and to grant exemptions from the payment of registration fees by nonresidents if the grants are reciprocal to Texas residents.
(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise:
(1) Cab card--The apportioned vehicle registration receipt that contains, but is not limited to, the vehicle description and the registered weight at which the vehicle may operate in each jurisdiction.
(2) Department--The Texas Department of Motor Vehicles.
(3) Director--The director of the Motor Carrier Division, Texas Department of Motor Vehicles.
(4) Executive director--The chief executive officer of the department.
(5) Regional Service Center--A department office which provides specific services to the public, including replacement titles, bonded title rejection letters, and apportioned registration under the International Registration Plan (IRP).
(6) Temporary cab card--A temporary registration permit authorized by the department that allows the operation of a vehicle for 30 days subject to all rights and privileges afforded to a vehicle displaying apportioned registration.
(c) Multilateral agreements.
(1) Authority. The executive director may on behalf of the department enter into a multilateral agreement with the duly authorized officials of two or more other jurisdictions to carry out the purpose of this section.
(2) International Registration Plan.
(A) Applicability. The IRP is a registration reciprocity agreement among states of the United States and other jurisdictions providing for payment of registration fees on the basis of fleet distance operated in various jurisdictions. Its purpose is to promote and encourage the fullest possible use of the highway system by authorizing apportioned registration for commercial motor vehicles and payment of appropriate vehicle registration fees and thus contributing to the economic development and growth of the member jurisdictions.
(B) Adoption. The department adopts by reference the
January 1, 2022, [2021] edition of the IRP.
The department also adopts by reference the January 1, 2016, edition
of the IRP Audit Procedures Manual. In the event of a conflict between
this section and the IRP or the IRP Audit Procedures Manual, the IRP
and the IRP Audit Procedures Manual control. Copies of the documents
are available for review in the Motor Carrier Division, Texas Department
of Motor Vehicles. Copies are also available on request.
(C) Application.
(i) An applicant must submit an application to the department on a form prescribed by the director, along with additional documentation as required by the director. An applicant shall provide the department with a copy of the applicant's receipt under the Unified Carrier Registration System Plan and Agreement under 49 U.S.C. §14504a (UCR) to prove the applicant is currently registered under UCR if the applicant is required to register under UCR.
(ii) Upon approval of the application, the department will compute the appropriate registration fees and notify the registrant.
(D) Fees. Upon receipt of the applicable fees in the form as provided by §209.23 of this title (relating to Methods of Payment), the department will issue one or two license plates and a cab card for each vehicle registered.
(E) Display of License Plates and Cab Cards.
(i) The department will issue one license plate for a tractor, truck-tractor, trailer, and semitrailer. The license plate issued to a tractor or a truck-tractor shall be installed on the front of the tractor or truck-tractor, and the license plate issued for a trailer or semitrailer shall be installed on the rear of the trailer or semitrailer.
(ii) The department will issue two license plates for all other vehicles that are eligible to receive license plates under the IRP. Once the department issues two license plates for a vehicle listed in this clause, one plate shall be installed on the front of the vehicle, and one plate shall be installed on the rear of the vehicle.
(iii) The cab card shall be carried at all times in the vehicle in accordance with the IRP. If the registrant chooses to display an electronic image of the cab card on a wireless communication device or other electronic device, such display does not constitute consent for a peace officer, or any other person, to access the contents of the device other than the electronic image of the cab card.
(iv) The authority to display an electronic image of the cab card on a wireless communication device or other electronic device does not prevent the Texas State Office of Administrative Hearings or a court of competent jurisdiction from requiring the registrant to provide a paper copy of the cab card in connection with a hearing, trial, or discovery proceeding.
(F) Audit. An audit of the registrant's vehicle operational records may be conducted by the department according to the IRP provisions and the IRP Audit Procedures Manual. Upon request, the registrant shall provide the operational records of each vehicle for audit in unit number order, in sequence by date, and including, but not limited to, a summary of distance traveled by each individual vehicle on a monthly, quarterly, and annual basis with distance totaled separately for each jurisdiction in which the vehicle traveled.
(G) Assessment. The department may assess additional registration fees of up to 100% of the apportionable fees paid by the registrant for the registration of its fleet in the registration year to which the records pertain, as authorized by the IRP, if an audit conducted under subparagraph (F) of this paragraph reveals that:
(i) the operational records indicate that the vehicle did not generate interstate distance in two or more member jurisdictions for the distance reporting period supporting the application being audited, plus the six-month period immediately following that distance reporting period;
(ii) the registrant failed to provide complete operational records; or
(iii) the distance must be adjusted, and the adjustment results in a shortage of registration fees due Texas or any other IRP jurisdiction.
(H) Refunds. If an audit conducted under subparagraph (F) of this paragraph reveals an overpayment of fees to Texas or any other IRP jurisdiction, the department will refund the overpayment of registration fees in accordance with Transportation Code, §502.195 and the IRP. Any registration fees refunded to a carrier for another jurisdiction will be deducted from registration fees collected and transmitted to that jurisdiction.
(I) Cancellation or revocation. The director or the director's designee may cancel or revoke a registrant's apportioned registration and all privileges provided by the IRP as authorized by the following:
(i) the IRP; or
(ii) Transportation Code, Chapter 502.
(J) Procedures for assessment, cancellation, or
revocation. [Enforcement of cancelled or revoked registration.]
(i) Notice. If a registrant is assessed additional registration fees, as provided in subparagraph (G) of this paragraph, and the additional fees are not paid by the due date provided in the notice or it is determined that a registrant's apportioned license plates and privileges should be canceled or revoked, as provided in subparagraph (I) of this paragraph, the director or the director's designee will mail a notice by certified mail to the last known address of the registrant. The notice will state the facts underlying the assessment, cancellation, or revocation; the effective date of the assessment, cancellation, or revocation; and the right of the registrant to request a conference as provided in clause (ii) of this subparagraph.
(ii) Conference. A registrant may request a conference
upon receipt of a notice issued as provided by clause (i) of this
subparagraph. The request must be made in writing to the director
or the director's designee within 30 days of the date of the notice.
If timely requested, the conference will be scheduled and conducted
by the director or the director's designee at division headquarters
in Austin and will serve to abate the assessment, cancellation, or
revocation unless and until that assessment, cancellation, or revocation
is affirmed or disaffirmed by the director or the director's designee.
In the event matters are resolved in the registrant's favor, the director
or the director's designee will mail the registrant a notice of withdrawal,
notifying the registrant that the assessment, cancellation, or revocation
is withdrawn, and stating the basis for that action. In the event
matters are not resolved in the registrant's favor, the director or
the director's designee will issue a decision [ruling]
reaffirming the department's assessment of additional registration
fees or cancellation or revocation of apportioned license plates and
privileges. The registrant has the right to appeal in accordance with
clause (iii) of this subparagraph.
(iii) Appeal. If a conference held in accordance with
clause (ii) of this subparagraph fails to resolve matters in the registrant's
favor, the registrant may submit an appeal under §224.122
of this title (relating to Appeal of Decision Regarding Assessment,
Cancellation, or Revocation Under §217.56). An appeal will be
governed by Transportation Code, Chapter 502 and Chapter 224 of this
title (relating to Adjudicative Practice and Procedure). [request
an administrative hearing. The request must be in writing and must
be received by the director no later than the 20th day following the
date of the ruling issued under clause (ii) of this subparagraph.
If requested within the designated period, the hearing will be initiated
by the department and will be conducted in accordance with Chapter
206, Subchapter D of this title (relating to Procedures in Contested
Cases). Assessment, cancellation, or revocation is abated unless and
until affirmed or disaffirmed by order of the Board of the Texas Department
of Motor Vehicles or its designee.]
(K) Reinstatement.
(i) The director or the director's designee will reinstate apportioned registration to a previously canceled or revoked registrant if all applicable fees and assessments due on the previously canceled or revoked apportioned account have been paid and the applicant provides proof of an acceptable recordkeeping system for a period of no less than 60 days.
(ii) The application for the following registration year will be processed in accordance with the provisions of the IRP.
(L) Denial of apportioned registration for safety reasons. The department will comply with the requirements of the Performance and Registration Information Systems Management program (PRISM) administered by the Federal Motor Carrier Safety Administration (FMCSA).
(i) Denial or suspension of apportioned registration. Upon notification from the FMCSA that a carrier has been placed out of service for safety violations, the department will:
(I) deny initial issuance of apportioned registration;
(II) deny authorization for a temporary cab card, as provided for in subparagraph (M) of this paragraph;
(III) deny renewal of apportioned registration; or
(IV) suspend current apportioned registration.
(ii) Issuance after denial of registration or reinstatement of suspended registration. The director or the director's designee will reinstate or accept an initial or renewal application for apportioned registration from a registrant who was suspended or denied registration under clause (i) of this subparagraph upon presentation of a Certificate of Compliance from FMCSA, in addition to all other required documentation and payment of fees.
(M) Temporary cab card.
(i) Application. The department may authorize issuance of a temporary cab card to a motor carrier with an established Texas apportioned account for a vehicle upon proper submission of all required documentation, a completed application, and all fees for either:
(I) Texas title as prescribed by Transportation Code, Chapter 501 and Subchapter A of this chapter (relating to Motor Vehicle Titles); or
(II) registration receipt to evidence title for registration purposes only (Registration Purposes Only) as provided for in Transportation Code, §501.029 and §217.24 of this title (relating to Vehicle Last Registered in Another Jurisdiction).
(ii) Title application. A registrant who is applying for a Texas title as provided for in clause (i)(I) of this subparagraph and is requesting authorization for a temporary cab card, must submit to a Regional Service Center a photocopy of the title application receipt issued by the county tax assessor-collector's office.
(iii) Registration Purposes Only. A registrant who is applying for Registration Purposes Only under clause (i)(II) of this subparagraph and is requesting authorization for a temporary cab card, must submit an application and all additional original documents or copies of original documents required by the director to a Regional Service Center.
(iv) Department approval. On department approval of the submitted documents, the department will send notice to the registrant to finalize the transaction and make payment of applicable registration fees.
(v) Finalization and payment of fees. To finalize the transaction and print the temporary cab card, the registrant may compute the registration fees through the department's apportioned registration software application, TxIRP system, and:
(I) make payment of the applicable registration fees to the department as provided by §209.23 of this title; and
(II) afterwards, mail or deliver payment of the title application fee in the form of a check, certified cashier's check, or money order payable to the county tax assessor-collector in the registrant's county of residency and originals of all copied documents previously submitted.
(vi) Deadline. The original documents and payment must be received by the Regional Service Center within 72-hours after the time that the office notified the registrant of the approval to print a temporary cab card as provided in clause (iv) of this subparagraph.
(vii) Failure to meet deadline. If the registrant fails to submit the original documents and required payment within the time prescribed by clause (vi) of this subparagraph, the registrant's privilege to use this expedited process to obtain a temporary cab card will be denied by the department for a period of six months from the date of approval to print the temporary cab card.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304813
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code §217.63, concerning Digital License Plate Fees and Payment. These amendments implement Transportation Code §504.154.
EXPLANATION.
Since the digital license plate program began in 2020, digital license plate sales volume has not met the department's estimated targets. This has resulted in the department being unable to cover the administrative costs associated with the program through digital license plate fees, as it is required to do under Texas Transportation Code, §504.154(d)(2). The department has received feedback from stakeholders that the administrative fee associated with the digital license plate is too high and does not incentivize Texans to adopt the new digital license plate technology. To address these concerns, the department proposes an amendment to §217.63(a)(1) to reduce the digital license plate administrative fee from $95 to $45. This fee reduction would provide an incentive for customers to choose a digital license plate over another type of specialty plate, which would result in the issuance of more digital license plates. Increased sales of digital license plates would allow the department to recoup the costs of administering the digital license plate program more quickly than it will be able to achieve while relying on the current fees from slow sales of very few plates. The proposed amendment to §217.63(a)(1) would also streamline the description of how the administrative fee is paid to more accurately reflect current practice.
The proposed amendments to §217.63(a)(2) clarify that the registration period of the digital license plate will be aligned with the vehicle registration period, and that the initial administrative fee will be prorated based on the remaining registration period. These proposed amendments would not change the meaning of the provision but would make it less confusing for the reader. The proposed amendment to §217.63(b) clarifies the purpose of the rule by amending the subsection title and language. The proposed amendment to §217.63(b)(2) corrects the description of the payment process for digital license plate fees to clarify that the fees for issuance of digital license plates are paid directly to the state through the digital license plate provider and state systems, in accordance with current practices.
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years these rules will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. There have been fewer than 10 digital license plates issued to Texas vehicles since the program began in 2020, so a change in the fee revenue created from their issuance and renewal is not expected to create a significant fiscal impact. Annette Quintero, Director of the Vehicle Titles and Registration (VTR) Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Ms. Quintero has also determined that, for each year of the first five years the amended and new section is in effect, there are public benefits anticipated from the administrative fee reduction for digital license plates.
Anticipated Public Benefits. The public benefits anticipated as a result of the proposal include a reduction in the cost of digital license plates to the public. Additionally, since digital license plates can serve as screens to broadcast emergency alerts including public safety alerts issued by governmental entities, the proposed rules have an anticipated public benefit of increasing the number of digital license plates on Texas roads that can serve to enhance public awareness of emergency alerts like Amber Alerts, Silver Alerts, and Blue Alerts.
Anticipated Costs to Comply with the Proposal. Ms. Quintero anticipates that there will be no significant costs to comply with these rules because no one is required to buy a digital license plate and because the proposal reduces the administrative fees associated with digital license plates.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code §2006.002(c), the department has determined that the amended section will not have an adverse economic impact on small businesses, micro businesses, and rural communities because there are no anticipated economic costs for persons required to comply. The department has determined that there will be no adverse economic impact on rural communities as a result of the proposal. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code §2006.002.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that for each year of the first five years the proposed amendments are in effect, the proposed rules will not create or eliminate a government program; will not require the creation of new employee positions or the elimination of existing employee positions; will not require an increase or decrease in future legislative appropriations to the department; will not create new regulations or expand existing regulations; will not repeal, expand, or limit existing regulations; will not expand or limit the number of individuals subject to the rule's applicability; and will not either positively or negatively impact the Texas economy. The department has determined that for each year of the first five years the proposed amendments are in effect, they may create a decrease in fees the department receives if the number of digital license plates does not increase as expected. On the other hand, if the sales volume of digital license plates increases significantly as a result of the reduced digital license plate fees during each year of the first five years the proposed amendments are in effect, the proposed rules may create an increase in total fees paid to the department.
REQUEST FOR PUBLIC COMMENT. If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
STATUTORY AUTHORITY. The amendments and new sections are proposed under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and more specifically, Transportation Code, §§504.151-504.157, which authorize digital license plates while giving the department rulemaking authority to implement the statutory provisions including setting specifications and requirements for digital license plates and establishing a fee.
CROSS REFERENCE TO STATUTE. The amendment implements Transportation Code, §§504.151-504.157.
§217.63.Digital License Plate Fees and Payment.
(a) Fees.
(1) A person issued a digital license plate must pay
an administrative fee of $45 [$95 to the digital license
plate provider] upon initial application for a digital license
plate[,] and [to the county tax-assessor collector
or the department, as applicable, ] on renewal of registration
for a vehicle with a digital license plate.
(2) The registration period [expiration
date] of the digital license plate will be aligned with the
registration period for the vehicle and the administrative
fee due under subsection (a) [of this section] will be prorated
[adjusted] to yield the appropriate fee based
on the remaining registration period.
(3) A digital license plate administrative fee will be refunded only when registration fees are overcharged under Transportation Code, §502.195.
(b) Payment of fees.
(1) All state, county, local, and other applicable fees are due at the time of registration of a vehicle with a digital license plate.
(2) The fees for issuance of digital license plates
will be paid directly to the state through the digital license plate
provider and state systems. [Digital license plate providers
that have received the administrative fee under subsection (a) must
submit payment of the administrative fee due in full to the department
upon receipt of an application for a digital license plate.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304815
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Subchapter B, Motor Carrier Registration, §218.10 and §218.16; Subchapter C, Records and Inspections, §218.33; Subchapter E, Consumer Protection, §218.64; and Subchapter F, Enforcement, §§218.70, 218.71 and 218.72. These amendments are necessary to delete language regarding adjudicative practice and procedure and to refer to proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure). In this issue of the Texas Register, the department proposes new Chapter 224, which would include all department adjudicative practice and procedure rules in one chapter. These amendments are also necessary to make the terminology consistent with statute and current practice, and to implement House Bill (HB) 2190 enacted during the 88th Texas Legislature, Regular Session (2023), which changed the word "accident" to "collision" in Transportation Code, §643.105. The department is also proposing the repeal of 43 TAC Subchapter F, Enforcement, §§218.73, 218.75, 218.76, 218.77, and 218.78, because those provisions would be incorporated into proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure).
EXPLANATION.
A proposed amendment to §218.10 would replace the word "accident" with "accidental" to be consistent with the terminology in Transportation Code, §643.106.
A proposed amendment to §218.16(d)(6) would replace the reference to orders issued or adopted by the department regarding self-insured status with a reference to the department's approval letter. When the department grants an applicant self-insured status under §218.16(d) and Transportation Code, §643.102, it issues an approval letter that contains the scope and terms of the approval, including maintenance requirements. A proposed amendment to §218.16(d) would also clarify the scope of the reasons for which self-insured status could be revoked by referring to the applicable requirements under §218.16, instead of the requirements under §218.16(d)(6). In addition, a proposed amendment to §218.16(d)(6) would refer to proposed new Chapter 224 for the revocation of self-insured status.
Proposed amendments to §218.16(d)(7) would delete reference to revocation of self-insured status and modify the catch line to indicate this change because revocations are addressed in §218.16(d)(6). Revocations would be treated differently than a denial of an application for self-insured status under proposed new Chapter 224. Government Code, §2001.054 authorizes this distinction between the two actions and the applicable procedures. Proposed amendments to §218.16(d)(7) would also reference proposed new §224.126 of this title (relating to Appeal of a Denial of Self-Insured Status) regarding the filing of an appeal of a denial of an application for self-insured status, and clarify that the applicant would file an appeal, rather than a petition for an administrative hearing. In addition, a proposed amendment to §218.16(d)(7) would replace the reference to "self-insurance status" with a reference to "self-insured status" to be consistent with the terminology in §218.16(d). Further, a proposed amendment to §218.16(d)(7) would delete the reference to Chapter 206, Subchapter D of this title (relating to Procedures in Contested Cases). In this issue of the Texas Register, the department is proposing amendments which would repeal Subchapter D of Chapter 206 and replace it with provisions in proposed new Chapter 224.
A proposed amendment to §218.16(h) would replace the word "accidents" with "collisions" to implement HB 2190, which changed the word "accident" to "collision" in Transportation Code, §643.105.
A proposed amendment to §218.33 would replace the reference to Subchapter F of Chapter 218 with a reference to proposed new Chapter 224, which would include all department adjudicative practice and procedure rules in one chapter.
Proposed amendments to §218.64(c)(7) would delete language regarding the current procedure for non-approval of a collective ratemaking agreement under Transportation Code, §643.154. Proposed amendments would replace the language with a new procedure that would be governed by proposed new Chapter 224. Department staff do not recall having any hearings regarding the rejection of a collective ratemaking agreement, which may be because the requirements for an acceptable collective ratemaking agreement are minimal. The proposed deletions in §218.64(c)(7) would provide for greater flexibility in the procedure for these cases and would make the procedure consistent with Transportation Code, §643.154 and other contested cases under Transportation Code, Chapter 643 to the extent applicable.
A proposed amendment to the heading for Subchapter F of Chapter 218 would make the heading consistent with the proposed amendments and repeals in Subchapter F that would change the scope of the subchapter. Proposed amendments to §218.70 would make the section consistent with the proposed amendments to and repeals of sections within Subchapter F. In addition, proposed amendments to §218.70 would reference the assessment of civil penalties in certain cases under federal law regarding the interstate movement of household goods under current §218.71(c). A proposed amendment to §218.70 would also state that the enforcement actions under Chapter 218 are governed by Transportation Code, Chapters 643 and 645; and proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure).
A proposed amendment to §218.70 would delete reference to Transportation Code, Chapter 648 regarding foreign commercial motor transportation because the department enforces the insurance requirements under Transportation Code, Chapter 643, rather than Chapter 648. Transportation Code, §643.101(b) requires the department by rule to set the amount of liability insurance required for a motor carrier at an amount that does not exceed the amount required under a federal regulation adopted under 49 U.S.C. §13906(a)(1). The insurance requirements in 49 C.F.R. Part 387 were adopted under 49 U.S.C. §13906. The department adopted the insurance requirements under Subchapter G of Chapter 218 under Transportation Code, §643.101(b). Also, Chapter 648 does not provide enforcement authority for the department; however, Transportation Code, Chapter 643 provides the department with enforcement authority, such as §§643.251, 643.252, 643.2525, 643.254, and 643.256.
Proposed amendments to §218.71 would delete subsections (b) and (d). In this issue of the Texas Register, the department is proposing new Chapter 224, which would include new §224.115 of this title (relating to Administrative Penalty Assessment and Probation of Suspension), which would contain the language found in current §218.71(b). Chapter 224 would also include new §224.116 of this title (relating to Administrative Proceedings), which would contain a modified version of the language the department proposes to delete from §218.71(d). A proposed amendment to §218.71 would re-letter subsection (c) due to the deletion of current subsection (b).
Proposed amendments to §218.72(a) would add language regarding the department's authority to deny a certificate of registration to a motor carrier under Transportation Code, §643.252, as well as the department's authority to place on probation a motor carrier whose registration is suspended. Proposed amendments to §218.72 would also delete subsection (c) and re-letter current subsection (c) to subsection (d). In this issue of the Texas Register, the department is proposing new Chapter 224, which would include new §224.115 of this title (relating to Administrative Penalty Assessment and Probation of Suspension), which would contain a modified version of the language found in current §218.72(c) regarding the probation of any suspension ordered under Transportation Code, §643.252.
Proposed amendments would repeal the following sections: §§218.73, 218.75, 218.76, 218.77, and 218.78. In this issue of the Texas Register, the department is proposing new Chapter 224, which would include the language in these sections with some modifications. Current §218.73 would be addressed in proposed new §224.116 of this title (relating to Administrative Proceedings), current §218.75 would be addressed in proposed new §224.31 of this title (relating to Cost of Record on Appeal), current §218.76 would be addressed in proposed new §224.120 of this title (relating to Registration Suspension Ordered Under Family Code), current §218.77 would be addressed in proposed new §224.114 of this title (relating to Cease and Desist Order), and current §218.78 would be addressed in proposed new §224.124 of this title (relating to Appeal of a Denial Under Transportation Code, §643.2526).
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments and repeals will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Jimmy Archer, Director of the Motor Carrier Division, has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Mr. Archer has also determined that, for each year of the first five years the amended and repealed sections are in effect, there are two anticipated public benefits regarding the amendments and repeals.
Anticipated Public Benefits. One anticipated public benefit as a result of the proposal is updated rules that would contain terminology that is consistent with statute and current practice. Another public benefit is that the repeal of language regarding adjudicative practice and procedure in Chapter 218 in conjunction with the department's proposal of new Chapter 224 would consolidate all of the department's rules regarding adjudicative practice and procedure in one chapter that provides more clarity, consistency regarding adjudicative practice and procedure, and consistency with statute.
Anticipated Costs To Comply With The Proposal. Mr. Archer anticipates that there will be no costs to comply with these rules.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendments and repeals will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the changes are not sufficient to create an adverse economic effect. The department's current Chapter 218 rules regarding adjudicative practice and procedure are proposed to be repealed, in conjunction with adding most of the repealed rule text to the proposed new Chapter 224 with some minor modifications, including modifications to make the rule text consistent with statute. In addition, the proposed amendments would not change the fact that the contested case procedures and requirements are primarily governed by Government Code, Chapter 2001 and 1 TAC Chapter 155, which are the rules of procedure for the State Office of Administrative Hearings (SOAH). Further, the proposed amendments would not change the fact that Transportation Code, Chapter 643 imposes certain requirements for a contested case under Chapter 643, such as the requirements in Transportation Code, §643.2525. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments and repeals are in effect, no government program would be created or eliminated. Implementation of the proposed amendments and repeals would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed amendments and repeals do not create a new regulation; however, they technically enable the expansion of an existing regulation regarding the department's adjudicative practice and procedure. The proposed amendments and repeals in Chapter 218 enable the department's proposed new Chapter 224 to govern the adjudicative practice and procedure under Chapter 218, which results in more detailed requirements and clarity for contested cases under Chapter 218. Lastly, the proposed amendments and repeals do not affect the number of individuals subject to the applicability of the rules and will not affect this state's economy.
REQUEST FOR PUBLIC COMMENT.
If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
SUBCHAPTER B. MOTOR CARRIER REGISTRATION
STATUTORY AUTHORITY.
The department proposes the amendments under Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.101(b), which requires the department by rule to set the amount of liability insurance required for a motor carrier at an amount that does not exceed the amount required under a federal regulation adopted under 49 U.S.C. §13906(a)(1); Transportation Code, §643.102, which authorizes a motor carrier to comply with the requirements under Transportation Code, §643.101 through self-insurance if it complies with the requirements; Transportation Code, §643.2525, which provides the administrative hearing process under Transportation Code, Chapter 643; Transportation Code, Section 648.102, which requires the department to adopt rules that conform with 49 C.F.R. Part 387 that require motor carriers operating foreign commercial motor vehicles in this state to maintain financial responsibility; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department under the Transportation Code and the other laws of this state.
The department also proposes the amendments under the authority of Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. The amendments would implement Transportation Code, Chapters 643 and 648; and Government Code, Chapter 2001.
§218.10.Purpose.
Transportation Code, Chapter 643, provides that a motor carrier
may not operate a commercial motor vehicle or transport household
goods on a for-hire basis on a road or highway of this state unless
the carrier registers with the department or is exempt from registration
under Transportation Code, §643.002. This subchapter prescribes
the procedures by which a motor carrier, leasing business, or for-hire
transporter of household goods may register, and sets out minimum
insurance requirements and minimum workers' compensation or accidental
[accident] insurance requirements.
§218.16.Insurance Requirements.
(a) Automobile liability insurance requirements. A motor carrier must file proof of commercial automobile liability insurance with the department on a form acceptable to the director for each vehicle required to be registered under this subchapter. The motor carrier must carry and maintain automobile liability insurance that is combined single limit liability for bodily injury to or death of an individual per occurrence, loss or damage to property (excluding cargo) per occurrence, or both. Extraneous information will not be considered acceptable, and the department may reject proof of commercial automobile liability insurance if it is provided in a format that includes information beyond what is required. Minimum insurance levels are indicated in the following table. However, a motor carrier that operates a foreign commercial motor vehicle must comply with the minimum level of financial responsibility in 49 C.F.R. Part 387 to the extent Part 387 prescribes a higher level of financial responsibility than the following table. The department adopts by reference 49 C.F.R. Part 387. Effective October 23, 2015, the department adopts by reference the amendments to 49 C.F.R. Part 387 with an effective date of October 23, 2015.
Figure: 43 TAC §218.16(a) (No change.)
(b) Cargo insurance. Household goods carriers shall file and maintain with the department proof of financial responsibility.
(1) The minimum limits of financial responsibility for a household goods carrier for hire is $5,000 for loss or damage to a single shipper's cargo carried on any one motor vehicle.
(2) The minimum limits of financial responsibility for a household goods carrier for hire is $10,000 for aggregate loss or damage to multiple shipper cargo carried on any one motor vehicle. In cases in which multiple shippers sustain damage and the aggregate amount of cargo damage is greater than the cargo insurance in force, the insurance company shall prorate the benefits among the shippers in relationship to the damage incurred by each shipper.
(c) Workers' compensation or accidental insurance coverage.
(1) A motor carrier that is required to register under this subchapter and whose primary business is transportation for compensation or hire between two or more incorporated cities, towns, or villages shall provide workers' compensation for all its employees or accidental insurance coverage in the amounts prescribed in paragraph (2) of this subsection.
(2) Accidental insurance coverage required by paragraph (1) of this subsection shall be at least in the following amounts:
(A) $300,000 for medical expenses and coverage for at least 104 weeks;
(B) $100,000 for accidental death and dismemberment, including 70 percent of employee's pre-injury income for not less than 104 weeks when compensating for loss of income; and
(C) $500 for the maximum weekly benefit.
(d) Qualification of motor carrier as self-insured.
(1) General qualifications. A motor carrier may meet the insurance requirements of subsections (a) and (b) of this section by filing an application, in a form prescribed by the department, to qualify as a self-insured. The application must include a true and accurate statement of the motor carrier's financial condition and other evidence that establishes its ability to satisfy obligations for bodily injury and property damage liability without affecting the stability or permanency of its business. The department may accept USDOT evidence of the motor carrier's qualifications as a self-insured.
(2) Applicant guidelines. In addition to filing an application as prescribed by the department, an applicant for self-insured status must submit materials that will allow the department to determine the following information.
(A) Applicant's net worth. An applicant's net worth must be adequate in relation to the size of its operations and the extent of its request for self-insurance authority. The applicant must demonstrate that it can and will maintain an adequate net worth.
(B) Self-insurance program. An applicant must demonstrate that it has established and will maintain a sound insurance program that will protect the public against all claims involving motor vehicles to the same extent as the minimum security limits applicable under this section. In determining whether an applicant is maintaining a sound insurance program, the department will consider:
(i) reserves;
(ii) sinking funds;
(iii) third-party financial guarantees;
(iv) parent company or affiliate sureties;
(v) excess insurance coverage; and
(vi) other appropriate aspects of the applicant's program.
(C) Safety program. An applicant must submit evidence of substantial compliance with the federal motor carrier safety regulations as adopted by the Texas Department of Public Safety and with Transportation Code, Chapter 644.
(3) Other securities or agreements. The department may accept an application for approval of a security or agreement if satisfied that the security or agreement offered will adequately protect the public.
(4) Periodic reports. An applicant shall file annual statements, semi-annual and quarterly reports, and any other reports required by the department reflecting the applicant's financial condition and the status of its self-insurance program while the motor carrier is self-insured.
(5) Duration and coverage of self-insured status. The department may approve an applicant as a self-insured for any specific time or for an indefinite time. An approved self-insured status only applies to the type of cargo that the applicant reported to the department in the application for self-insured status.
(6) Revocation of self-insured status. On receiving
evidence that a self-insured motor carrier's financial condition has
changed, that its safety program or record is inadequate, or that
it is otherwise not in compliance with this subchapter, the department
may at any time require the self-insured to provide additional information.
On 10 days' notice from the department, the self-insured shall appear
and demonstrate that it continues to have adequate financial resources
to pay all claims involving motor vehicles for bodily injury and property
damage liability. The self-insured shall also demonstrate that it
remains in compliance with the requirements of this section and of
any active self-insurance requirements included in the department's
approval letter. [orders issued or adopted by the department.]
If an applicant fails to comply with the applicable requirements
under this section, [this paragraph,] its self-insured
status may be revoked. The revocation of self-insured status
will be governed by Transportation Code, Chapter 643 and Chapter 224
of this title (relating to Adjudicative Practice and Procedure).
(7) Appeal of denial of application for self-insured
status. An applicant may appeal a denial [or revocation]
of self-insured [self-insurance] status by filing an appeal [a petition for an administrative hearing]
in accordance with §224.126 of this title (relating to Appeal
of a Denial of Self-Insured Status). [Chapter 206, Subchapter
D of this title (relating to Procedures in Contested Cases).]
(e) Filing proof of insurance with the department.
(1) Forms.
(A) A motor carrier shall file and maintain proof of automobile liability insurance for all vehicles required to be registered under this subchapter at all times. This proof shall be filed on a form acceptable to the director.
(B) A household goods carrier shall also file and maintain proof of cargo insurance for its cargo at all times. This proof shall be on a form acceptable to the director.
(2) Filing proof of insurance. A motor carrier's insurer shall file and maintain proof of insurance on a form acceptable to the director:
(A) at the time of the original application for motor carrier certificate of registration;
(B) on or before the cancellation date of the insurance coverage as described in subsection (f) of this section;
(C) when the motor carrier changes insurers;
(D) when the motor carrier asks to retain the certificate number of a revoked certificate of registration;
(E) when the motor carrier changes its name under §218.13(e)(2) of this title (relating to Application for Motor Carrier Registration);
(F) when the motor carrier, under subsection (a) of this section, changes the classification of the cargo being transported; and
(G) when replacing another active insurance filing.
(3) Filing fee. Each certificate of insurance or proof of financial responsibility filed with the department for the coverage required under this section shall be accompanied by a nonrefundable filing fee of $100. This fee applies both when the carrier submits an original application and when the carrier submits a supplemental application when retaining a revoked certificate of registration number.
(4) Acceptable filings. The motor carrier's insurer must file proof of insurance with the department in a form prescribed by the department and approved by an authorized agent of the insurer.
(f) Cancellation of insurance coverage. Except when replaced by another acceptable form of insurance coverage or proof of financial responsibility approved by the department, no insurance coverage shall be canceled or withdrawn until 30 days after notice has been given to the department by the insurer in a form approved by the department. Nonetheless, proof of insurance coverage for a seven day or 90 day certificate of registration may be canceled by the insurer without 30 days' notice if the certificate of registration is expired, suspended, or revoked, and the insurer provides a cancellation date on the proof of insurance coverage.
(g) Replacement insurance filing. The department will consider a new insurance filing as the current record of financial responsibility required by this section if:
(1) the new insurance filing is received by the department; and
(2) a cancellation notice has not been received for previous insurance filings.
(h) Insolvency of insurance carrier. If the insurer of a motor carrier becomes insolvent or becomes involved in a receivership or other insolvency proceeding, the motor carrier must file an affidavit with the department. The affidavit must be executed by an owner, partner, or officer of the motor carrier and show that:
(1) no collisions [accidents]
have occurred and no claims have arisen during the insolvency of the
insurance carrier; or
(2) all claims have been satisfied.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304774
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes the amendments under Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the administrative hearing process under Transportation Code, Chapter 643; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department under the Transportation Code and the other laws of this state.
The department also proposes the amendments under the authority of Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. The amendments would implement Transportation Code, Chapters 643 and 645; and Government Code, Chapter 2001.
§218.33.Enforcement.
A motor carrier who fails or refuses to permit an inspection,
fails to maintain and make available the requisite records, or otherwise
fails to comply with the requirements of this subchapter commits a
violation subject to enforcement under Chapter 224 of this title
(relating to Adjudicative Practice and Procedure). [Subchapter
F of this chapter (relating to Enforcement).]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304775
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes the amendments under Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the administrative hearing process under Transportation Code, Chapter 643; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department under the Transportation Code and the other laws of this state.
The department also proposes the amendments under the authority of Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. The amendments would implement Transportation Code, Chapter 643; and Government Code, Chapter 2001.
§218.64.Rates.
(a) Ratemaking. A household goods carrier and/or its household goods agent shall set maximum rates and charges for services in its applicable tariff. The household goods carrier and/or its household goods agent shall disclose the maximum rates and charges to prospective shippers before transporting a shipment between two incorporated cities.
(b) Prohibited charges and allowances. A household goods carrier and/or its household goods agent shall not charge more than the maximum charges published in its tariff on file with the department for services associated with transportation between two incorporated cities.
(c) Collective ratemaking agreements.
(1) Eligibility. In accordance with Transportation Code, §643.154, a household goods carrier and/or its household goods agent may enter into collective ratemaking agreements between one or more other household goods carriers or household goods agents concerning the establishment and filing of maximum rates and charges, classifications, rules, or procedures.
(2) Designation of collective ratemaking associations. An approved association may be designated by a member household goods carrier as its collective ratemaking association for the purpose of filing a tariff containing maximum rates and charges required by §218.65 of this title (relating to Tariff Registration).
(3) Submission. In accordance with Transportation Code, §643.154, a collective ratemaking agreement shall be filed with the department for approval. The agreement shall include the following information:
(A) full and correct name, business address (street and number, city, state and zip code), and phone number of the association;
(B) whether the association is a corporation or partnership; and
(i) if a corporation, the government, state, or territory under the laws of which the applicant was organized and received its present charter; and
(ii) if an association or a partnership, the names of the officers or partners and date of formation;
(C) full and correct name and business address (city and state) of each household goods carrier on whose behalf the agreement is filed and whether it is an association, a corporation, an individual, or a partnership;
(D) the name, title, and mailing address of counsel, officer, or other person to whom correspondence in regard to the agreement should be addressed; and
(E) a copy of the constitution, bylaws, or other documents or writings, specifying the organization's powers, duties, and procedures.
(4) Signature. The collective ratemaking agreement shall be signed by all parties subject to the agreement or the association's executive officer.
(5) Incomplete agreement. If the department receives an agreement which does not comply with this subsection, the department will send a letter to the individual submitting the agreement. The letter shall identify the information that is missing and advise the association that the agreement will not be processed until the information is received.
(6) Approval. In accordance with Transportation Code, §643.154, the director or designee will approve a collective ratemaking agreement if the agreement provides that:
(A) all meetings are open to the public; and
(B) notice of meetings shall be sent to shippers who are multiple users of household good carriers.
(7) Noncompliance. If the director or the director's designee determines that an agreement does not comply with paragraph (6) of this subsection, the matter will be governed by Transportation Code, Chapter 643 and Chapter 224 of this title (relating to Adjudicative Practice and Procedure).
[(A) If the director or designee determines
that an agreement does not comply with paragraph (6) of this subsection,
the department will notify the association representative by certified mail of:]
[(i) the specific reason that an agreement is not being approved; and]
[(ii) the hearing date.]
[(B) If the association representative resubmits an acceptable agreement which meets the requirements of paragraph (6) of this subsection within 10 business days prior to the hearing date, the hearing will be canceled and the agreement will be approved. The State Office of Administrative Hearings (SOAH) shall conduct the hearing in accordance with Chapter 206, Subchapter D of this title (relating to Procedures in Contested Cases).]
[(C) If the hearing is held, the presiding officer shall explain the reason(s) that the agreement was rejected. The association representative will be allowed to respond to the objections and present evidence or exhibits which relate to his or her response. The hearing examiner, based on the evidence provided, will make a recommendation to the board whether the agreement should be approved or resubmitted. The association representative shall be advised of the examiner's recommendation. The final order will be submitted to the board for approval.]
(8) New parties to an agreement. An updated agreement shall be filed with the department as new parties are added.
(9) Amendments to approved agreements. Amendments to approved agreements (other than as to new parties) may become effective only after approval of the department.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304776
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes the amendments under Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the administrative hearing process under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department under the Transportation Code and the other laws of this state.
The department also proposes the amendments under the authority of Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. The amendments would implement Transportation Code, Chapters 643 and 645; and Government Code, Chapter 2001.
§218.70.Purpose.
The purpose of this subchapter is to provide for administrative
penalties and sanctions under Transportation Code, Chapters 643 and
645, as well as the probation of the suspension of a motor carrier's
certificate of registration. This subchapter also provides for the
assessment of civil penalties in certain cases under federal law regarding
the interstate movement of household goods. The enforcement actions
under this chapter are governed by Transportation Code, Chapters 643
and 645; and Chapter 224 of this title (relating to Adjudicative Practice
and Procedure), as applicable. [an efficient and effective
system of enforcement of Transportation Code, Chapters 643, 645, and
648, by establishing procedures for the assessment of administrative
penalties; the suspension, revocation, and denial of motor carrier
registration and leasing business registration; cease and desist orders;
and probation of the suspension of a motor carrier's certificate of
registration.]
§218.71.Administrative Penalties.
(a) Authority. The department, after notice and opportunity for hearing, may impose an administrative penalty against the following:
(1) a motor carrier that violates a provision of Transportation Code, Chapter 643 or Chapter 645 or violates a rule or order adopted under Transportation Code, Chapter 643 or Chapter 645; or
(2) a motor carrier or broker that violates a federal law or regulation, the enforcement of which has been delegated to the department.
[(b) Amount of administrative penalty
for violations of state laws, rules, or orders.]
[(1) In an action brought by the department, the aggregate amount of administrative penalty shall not exceed $5,000 unless it is found that the motor carrier knowingly committed a violation.]
[(2) In an action brought by the department, if it is found that the motor carrier knowingly committed a violation, the aggregate amount of administrative penalty shall not exceed $15,000. "Knowingly" means actual awareness of the act or practice that is the alleged violation, or acting with deliberate ignorance of or reckless disregard for the violation involved. Actual awareness may be inferred from the conduct of the alleged violator or from the history of previous violations by the alleged violator.]
[(3) In an action brought by the department, if it is found that the motor carrier knowingly committed multiple violations, the aggregate amount of administrative penalty for the multiple violations shall not exceed $30,000.]
[(4) Each day a violation continues or occurs is a separate violation for purposes of imposing an administrative penalty.]
(b) [(c)] Memorandum of Agreement.
Pursuant to a Memorandum of Agreement between the department and the
Federal Motor Carrier Safety Administration, United States Department
of Transportation, the department is authorized to initiate an enforcement
action and assess civil penalties against a motor carrier or broker,
as applicable, under the authority of the following:
(1) 49 U.S.C. §§13702, 13704, 13707(b), 13901, 14104(b), 14706(f), 14708, 14710, 14901(d)(2) and (3), 14901(e), and 14915, as amended;
(2) 49 C.F.R. §§366.4, 370.3-370.9, 371.3(c), 371.7, 371.105, 371.107, 371.109, 371.111, 371.113, 371.115, 371.117, 371.121, 373.201, Part 375, §§378.3 - 378.9, 387.301(b), 387.307, 387.403, and Part 386 Appendix B(g)(22) - (23), as amended; and
(3) any future delegations pursuant to 49 U.S.C. §14710.
(d) Enforcement process for federal
laws and regulations. The department will follow the process set forth
in Transportation Code, §643.2525 when enforcing the federal
laws and regulations cited in subsection(c) of this section via an
administrative proceeding.]
§218.72.Administrative Sanctions.
(a) Grounds for suspension, [and]
revocation, denial, and probation. Transportation Code, §643.252
provides the grounds on [for] which the department
can suspend, [or] revoke, or deny a
certificate of registration issued under Transportation Code, Chapter
643. Transportation Code, §643.252 also provides the grounds
on which the department can place on probation a motor carrier whose
registration is suspended.
(b) Department of Public Safety enforcement recommendations.
(1) The department may suspend or revoke a certificate of registration of a motor carrier upon a written request by the Department of Public Safety, if a motor carrier:
(A) has an unsatisfactory safety rating under 49 C.F.R., Part 385; or
(B) has multiple violations of Transportation Code, Chapter 644, a rule adopted under that chapter, or Transportation Code, Title 7, Subtitle C.
(2) A request under paragraph (1) of this subsection must include documentation showing the violation.
[(c) Probation.]
[(1) The department may probate any suspension ordered under this section.]
[(2) In determining whether to probate a suspension, the department will review:]
[(A) the seriousness of the violation;]
[(B) prior violations by the motor carrier;]
[(C) whether the department has previously probated a suspension for the motor carrier;]
[(D) cooperation by the motor carrier in the investigation and enforcement proceeding; and]
[(E) the ability of the motor carrier to correct the violations.]
[(3) The department shall set the length of the probation based on the seriousness of the violation and previous violations by the motor carrier.]
[(4) The department will require that the motor carrier report monthly to the department any information necessary to determine compliance with the terms of the probation.]
[(5) The department may revoke the probation and order the initial suspension and administrative penalty if the motor carrier fails to abide by any terms of the probation.]
(c) [(d)] Refund.
(1) The department may order a motor carrier that violates Transportation Code Chapter 643, department rules, or a department order adopted under Transportation Code Chapter 643 to issue a refund to a customer who paid the motor carrier to transport household goods.
(2) Under this subsection, a refund is the return of any percentage of funds paid, or contracted to be paid, to a motor carrier transporting household goods, whether those funds are documented as a separate line item or included in the overall amount paid by a customer.
(A) A refund includes overpayments, fees paid for services not rendered, and fees paid for charges not listed on the household mover's tariff after the household mover takes possession of the customer's property.
(B) A refund does not include any consideration of damages or harm over the amount paid by the customer.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304777
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY.
The department proposes the repeals under Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the administrative hearing process under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department under the Transportation Code and the other laws of this state.
The department also proposes the repeals under the authority of Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. The repeals would implement Transportation Code, Chapters 643 and 645; and Government Code, Chapter 2001.
§218.73.Administrative Proceedings.
§218.75.Cost of Preparing Agency Record.
§218.76.Registration Suspension Ordered under Family Code.
§218.77.Cease and Desist Order.
§218.78.Appeal of Denial.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304778
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Subchapter F, Compliance, §219.82; and Subchapter H, Enforcement, §§219.120, 219.121, and 219.126. The department also proposes the repeal of Subchapter H, Enforcement, §§219.122, 219.124, and 219.127.
These amendments and repeals are necessary to delete language regarding adjudicative practice and procedure. In addition, the amendments are necessary to refer to proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure), which the department proposes in this issue of the Texas Register to include all department adjudicative practice and procedure rules in one chapter.
EXPLANATION.
Amendments to §219.82 would delete the word "enforcement" and add a reference to proposed new Chapter 224, which would apply to any adjudicative practice and procedure under the department's rules, including Chapter 219.
A proposed amendment to the heading for Subchapter H of Chapter 219 would make the heading consistent with the rules under Subchapter H because the proposed amendments and repeals would change the contents of this subchapter. Proposed amendments to §219.120 would make the section consistent with the proposed amendments to and repeals of sections within Subchapter H. A proposed amendment to §219.120 would also state that the enforcement actions under this chapter are governed by Chapter 224 of this title (relating to Adjudicative Practice and Procedure) and Transportation Code, Chapters 621 through 623 for clarity and ease of reference.
Proposed amendments to §219.121 would replace the current language with a summary of the department's authority under Transportation Code, §623.271 to investigate and impose an administrative penalty or revoke an oversize or overweight permit. Current language in §219.121(a) repeats the language found in Transportation Code, §623.271. It is not necessary to repeat statutory language in rules. A proposed amendment to the title of §219.121 would include sanctions and a reference to Transportation Code, §623.271 to address the expanded scope of §219.121 due to the proposed amendments and to distinguish §219.121 from §219.126 of this title (relating to Administrative Penalty for False Information on Certificate by a Shipper) regarding the administrative penalty under Transportation Code, §623.272.
Proposed amendments to §219.121(b) would delete the language regarding the calculation of administrative penalties under Transportation Code, §623.271, which says the amount of an administrative penalty imposed under §623.271 is calculated in the same manner as the amount of an administrative penalty imposed under Transportation Code, §643.251. In this issue of the Texas Register, the department proposes new Chapter 224 of this title (relating to Adjudicative Practice and Procedure). The language in current §219.121(b) would be addressed in proposed new §224.115 of this title (relating to Administrative Penalty Assessment and Probation of Suspension).
A proposed amendment would repeal §219.122. Current language in §219.122(a) repeats the language found in Transportation Code, §623.271. It is not necessary to repeat statutory language in rules. Current language in §219.122(b) is not expressly authorized under Transportation Code, Chapter 623.
A proposed amendment to §219.126 would delete subsection (b) because a proposed amendment to §219.120 would state that the enforcement actions under this chapter are governed by Chapter 224 of this title (relating to Adjudicative Practice and Procedure) and Transportation Code, Chapters 621 through 623. It is not necessary for §219.126 to cite the specific provisions in proposed new Chapter 224 regarding notice and hearing requirements. A proposed amendment to §219.126 would also delete subsection (c) regarding the calculation of an administrative penalty under §219.126. In this issue of the Texas Register, the department proposes new Chapter 224 of this title (relating to Adjudicative Practice and Procedure). The language in current §219.126(c) would be addressed in proposed new §224.115 of this title (relating to Administrative Penalty Assessment and Probation of Suspension). Due to the proposed deletions of §219.126(b) and (c), a proposed amendment to §219.126 would delete the "(a)" because there would only be one subsection in §219.126. An amendment to §219.126 would also cite to Transportation Code, §623.272 as the authority for the administrative penalty to help distinguish §219.126 from the provisions in §219.121 regarding the administrative penalty under Transportation Code, §623.271.
Proposed amendments would repeal §219.124 and §219.127. In this issue of the Texas Register, the department proposes new Chapter 224, which would include the language in current §219.124 and §219.127 with some modifications. Current §219.124 would be addressed in proposed new §224.116 of this title (relating to Administrative Proceedings). Current §219.127 would be addressed in proposed new §224.31 of this title (relating to Cost of Record on Appeal).
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments and repeals will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Jimmy Archer, Director of the Motor Carrier Division (MCD), has determined that there will be no significant effect on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Mr. Archer has also determined that, for each year of the first five years amendments and repeals will be in effect, there is one anticipated public benefit as a result of the amendments and repeals.
Anticipated Public Benefits. The anticipated public benefit is that the repeal of language regarding adjudicative practice and procedure in Chapter 219 in conjunction with the department's proposed new Chapter 224 would consolidate all of the department's rules regarding adjudicative practice and procedure in one chapter that provides more clarity and consistency.
Anticipated Costs To Comply With The Proposal. Mr. Archer anticipates that there will be no costs to comply with these amendments and repeals.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendments and repeals will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the changes are not sufficient to create an adverse economic effect. The department's current Chapter 219 rules regarding adjudicative practice and procedure are proposed to be repealed, in conjunction with adding most of the repealed rule text to the proposed new Chapter 224 with some minor modifications. In addition, the proposed amendments would not change the fact that the contested case procedures and requirements are primarily governed by Government Code, Chapter 2001 and 1 TAC Chapter 155, which are the rules of procedure for the State Office of Administrative Hearings (SOAH). Further, the proposed amendments would not change the fact that Transportation Code, Chapter 623 imposes certain requirements for a contested case under Chapters 621 through 623, such as the requirements in Transportation Code, §623.271. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments and repeals are in effect, no government program would be created or eliminated. Implementation of the proposed amendments and repeals would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed amendments and repeals do not create a new regulation; however, they technically enable the expansion of an existing regulation regarding the department's adjudicative practice and procedure. The proposed amendments and repeals in Chapter 219 enable the department's proposed new Chapter 224 to govern the adjudicative practice and procedure under Chapter 219, which results in more detailed requirements and clarity. Lastly, the proposed amendments and repeals do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.
REQUEST FOR PUBLIC COMMENT.
If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
SUBCHAPTER F. COMPLIANCE
STATUTORY AUTHORITY.
The department proposes amendments under Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622, including Transportation Code, §622.051, et seq., which authorize the department to issue a permit for transporting poles required for the maintenance of electric power transmission and distribution lines; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under Transportation Code, §623.272 or §623.274, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department under the Transportation Code and other laws of this state.
The department also proposes amendments under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout the preamble.
CROSS REFERENCE TO STATUTE. The amendments would implement Transportation Code, Chapters 621, 622, and 623; and Government Code, Chapter 2001.
§219.82.Falsification of Information on Application and Permit.
(a) A person who provides false information on the
permit application or another form required by the department for
the issuance of an oversize or overweight permit commits a violation
of this chapter and is subject to revocation of an oversize or overweight
permit and the [enforcement] provisions of Subchapter H
of this chapter and Chapter 224 of this title (relating to Adjudicative
Practice and Procedure).
(b) A person violates this chapter if the person produces a counterfeit permit or alters a permit issued by the department.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304779
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§219.120, 219.121, 219.126
STATUTORY AUTHORITY.
The department proposes amendments under Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622, including Transportation Code, §622.051, et seq., which authorize the department to issue a permit for transporting poles required for the maintenance of electric power transmission and distribution lines; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under Transportation Code, §623.272 or §623.274, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department under the Transportation Code and other laws of this state.
The department also proposes amendments under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout the preamble.
CROSS REFERENCE TO STATUTE. The amendments would implement Transportation Code, Chapters 621, 622, and 623; and Government Code, Chapter 2001.
§219.120.Purpose.
The purpose of this subchapter is to provide for administrative
penalties and sanctions under Transportation Code, Chapters 621 through
623. The enforcement actions under this chapter are governed by Chapter
224 of this title (relating to Adjudicative Practice and Procedure)
and Transportation Code, Chapters 621 through 623 [an efficient
and effective system of enforcement of Transportation Code, Chapters
621, 622, and 623 and the rules adopted under those chapters by setting
out procedures for administrative penalties, revocation, and denial
of oversize or overweight permits].
§219.121.Administrative Penalties and Sanctions under Transportation Code, §623.271.
Transportation Code, §623.271 authorizes the department to investigate and impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623.
[(a) Authority. The department, after
notice and opportunity for hearing, may impose an administrative penalty
against a person or the holder of the permit who:]
[(1) provides false information on a permit application or another form required by the department concerning the issuance of an oversize or overweight permit;]
[(2) violates this chapter or Transportation Code, Chapters 621, 622, or 623;]
[(3) violates an order adopted under this chapter or Transportation Code, Chapters 621, 622, or 623; or]
[(4) fails to obtain an oversize or overweight permit that is required under this chapter or Transportation Code, Chapters 621, 622, or 623.]
[(b) Amount of administrative penalty.]
[(1) In an action brought by the department, the aggregate amount of administrative penalty shall not exceed $5,000 unless it is found that the person or the holder of the permit knowingly committed a violation.]
[(2) In an action brought by the department, if it is found that the person or the holder of the permit knowingly committed a violation, the aggregate amount of administrative penalty shall not exceed $15,000. "Knowingly" means actual awareness of the act or practice that is the alleged violation, or acting with deliberate ignorance of or reckless disregard for the violation involved. Actual awareness may be inferred from the conduct of the alleged violator or from the history of previous violations by the alleged violator.]
[(3) In an action brought by the department, if it is found that the person or the holder of the permit knowingly committed multiple violations, the aggregate amount of administrative penalty for the multiple violations shall not exceed $30,000.]
[(4) Each day a violation continues or occurs is a separate violation for purposes of imposing an administrative penalty.]
[(5) Any recommendation that an administrative penalty should be imposed must be based on the following factors:]
[(A) the seriousness of the violation, including the nature, circumstances, extent, and gravity of any prohibited acts, and the hazard or potential hazard created to the health, safety, or economic welfare of the public;]
[(B) the economic harm to property or the environment caused by the violation;]
[(C) the history of previous violations;]
[(D) the amount necessary to deter future violations;]
[(E) efforts made to correct the violation; and]
[(F) any other matters that justice may require.]
§219.126.Administrative Penalty for False Information on Certificate by a Shipper.
[(a)] Transportation Code, §623.272
authorizes the [The] department to [may]
investigate and impose an administrative penalty on a shipper who
does not provide a shipper's certificate of weight as required under
Transportation Code, §623.274(b) or provides false
information on a shipper's certificate of weight that the shipper
delivers to a person transporting a shipment.
[(b) The notice and hearing requirements
of §219.124 of this title (relating to Administrative Proceedings)
apply to the imposition of an administrative penalty under this section.]
[(c) The amount of an administrative penalty imposed under this section is calculated in the same manner as the amount of an administrative penalty imposed under §219.121 of this title (relating to Administrative Penalties).]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304780
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§219.122, 219.124, 219.127
STATUTORY AUTHORITY.
The department proposes repeals under Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622, including Transportation Code, §622.051, et seq., which authorize the department to issue a permit for transporting poles required for the maintenance of electric power transmission and distribution lines; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under Transportation Code, §623.272 or §623.274, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department under the Transportation Code and other laws of this state.
The department also proposes repeals under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; and the statutory authority referenced throughout the preamble.
CROSS REFERENCE TO STATUTE. The repeals would implement Transportation Code, Chapters 621, 622, and 623; and Government Code, Chapter 2001.
§219.122.Administrative Sanctions.
§219.124.Administrative Proceedings.
§219.127.Cost of Preparing Agency Record.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 14, 2023.
TRD-202304781
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes to amend 43 Texas Administrative Code (TAC) Subchapter A, General Provisions, §221.1 and §221.2; Subchapter B, Licensing, §§221.11, 221.13 - 221.20; Subchapter C, Licensed Operations, §§221.41 - 221.47 and 221.49 - 221.54; Subchapter D, Records, §§221.71 - 221.73; and Subchapter F, Administrative Sanctions, §§221.111, 221.112, and 221.115. The department proposes to repeal §221.48 and Subchapter E, Administrative Procedures, §§221.91 - 221.96. The proposed amendments are necessary to modify language to be consistent with statutes and other chapters in Title 43 of the Texas Administrative Code; to clarify the purpose of a rule by amending the rule title and language; to modify language to be consistent with current practice including the use of records or electronic systems; to improve readability by use of consistent terminology; to clarify or delete unused, archaic, or inaccurate definitions, terms, and references or other language; to delete language that is inconsistent with statute, to implement statutory changes and add conforming language; to deter fraud or abuse by expanding fingerprint requirements to salvage vehicle dealers and setting minimum standards for business operations; to clarify existing requirements; and to modernize language and improve understanding and readability. Proposed amendments would implement Senate Bill (SB) 422, 88th Legislature, Regular Session (2023), which amended Occupations Code §§55.004, 55.0041, and 55.005 affecting licensing of military service members, and would conform language with SB 604, 86th Legislature, Regular Session (2019), which eliminated salvage vehicle dealer license endorsements, and House Bill (HB) 1667, 86th Legislature, Regular Session (2019) which granted certain motor vehicle dealers the option to act as a salvage dealer.
Repeals are proposed to remove a section which duplicates §217.86 of this title and to move the adjudicative rules in Subchapter E to proposed new Chapter 224 of this title (relating to Adjudicative Practice and Procedure), which is proposed in this edition of the Texas Register to consolidate all department adjudicative practice and procedure rules in one chapter. Subchapter F is also proposed for relettering because the preceding subchapter is proposed for repeal.
EXPLANATION.
Subchapter A. General Provisions
Proposed conforming amendments to §221.1 would more completely describe the scope of the chapter to include holders of an independent motor vehicle dealer's general distinguishing number (GDN) issued under Transportation Code, Chapter 503, who act as salvage vehicle dealers. HB 1667, 86th Legislature, Regular Session (2019), added Occupations Code, §2302.009 and amended §2302.101, granting these dealers the ability to perform salvage activities without obtaining a salvage vehicle dealer's license, but at the same time requiring these dealers to comply with Occupations Code, Chapter 2302 requirements. For completeness, a proposed amendment would add a reference to persons exempt from licensure as Occupations Code, Chapter 2302 contains exceptions for metal recyclers, insurance companies, and used automotive recyclers licensed under Occupations Code, Chapter 2309.
The proposed amendments to §221.2 would add the following definitions for consistency: "day" in §221.2(4) to mean a calendar day, unless otherwise stated or the context clearly indicates otherwise; "director" in §221.2(6) to mean the division director that regulates the distribution and sales of motor vehicles, including any department staff to whom the director delegates any duty assigned under this chapter; and "General Distinguishing Number (GDN)" in §221.2(7) to match the definition of the same term in Occupations Code, §2301.002(17). A proposed amendment to §221.2(8) would also conform the definition of "license holder" to include an independent motor vehicle dealer GDN authorized to operate as a salvage vehicle dealer consistent with Occupations Code, §2302.009 and §2302.102. A proposed amendment to renumbered §221.2(15) would also substitute the current definition of "person" for the definition in Occupations Code, §2301.002 for consistency. The proposed amendments to §221.2 would also remove the definition of "corporation" in §221.2(4) because a special definition for corporation is unnecessary. The proposed amendments to §221.2 would remove the definition of "final order authority" in §221.2(6) because the sections of Chapter 221 that use the term "final order authority", §221.93 and §221.95, are proposed for repeal and will be incorporated into new proposed Chapter 224 of this title (relating to Adjudicative Practice and Procedure). The proposed amendments to §221.2 would also remove the definitions of "major component part," in §221.2(8) and "minor component part" in §221.2 (10) because these two terms are not referenced in Chapter 221. Proposed amendments would also renumber the definitions to correspond with the proposed revisions.
Subchapter B. Licensing
The proposed amendment to § 221.11(b) would make a minor change to reflect that a motor vehicle may be either registered or titled to operate on public highways. Proposed amendments to §221.11(c) would substitute a statutory reference to a person exempt from licensure and would delete rule language that duplicates the statute to ensure consistency with any future statutory changes.
A proposed amendment to § 221.13(c) would set a fee for a salvage vehicle dealer license amendment at $25. Occupations Code, §2302.052 assigns the board the duty of setting reasonable and necessary fees. Occupations Code, §2301.264(e) prescribes a $25 license amendment fee for licenses issued under Occupations Code, Chapter 2301 and Transportation Code, Chapter 503. The department construes the fee amount prescribed in statute to be reasonable and necessary and proposes adopting the same fee because department resources required to process a license amendment are similar across all license types.
A proposed amendment to §221.14(a) would make a minor edit to remove redundant language. Occupations Code, §2302.103 requires an applicant to submit an application on a form prescribed by the department. Proposed amendments to §221.14(b) would update application requirements for a new salvage vehicle dealer license, license amendment, or license renewal. These proposed amendments include language consistent with current practices and new requirements to deter and prevent fraud in the application process, such as fingerprinting and site visits, that have proven to be successful in reducing fraud in the issuance of dealer GDNs, a related license type. Proposed amendments §221.14(b) would specify that the application must be on a department-approved form; completed by the applicant, license holder, or authorized representative who is an employee, a licensed attorney, or a certified public accountant; and accompanied by the required fee from an account held by the applicant or license holder, or from a trust account of the applicant or license holder, or from a trust account of the applicant's or license holder's attorney or certified public accountant. Proposed amendments would create new §221.14(c) to modernize the application process by requiring license applications and fees to be submitted to the department electronically and paid for by credit card or electronic funds transfer. Proposed amendments would create new §221.14(d), intended to reduce application fraud by giving the department the option to require a site visit to determine whether a business location meets the requirements of Chapter 221. Proposed amendments would add new §221.14(e) to reduce application fraud by requiring salvage vehicle dealers applying for or renewing a license to comply with fingerprint requirements in §211.6 of Title 43. The proposed fingerprinting requirement would be a one-time requirement if a person maintains an active license. Proposed amendments would create new §221.14(f) to clarify that the department will not provide information regarding the status of an application, application deficiencies, or pending new license numbers to a person other than to the applicant, license holder, or authorized representative, unless the person files a written request under the Texas Public Information Act. These proposed revisions to §221.14 would provide more clarity and certainty regarding the salvage vehicle dealer license application process.
Proposed amendments to §221.15 update the information required on a salvage vehicle dealer application. Proposed new §221.15(a) would modernize the application process by requiring an applicant for a new salvage dealer license to register for an account in the online licensing system, to designate an account administrator, to provide the name and email address for that person, and to provide the business telephone number, name, business type, and social security number or employer identification number, as applicable. Proposed new §221.15(a) would specify that the applicant's license account administrator must be an owner, officer, manager, or bona fide employee to reduce fraud and increase responsiveness and accountability by the applicant.
Proposed amendments would create a new subsection §221.15(b) that would include language currently in §221.15. Proposed new §221.15(b) would require the applicant to provide the reason for the application and certain other business information. Proposed amendments to the existing language incorporated into proposed new §221.15(b) would remove surplus language and provide additional detail regarding required business information to improve the department's ability to identify fraud and investigate applicants, including clarifying that the business address is the physical address of the business, and that the following information is required: business email address; telephone number; Texas Sales Tax Identification Number; National Motor Vehicle Title Information System Identification Number (NMVTIS); and Secretary of State filing number, if applicable. Proposed amendments to the text in proposed new §221.15(b) would prohibit the business name or assumed name from being misleading to the public so that accurate information about the nature of the salvage business is disclosed to the public. Proposed amendments to the text incorporated into proposed new §221.15(b) would also require the applicant to provide an application contact name, email address, and telephone number to allow the division to contact the applicant easily and would delete the prior requirement that the department consider the applicant's last known address as the applicant's designated mailing address to decrease misdirected mail. Additionally, proposed new §221.15(b) would consolidate previous subsections that set out separate requirements for the applicant to apply as a sole proprietor, a general partnership, or a limited partnership, limited liability company, or corporation. To allow the department to identify and investigate applicants, the proposed amendments to §221.15(b) would require the applicant to provide: the name, social security number, date of birth, identity document information, and ownership percentage for each owner, partner, member, beneficiary, or principal if the applicant is not a publicly traded company; the name, social security number, date of birth, and identity document information for each officer, director, manager, trustee, or other representative authorized to act on behalf of the applicant if the applicant is owned in full or in part by a legal entity; the name, employer identification number, ownership percentage, and non-profit or publicly-traded status for each legal entity that owns the applicant in full or in part; the name, social security number, date of birth, and identity document information of at least one manager or other bona fide employee who will be present at the business location if the license holder is out of state or will not be present during business hours at the business location in Texas. To facilitate the department's evaluation of applicants and its efforts to protect the public from crime, proposed amendments to the text incorporated into new §221.15(b) would clarify that criminal history record information required for an application is criminal history record information under the laws of Texas, another state in the United States, the United States, and any foreign jurisdiction for each person listed in the application, including the offense description, date, and location. Other proposed amendments to the text incorporated into new §221.15(b) would clarify that applicants are required to provide their military service status to enable the department to determine eligibility for special licensing considerations provided under law to veterans. Proposed amendments to the text incorporated into new §221.15(b) would facilitate department investigations of applicants by clarifying the requirement for an applicant to provide information regarding previously submitted license applications, whether under this chapter or the laws of another jurisdiction, the result of previous applications, and whether the applicant has ever been the holder of a license issued by the department or another jurisdiction that was revoked, suspended, or subject of an order issued by the board or by another jurisdiction, or has an unpaid administrative penalty. These proposed requirements in proposed new §221.15(b) are consistent with Occupations Code, §2302.104, which prescribes information that must be obtained from an applicant, and that is necessary for the department to investigate an applicant's qualifications as required under Occupations Code, §2302.105. Proposed amendments in proposed new §221.15(b) would require an applicant to provide information about each business location and business premises sufficient to demonstrate compliance with related premises rules in Chapter 221, Subchapter C. Proposed amendments in proposed new §221.15(b) would also clarify that a salvage vehicle dealer renewing or amending its license must verify its current license information and provide information for any new requirements or changes to the license.
Proposed amendments to §221.16 would require an applicant to attach a legible and accurate image of each required document to allow the department to investigate and process the application as required under Occupations Code, Chapter 2302. Proposed amendments to §221.16 would specify that required attachments include the certificate of filing, certificate of incorporation, or certificate of registration on file with the Secretary of State, if applicable; each assumed name certificate on file with the Secretary of State or county clerk; at least one identity document for each natural person listed in the application; documents proving premises ownership or a valid lease; business premises photos with a notarized affidavit; a Texas Use and Sales Tax Permit; a Franchise Tax Account Status issued by the Comptroller's Office, and any other documents required by the department to evaluate the application under current law and board rules. These proposed amendments would consolidate previous separate requirements for sole proprietors, general partnerships, limited partnerships, limited liability companies, and corporations. The proposed amendments to §221.16(c) would also update references to types of identification consistent with current usage and changes in statute. The proposed amendments to §§221.16(d) and (e) would clarify and add requirements that the license application includes documents proving business premises ownership or a fully executed lease or sublease agreement for the license period, and business premises photos with a notarized affidavit certifying that all premises requirements in Subchapter C are met and will be maintained during the license period. These changes are necessary to prevent and deter fraud in the application process and to improve compliance with premises requirements in Chapter 221, Subchapter C. These requirements are consistent with GDN dealer requirements, which have proven successful in preventing and deterring fraud and improving compliance with premises requirements. A proposed amendment to §221.16(h) would further authorize the department to require any other documents necessary to evaluate the application to ensure that the department can comply with its statutory duty to investigate each license application as required under Occupations Code, §2302.105.
A proposed amendment to §221.17(a) would exempt a license holder from any increased fee or penalty for failing to timely renew a license because the license holder was on active military duty. This amendment is necessary to conform to Occupations Code, §55.002.
Proposed amendments to §221.17(b) would add the phrase "military service members or" in multiple places in subparagraphs (1), (2), and (3). These proposed amendments are necessary to implement SB 422, which entitled military service members with out-of-state licenses to be eligible for special business or occupational authorization or licensing consideration that is already afforded for military spouses.
Proposed amendments in §221.17(b)(1) would delete duplicate references to Occupations Code, §55.0041 and would substitute the phrase "being stationed" for "residency" to clarify that eligibility for special licensing consideration for both the military service member and military spouse is based on the military service member being stationed in Texas rather than residing in Texas.
Three other amendments to §221.17(b)(3) are proposed to implement SB 422. Proposed amendments would change the word "may" to "shall" and add the phrase "within 30 days" to set a deadline by which the department must issue a license to a military service member or spouse. This change is necessary to implement changes to Occupations Code, §55.005(a) from SB 422, which requires a state agency to issue a license no later than the 30th day after an application is filed. Issuing a license within 30 days would also fulfill the requirement of Occupations Code, §55.0041, as amended by SB 422, which requires that the department confirm within 30 days that the military service member or military spouse is authorized to engage in the licensed business or occupation. Another amendment to §221.17(b)(3) would add the phrase "or modified" to recognize that provisions of Occupations Code, Chapter 55 may require the department to modify standard licensing processes when processing an application for a military service member or military spouse and to clarify that the department's licensing process for military service members and military spouses will be in accordance with all Occupations Code, Chapter 55 requirements. A proposed amendment would add new §221.17(c) to clarify that the requirements and procedures authorized under Texas law do not modify or alter rights under federal law.
Proposed amendments to §§221.18(a-c) would modernize the notification requirements by specifying that a license holder notify the department if the license holder opens or closes an additional location by electronically submitting a license amendment in the department's designated licensing system. Proposed amendments to §221.18(a)(2) and §221.18(b)(2) would remove surplus language. A proposed amendment to §221.18(c) would clarify the appropriate action a license holder must take when closing a location depending on the number of locations listed in the license. A proposed amendment would add new §221.18(d) to clarify an existing requirement that a license holder must apply for a new license if the license holder is opening a new location not located in the same county.
Proposed amendments to §221.19 would update the title to reflect the scope of the section. Proposed amendments to §221.19(a) and (b) would modernize the process for requesting a license amendment by requiring the license holder to submit a license amendment application electronically in the department's designated licensing system. A proposed amendment to §221.19(a) would clarify that a license holder is required to submit a change in assumed name to the department to enable the department to investigate whether the assumed name is misleading or deceptive or otherwise violates a law or rule. Proposed amendments would add new §221.19(b)(4) to clarify that a license holder must notify the department of a change in business email address, telephone number, mailing address, or license contact so that the department can communicate with a license holder. Another proposed amendment would add §221.19(c), which would require the license holder to provide the department with any information necessary for the department to fully evaluate a license amendment to enable the department before approving to conduct a thorough and efficient investigation as required by Occupations Code, §2302.105.
Proposed amendments to §221.20(a), (d), (e), (h), and relettered (j) would simplify the language and improve readability without changing meaning. Proposed amendments to §221.20(c) would change "salvage vehicle dealer’s" to "license holder’s" for clarity and consistency, correct the time frame in which the department will provide notice of license expiration from 30 to 31 days consistent with Occupations Code, §2302.152, add "of expiration" to clarify a reference to a written notice, and add "license" to clarify the description of a renewal fee. A proposed amendment to §220.20(i) would add new language to clarify that a license holder who timely submits a renewal application may continue to operate under the expired license until the status of the renewal application is determined by the department in accordance with Government Code, §2001.054. The current language in §220.20(i) is relettered to §220.20(j).
Subchapter C. Licensed Operations
Proposed amendments to §221.41 would make minor changes to simplify and modernize the language to add clarity without changing meaning. Proposed amendments to §221.41(1) would add new requirements that apply if a salvage dealer leases or subleases property for a business location. Proposed amendments to create new §§221.41(1)(D) and (E) would require a property owner signature or a signed and notarized statement from the property owner if the location is subleased and the property owner is not the lessor. The property owner statement must include the property owner's full name, email address, mailing address, and phone number and confirm that the dealer is authorized to sublease the location and to operate a salvage vehicle dealer business. These proposed changes are necessary to prevent fraud in the application process, to prevent consumer abuse, and to protect public health and safety. This provision also protects salvage vehicle dealer applicants: the department has received applications from dealers with a signed sublease who are unable to operate a business because the property owner has not authorized a dealer to operate such a business on the property.
Proposed amendments to the title and language of §221.42 would make minor wording changes to clarify and remove surplus wording.
Proposed amendments to §221.43(a) would require a salvage vehicle dealer who sells to a retail customer to be open at least four days per week for at least four consecutive hours per day and prohibit the office to be open solely by appointment. These proposed amendments would create standard minimum business hours across the industry by requiring the office of a salvage pool operator selling only to a wholesale dealer to be open at least two weekdays per week for at least two consecutive hours per day and prohibit the office to be open solely by appointment. Occupations Code, §2302.0015 requires a person to allow the department, law enforcement officers, and others to enter and inspect a business during normal business hours. Minimum normal business hours are not defined in statute or rule; therefore, these proposed amendments are necessary to establish these standards, and the board is authorized to do so under the rulemaking authority in Occupations Code, §2302.051. Proposed minimum standards for salvage vehicle dealers are consistent with current minimum requirements for GDN dealers in §215.140(1)(A) of this title and proposed minimum standards for salvage pool operators that only sell to wholesale dealers are consistent with current requirements for wholesale GDN dealers in §215.140(2) of this title. These proposed minimum hours are necessary to deter and prevent fraud in the application process, prevent consumer harm, and ensure the department and others authorized by law have access to a salvage vehicle dealer's location for inspection purposes. Proposed amendments to §221.43(c) and (d) would make minor word changes for clarity. An additional proposed amendment to §221.43(d) would give license holders more flexibility by adding options for the office telephone to be answered by the owner or a voicemail service in addition to a bona fide employee, answering service, or answering machine.
Proposed amendments to §221.44(a) would clarify that a permanent business sign must be made of durable, weather resistant material. Proposed amendments to §221.44(b) would clarify that a sign will be considered permanently mounted if it is bolted to an exterior building wall or bolted or welded to a dedicated sign pole or a sign support permanently installed in the ground. Proposed new §221.44(c) would authorize a license holder to use a temporary sign or banner if that license holder can show proof that a business sign that meets the above requirements has been ordered and provides a written statement that the business sign will be promptly and permanently mounted upon delivery. This proposed amendment would allow a license holder to open their business without delay if all other department requirements are met. Proposed new §221.44(d) would clarify that a license holder is still responsible for ensuring that the business sign complies with applicable municipal ordinances and that any signage requirements in a lease comport with the requirements of this section.
A proposed amendment to §221.45(a) would clarify that a business must be located in a building that has a permanent roof. A proposed amendment to §221.45(c) would clarify that a business may not conduct operations in a room or building not open to the public. A proposed amendment would create new §221.45(e) to clarify that a business may not be virtual or provided by a subscription for office space or office services. A proposed amendment would create new §221.45(f) to require the physical address of a business be in Texas, recognized by the U.S. Postal Service, and have an assigned emergency services property address, to ensure that both the public and department personnel can readily locate the place of business, and confirm the municipality in which the property is located. A proposed amendment to §221.45(g) would modernize the business access requirements by requiring the business to be equipped with internet access. These amendments are consistent with minimum standards for public health and safety and business operation and are necessary to deter and prevent fraud in the licensing process.
Proposed amendments to §221.46 regarding the requirements to display a license would make minor wording changes to simplify language for clarity without changing meaning.
A proposed amendment to §221.47 would clarify that a salvage vehicle dealer must properly process vehicle records in accordance with §217.86 of this title regarding the dismantling, scrapping, or destruction of motor vehicles. The following provision, §221.48, duplicates §217.86 and is therefore proposed for repeal because it is redundant and unnecessary with the proposed addition of a citation to §217.86 in §221.47.
A proposed amendment to §221.49 would add a phrase from the title of the section to the body of the section for clarification.
Proposed amendments to §221.50(a) would clarify that a sale or transfer of a flood-damaged vehicle must be in accordance with §217.88 of this title, regarding the sale, transfer, or release of ownership of a non-repairable or salvage motor vehicle. Proposed amendments to §221.50(b) would make wording and format changes to clarify the language without changing the meaning. Proposed amendments to §221.50(c) and (d) would delete duplicative language also found in §217.88.
Proposed amendments to §221.51 would make wording changes to clarify the language and comport with current practice. Proposed amendments to §221.51(c) and (d) would remove the phrase "or any other state" to reflect that the department does not have jurisdiction over out-of-state highways. Proposed amendments to §221.51(f) would allow flexibility for a salvage vehicle dealer who offers only salvage vehicles for sale to install a conspicuous permanent sign to provide the required notice to consumers under §221.51(a) and (c). A proposed amendment to §221.51(h) would rephrase the existing requirement to recognize that a separate salvage pool license endorsement no longer exists in statute as salvage vehicle dealer license endorsements were eliminated by SB 604, 86th Legislature, Regular Session (2019).
The proposed amendment to §221.52(a) would add a reference to §217.88 of this title. A proposed amendment to §221.52(b) would remove duplicate language found in §217.88 of this title, and the remaining subsections would be relettered. A proposed change to relettered §221.52(b) would change the retention period for a copy of a purchaser's photo identification from 48 to 36 months for consistency with §217.88.
Proposed amendments to §221.53 would reference §217.88 and delete redundant language found in §217.88.
Proposed amendments to §221.54 would add "vehicle" for consistency in terminology and would add two factors the department will consider in determining whether to conduct a site visit: whether a business location fails to meet premises or operating requirements and whether records require further investigation by the department. These criteria are proposed to be added because they are indicators of fraud and consumer harm that frequently arise in complaints investigated by the department.
Subchapter D. Records
Proposed amendments to §221.71 would edit language to remove surplus language and improve grammar and clarity. A proposed amendment to §221.71(c) would modernize the rule by deleting a reference to a requestor being present at the business location and adding an option for records to be provided electronically upon request. A proposed amendment to §221.71(e) would increase the deadline from 10 days to 15 days for a salvage vehicle dealer to provide copies of requested records to the department.
Proposed amendments to §221.72 would clarify an existing requirement that a salvage vehicle dealer maintain a record of each vehicle that is dismantled, in addition to each vehicle scrapped or destroyed, and shortens the length of retention of these records from the fourth anniversary of the date the report was acknowledged as received by the department to the third anniversary for consistency with other sections. Lastly, proposed amendments to §221.72(c) would add a word and remove a comma for clarity without changing the meaning of the rule.
Proposed amendments to §221.73 would make wording changes to improve clarity and reflect current practice regarding both vehicle purchase and vehicle sales records. Proposed amendments would add references to §221.52 and §217.89 and would remove redundant language in this section, related to unnecessary descriptors including various types of photo identification. The proposed amendments to §221.73(a) would expand the list of records that may be applicable to a particular purchase or sale for clarification and consistency with other rules and because these records are necessary for the department to determine a dealer's compliance with existing laws and rules.
Subchapter E. Administrative Procedures
All sections in Subchapter E are proposed for repeal because the substance of each rule and any proposed amendments are incorporated into proposed new Chapter 224, Adjudicative Practice and Procedure, which is published in this issue of the Texas Register. The proposed repeal includes §§221.91-221.96.
Subchapter F. Administrative Sanctions
Proposed amendments to §221.111 would delete unnecessary phrases without changing the meaning and would update a citation to improve clarity. Additionally, proposed amendments to §221.111(a)(5-6) would remove the phrase "is unfit to hold the licenses, is ineligible for licensure" from the factors the department considers to determine denial of licensure as that language is not found in Occupations Code, Chapter 2302.
Proposed amendments to §221.112 would delete unnecessary phrases without changing the meaning, add statutory and rule references and explanatory language for clarity, remove surplus language associated with those references, and renumber accordingly.
Proposed amendments to §221.115 would remove the language stating that the department will not refund license fees in the case of a licensure denial, suspension, or revocation and would substitute language that allows a refund with director approval unless a license application is withdrawn, denied, suspended, or revoked, or the license applicant or license holder is subject to an unpaid civil penalty imposed by a final order against the license applicant or license holder. This provision would ensure that the department receives as much of the civil penalties it assesses as possible but would also give the department flexibility to refund an application fee in other circumstances. These proposed amendments are consistent with the refund process for other license types.
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Monique Johnston, Director of the Motor Vehicle Division (MVD), has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Ms. Johnston also determined that, for each year of the first five years the proposed amendments are in effect, several significant public benefits are anticipated, and certain applicants and license holders may incur costs to comply with the proposal. In proposing these amendments, the department prioritized the public benefits associated with reducing fraud and related crime and improving public health and safety, while carefully considering potential costs to salvage vehicle dealers consistent with board and department responsibilities.
A proposed amendment would charge a $25 fee for a license amendment, the same amount paid by all other license holders for filing an amendment. Ms. Johnston has determined department resources to process a salvage vehicle dealer license amendment is approximately the same on average as for other dealer license types and a $25 fee is reasonable and fair.
Proposed amendments to §§221.14, 221.15, and 221.16, may require applicants and license holders to provide more information in the application. While some applicants may be required to spend more time completing an application or providing additional information, Ms. Johnston has determined these costs will be offset by the reduced risk of license applicants and holders incurring financial penalties due to noncompliance with applicable federal, state, or local statutes or property owner requirements, which will benefit both license holders and the public. The department's civil penalty guidelines for license holders who violate statutory provisions range $500 to $10,000 per violation.
In proposed amendments to §221.15, an applicant or license holder may not use a name or assumed name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public. Ms. Johnston estimates that a small number of current license holders may have to change a confusing, deceptive, or misleading business name or assumed name and may incur related secretary of state or county filing fees or signage cost. The Secretary of State filing fee to amend a business name is $150. Department research suggests the cost for an exterior sign will vary between $30 to $167, with an average expected cost of about $80. The department recognizes that these costs may vary widely based on business owner style and design preferences. The department's civil penalty guidelines for license holders who violate statutory provisions range $500 to $10,000 per violation. Ms. Johnston has determined that the signage cost will be offset by the reduced risk of these license holders incurring financial penalties due to noncompliance with laws and regulations and will benefit the public by informing the public and preventing consumer harm.
A proposed amendment to §221.14 would add fingerprint requirements for a salvage vehicle dealer license applicant and holder. Fingerprint requirements allow the department to verify the identity of license applicants, preventing fraudulent applications under false or stolen identities, while giving the department access to more accurate and comprehensive criminal history record information to use in evaluating fitness for licensure under its criminal offense guidelines in §211.3. These new fingerprint requirements benefit the public by preventing bad actors with a history of criminal offenses that directly relate to the duties and responsibilities of a license holder from obtaining licenses from the department and using those licenses to perpetrate fraudulent and criminal actions, or otherwise taking advantage of the position of trust created by the license. Ms. Johnston anticipates that there will be no additional costs on regulated persons to comply with the fingerprint requirements under this proposal as the new section does not establish fees for fingerprinting or processing criminal background checks. Fees for fingerprinting and access to criminal history reports are established by DPS under the authority of Texas Government Code Chapter 411.
Proposed amendments to §221.73 may require a salvage vehicle dealer to keep more document copies in a vehicle records file. Ms. Johnston anticipates that while most bona fide dealers already comply with these requirements, a few dealers may have to add up to four additional pages to the sales file. Department research suggests that the cost of a copy ranges from $0.14 to $0.22 per page. She has determined that these costs are necessary to prevent fraud and protect consumers.
Proposed changes to §221.43 requires a salvage vehicle dealer to observe minimum requirements for weekly business hours which vary based on whether a dealer sells at retail to the public or to wholesale customers. Ms. Johnston anticipates that bona fide salvage vehicle dealers exceed these minimum requirements. However, a salvage vehicle dealer may be required to establish more regular hours to comply. Ms. Johnston has determined that the minimum 16 hours per week for retail dealers and four hours per week for wholesale dealers is set so that the hiring of additional staff should not be required and that establishing minimum requirements for regular business hours is necessary to prevent fraud and ensure the public and department has access to the licensed business.
A proposed amendment would require a salvage vehicle dealer to have internet access in the office. Ms. Johnston anticipates that most bona fide salvage vehicle dealers already have access either at their office or on a mobile device. If a salvage dealer does not have access a dealer could purchase a mobile phone with a data plan. Department research suggests that this cost ranges from $15 to $90 per month and that basic internet service costs $65 per month. Ms. Johnston has determined that these requirements are reasonable minimum standards as the public and the department must be able to communicate with a license holder and these requirements are necessary to prevent fraud and consumer harm.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS.
The cost analysis in the Public Benefit and Cost Note section of this proposal determined that proposed amendments may result in additional costs for a few license holders. Based on data from the Comptroller and the Texas Workforce Commission, the department estimates that most license holders are small or micro-businesses. The department has tried to minimize costs to license holders. The new proposed requirements are designed to be the minimum standards that will prevent fraud in the application process, prevent consumer abuse, and protect public health and safety. These requirements do not include requirements that will cause a license holder to incur unnecessary or burdensome costs, such as employing additional persons.
Under Government Code §2006.002, the department must perform a regulatory flexibility analysis. The department considered the alternatives of not adopting amendments, exempting small or micro-businesses, and rural community license holders from these amendments, and adopting a limited version of these amendments for these license holders. The department rejects all three options. The department reviewed licensing and enforcement records, including records for license holders whose license has been revoked and determined that small and micro-business license holders are largely the bad actors perpetrating fraud in the application process and causing consumer harm, and that rural communities are not currently affected because department records indicate that no rural community holds a salvage dealer license. The department, after considering the purpose of the authorizing statutes, does not believe it is feasible to waive or limit the requirements of the proposed amendments for small or micro-business salvage vehicle dealers. Also, Government Code §2006.002(c-1) does not require the department to consider alternatives that might minimize possible adverse impacts on small businesses, micro-businesses, or rural communities if the alternatives would not be protective of the health and safety of the state.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments and repeals are in effect, the amendments will not create or eliminate a government program; will not require the creation of new employee positions and will not require the elimination of existing employee positions; will not require an increase or decrease in future legislative appropriations to the department; will require an increase in fees paid to the department by certain license holders who are required to file a license amendment; will expand existing regulations, delete some existing regulations, and make other existing regulations more flexible as described in the explanation section of this proposal; will repeal existing regulations to improve overall organization of department rules in conjunction with other proposals published in this issue of the Texas Register; will not increase or decrease the number of individuals subject to the rule's applicability; and will positively affect the Texas economy by deterring fraud and preventing consumer harm.
REQUEST FOR PUBLIC COMMENT. If you want to comment on the proposal, submit your written comments by 5:00 p.m. Central Time on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
STATUTORY AUTHORITY. The department proposes amendments to Chapter 221 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a license issued under Occupations Code, Chapter 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.052, which assigns the board a duty to set reasonable and necessary application fees, license fees, renewal fees, and other fees as required to implement the chapter; Occupations Code, §2302.103, which requires a salvage vehicle dealer to apply for a license on a form prescribed by the department and pay an application fee; Occupations Code, §2302.104, which prescribes content that must be included in an application; Occupations Code, §2302.105, which requires the department to complete an investigation of the applicant's qualifications before issuing a license; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
CROSS REFERENCE TO STATUTE. These rule revisions would implement Government Code, Chapter 411 and 2001; Occupations Code, Chapter 2302; and Transportation Code, Chapter 1002.
SUBCHAPTER A. GENERAL PROVISIONS
STATUTORY AUTHORITY.
The department proposes amendments to Chapter 221 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a license issued under Occupations Code, Chapter 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.052, which assigns the board a duty to set reasonable and necessary application fees, license fees, renewal fees, and other fees as required to implement Chapter 2302; Occupations Code, §2302.103, which requires a salvage vehicle dealer to apply for a license on a form prescribed by the department and pay an application fee; Occupations Code, §2302.104, which prescribes content that must be included in an application; Occupations Code, §2302.105, which requires the department to complete an investigation of the applicant's qualifications before issuing a license; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes amendments under the authority of Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and to take any action that is necessary or convenient to exercise that authority; Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These rule revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 53, 55, 2301, and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.1.Purpose and Scope.
Transportation Code, §1001.002, provides that the department shall administer and enforce Occupations Code, Chapter 2302. Chapter 2302 provides that a person may not act as a salvage vehicle dealer, unless the department issues that person a salvage vehicle dealer license, or an independent motor vehicle dealer's general distinguishing number issued under Chapter 503, Transportation Code, or a person is exempt from licensure under Occupations Code, Chapter 2302. This chapter describes the procedures by which a person obtains a salvage vehicle dealer license and the rules governing how a license holder or an independent motor vehicle dealer with authority to operate as a salvage vehicle dealer, must operate, and the procedures by which the department will administer and enforce Occupations Code, Chapter 2302, and this chapter.
§221.2.Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Board--The Board of the Texas Department of Motor Vehicles.
(2) Casual sale--A sale as defined by Transportation Code, §501.091.
(3) Component part--As defined by Occupations Code, §2302.251.
(4) Day--Means a calendar day unless otherwise
stated or context clearly indicates otherwise. [Corporation--A
business entity, including a corporation, or limited liability company,
but not a sole proprietorship or general partnership, which has filed
a certificate of formation or registration with the Texas Secretary
of State.]
(5) Department--The Texas Department of Motor Vehicles.
(6) Director--Means the division director that
regulates the distribution and sales of motor vehicles, including
any department staff to whom the director delegates any duty assigned
under this chapter. [Final order authority--The person
with authority under Occupations Code, Chapter 2302, or board rules
to issue a final order.]
(7) General Distinguishing Number (GDN)--As defined by Occupations Code, §2301.002(17).
(8) [(7)] License holder--A person
that holds a salvage vehicle dealer license or an independent
motor vehicle dealer GDN that authorizes the dealer to operate as
a salvage vehicle dealer [issued by the department].
[(8) Major component part--As defined
by Transportation Code, §501.091.]
(9) Metal recycler--As defined by Transportation Code, §501.091.
[(10) Minor component part--As defined
by Occupations Code, §2302.251.]
(10) [(11)] Nonrepairable motor
vehicle--As defined by Transportation Code, §501.091.
(11) [(12)] Nonrepairable record
of title--As defined by Transportation Code, §501.091.
(12) [(13)] Nonrepairable vehicle
title--As defined by Transportation Code, §501.091.
(13) [(14)] Out-of-state buyer--As
defined by Transportation Code, §501.091.
(14) [(15)] Out-of-state ownership
document--As defined by Transportation Code, §501.091.
(15) [(16)] Person--Has
the meaning assigned by Occupations Code, §2301.002. [A
natural person, partnership, corporation, trust, association, estate,
or any other legal entity.]
(16) [(17)] Public highway--As
defined by Transportation Code, §502.001.
(17) [(18)] Retail sale--As defined
by Occupations Code, §2301.002.
(18) [(19)] Salvage motor vehicle--As
defined by Transportation Code, §501.091.
(19) [(20)] Salvage record of
title--As defined by Transportation Code, §501.091.
(20) [(21)] Salvage vehicle dealer--As
defined by Transportation Code, §501.091.
(21) [(22)] Salvage vehicle title--As
defined by Transportation Code, §501.091.
(22) [(23)] Used part--As defined
by Transportation Code, §501.091.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304795
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§221.11, 221.13 - 221.20
STATUTORY AUTHORITY. The department proposes amendments to Chapter 221 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a license issued under Occupations Code, Chapter 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.052, which assigns the board a duty to set reasonable and necessary application fees, license fees, renewal fees, and other fees as required to implement Chapter 2302; Occupations Code, §2302.103, which requires a salvage vehicle dealer to apply for a license on a form prescribed by the department and pay an application fee; Occupations Code, §2302.104, which prescribes content that must be included in an application; Occupations Code, §2302.105, which requires the department to complete an investigation of the applicant's qualifications before issuing a license; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes amendments and under the authority of Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These rule revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 53, 55, 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.11.License Required.
(a) A person must hold a salvage vehicle dealer license, or an independent motor vehicle dealer's general distinguishing number issued under Chapter 503; Transportation Code to:
(1) act as a salvage vehicle dealer or rebuilder; or
(2) store or display a motor vehicle as an agent or escrow agent of an insurance company.
(b) A person may not engage in the business of buying, selling or exchanging motor vehicles that can be titled or registered to operate on public highways, including selling a salvage motor vehicle that has been rebuilt, repaired or reconstructed, unless the person holds a general distinguishing number issued by the department under Transportation Code, Chapter 503.
(c) The provisions of this subchapter do not apply
to a person exempt from licensure under Occupations Code, Chapter
2302.[:]
[(1) a person who purchases no more
than five (5) nonrepairable or salvage motor vehicles at casual sale
in a calendar year from:]
[(A) a salvage vehicle dealer; or]
[(B) an insurance company;]
[(2) a metal recycler, unless a motor vehicle is sold, transferred, released, or delivered to the metal recycler for the purpose of reuse or resale as a motor vehicle, or as a source of used parts, and is used for that purpose;]
[(3) a person who casually repairs, rebuilds, or reconstructs no more than five (5) salvage motor vehicles in the same calendar year;]
[(4) a person who is a non-United States resident who purchases nonrepairable or salvage motor vehicles for export only;]
[(5) an agency of the United States, an agency of this state, or a local government;]
[(6) a financial institution or other secured party that holds a security interest in a motor vehicle and is selling that motor vehicle in the manner provided by law for the forced sale of a motor vehicle;]
[(7) a receiver, trustee, administrator, executor, guardian, or other person appointed by or acting pursuant to the order of a court;]
[(8) a person selling an antique passenger car or truck that is at least 25 years old or a collector selling a special interest motor vehicle as defined in Transportation Code, §683.077, if the special interest vehicle is at least 12 years old; and]
[(9) a licensed auctioneer who, as a bid caller, sells or offers to sell property to the highest bidder at a bona fide auction under the following conditions:]
[(A) neither legal nor equitable title passes to the auctioneer;]
[(B) the auction is not held for the purpose of avoiding a provision of Occupations Code, Chapter 2302, or this subchapter; and]
[(C) the auction is conducted of motor vehicles owned, legally or equitably, by a person who holds a salvage vehicle dealer's license and the auction is conducted at their licensed location or at a location approved by the department.]
§221.13.License Terms and Fees.
(a) The term of a salvage vehicle dealer license issued by the department under Occupations Code, Chapter 2302, and this chapter, is two years. The fee for a salvage vehicle dealer license is $190. The entire amount of the fee is due at the time of application for the license.
(b) The department may prorate the fee for a salvage vehicle dealer license to allow the salvage vehicle dealer license to expire on the same day as another license issued by the department under Occupations Code, Chapter 2301; Chapter 2302; or Transportation Code, Chapter 503.
(c) The fee for a license amendment is $25.
§221.14.License Applications Generally.
(a) A salvage vehicle dealer license may be issued
for multiple locations within a single county. A separate license
and fee is required for a business location [or locations located]
in another county.
(b) An application for a new license, license
amendment, or license renewal filed with the department must be: [A license applicant must submit a signed application on a form prescribed
by the department, provide any required attachments, and remit the
required fees at the time of submission of the application.]
(1) on a form approved by the department;
(2) completed by the applicant, license holder, or authorized representative who is an employee, a licensed attorney, or a certified public accountant; and
(3) accompanied by the required fee from an account held by the applicant or license holder, or from a trust account of the applicant's or license holder's attorney or certified public accountant.
(c) License applications and fees must be submitted to the department electronically in a system designated by the department for licensing. Fees may be paid by credit card or electronic funds transfer.
(d) In evaluating a new or renewal salvage vehicle dealer license application or an application for a new location, the department may require a site visit to determine if the business location meets the requirements in this chapter.
(e) An applicant for a salvage vehicle dealer license must also comply with fingerprint requirements in §211.6 of this title (relating to Fingerprint Requirements for Designated License Applicants and License Holders).
(f) The department will not provide information regarding the status of an application, application deficiencies, or pending new license numbers to a person other than a person listed in subsection (b)(2) of this section unless the person files a written request under Government Code, Chapter 552.
§221.15.Required License Application Information.
(a) An applicant for a new salvage dealer license must register for an account in the department-designated licensing system by selecting the licensing system icon on the dealer page of the department website. An applicant must designate the account administrator and provide the name and email address for that person, and provide the business telephone number, name, business type, and social security number or employer identification number, as applicable. The applicant's licensing account administrator must be an owner, officer, manager, or bona fide employee.
(b) Once registered, an applicant for
a new salvage dealer license may apply for a license and must provide
the following: [The following information must be provided
on each salvage vehicle dealer application:]
(1) the application reason [full legal
name of the applicant];
(2) business information including:
(A) the name, provided that the applicant may not use a name or assumed name under which the applicant is authorized to do business that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public;
(B) mailing address;
(C) [(2)] the full business physical
address, including number, street, municipality, county, and
zip code for each location where the applicant will conduct business
[under the license if each location is] in the same county;
(D) business email;
(E) telephone number;
(F) Texas Sales Tax Identification Number;
(G) National Motor Vehicle Title Information System (NMVTIS) Identification Number;
(H) Secretary of State file number, if applicable; and
(I) website address, if applicable.
(3) application contact name, email address, and telephone number [the business telephone number and email address];
(4) the name, social security number, date of birth, identity document information, and ownership percentage for each owner, partner, member, beneficiary, or principal if the applicant is not a publicly traded company [the mailing address];
(5) the name, social security number, date of
birth, and identity document information for each officer, director,
manager, trustee, or other representative authorized to act on behalf
of the applicant if the applicant is owned in full or in part by a
legal entity; [a statement acknowledging that the department
will consider the applicant's designated mailing address the applicant's
last known address for department communication, including service
of process under Subchapter E of this chapter (relating to Administrative
Procedures). The designated mailing address will be considered applicant's
last known address until such time that the mailing address is changed
in the licensing records of the department after the license holder
submits an amendment to change the license holder's mailing address;]
(6) the name, employer identification number,
ownership percentage, and non-profit or publicly-traded status for
each legal entity that owns the applicant in full or in part; [all assumed names as registered with the secretary of state or county
clerk, as applicable;]
(7) the name, social security number, date of
birth, and identity document information of at least one manager or
other bona fide employee who will be present at the business location
if the license holder is out of state or will not be present during
business hours at the business location in Texas; [if applying
as a sole proprietor, the social security number, address and telephone
number for the sole proprietor;]
(8) criminal history record information under
the laws of Texas, another state in the United States, the United
States, and any foreign jurisdiction for each person listed in the
application, including offense description, date, and location; [if applying as a general partnership, the social security number,
address and telephone number for each of the general partners;]
(9) military service status; [if applying
as a limited partnership, limited liability company, or corporation,
the full name, social security number, address and telephone number
for each officer or director of the corporation, each member, officer,
or manager of the limited liability company, each partner, and each
officer of the limited partnership, including the information for
the general partner based on the type of entity;]
(10) licensing history required to evaluate business
reputation, character, and fitness for licensure including a statement
indicating whether the applicant or any person described in §211.2
of this title (relating to Application of Subchapter) has previously
applied for a license under this chapter or the salvage vehicle dealer
licensing laws of another jurisdiction, the result of the previous
application, and whether the applicant, including a person described
in §211.2 of this title, has ever been the holder of a license
issued by the department or another jurisdiction that was revoked,
suspended, or subject of an order issued by the board or by another
jurisdiction to pay an administrative penalty that remains unpaid; [the state sales tax
number;]
(11) information about each business location
and business premises to demonstrate compliance with related rules
in this chapter; [the National Motor Vehicle Title Information
System (NMVTIS) number evidencing that the applicant is registered
with NMVTIS;]
(12) signed Certification of Responsibility, which
is a form provided by the department; and [a statement
indicating whether the applicant or any person described in §211.2
of this title (relating to Application of Subchapter) has previously
applied for a license under this chapter or the salvage vehicle dealer
licensing laws of another jurisdiction, the result of the previous
application, and whether the applicant, including a person described
in §211.2 of this title, has ever been the holder of a license
issued by the department or another jurisdiction that was revoked,
suspended, or subject of an order issued by the board or by another
jurisdiction to pay an administrative penalty that remains unpaid;]
(13) any other information required by the department
to evaluate the application under current law and board rules. [a statement indicating whether the applicant has an ownership, organizational,
affiliation, or other business arrangement that would allow a person
to direct the management, policies, or activities of an applicant
or license holder, whether directly or indirectly, who was the holder
of a license issued by the department or by another jurisdiction that
was revoked, suspended, or subject of an order issued by the board
or by another jurisdiction to pay an administrative penalty that remains
unpaid;]
[(14) details of the criminal history
of the applicant and any person described in §211.2 of this title;]
[(15) details of the professional information of the applicant and any person described in §211.2 of this title;]
[(16) a statement that the applicant at the time of submitting the application is in compliance, and, after issuance of a license, will remain in compliance, with all ordinances and rules of the municipality or county of each location where the applicant will conduct business; and]
[(17) an acknowledgement that the applicant understands, is, and will remain in compliance with all state and federal laws relating to the licensed activity.]
(c) A salvage vehicle dealer renewing or amending its license must verify current license information and provide related information for any new requirements or changes to the license.
§221.16.Required Attachments to the License Application.
A legible and accurate electronic image of each applicable required document must be attached to the license application:
(1) the certificate of filing, certificate of incorporation, or certificate of registration on file with the Secretary of State, if applicable;
(2) each assumed name certificate on file with the Secretary of State or county clerk;
(3) at least one of the following valid and current identity documents for each natural person listed in the application:
(A) driver's license;
(B) Texas Identification Card issued by the Texas Department of Public Safety under Transportation Code, Chapter 521, Subchapter E;
(C) license to carry a handgun issued by the Texas Department of Public Safety under Government Code, Chapter 411, Subchapter H;
(D) United States or foreign passport; or
(E) United States military identification card;
(4) documents proving business premises ownership, or a fully executed lease or sublease agreement for the license period;
(5) business premises photos and a notarized affidavit certifying that all premises requirements in Subchapter C of the chapter are met and will be maintained during the license period;
(6) Texas Use and Sales Tax Permit;
(7) Franchise Tax Account Status issued by the Comptroller's Office; and
(8) any other documents required by the department to evaluate the application under current law and board rules.
[(a) If the applicant is a sole proprietor
or general partnership, in addition to the information required by §221.15
of this title (relating to Required License Application Information),
the applicant must submit a legible copy of one of the following types
of identification that is valid and active at the time of application
for the sole proprietor and each of the general partners:]
[(1) driver's license, Department of Public Safety identification, or state identification certificate issued by a state or territory of the United States;]
[(2) concealed handgun license or license to carry a handgun issued by the Department of Public Safety under Government Code, Chapter 411, Subchapter H;]
[(3) United States or foreign passport;]
[(4) United States Department of Homeland Security, United States Citizenship and Immigration Services, or United States Department of State Identification document;]
[(5) United States military identification card; or]
[(6) North Atlantic Treaty Organization identification or identification issued under a Status of Forces Agreement.]
[(b) If the applicant is a limited partnership, limited liability company, or a corporation, the applicant must submit a legible copy of one of the following current types of identification that is valid and active at the time of application for each partner of the limited partnership, each member of the limited liability company, and for each officer of the corporation:]
[(1) driver's license, Department of Public Safety identification, or state identification certificate issued by a state or territory of the United States;]
[(2) concealed handgun license or license to carry a handgun issued by the Department of Public Safety under Government Code, Chapter 411, Subchapter H;]
[(3) United States or foreign passport;]
[(4) United States Department of Homeland Security, United States Citizenship and Immigration Services, or United States Department of State Identification document;]
[(5) United States military identification card; or]
[(6) North Atlantic Treaty Organization identification or identification issued under a Status of Forces Agreement.]
[(c) If the applicant is a corporation, the applicant must submit a copy of the certificate of incorporation issued by the secretary of state or a certificate issued by the jurisdiction where the applicant is incorporated, and a verification that, at the time the application is submitted, all business franchise taxes of the corporation have been paid.]
[(d) If the applicant is a limited partnership, the applicant must submit a copy of the certificate of partnership issued by the secretary of state or a certificate issued by the jurisdiction where the applicant is formed, and verification that, at the time the application is submitted, all business franchise taxes of the limited partnership have been paid.]
[(e) Upon request by the department, the applicant shall submit documents demonstrating that the applicant owns the real property on which the business is situated or has a written lease for the property that has a term of not less than the term of the license.]
[(f) If the applicant is a sole proprietor or general partnership, in addition to the information required by §221.15, the applicant must submit a legible copy of the Assumed Name Certificate (DBA) issued by the county clerk in which the business is located.]
[(g) If the applicant is a limited partnership, limited liability company, or a corporation, the applicant must submit a legible copy of the Assumed Name Certificate (DBA) as registered with the Texas Secretary of State's office.]
[(h) If the applicant is a sole proprietor or general partnership, in addition to the information required by §221.15, the applicant must submit a legible copy of the Texas Sales and Use Tax Permit.]
[(i) If the applicant is a limited partnership, limited liability company, or a corporation, the applicant must submit a legible copy of the Texas Sales and Use Tax Permit.]
§221.17.License Processing for Military Service Members, Spouses, and Veterans.
(a) The department will process a license, amendment, or renewal application submitted for licensing of a military service member, military spouse, or military veteran in accordance with Occupations Code, Chapter 55. A license holder who fails to timely file a sufficient renewal application because the license holder was on active duty is exempt from any increased fee or penalty imposed by the department.
(b) A military service member or military spouse may engage in a business or occupation for which a department issued license is required if the military service member or military spouse meets the requirements of Occupations Code, §55.0041 and this section.
(1) A military service member or [To
meet the requirements of Occupations Code, §55.0041, a]
military spouse must submit to the department:
(A) notice of the military service member or military spouse's intent to engage in a business or occupation in Texas for which a department issued license is required;
(B) proof of the military service member being
stationed [military spouse's] [residency]
in Texas and a copy of the military service member or military
spouse's military identification card[, as required by Occupations
Code, §55.0041(b)(2)]; and
(C) documentation demonstrating that the military service member or military spouse is licensed and in good standing in another jurisdiction for the relevant business or occupation.
(2) Upon receipt of the notice and documentation required by paragraphs (1)(B) and (1)(C) of this subsection the department shall:
(A) confirm with the other licensing jurisdiction that the military service member or military spouse is currently licensed and in good standing for the relevant business or occupation; and
(B) conduct a comparison of the other jurisdiction's license requirements, statutes, and rules with the department's licensing requirements to determine if the requirements are substantially equivalent.
(3) If the department confirms that a military
service member or military spouse is currently licensed in good
standing in another jurisdiction with substantially equivalent licensing
requirements, the department shall [may] issue
a license to the military service member or military spouse
for the relevant business or occupation within 30 days.
The license is subject to the requirements of this chapter
and Occupations Code, Chapter 2302 in the same manner as a license
issued under the standard application process, unless exempted or
modified under Occupations Code, Chapter 55.
(c) This section establishes requirements and procedures authorized or required by Occupations Code, Chapter 55, and does not modify or alter rights that may be provided under federal law.
§221.18.Additional, New, or Closed Location.
(a) If the license holder intends to conduct business at more than one location within the same county, the applicant must:
(1) notify the department no later than 10 days before
opening the additional location by electronically submitting
a license amendment application in the department-designated licensing
system; [to amend the license to add an additional location;]
(2) acknowledge that the additional location[,
at the time of submitting the amendment,] is and will remain
in compliance with all ordinances and rules of the municipality or
county for the additional location and board rules; and
(3) obtain approval from the department before conducting business at the additional location.
(b) If the license holder intends to relocate its business to a new location within the same county, the license holder must:
(1) notify the department no later than 10 days before
opening the new location by electronically submitting a license
amendment application in the department-designated licensing system [to amend the license] to add a new location and remove the existing
location from the department's records;
(2) acknowledge that the new location[, at the
time of submitting the amendment,] is and will remain in compliance
with all ordinances and rules of the municipality or county for the
new location and board rules; and
(3) obtain approval from the department before conducting business at the new location.
(c) A license holder must notify the department in
writing within 10 days of [the] closing [of]
a business location by electronically submitting a license amendment
application in the department-designated licensing system to delete
the location if more than one location is listed on the license, or
closing the license if a single location is listed on the license.
(d) If a license holder is opening a new location not located in the same county, the license holder must apply for a new license.
§221.19.Notice of Change in [of] License Holder Information [Holder's Name,
Ownership, or Control].
(a) A license holder shall notify the department by electronically submitting a license amendment application in the department-designated licensing system to amend its license within 30 days of a change in the license holder's business name or assumed name. Upon submission of an amendment to change the business name or assumed name, the department shall reflect the new business name in the department's records. The dealer shall retain the same salvage vehicle dealer license number except if the business name change is the result of a change in the type of entity being licensed, such as a sole proprietorship becoming a corporation, or if the ownership of the business changes as discussed in subsection (b) of this section.
(b) A salvage vehicle dealer shall notify the department by electronically submitting a license amendment application in the
department-designated licensing system [by submitting a
request for license amendment] within 30 days of a change to:
(1) the entity type of the applicant or license holder;
(2) the departure or addition of any person reported to the department in the original license application or most recent renewal application, including any person described in §211.2 of this title (relating to Application of Subchapter);
(3) an ownership, organizational, managerial, or other
business arrangement that would allow the power to direct or cause
the direction of the management and policies and activities of an
applicant or license holder, whether directly or indirectly, to be
established in or with a person not described in paragraph (1) or
(2) of this subsection; or[.]
(4) a business email address, telephone number, mailing address, or change in license contact.
(c) The license holder must submit to the department
[a notice of change and] all information required
by the department to evaluate the license amendment application under
current law and rules [needed for that specific license modification].
§221.20.License Renewal.
(a) A salvage vehicle dealer license expires on the
second anniversary of the date the license was issued [of
issuance of the salvage vehicle dealer license].
(b) The salvage vehicle dealer license may be renewed for an additional period of two years upon timely submission of a renewal application on a form approved by the department with all required information, attachments, and fees. A renewal application is considered "timely" submitted if the renewal application with all required information, attachments, and required fees are received by the department on or before the expiration date of the existing license.
(c) The department will send a written notice of expiration
to a license holder's [salvage vehicle dealer's]
email address at least 31 [30] days before expiration
of a license.
(d) Failure by the department to send written notice of expiration under this section does not relieve a license holder from timely renewing a license.
(e) The renewal fee for salvage vehicle dealer license is $170.
(f) A license holder may renew an expired license by submitting a renewal application and paying a late renewal fee of $85 in addition to the renewal fee, if 90 or fewer days have elapsed since the license expired.
(g) A license holder may renew an expired license by submitting a renewal application and paying a late renewal fee of $170 in addition to the renewal fee, if more than 90 days but less than one year has elapsed since the license expired.
(h) If a license has been expired for [a period
of] one year or longer and the department has not received [is not in receipt of] a renewal application [with all required
information and attachments], the department will close
the license, and the license holder must apply for a new license
[in the same manner as an applicant for an initial license].
(i) In accordance with Government Code, §2001.054, a license holder that timely submits a renewal application under subsection (b) of this section may continue to operate under the expired license until the status of the renewal application is determined by the department.
(j) [(i)] If the department does
not receive a timely [is not in receipt of a] renewal
application with all required information and attachments and the
applicable renewal fee on or before [prior to]
the license expiration date [cancellation date of
the license], a salvage vehicle dealer may not engage in the
activities that require the license until the license has been renewed
by the department.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304796
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§221.41 - 221.47, 221.49 - 221.54
STATUTORY AUTHORITY. The department proposes amendments to Chapter 221 under §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes amendments and under the authority of Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.41.Location Requirements.
A salvage vehicle dealer must meet and maintain the
following requirements at each licensed business location [and
must maintain the following requirements] during the [entire]
term of the license.
(1) If the licensed business location is not owned
by the license holder, the license holder must maintain a lease that
is continuous during the period of time for which the license will
be issued [that extends through the period for which the
license will be issued]. The lease agreement must be on a
properly executed form [an executed lease contract]
containing at a minimum:
(A) the name of the property owner as the lessor
of the premises and the name of the dealer as the tenant or lessee
of the premises [ the names of the lessor and lessee];
(B) the period of time for which the lease is valid; [and]
(C) the street address or legal description of the
property, provided that if only a legal description of the property
is provided, the license holder must attach a statement verifying
that the property description in the lease agreement is the physical
street address identified on the application;[.]
(D) the signature of the property owner as the lessor and the signature of the dealer as the tenant or lessee; and
(E) if the lease agreement is a sublease in which the property owner is not the lessor, the dealer must also obtain a signed and notarized statement from the property owner including the following information:
(i) property owner's full name, email address, mailing address, and phone number; and
(ii) property owner's statement confirming that the dealer is authorized to sublease the location and may operate a salvage vehicle dealer business from the location.
(2) Any business location requirement in this subchapter
are in addition to any requirements by municipal [city]
ordinance, county rule, or state law.
§221.42.Operations Only at Licensed Business Location.
A salvage vehicle dealer may not sell or offer to sell a salvage
motor vehicle [vehicles] or non-repairable motor vehicle [vehicles] from any location other than a
licensed [the] business location [that has been
approved by the department].
§221.43.Business Hours.
(a) The office of a salvage vehicle dealer who sells to a retail customer shall be open at least four days per week for at least four consecutive hours per day and may not be open solely by appointment. The office of a salvage pool operator selling only to a wholesale dealer must be open at least two weekdays per week for at least two consecutive hours per day and may not be open solely by appointment. The business hours must be posted at the main entrance of the business's office that is accessible to the public.
(b) The license holder or a bona fide employee of the license holder shall be at the licensed business location during the posted business hours for the purpose of operating the salvage business and allowing the inspection of the business location and records.
(c) If the license holder or a bona fide employee of the license holder is not available to conduct business during the posted business hours due to special circumstances or emergencies, a separate sign must be posted indicating the date and time the license holder or bona fide employee of the license holder will resume operations at the licensed business location.
(d) Regardless of the license holder's business hours,
the license holder's [licensee's] telephone
must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide
employee, owner, answering service, voicemail service, or
answering machine.
§221.44.Business Sign Requirements.
(a) The license holder must display a permanent business
sign with letters at least six inches in height showing the
license holder's business name or assumed name as reflected on the
[license holder's] license issued by the department. A
business sign is considered permanent only if it is made of durable,
weather-resistant material.
(b) A business [The] sign must
be permanently mounted at each physical business [the]
address listed on the license. A business sign is considered
permanently mounted if bolted to an exterior building wall or bolted
or welded to a dedicated sign pole or sign support permanently installed
in the ground.
(c) A license holder may use a temporary sign or banner if that license holder can show proof that a business sign that meets the requirements of this paragraph has been ordered and provides a written statement that the business sign will be promptly and permanently mounted upon delivery.
(d) A license holder is responsible for ensuring that the business sign complies with municipal ordinances, and that any lease signage requirements are consistent with the signage requirements in this section.
§221.45.Business Office.
(a) The license holder's office must be located at the licensed business [license] location in a building with a permanent roof and connecting exterior walls on all sides.
(b) A license holder's office structure must comply with all applicable local zoning ordinances and deed restrictions.
(c) A license holder's office may not be located within a residence, apartment house or building, hotel, motel, [or]
rooming house, or any room or building not open to the public.
(d) A portable-type office structure may qualify as a business office only if the structure meets the requirements of this section and is not a readily moveable trailer or other vehicle.
(e) A license holder's office may not be virtual or provided by a subscription for office space or office services.
(f) The physical address of the salvage vehicle dealer's office must be in Texas, recognized by the U.S. Postal Service, and have an assigned emergency services property address.
(g) A license holder's office must be equipped with internet access.
§221.46.Display of License.
At each licensed business location, a [A] license holder must continuously display [at its business location the original or copy of] the license issued by the department [at all times] in a conspicuous manner that makes the license easily readable by the public [and is displayed in a conspicuous place at each licensed business location for which the license is
issued].
§221.47.Evidence of Ownership.
A salvage vehicle dealer must receive a properly assigned salvage vehicle title, salvage record of title, non-repairable vehicle title, non-repairable record of title, or out-of-state ownership document, as applicable, when acquiring a non-repairable motor vehicle or salvage motor vehicle in accordance with §217.86 of this title (relating to Dismantling, Scrapping, or Destruction of Motor Vehicles).
§221.49.Unique Inventory Number.
Occupations Code, §2302.255, sets out the requirements for a salvage vehicle dealer in assigning a unique inventory number when the salvage vehicle dealer purchases or takes delivery of a component part.
§221.50.Restrictions on Sales of Flood Damaged Vehicles.
(a) A motor vehicle that is [classified as]
a non-repairable motor vehicle or salvage motor vehicle based solely
on flood damage may be sold or transferred only as provided by this
section and §217.88 of this title (relating to Sale, Transfer,
or Release of Ownership of a Non-repairable or Salvage Motor Vehicle).
(b) A salvage vehicle dealer may sell, transfer, or
release a non-repairable motor vehicle or salvage motor vehicle if
the salvage vehicle dealer provides [to anyone if a non-repairable
or salvage vehicle title or a comparable out-of-state ownership document
has been issued for the motor vehicle provided] a written disclosure
[has been made] that the vehicle has been classified as
a non-repairable motor vehicle or salvage motor vehicle based solely
on flood damage.
[(c) If a non-repairable or salvage
vehicle title or a comparable out-of-state ownership document has
not been issued for the motor vehicle, a salvage vehicle dealer may
only sell, transfer, or release a non-repairable motor vehicle or
salvage motor vehicle to:]
[(1) an insurance company;]
[(2) a governmental entity;]
[(3) a licensed salvage vehicle dealer;]
[(4) an out-of-state buyer;]
[(5) a metal recycler; or]
[(6) a used automotive parts recycler, provided a written disclosure has been made that the vehicle has been classified as a non-repairable motor vehicle or salvage motor vehicle based solely on flood damage.]
§221.51.Duty to Identify Motor Vehicles Offered for Sale.
(a) A salvage vehicle dealer shall place a notice [sign] on each salvage motor vehicle it displays or offers for
sale that:
(1) is visible from outside of the salvage motor vehicle;
(2) contains lettering that is two inches or more in height identifying the vehicle is a salvage motor vehicle; and
(3) states as follows: "This is a salvage titled vehicle that cannot be operated on a public highway. If the salvaged vehicle is to be registered in Texas, the purchaser must apply to a county tax assessor-collector's office, surrender the salvage title, submit the required information on repairs that have been made to the vehicle and pay the applicable fees before the vehicle may be titled and/or registered to operate on the public highway."
(b) Upon the sale of a salvage motor vehicle, a salvage vehicle dealer shall obtain the purchaser's signature to a disclosure statement written in eleven point or larger font that states as follows: "I, (name of purchaser), acknowledge that at the time of purchase, I am aware that: the vehicle is titled on a salvage title; if I intend to operate the vehicle on a public highway in Texas, I am responsible for applying for a title for this salvage vehicle through a Texas county tax assessor-collector's office accompanied by the required forms showing that repairs have been made to the vehicle; I am responsible for paying the applicable fees; and, I may not drive this salvage vehicle on a public highway until after a titled branded rebuilt salvage and registration have been issued."
(c) A salvage vehicle dealer shall place a sign on each non-repairable motor vehicle it displays or offers for sale that:
(1) is visible from outside of the non-repairable motor vehicle;
(2) contains lettering that is two inches or more in height; and
(3) states as follows: "This
is a non-repairable titled motor vehicle that can never be operated
on a public highway of this state [or any other state]."
(d) Upon the sale of a non-repairable motor vehicle,
a salvage vehicle dealer shall obtain the purchaser's signature to
a disclosure statement written in eleven point or larger font that
states as follows: "I, (name of purchaser),
acknowledge that at the time of purchase, I am aware that the vehicle
is a non-repairable vehicle; this vehicle will never be able to operate
on a public highway of this state [or any other state]
and will never be registered to operate on a public highway of this
state [or any other state]; and, before selling this non-repairable
vehicle I must have the non-repairable vehicle titled in my name."
(e) A salvage vehicle dealer shall maintain a copy of the written disclosures required by this section as part of its records of sales in accordance with §221.73 of this title (relating to Content of Records).
(f) The notice requirements of subsections (a) and
(c) can be met if the salvage vehicle dealer conspicuously displays
a permanent sign that [single notice or notices if]
all of the vehicles being offered for sale by the salvage vehicle
dealer are salvage motor vehicles or non-repairable motor vehicles.
(g) If the salvage vehicle dealer conducts a sale of a salvage motor vehicle or a non-repairable motor vehicle in Spanish or other foreign language, the notices and disclosures required by this section shall be in that language.
(h) This section does not apply to a vehicle that is
displayed or offered for sale by a salvage vehicle dealer who
operates solely as a salvage pool operator and only sells vehicles
at wholesale [person who holds a salvage pool license on
the premises of the licensed salvage pool operator].
§221.52.Export-only Sales.
(a) A license holder may sell a non-repairable motor vehicle or a salvage motor vehicle to a person who resides in a jurisdiction outside the United States only as provided by Transportation Code, §501.099 and §217.88 of this title (relating to Sale, Transfer, or Release of Ownership of a Non-repairable or Salvage Motor Vehicle).
[(b) A license holder may accept any
of the following types of government-issued photo identification documents
to establish that the purchaser resides outside the United States:]
[(1) passport;]
[(2) driver's license;]
[(3) consular identity document;]
[(4) national identification certificate or identity document; or]
[(5) other photo identification card issued by the jurisdiction where the purchaser resides that contains the name, address, and date of birth of the purchaser.]
(b) [(c)] A legible copy of the purchaser's photo identification document must be maintained
in the records of the license holder for a period of 36 [48] months after the sale of a salvage motor vehicle or a non-repairable motor vehicle for "export-only."
(c) [(d)] The limitation on the
number of casual sales that may be made to a person under §221.53
of this title (relating to Casual Sales) does not apply to sales to
a person who resides in a jurisdiction outside the United States and
who purchases salvage motor vehicles and non-repairable motor vehicles
for "export-only."
§221.53.Casual Sales.
(a) A license holder may not make more than five (5) casual sales of salvage motor vehicles or non-repairable motor vehicles during a calendar year to the same person.
(b) A license holder must maintain records of each
casual sale made in accordance with §217.88 of this title
(relating to Sale, Transfer, or Release of Ownership of a Non-repairable
or Salvage Motor Vehicle). [during the previous 36 months,
as provided by §221.72 of this title (relating to Record Retention).
Such records must contain the following information regarding each
casual sale:]
[(1) the complete name, address and
phone number of the purchaser;]
[(2) a copy of one of the following valid and current photo identification documents for the purchaser:]
[(A) driver's license, Department of Public Safety identification, or state identification certificate issued by a state or territory of the United States;]
[(B) concealed handgun license or license to carry a handgun issued by the Department of Public Safety under Government Code, Chapter 411, Subchapter H;]
[(C) United States or foreign passport;]
[(D) United States Department of Homeland Security, United States Citizenship and Immigration Services, or United States Department of State Identification document;]
[(E) United States military identification card; or]
[(F) North Atlantic Treaty Organization identification or identification issued under a Status of Forces Agreement; and]
[(3) the year, make, model, color and vehicle identification number for the salvage motor vehicle or non-repairable motor vehicle.]
(c) A person who purchases a salvage motor vehicle or a non-repairable motor vehicle through a casual sale may not sell that salvage motor vehicle or non-repairable motor vehicle until the salvage vehicle title, salvage record or title, non-repairable vehicle title or non-repairable record of title, as applicable, is in the person's name.
§221.54.Criteria for Site Visits.
In determining whether to conduct a site visit at an active salvage vehicle dealer's location, the department will consider whether the dealer has:
(1) failed to respond to a records request;
(2) failed to operate from the license location; [or]
(3) an enforcement history that reveals failed compliance
inspections or multiple complaints with administrative sanctions being
taken by the department;[.]
(4) a business location that fails to meet premises or operating requirements under this chapter; or
(5) records that require further investigation by the department.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304797
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes a repeal to Chapter 221 under §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes repeals under the authority of Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, 2001.054, and 2001.039 in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. This repeal would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.48.Scrapped or Destroyed Motor Vehicle.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304798
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes amendments to Chapter 221 under §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes amendments and under the authority of Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.71.Records; Generally.
(a) A salvage vehicle dealer shall maintain a record of each salvage motor vehicle and non-repairable motor vehicle purchased, sold, or exchanged by the salvage vehicle dealer.
(b) A salvage vehicle dealer's records must be maintained at the licensed business location.
(c) Any records required to be maintained by a license
holder may be maintained in an electronic format if the record can
be reviewed and printed at the licensed business location or
provided electronically upon request [by a representative]
of the department [at the time the requestor is at the business location].
(d) A salvage vehicle dealer must make records available
for review and copying upon request by [a representative of]
the department. The department may request records [A
request for records may be made by the department] in person,
by mail, or electronically from a department email
or a department-designated system [by electronically document transfer].
(e) [Upon receipt of a request for review of records
sent by mail or electronic document transfer from the department,
a] A salvage vehicle dealer must provide [produce] copies of requested [specified]
records to the department [requestor] within 15
[10 calendar] days of receipt of the request [by
mail or electronic document transfer].
(f) Occupations Code, §2302.254, establishes the requirements that a salvage vehicle dealer maintain a record of an inventory of component parts purchased by or delivered to the salvage vehicle dealer.
§221.72.Record Retention.
(a) A salvage vehicle dealer must retain at the licensed business location, or have electronic access at the licensed business location of records stored electronically, a complete record of all purchases and sales of salvage motor vehicles and nonrepairable motor vehicles for a minimum period of 36 months from the date of the transaction.
(b) A salvage vehicle dealer shall maintain at the
licensed business location a record of each vehicle that is dismantled,
scrapped or destroyed, and a photocopy of the front and back
of all salvage vehicle titles and nonrepairable vehicle titles, or
a photocopy or electronic copy of all salvage records of title, and
nonrepairable records of title, and, if applicable, a photocopy of
any out-of-state evidence of ownership surrendered to the department,
until the third [fourth] anniversary of the
date the report was acknowledged as received by the department.
(c) A salvage vehicle dealer utilizing the department's
web-based title application known as webDEALER, as defined in §217.71
of this title (relating to Automated and Web-Based Vehicle Registration
and Title Systems), must comply with §217.74 of this title (relating
to Access to and Use of webDEALER). Original hard copy titles are
not required to be kept at the licensed business location[,] but must be made available to the department upon request.
§221.73.Content of Records.
(a) The records of a salvage vehicle dealer for purchases and sales shall include:
(1) the date the license holder purchased [of purchase of] the salvage motor vehicle, or non-repairable
motor vehicle;
(2) the name and address of the person who sold the salvage motor vehicle or non-repairable motor vehicle to the salvage vehicle dealer;
(3) if the person [who sold the salvage motor
vehicle or non-repairable motor vehicle to the salvage motor vehicle
dealer] is not an insurance company or a license holder [salvage pool operator], a photocopy of [one of] the
[following current] photo identification document [documents] of the person who purchased the salvage motor
vehicle or non-repairable motor vehicle from the salvage vehicle dealer
or sold the salvage motor vehicle or non-repairable motor vehicle
to the salvage vehicle dealer;[:]
[(A) driver's license, Department
of Public Safety identification, or state identification certificate
issued by a state or territory of the United States;]
[(B) concealed handgun license or license to carry a handgun issued by the Department of Public Safety under Government Code, Chapter 411, Subchapter H;]
[(C) United States or foreign passport;]
[(D) United States Department of Homeland Security, United States Citizenship and Immigration Services, or United States Department of State Identification document;]
[(E) United States military identification card; or]
[(F) North Atlantic Treaty Organization identification or identification issued under a Status of Forces Agreement;]
(4) a description of the salvage motor vehicle or non-repairable motor vehicle, including the model, year, make, and vehicle identification number, if applicable;
(5) the ownership document number and state of issuance of the salvage motor vehicle or non-repairable motor vehicle ownership document, if applicable;
(6) a copy of the salvage record of title or non-repairable record of title, if applicable, or a copy of the front and back of the ownership document for the salvage motor vehicle or non-repairable motor vehicle;
(7) a copy of the form if the ownership document has
been surrendered to the department; [and]
(8) any evidence indicating that the motor vehicle
was dismantled, scrapped, or
destroyed;[.]
(9) the sales contract or buyer’s order;
(10) the salvage disclosure notice required under §221.51 of this title (relating to Duty to Identify a Motor Vehicle Offered for Sale);
(11) a copy of the photo identification document required for export sales under §221.52 (relating to Export-Only Sales);
(12) records for a casual sale as required under §221.53 (relating to Casual Sales); and
(13) any other records required under current rules in this title.
(b) If the salvage motor vehicle has been rebuilt, repaired, or reconstructed by the salvage vehicle dealer the salvage
vehicle dealer's records must also include a form prescribed by the
department in accordance with §217.89 of this title (relating
to Rebuilt Salvage Motor Vehicles). [for "Rebuilt Vehicle
Statement," listing all repairs made to the motor vehicle, and, when
required to be completed, a form prescribed by the department for
"Component Part(s) Bill of Sale."]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304799
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
STATUTORY AUTHORITY. The department proposes repeals to Chapter 221 under §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes repeals under the authority of Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, 2001.054, and 2001.039 in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These repeals would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.91.Notice of Department Decision.
§221.92.Notice of Hearing.
§221.93.Final Decisions and Orders; Motions for Rehearing.
§221.94.Judicial Review of Final Order.
§221.95.Delegation of Final Order Authority.
§221.96.Cease and Desist Order.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304800
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
43 TAC §§221.111, 221.112, 221.115
STATUTORY AUTHORITY. The department proposes amendments to Chapter 221 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a license issued under Occupations Code, Chapter 2302; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.052, which assigns the board a duty to set reasonable and necessary application fees, license fees, renewal fees, and other fees as required to implement Chapter 2302; Occupations Code, §2302.103, which requires a salvage vehicle dealer to apply for a license on a form prescribed by the department and pay an application fee; Occupations Code, §2302.104, which prescribes content that must be included in an application; Occupations Code, §2302.105, which requires the department to complete an investigation of the applicant’s qualifications before issuing a license; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.
The department also proposes amendments and under the authority of Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.
Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.
Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.
CROSS REFERENCE TO STATUTE. These rule revisions would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 501-503, 1001-1003, and 1005.
§221.111.Denial of License.
(a) The [board or] department may deny an
application for a new license or an application for a license renewal [of a license] under Occupations
Code Chapter 53 or Chapter 2302, and §211.3 of this title (relating
to Criminal Offense Guidelines) or this chapter, if:
(1) all the information required on the application is not complete;
(2) the applicant or any owner, officer, director, or other person described in §211.2 of this title (relating to Application of Subchapter) made a false statement, material misrepresentation, or a material omission, on the application to issue, renew, or amend a license;
(3) the applicant, or any owner, officer, director, or other person described in §211.2 of this title, has been convicted, or considered convicted under Occupations Code §53.021(d), by any local, state, federal, or foreign authority, of an offense that directly relates to the duties or responsibilities of the licensed occupation as described in §211.3 of this title or is convicted of an offense that is independently disqualifying under Occupations Code §53.021;
(4) the applicant's or any owner's, officer's, director's, or other person described in §211.2 of this title, previous license was revoked;
(5) the applicant [or license holder] has
an ownership, organizational, managerial, or other business arrangement
that would allow a person the power to direct, management, policies,
or activities, of the applicant or license holder, whether directly
or indirectly, who [is unfit, ineligible for license, or]
has been subject to disciplinary action, including suspension, revocation,
denial, corrective action, cease and desist order, or assessment of
a civil penalty, administrative fine, or similar assessment for a
current or previous license, permit, or other authorization issued
by any local, state, or federal regulatory authority; or
(6) the applicant, or any owner, officer, or director,
or other person described in §211.2 of this title [is unfit
to hold the license, is ineligible for licensure, or] whose
current or previous license, permit, or other authorization issued
by any local, state, or federal regulatory authority has been subject
to disciplinary action, including suspension, revocation, denial,
corrective action, cease and desist order, or assessment of a civil
penalty, administrative fine, fee, or similar assessment.
(b) If the department denies an application for a license
to be issued under the authority of Occupations Code Chapter 2302,
the applicant may request an administrative hearing in the manner
specified in §224.54 [§221.91] of
this title (relating to Notice of Department Decision).
(c) In accordance with Occupations Code §2302.108,
the [board or] department shall reject any application
for issuance of a new license under Occupations Code Chapter 2302
filed by a person whose license is revoked before the first anniversary
of the date of revocation.
§221.112.Suspension, Revocation and Administrative Penalties.
The [board or] department may suspend or revoke
a license or impose an administrative penalty if the license holder:
(1) fails to meet or maintain the qualifications and requirements for a license;
(2) violates any law relating to the purchase, sale, exchange, storage, or distribution of motor vehicles, including salvage motor vehicles and nonrepairable motor vehicles;
(3) willfully defrauds a purchaser;
(4) fails to maintain purchase, sales, and inventory records as required by Occupations Code, Chapter 2302, Transportation Code, Chapter 501, Chapter 217, Subchapter D of this title, or this chapter;
(5) refuses[ to permit,] or fails to comply
with a request by the department to examine, during normal business
hours, the license holder's records as required by Occupations Code,
Chapter 2302, or this chapter;
(6) engages in motor vehicle or salvage business without the required license;
(7) engages in business as a salvage vehicle dealer at a location for which a license has not been issued by the department;
(8) fails to notify the department of a change of the
salvage vehicle dealer's license holder information as required
under §221.19 of this title (relating to Notice of Change in
License Holder Information) [legal business entity name,
assumed name, mailing address, or email address within 30 days of
such change by submitting an amendment to the license];
(9) fails to notify the department of a change in
location prior to operating in a new location or closing a location
in accordance with §221.18 of this title (relating to Additional,
New, or Closed Location) [described in §221.19(b)
of this title (relating to Change of License Holder's Name, Ownership,
or Control) as required in that section];
(10) fails to remain regularly and actively engaged in the business for which the salvage vehicle dealer license is issued;
(11) sells more than five (5) nonrepairable motor vehicles or salvage motor vehicles to the same person in a casual sale during a calendar year;
(12) violates any provision of Occupations Code Chapters 2301 or 2302, Transportation Code Chapters 501, 502, or 503, or any board rule or order promulgated under those statutes;
(13) uses or allows use of the salvage vehicle dealer's license or business location for the purpose of avoiding the requirements of Occupations Code Chapters 2301 or 2302, Transportation Code, Chapters 501, 502 or 503, or any board rule or order promulgated under those statutes;
(14) violates any law, ordinance, rule or regulation governing the purchase, sale, exchange, or storage, of salvage motor vehicles or nonrepairable motor vehicles;
(15) sells or offers for sale a nonrepairable motor vehicle or a salvage motor vehicle from any location other than the salvage vehicle dealer's licensed business location;
(16) is, or any owner, officer, director, or other person described in §211.2 of this title (relating to Application of Subchapter), is convicted, or considered convicted under Occupations Code §53.021(d), by any local, state, federal, or foreign authority, of an offense that directly relates to the duties or responsibilities of the licensed occupation as described in §211.3 of this title (relating to Criminal Offense Guidelines) or an offense that that is independently disqualifying under Occupations Code §53.021 after initial issuance or renewal of the salvage vehicle dealer license, or that has not been reported to the department as required;
(17) makes a false statement, material misrepresentation, or material omission in any application or other information filed with the department;
(18) fails to timely remit payment for administrative penalties imposed by the department;
(19) engages in business without a license required under Occupations Code Chapters 2301 or 2302, or Transportation Code Chapter 503;
(20) operates a salvage motor vehicle or a nonrepairable
motor vehicle on [the] public highways or allows another
person to operate a salvage motor vehicle or a nonrepairable motor
vehicle on public highways; or
[(21) dismantles a salvage motor vehicle
or a nonrepairable motor vehicle]
(21) [(22)] deals in used automotive
parts as more than an incidental part of the salvage vehicle dealer's
primary business.
§221.115.Refund of Fees.
In the absence of director approval, the department will not refund a fee paid by a license applicant or a license holder if:
(1) the application or license is withdrawn, denied, suspended, or revoked; or
(2) the license applicant or license holder is subject to an unpaid civil penalty imposed against the license applicant or license holder by a final order.
[The department will not refund fees paid if a license
is denied, suspended or revoked.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304801
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-4160
INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes new 43 Texas Administrative Code (TAC) Subchapter A, General Provisions, §§224.1-224.31; Subchapter B, Motor Vehicle, Salvage Vehicle, and Trailer Industry Enforcement, §§224.50-224.64; Subchapter C, Contested Cases Between Motor Vehicle Industry License Holders or Applicants, §§224.80-224.94; Subchapter D, Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement, §§224.110-224.130; Subchapter E, Contested Cases Referred to SOAH, §§224.150-224.166; Subchapter F, Board Procedures in Contested Cases, §§224.190-224.206; and Subchapter G, Lemon Law and Warranty Performance Claims, §§224.230-224.268.
The proposed new Chapter 224 is necessary to organize and consolidate adjudicative practice and procedure into one chapter for easier reference by license applicants, license holders, permit and registration holders, the public, and the department; to modify language to be consistent with current practice including use of electronic systems; for consistency with related rules and rule requirements promulgated by the State Office of Administrative Hearings (SOAH), to improve readability through the use of consistent terminology; to clarify existing language; to delete unused, archaic, or inaccurate definitions, terms, references or other language; to add new rules to address statutory requirements or department adjudicative procedures; and to modernize language and improve readability.
In 2019, the Sunset Commission recommended the Board of the Texas Department of Motor Vehicles (board) establish advisory committees and adopt rules regarding standard advisory committee structure and operating criteria. The board adopted rules in 2019 and advisory committees have since provided valuable input on rule proposals considered by the board for proposal or adoption. In September of 2023, the department provided an early draft of these rules to two department advisory committees, the Motor Vehicle Industry Regulation Advisory Committee (MVIRAC) and the Customer Service and Protection Advisory Committee (CSPAC). Committee members voted on formal motions and provided informal comments on other provisions. Input from both committees was incorporated into proposed new §§224.52 relating to Cease and Desist Order; Delegation of Authority, 224.162 relating to Statutory Stay, 224.192 relating to Appeal of an Interlocutory Order, and 224.260 relating to Lemon Law Relief Decisions.
EXPLANATION.
In this issue of the Texas Register, the department proposes revisions that would delete language regarding adjudicative practices and procedures in current 43 TAC §217.56 and Chapters 206, 215, 218, 219, and 221. The department is proposing to reorganize these rules into proposed new Chapter 224 for easier reference and to add rules consistent with the department's authority and responsibility under Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; Transportation Code, Chapters 502, 503, 621-623, 643, 645, and 1001-1005; and rules promulgated by the State Office of Administrative Hearings (SOAH). The proposed new rules would be organized into seven subchapters.
Subchapter A. General Provisions
Proposed new §224.1 would describe the purpose and scope of new Chapter 224, which would include all contested case matters in which the department has jurisdiction. Subchapter A would apply to all contested case matters unless expressly excluded or limited in another subchapter. The following current sections of this title regarding purpose or scope would be incorporated into new Chapter 224: §206.61, relating to Scope and Purpose; §215.21, relating to Purpose and Scope; §215.201, relating to Purpose and Scope; §218.70, relating to Purpose; and §219.120, relating to Purpose. These provisions are all proposed for repeal in this issue of the Texas Register.
Proposed new §224.3 would include definitions for terms used throughout Chapter 224. Proposed new §224.3 would incorporate terms defined in relevant content from 1 TAC §155.5, relating to Definitions, which are definitions used by SOAH. It would also incorporate the provisions of the following current sections of this title, which are proposed for repeal in this issue of the Texas Register: §215.2, relating to Definitions; Conformity with Statutory Requirements; §221.2, relating to Definitions; and §206.62, relating to Definitions.
Proposed new §224.5 would address prohibited communication during a contested case, including ex parte communication, and would incorporate the existing provisions of current section §215.22 of this title, relating to Prohibited Communications, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.7 would address the appearance by an authorized representative, intervention in a contested case, and the invitation of a person who is not a contested case party to participate in mediation. Relevant content would be incorporated into proposed new §224.7 from 1 TAC §155.201, relating to Representation of Parties, as well as current §215.23 of this title, relating to Appearances, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.9 would provide guidance on computing time consistent with Government Code, §311.014. Proposed new §224.9 would also incorporate relevant content from the existing provisions of §215.29 of this title, relating to Computing Time, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.11 would provide general procedures related to filing and service of documents. Proposed new §224.11 would incorporate relevant content from 1 TAC §155.101 (a-d), relating to Filing Documents. Proposed new §224.11 would also incorporate other current sections of this title--§215.30, relating to Filing of Documents, and §215.49, relating to Service of Pleading, Petitions, Briefs, and Other Documents--that are proposed for repeal in this issue of the Texas Register.
Proposed new §224.13 would address discovery matters, including the requirement for cooperation between the contested case parties and criteria and process for a party to request a commission or subpoena. Proposed new §224.13 would incorporate relevant content from 1 TAC §155.259, relating to Discovery Motions, and §206.67 of this title, relating to Discovery, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.15 would address hearing recording and transcription costs. Proposed new §224.15 would incorporate relevant content from 1 TAC §155.423, relating to Making a Record of the Proceeding, and §215.37(a-c) of this title, relating to Recording and Transcriptions of Hearing Cost, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.17 would address when proceedings may be consolidated. Proposed new §224.17 would incorporate relevant provisions from current §215.38 of this title, relating to Consolidation of Proceedings, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.19 would address the timing and criteria for informally disposing of a contested case. Proposed new §224.19 would incorporate relevant content from current §215.316 of this title, relating to Informal Disposition, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.21 would address criteria for when a party may waive a hearing and consent to an agreed order. Proposed new §224.21 would incorporate relevant content from current §215.39 of this title, relating to Waiver of Hearing, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.23 would require a contested case hearing to be open to the public. Proposed new §224.23 would incorporate content from current §215.36 of this title, relating to Hearings To Be Public, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.25 would address when a deadline may or may not be extended. Proposed new §224.25 would incorporate content from current §215.32 of this title, relating to Extension of Time, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.27 would implement provisions of Government Code 2001, Subchapter F that govern the issuance of final orders and motions for rehearing. Proposed new §224.27 would include related content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.55, relating to Final Decision, §215.501, relating to Final Decisions and Orders; Motions for Rehearing, §215.505, relating to Denial of Dealer or Converter Access to Temporary Tag System, and §221.93, relating to Final Decisions and Orders; Motions for Rehearing.
Proposed new §224.29 would address delegation of final order authority in accordance with Occupations Code, §2301.154(c) and §2301.711, and Transportation Code, §1003.005(b), as applicable. Proposed new §224.29 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.43, relating to Conduct and Decorum, §215.58, relating to Delegation of Final Authority, and §221.95, relating to Delegation of Final Order Authority.
Proposed new §224.31 would address the cost of providing a contested case record for appeal purposes. Proposed new §224.31 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.37(d), relating to Recording and Transcriptions of Hearing Cost, §218.75, relating to Cost of Preparing the Agency Record, and §219.127, relating to Cost of Preparing Agency Record.
Subchapter B. Motor Vehicle, Salvage Vehicle, and Trailer Industry Enforcement
Proposed new §224.50 would address the purpose and scope of this subchapter and would identify the other subchapters that apply to these types of contested cases. Proposed new §224.50 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.21, relating to Purpose and Scope, and §215.201, relating to Purpose and Scope.
Proposed new §224.52 would address procedures related to cease and desist orders issued under Occupations Code, Chapters 2301 or 2302, including the notice and opportunity required for due process. Proposed new §224.52 would also address the delegation of signature authority to the department's Enforcement Division Director to sign interlocutory cease-and-desist orders. Proposed new §224.52 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.314, relating to Cease and Desist Orders, and §221.96, relating to Cease and Desist Order. The delegation of signature authority for an interlocutory cease-and-desist order is new text that is not contained in the department's current sections of this title. The delegation of signature authority is necessary to address a situation in which the facts warrant the issuance of an interlocutory cease-and-desist order as soon as possible. Additionally, proposed new §224.52 would clarify the notice and opportunity to respond for an individual who may be subject to a cease-and-desist order, to ensure consistent due process.
Proposed new §224.54 would address criteria used by the department to assess a civil penalty consistent with and under the authority of Occupations Code, §2301.801 and §2302.354, and Transportation Code, §503.095. These criteria are currently reflected in the department's disciplinary matrix for motor vehicle dealers that is published on the department's website. Proposed new §224.54 would create clarity and ease of reference for licensees, administrative law judges, and board members seeking to determine the appropriate penalty in a contested case.
Proposed new §224.56 would address the requirements for a notice of department decision issued to a person who is alleged to have violated a statute or department rule. Proposed new §224.56 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.500, relating to Administrative Sanctions and Procedures, and §221.91, relating to Notice of Department Decision.
Proposed new §224.58 would address the process for denying access to the temporary tag system as authorized under Transportation Code, §503.062(f). Proposed new §224.58 would incorporate content from current §215.505 of this title, regarding Denial of Dealer or Converter Access to Temporary Tag System, that is proposed for repeal in this issue of the Texas Register.
Proposed new §224.60 would describe the process for filing and service of documents under this subchapter. Proposed new §224.60 would be incorporate relevant content into from 1 TAC §155.101 (a-d), relating to Filing Documents, and the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.30, relating to Filing of Documents, and §215.49, relating to Service of Pleading, Petitions, Briefs, and Other Documents.
Proposed new §224.62 would address the process for referring a contested case under this subchapter to SOAH. Proposed new §224.62 would be incorporate relevant content from 1 TAC §155.51, relating to Jurisdiction, and §155.53, relating to Request to Docket Case, as well as current §215.306 of this title, relating to Referral to SOAH, that is proposed for repeal in this issue of the Texas Register.
Proposed new §224.64 would address the process for the department to issue a notice of hearing for contested cases under this subchapter. Proposed new §224.64 would incorporate relevant content into from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.34, relating to Notice of Hearing in Contested Case, and §221.92, relating to Notice of Hearing.
Subchapter C. Contested Cases Between Motor Vehicle Industry License Holders or Applicants
Proposed new §224.80 would address the purpose and scope of this subchapter and would identify the other subchapters that would apply to these types of contested cases for clarity and ease of reference. Proposed new §224.80 incorporates relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.21, relating to Purpose and Scope, and §215.201, relating to Purpose and Scope.
Proposed new §224.82 would address the requirements for a franchised dealer to file a protest or complaint consistent with the department's responsibilities under Occupations Code, Chapter 2301. Proposed new §224.82 would incorporate relevant content would from current §215.106 of this title, relating to Time for Filing Protest.
Proposed new §224.84 would address how a protest, complaint, or other document must be filed, including the requirement to file and pay any required fee electronically, and include all assigned docket numbers. Proposed new §224.84 would incorporate relevant content into from 1 TAC §155.101 (a-d), relating to Filing Documents, and the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.24, relating to Petitions, §215.30, relating to Filing of Documents, §215.49, relating to Service of Pleading, Petitions, Briefs, and Other Documents, and §215.305, relating to Filing of Complaints, Protests, and Petitions; Mediation.
Proposed new §224.86 would describe the process used by the department to review a protest or complaint to determine if the protest or complaint meets the minimum statutory requirements and is appropriate to refer to SOAH for a hearing at SOAH consistent with the department's responsibilities under Occupations Code, Chapter 2301.
Proposed new §224.88 would describe the department's procedure for docketing a contested case under this subchapter, the issuance of a stay as authorized by Occupations Code §2301.803, the notice to the parties, the opportunity for the parties to accept or decline a department mediator and retain a private mediator, and the deadline to notify the department regarding the mediator option chosen by the parties. Mediation is required under Occupations Code, Subchapter K and §2301.703.
Proposed new §224.90 would describe the procedures related to mediation including the timeline for mediation, requirements if a private mediator is selected by the parties, the requirement for a mediator to submit a written report, and the department's actions upon receiving the report including notifying SOAH whether a party refused to participate or attend mediation. Proposed new §224.90 would allow a SOAH Administrative Law Judge (ALJ) to recommend a sanction in the final proposal for decision for refusal to participate or attend statutorily required mediation. Proposed new §224.90 would incorporate relevant content from the following current §215.305 of this title, relating to Filing of Complaints, Protests, and Petitions; Mediation, that is proposed for repeal in this issue of the Texas Register.
Proposed new §224.92 would address the process for referring a contested case under this subchapter to SOAH. Proposed new §224.92 would incorporate relevant content from 1 TAC §155.51, relating to Jurisdiction, and §155.53, relating to Request to Docket Case, as well as the following current §215.306 of this title, relating to Referral to SOAH, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.94 would address the process for the department to issue a notice of hearing for contested cases under this subchapter. Proposed new §224.94 would incorporate relevant content from current §215.34 of this title, relating to Notice of Hearing in Contested Cases, which is proposed for repeal in this issue of the Texas Register.
Subchapter D. Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement
Proposed new §224.110 would address the purpose and scope of this subchapter and identify the other subchapters that would apply to these types of contested cases. Proposed new §224.110 would incorporate relevant content from the following current sections of this title: §218.1, relating to Purpose, §218.70, relating to Purpose, §219.1, relating to Purpose and Scope, and §219.120, relating to Purpose.
Proposed new §224.112 would reference definitions used in statute and existing rules to avoid duplication and potential conflict when incorporating definitions from the Transportation Code, and the following current sections of this title: §218.2, relating to Definitions, and §219.2, relating to Definitions.
Proposed new §224.114 would address procedures related to cease-and-desist orders issued under Transportation Code, §643.256. Proposed new §224.114 would incorporate relevant content from §218.77, relating to Cease and Desist Order, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.115 would address criteria used by the department to assess an administrative penalty under Transportation Code, §§623.271, 623.272, and 643.251. Transportation Code, §643.251 provides the dollar caps for administrative penalties, as well as the factors on which the administrative penalty shall be based. Transportation Code, §623.271 and §623.272 state that the amount of an administrative penalty imposed under §623.271 and §623.272, respectively, is calculated in the same manner as the amount of an administrative penalty imposed under Transportation Code, §643.251. Proposed new §224.115 would also address the criteria the department would use to determine whether to probate a suspension of a motor carrier's registration, as well as the length of the probation and the reporting requirements during the probation. Many of these criteria are currently reflected in the department's disciplinary matrix for motor carriers that is published on the department's website. The department's disciplinary matrix for motor carriers also includes the factors on which the administrative penalty shall be based under Transportation Code, §§623.271, 623.272, and 643.251(c). Proposed new §224.115 would create clarity and provide ease of reference for motor carriers, administrative law judges, and the Motor Carrier Division Director seeking to determine the appropriate administrative penalty in a contested case. Proposed new §224.115 would incorporate relevant content from §218.71, relating to Administrative Penalties; §218.72, relating to Administrative Sanctions; §219.121, relating to Administrative Penalties; and §219.126, relating to Administrative Penalty for False Information on Certificate by a Shipper, which are proposed for amendment or repeal in this issue of the Texas Register.
Proposed new §224.116 would address procedures when the department decides to take enforcement action under any of the following sections of this title: §218.16, relating to Short-term Lease and Substitute Vehicles; §218.64, relating to Rates; §218.71, relating to Administrative Penalties; §218.72, relating to Administrative Sanctions; §219.121, relating to Administrative Penalties; §219.122, relating to Administrative Sanctions; or §219.126, relating to Administrative Penalty for False Information on Certificate by a Shipper. Proposed new §224.116 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §218.71, relating to Administrative Penalties; §218.73, relating to Administrative Proceedings; and §219.124, relating to Administrative Proceedings.
Proposed new §224.118 would require a person to file a document according to written instructions provided by the department as different systems and methods may be used depending on the party and type of enforcement action.
Proposed new §224.120 would describe the procedures followed by the department upon receiving a final order issued under Family Code, §§232.003, 232.008, or 232.009, regarding child support enforcement. Proposed new §224.120 would incorporate relevant content from current §218.76 of this title, relating to Registration Suspension Ordered Under the Family Code, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.122 would prescribe the requirements for a vehicle registrant that wants to appeal a decision against the registrant of an assessment (a financial penalty under §217.56(c)(2)(G)) or a cancellation or revocation of the registrant's apportioned registration under the International Registration Plan (IRP). Proposed new §224.122 would incorporate relevant content from current §217.56(c)(2)(J)(iii) of this title, relating to Registration Reciprocity Agreements, which is proposed for amendment in this issue of the Texas Register.
Proposed new §224.124 would describe the appeal process for a person who is denied registration whether it be a new, renewal, or reregistration application under Transportation Code, Chapter 643. Proposed new §224.124 would incorporate relevant content from current §218.78 of this title, relating to Appeal of Denial, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.126 would describe the appeal process for a person whose application for self-insured status is denied under §218.16(d), relating to Insurance Requirements. Relevant content would be incorporated from current §218.16(d), which is proposed for amendment in this issue of the Texas Register.
Proposed new §224.128 would address the process for referring a contested case under this subchapter to SOAH. Relevant content would be incorporated from 1 TAC §155.51, relating to Jurisdiction, and §155.53, relating to Request to Docket.
Proposed new §224.130 would address the process for the department to issue a notice of hearing for contested cases under this subchapter consistent with the statutory requirements under Government Code, Chapter 2001, and SOAH's rule regarding notice of hearing in 1 TAC §155.401, relating to Notice of Hearing.
Subchapter E. Contested Cases Referred to SOAH
Proposed new §224.150 would describe the types of contested cases that are referred to SOAH, the transfer of jurisdiction from the department to SOAH, and the transfer of jurisdiction from SOAH back to the department. Proposed new §224.150 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.21, relating to Purpose and Scope; §215.201, relating to Purpose and Scope; and §215.303, relating to Application of Board and SOAH Rules.
Proposed new §224.152 would describe the department's procedures for referring a contested case to SOAH consistent with SOAH's rules. Relevant content would be incorporated into proposed new §224.152 from SOAH's related rules in 1 TAC §155.51, relating to Jurisdiction, and §155.53, relating to Request to Docket, as well as current §215.306 of this title, relating to Referral to SOAH, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.154 would address notice of hearing requirements applicable under Government Code, §2001.052; Occupations Code, §2301.705; 1 TAC §155.401, relating to Notice of Hearing; and Transportation Code, Chapters 621-623 and 643; would provide for service of parties outside the United States to the extent authorized by applicable law; and would address the amendment of a notice of hearing under Government Code, §2001.052(b). Proposed new §224.154 would incorporate relevant content from SOAH's related rules in 1 TAC §155.401, as well as the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.34, relating to Notice of Hearing in Contested Cases; §215.307, relating to Notice of Hearing; §218.73, relating to Administrative Proceedings; §219.124, relating to Administrative Proceedings; and §221.92, related to Notice of Hearing. Transportation Code, §643.2525(a) requires the department to give written notice to the motor carrier by first class mail for an enforcement action under Transportation Code, §643.251 or §643.252 regarding administrative penalties and sanctions, respectively. Transportation Code, §623.271(b) and §623.272(b) state that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or revocation of a permit under §623.271 and the imposition of an administrative penalty under §623.272.
Proposed new §224.156 would describe the process for a party to reply to a notice of hearing and the consequences for when a party does not appear at a hearing. Proposed new §224.156 would incorporate relevant content from current §215.308 of this title, relating to Reply to Notice of Hearing and Default Proceedings, which is proposed for repeal in this issue of the Texas Register. Relevant content would also incorporate applicable sections of SOAH's rules of procedure for contested cases within SOAH's jurisdiction.
Proposed new §224.158 would describe the process and deadlines for an ALJ to consider an amicus brief. The new proposed rule would allow amicus briefs to be incorporated into the administrative record of the contested case for review and consideration by the ALJ, and the board or board designate responsible for issuing a final order in the case. Proposed new §224.158 would incorporate relevant content from current §215.311 of this title, relating to Amicus Briefs, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.162 would address an ALJ's responsibilities to hear and rule on a request regarding a statutory stay and the right for a party to file an interlocutory appeal with the board. Proposed new §224.162 would incorporate relevant content from §215.315 of this title, relating to Statutory Stay, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.164 would describe the ALJ and party responsibilities relating to a proposal for decision in a contested case. Proposed new §224.164 would be incorporate relevant content from SOAH's related rule in 1 TAC §155.507, relating to Proposals for Decision; Exceptions and Replies, and current §215.310 of this title, relating to Issuance of Proposals for Decision and Orders, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.166 would describe the process by which jurisdiction transfers back to the board or board delegate for a final decision, consistent with the requirements of Government Code, Chapter 2001.
Subchapter F. Board Procedures for Contested Cases
Proposed new §224.190 would describe the scope of the subchapter, which includes review and consideration of a contested case and issuance of a final order by the board or board delegate. Proposed new §224.190 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.21, relating to Purpose and Scope, and §215.201, relating to Purpose and Scope.
Proposed new §224.192 would describe the process for a person to appeal an interlocutory cease-and-desist or stay order authorized under Occupations Code, Chapter 2301, to comply with the statutory requirement that the board rule on appeals of such interlocutory orders. Proposed new §224.192 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.314, relating to Cease and Desist Orders, and §221.96, relating to Cease and Desist Order. Proposed new §224.192 would also clarify the timelines and process through which a party would request to make an oral presentation or to provide written materials to the board when it reviews the appeal of the interlocutory order. Proposed new §224.192 would also stipulate that the board's review of an appeal of an interlocutory order is limited to the review and changes allowed under Texas Government Code, §2001.058(e), to clarify the separate roles of the SOAH ALJ and the board in reviewing an interlocutory order issued by the department.
Proposed new §224.194 would describe the process for scheduling the review of a contested case by the board or a board delegate and allow for the decision-making authority to review the case during a public meeting to increase public insight into the decision-making process.
Proposed new §224.196 would describe department's procedures, deadlines, and order of presentations, if a contested case party wants to make an oral presentation to the board as part of the board's consideration of the contested case. Proposed new §224.196 would incorporate relevant content from current §215.59 of this title, relating to Request for Oral Presentation, which is proposed for repeal in this issue of the Texas Register. In addition, language in proposed new §224.196(e) would clarify that §206.22 of this title, relating to Public Access to Board Meetings, does not authorize a party to speak as a public commenter regarding the party's contested case before the board during the posted agenda item or during the open comment period. Proposed new §224.196 complies with Transportation Code, §1004.002, which requires the board to develop policies that provide the public with a reasonable opportunity to appear before the board and speak on any issue under the jurisdiction of the board. A party that complies with the requirements under proposed new §224.196 would be allowed a maximum of 15 minutes to make their oral presentation to the board unless the board chair increases this time under proposed new §224.200.
Proposed new §224.198 would describe the responsibilities and deadlines for a party that wants to provide written materials to the board as part of the board's consideration of the contested case. Proposed new §224.198 would incorporate relevant content from current §215.60 of this title, relating to Written Materials and Evidence, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.200 would describe the responsibilities and limitations for a party making an oral presentation as part of the board's consideration of the contested case. Proposed new §224.200 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §§206.22(f), relating to Public Access to Board Meetings, §215.61, relating to Limiting Oral Presentation and Discussion to Evidence in the Administrative Record, and §215.62, relating to Order of Presentations to the Board for Review of a Contested Case.
Proposed new §224.202 would describe the order of presentations at the board meeting in which the board is considering a contested case. Proposed new §224.202 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §§206.22(f), relating to Public Access to Board Meetings, and 215.62, relating to Order of Presentations to the Board for Review of a Contested Case.
Proposed new §224.204 would address board member conduct while reviewing and considering a contested case. Proposed new §224.204 would incorporate relevant content from current §215.63 of this title, relating to Board Conduct and Discussion When Reviewing a Contested Case, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.206 would describe the requirements for a final order issued by the board or a board delegate and when the order is final. Proposed new §224.206 would incorporate relevant content from §215.501 of this title, relating to Final Decisions and Orders; Motions for Rehearing, which is proposed for repeal in this issue of the Texas Register.
Subchapter G. Lemon Law and Warranty Performance Claims
Proposed new §224.230 would describe the scope of this subchapter, provide statutory references, and define terms used in the subchapter. Proposed new §224.230 would be incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.21, regarding Purpose and Scope, and §215.201, regarding Purpose and Scope.
Proposed new §224.232 would describe the requirements for a person to file a lemon law or warranty performance claim, the process, and the assistance available from the department to enable a person to do so. Proposed new §224.232 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.27, relating to Complaints, and §215.202, relating to Filing of Complaints.
Proposed new §224.234 would describe how the department reviews a complaint to determine if the department has jurisdiction and meets minimum statutory requirements. Proposed new §224.234 would incorporate relevant content from current §215.203 of this title, relating to Review of Complaints, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.236 would describe the process regarding the notification to the manufacturer, distributor, or converter. Proposed new §224.236 would be incorporate relevant content from current §215.204 of this title, relating to Notification to Manufacturer, Converter, or Distributor, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.238 would describe the process for mediation, settlement, and referral for hearing with a hearings examiner. Proposed new §224.238 would incorporate relevant content from current §215.205 of this title, relating to Mediation; Settlement, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.240 would describe the notice of hearing requirements consistent with Government Code, Chapter 2001. Proposed new §224.240 would incorporate relevant content from the current §215.34 of this title, relating to Notice of Hearing in Contested Cases, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.242 would describe the requirements for a party to make a motion, as well as the fact that a motion is not granted unless a hearings examiner makes a ruling. Proposed new §224.242 would incorporate relevant content from current §215.47 of this title, relating to Motions, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.244 would describe the methods by which a document may be filed and served in this subchapter. Proposed new §224.244 would incorporate relevant content from current §215.49 of this title, relating to Service of Pleading, Petitions, Briefs, and Other Documents, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.246 would describe the role and powers of the hearings examiner and the recusal or substitution process. Proposed new §224.246 would incorporate relevant content from current §215.41 of this title, relating to Presiding Officials, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.248 would describe the criteria for the granting of a continuance by a hearings examiner. Proposed new §224.248 would incorporate relevant content from current §215.40 of this title, relating to Continuance of Hearing, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.250 would describe a party's rights during the hearing, provide guidance as to how a hearing will be conducted, and address participant conduct and decorum in a hearing. Proposed new §224.250 would incorporate relevant content from the following current provisions of this title that are proposed for repeal in this issue of the Texas Register: §215.42, relating to Conduct of Hearing, and §215.43, relating to Conduct and Decorum.
Proposed new §224.252 would address the procedure that will be followed during a hearing. Proposed new §224.252 would incorporate related content from current §215.206 of this title, relating to Mediation; Settlement, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.254 would address the standards and handling of evidence during a hearing. Proposed new §224.254 would incorporate relevant content from the following current sections of this title that are proposed for repeal in this issue of the Texas Register: §215.44, relating to Evidence, and §215.45, relating to Stipulation of Evidence.
Proposed new §224.256 would address how objections and exceptions may be handled during a hearing conducted by a hearings examiner. Proposed new §224.256 would incorporate relevant content from current §215.46 of this title, relating to Objections and Exceptions, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.258 would specify that the hearings examiner has final order authority in cases under this subchapter. Proposed new §224.258 would incorporate relevant content from current §215.55 of this title, relating to Final Decision, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.260 would describe how lemon law relief decisions will be evaluated by a hearings examiner, the presumptions that may be applied, and how refunds may be calculated, in addition to other important criteria. proposed new §224.260 would incorporate content from current §215.208 of this title, relating to Lemon Law Relief Decisions, which is proposed for repeal in this issue of the Texas Register. However, language in §215.208 requiring a different presumptive useful life calculation for a towable recreational vehicle that is lived in full-time would be omitted as useful life may vary based on whether the towable recreational vehicle is at a fixed location or used for traveling. Proposed new §224.260 would allow the hearings examiner to consider the evidence presented regarding usage and adjust the calculation accordingly.
Proposed new §224.262 would detail which incidental costs may be included in a final refund amount ordered by a hearings examiner. Proposed new §224.262 would incorporate relevant content from current §215.209 of this title, relating to Incidental Expenses, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.264 would describe the requirements for a hearings examiner to issue a final order, the process for filing and considering a motion for rehearing, and notification of the parties. Proposed new §224.264 would incorporate relevant content from current §215.207 of this title, relating to Contested Cases: Final Orders, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.266 would describe the complainant's option to accept or reject the final order and the responsibilities of a manufacturer, distributor, or converter if a complainant accepts the final order. Proposed new §224.266 would incorporate relevant content from current §215.210 of this title, relating to Compliance with Order Granting Relief, which is proposed for repeal in this issue of the Texas Register.
Proposed new §224.268 would describe the process for a party to appeal a final order in Travis County district court under Government Code, Chapter 2001, and subject to Occupations Code, §2301.609. Proposed new §224.268 would incorporate relevant content from current §215.207(f) of this title, relating to Contested Cases: Final Orders, which is proposed for repeal in this issue of the Texas Register.
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the new rules will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Corrie Thompson, Director of the Enforcement Division, has determined that there will be no significant effect on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT AND COST NOTE. Ms. Thompson has also determined that, for each year of the first five years the new sections are in effect, there are several anticipated public benefits because of the proposed new chapter.
Anticipated Public Benefits. The public benefits anticipated as a result of the proposal include the following: consolidation of the department's rules regarding adjudicative practice and procedure into one chapter that provides more clarity, more detail, easier reference, and more consistency with current practice.
Anticipated Costs To Comply With The Proposal. Ms. Thompson anticipates that no additional costs beyond those they already incur to comply with current provisions that we are incorporating, to the extent that is a true statement.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed new chapter will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the proposed new chapter primarily consolidates current rules into a new chapter that is consistent with current practice. Also, for the cases that the department refers to SOAH, the proposed rules would not change the fact that the contested case procedures and requirements are primarily governed by Government Code, Chapter 2001 and 1 TAC Chapter 155, which are SOAH's rules of procedure.
TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the new rules are in effect, a government program would not be created or eliminated. Implementation of the new rules would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed new chapter technically creates new regulation; however, most of the new rule text is consistent with current practice and rule. The proposed rules do not expand, limit or repeal existing regulations since the entire chapter is new. Lastly, the proposed new rules do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.
REQUEST FOR PUBLIC COMMENT.
If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on January 28, 2024. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.
SUBCHAPTER A. GENERAL PROVISIONS
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders; ensure that the distribution, sale and lease of motor vehicles is conducted as required by statute and board rules; to provide for compliance with warranties; to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles; and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.602, which requires the board to adopt rules for the enforcement and implementation of Subchapter M of Occupations Code, Chapter 2301; Occupations Code, §2301.651, which authorizes the board to deny an application for a license, revoke or suspend a license, place on probation a person whose license has been suspended, or reprimand a licensee; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under §623.272, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.102, which authorizes a motor carrier to comply with the requirements under Transportation Code, §643.101 through self-insurance if it complies with the requirements; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the process for an administrative hearing under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to one or more board members or certain department staff; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 502, 503, 621-623, 643, 645, and 1002-1005.
§224.1.Purpose and Scope.
This subchapter describes the procedures by which the department will adjudicate a contested case arising under Occupations Code, Chapters 2301 or 2302, or Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005, consistent with the requirements of Government Code, Chapter 2001. Unless expressly excluded or limited, this subchapter applies to every contested case in which the department has jurisdiction.
§224.3.Definitions.
(a) The statutory definitions govern this chapter. In the event of a conflict, the definition or procedure referenced in statute controls.
(b) When used in this chapter, the following words and terms shall have the following meanings unless the context clearly indicates otherwise.
(1) Administrative Law Judge or ALJ--An individual appointed to serve as a presiding officer by the State Office of Administrative Hearings Chief Judge under Government Code, Chapter 2003, to conduct a hearing on matters within the department's jurisdiction.
(2) APA--The Administrative Procedure Act, Government Code, Chapter 2001.
(3) Authorized representative--An attorney authorized to practice law or, if authorized by the applicable subchapter, a non-attorney designated by a party to represent the party.
(4) Board--The board of the Texas Department of Motor Vehicles, including department staff personnel to whom the board delegates an assigned duty.
(5) Complaint--A matter filed under Occupations Code, §2301.460 or under Subchapters E or M, or under Transportation Code, Chapter 503.
(6) Confidential Information--Information considered to be confidential under constitutional or statutory law or by judicial decision.
(7) Contested Case--A proceeding in which the legal rights, duties, or privileges of a party are determined by the department after the opportunity for an adjudicative hearing.
(8) Day--A calendar day.
(9) Department--The Texas Department of Motor Vehicles.
(10) Director--The division director of the department authorized by the board or by statute to act, including any department personnel to whom the division director delegates a duty assigned under this chapter.
(11) Electronic filing or filed electronically--The electronic transmission of documents filed in a contested case by uploading the documents to a case docket using a department-designated system or department-designated email.
(12) Electronic service or served electronically--The electronic transmission of documents filed in a contested case and sent to a party or a party's authorized representative by email or a department-designated system.
(13) Electronic signature or signed electronically--An electronic version of a person's signature that is the legal equivalent of the person's handwritten signature, unless the document is required to be notarized or sworn. Electronic signature formats include:
(A) an "/s/" and the person's name typed in the space where the signature would otherwise appear;
(B) an electronic graphical image or scanned image of the signature; or
(C) a "digital signature" based on accepted public key infrastructure technology that guarantees the signer's identity and data integrity.
(14) Evidence--Testimony and exhibits admitted into the hearing record by an ALJ or hearings examiner to prove or disprove the existence of an alleged fact.
(15) Ex Parte Communication--Direct or indirect communication between a state agency, party, person, or representative of those entities and an ALJ, board member, or hearings examiner in connection with an issue of law or fact in a contested case where the other known parties to the contested case do not have notice of the communication and an opportunity to participate. Ex parte communication does not include:
(A) communication where all parties to the contested case have notice of the communication and an opportunity to participate;
(B) communication concerning uncontested administrative or uncontested procedural matters;
(C) consultation between a board member or hearings examiner and the department's general counsel or hearings personnel;
(D) communication required for the disposition of an ex parte matter or otherwise expressly authorized by law; and
(E) communication between a state agency, party, person, or representative of those entities and a mediator made in an effort to evaluate a contested matter for mediation or to mediate or settle a contested matter.
(16) Exhibit--A document, record, photograph, video, or other form of data compilation, regardless of media, or other tangible object offered by a party as evidence.
(17) Filed--The receipt by the department of a document and required payment, if applicable.
(18) Final order authority--The person with authority under statute or a board rule to issue a final order.
(19) GDN--General distinguishing number as defined in Transportation Code, Chapter 503.
(20) Hearings Examiner--An individual appointed by the Chief Hearings Examiner to serve as a presiding officer to hear contested cases under Occupations Code, §2301.204 or Subchapter M.
(21) License holder--A person holding a license under Occupations Code, Chapters 2301 or 2302, or a GDN or other license issued under Transportation Code, Chapter 503.
(22) Mediation--A confidential, informal dispute resolution process in which a qualified impartial person facilitates communication between the contested case parties to promote settlement, reconciliation, or understanding, as defined by Occupations Code, §2301.521.
(23) Party--A person, including the department, named or allowed to participate in a contested case.
(24) Person--As defined in Occupations Code, §2301.002.
(25) Personal information--As defined by Transportation Code, §730.003(6).
(26) Personal identifying information--As defined by Business and Commerce Code, §521.002(1).
(27) Pleading--A filed document that requests procedural or substantive relief, makes a claim, alleges a fact, denies an allegation, makes or responds to a legal argument, or otherwise addresses a matter involved in a contested case.
(28) Protest--To challenge a person's licensing application or a decision by a license holder, as provided under Occupations Code, Chapter 2301.
(29) Redact--To remove a reference from a document.
(30) Sensitive personal information--As defined by Business and Commerce Code, §521.002(2).
(31) SOAH--The State Office of Administrative Hearings.
(32) Stipulation--A binding agreement among opposing parties concerning a relevant issue or fact.
(33) TAC--The Texas Administrative Code.
(34) TRCP--The Texas Rules of Civil Procedure, which may be found on the website of the Supreme Court of Texas.
(35) TRE--The Texas Rules of Evidence, which may be found on the website of the Supreme Court of Texas.
§224.5.Prohibited Communication.
(a) No person, party, attorney of record, or authorized representative in any contested case shall violate Government Code, §2001.061 by directly or indirectly engaging in ex parte communication concerning a contested case with an ALJ, board member, board delegate, or a hearings examiner assigned to render a decision or make findings of fact and conclusions of law in a contested case.
(b) Unless prohibited by Government Code, §2001.061, department staff who did not participate in the hearing may advise a board member, a board delegate, or a hearings examiner, regarding a contested case and any procedural matters.
(c) Department staff shall not recommend a final decision to the board unless the department is a party to the contested case.
(d) A violation of this section shall be promptly reported to the board chair or chief hearings examiner, as applicable, and the general counsel of the department.
(e) The general counsel shall ensure that a copy or summary of the ex parte communication is included with the record of the contested case and that a copy is forwarded to all parties or their authorized representatives.
(f) The general counsel may take any other appropriate action otherwise provided by law.
§224.7.Appearance.
(a) General. Any party to a contested case may appear in person or by an authorized representative. An authorized representative may be required to show authority to represent a party.
(b) Appearance by authorized representative. An authorized representative who has not entered an appearance as a matter of record in a contested case shall enter an appearance by filing with the department appropriate documentation that contains the representative's mailing address, email address, and telephone number. If the authorized representative's authority is challenged, the representative must show authority to appear as the party's representative.
(c) Attorney in charge. When more than one attorney makes an appearance in a contested case on behalf of a party, the attorney whose signature appears first on the initial document filed in the contested case shall be the attorney in charge for that party unless another attorney is specifically designated in writing. All communication sent by the department or other party regarding the contested case shall be sent to the attorney in charge unless otherwise requested by a party.
(d) Intervention. Any public official or other person having an interest in a contested case may, upon request to the ALJ or hearings examiner, be allowed to intervene. A person requesting to intervene in a contested case may be required to disclose that person's interest in the contested case before permission to intervene will be granted.
(e) A person may be invited to participate in a contested case mediation if all parties and the mediator agree that the person's participation will facilitate understanding and resolution of the contested case. However, an invited person who is not a party is not required to participate in a mediation.
(f) This rule does not allow a person to engage in the unauthorized practice of law.
§224.9.Computing Time.
(a) General. Any time period prescribed or allowed by this chapter, by order of the board, or by any applicable statute shall be computed in accordance with Government Code, §311.014.
(b) Application of this section. This section applies, unless another method is required by statute, another rule in this chapter, or order.
(c) Computing time periods. When computing a time period under this chapter:
(1) the day of the act, event, or default from which the designated time period begins to run is not counted; and
(2) the last day of the time period is counted, unless it is a Saturday, Sunday, or legal holiday, in which case the period is extended to include the next day that is not a Saturday, Sunday, or legal holiday.
(d) Calendar days. Time shall be computed using calendar days rather than business days, unless otherwise specified in statute or rule.
§224.11.Filing and Service of Documents.
(a) Each document required or allowed to be filed with the department under this chapter must be filed as required under this section and the relevant subchapter for the applicable type of contested case.
(b) A copy of each document filed in a contested case shall be filed or served on the same date upon:
(1) the department, and
(2) each party or the party's authorized representative or attorney in charge.
(c) A certificate of service shall accompany each document. A certificate of service by the party or party's authorized representative showing timely service in a manner described in the relevant subchapter shall be prima facie evidence of timely service. This section does not preclude the department or any party from offering proof that the document was not timely filed or served.
(d) To be timely filed, a document must be received by the department within the time specified by statute, rule, or department order. A document received after the specified time, notwithstanding the means of delivery, shall be deemed untimely. Electronic filing is considered timely if the document is received by 5:00 p.m. Central Standard Time or Daylight Savings Time when in effect. Electronic filing after 5:00 p.m. shall be deemed received on the following day or the next business day if filed on a Saturday, Sunday, or legal holiday.
(e) A document filed electronically must:
(1) be legible and in a portable document format (PDF), unless the department requests a different format;
(2) be directly converted to PDF rather than scanned, to the extent possible;
(3) not be locked;
(4) include the email address of the party or authorized representative who electronically filed the document;
(5) include the docket number and the name of the contested case in which the document is filed;
(6) be titled or described in a manner that allows the department and the parties to reasonably ascertain the contents of the document; and
(7) include an electronic signature.
(f) The department is not responsible for a filing party's user, system, transmission, or service error.
(g) If a document is not filed or served timely due to a system outage of a department-designated system, the filing party may send the document to a department-designated email address or seek appropriate relief from the final order authority.
(h) A party must redact information in a document before filing if the document contains personal identifying information, sensitive identifying information, or other confidential information that is not necessary to the resolution of the case. If the information is necessary to the resolution of the case, each page of the document must be conspicuously marked as "CONFIDENTIAL - NOT FOR PUBLIC RELEASE" in bold 12-point or larger type in the document header or footer. A party may request a document be filed under seal if allowed by other law, order, or rule.
§224.13.Discovery.
(a) Party Cooperation. The parties and their authorized representatives shall cooperate in discovery and shall endeavor to make any agreement reasonably necessary for the efficient disposition of the contested case.
(b) Discovery Request. A party may request that the department issue a commission or a subpoena if the parties cannot agree, or a contested case requires testimony, documents, or information from a person who is not a party. A party must submit a commission or subpoena request to the department's Office of General Counsel for review.
(c) Commission to take a deposition. Upon the written request of a party, the executive director may issue a written commission directed to an officer, authorized by statute, to take a deposition of a witness.
(d) Subpoena to produce documents. Upon the written request of a party, the executive director may issue a subpoena for the production of documents. The written request must identify the documents with as much detail as possible and must include a statement of their relevance to the issues in the contested case.
(e) Subpoena for attendance at a hearing or a deposition. Upon the written request of a party, the executive director may issue a subpoena for the attendance of a witness at a hearing or a deposition in a contested case. The subpoena may be directed to any person without regard to the distance between the location of the witness and the location of the hearing.
(f) The executive director is authorized to delegate the authority to department staff to issue a subpoena and a commission.
(g) Limits on discovery. A commission or subpoena will only be issued on a showing of good cause and receipt of a deposit sufficient to ensure payment of expenses and fees related to the subpoena, including statutory witness fees. A commission or subpoena will not be issued if it appears to be duplicative, dilatory, sought for the purpose of harassment, or if it would unduly inconvenience the person to whom it is directed. Issuance of a commission or subpoena will be subject to the provisions of Government Code, Chapter 2001, and SOAH rules.
§224.15.Hearing Recording and Transcription Cost.
(a) Except as provided by Subchapter G of this chapter (relating to Lemon Law and Warranty Performance Claims), a hearing in a contested case will be transcribed by a court reporter if anticipated to last longer than one day.
(b) The costs of transcribing the hearing and for the preparation of an original transcript of the record for the department shall be:
(1) assessed to a party requesting the transcript in a contested case;
(2) shared by the parties in a contested case under Subchapter C of this chapter (relating to Contested Cases Between Motor Vehicle Industry License Holders or Applicants); or
(3) assessed as directed by the ALJ or hearings examiner.
(c) Copies of recordings or transcriptions of a contested case hearing will be provided to any party upon written request and upon payment for any duplication costs incurred by the department.
§224.17.Consolidation of Proceedings.
No contested case proceedings including two or more related cases or claims shall be jointly heard without the consent of all parties, unless the ALJ or hearings examiner finds that justice and efficiency are better served by the consolidation.
§224.19.Informal Disposition.
(a) Notwithstanding any other provision in this chapter, at any time during the contested case, the final order authority may informally dispose of a contested case in whole or in part by stipulation, agreement, dismissal, or consent order.
(b) If the parties have settled or otherwise determined that a contested case proceeding is not required, the party who initiated the contested case shall file a motion to dismiss the contested case from the docket and present a proposed agreed order or dismissal order to the final order authority. If the party who initiated the contested case fails to file a motion to dismiss as required under this subsection, the final order authority may issue a dismissal order after providing the parties with a 30-day notice.
(c) A proposed agreed order submitted to the final order authority by the parties must contain proposed findings of fact and conclusions of law.
(d) Upon receipt of the proposed agreed order, the final order authority may:
(1) adopt the settlement agreement and issue a final order;
(2) reject the settlement agreement and remand the contested case for a hearing; or
(3) take other action that the final order authority finds just.
§224.21.Waiver of Hearing.
After the department issues a notice of hearing in a contested case, a party may waive a hearing and consent to an agreed order. An agreed order proposed by the parties is subject to the approval of the final order authority.
§224.23.Hearings to be Public.
A hearing in a contested case shall be open to the public.
§224.25.Extension of Time.
(a) The final order authority may not extend the time for filing a document when a statute or rule specifies the time period by which a document must be filed with the department.
(b) When an act is discretionary or allowed to be done at or within a specified time in accordance with this chapter and Government Code, Chapter 2001, the final order authority, with good cause shown, may:
(1) order the specific period extended if the extension is requested before the expiration of the period previously specified; or
(2) allow the act to be done after the expiration of the specified period, provided good cause is shown for the failure to act.
§224.27.Final Order; Motion for Rehearing.
(a) The provisions of Government Code, Chapter 2001, Subchapter F, govern the issuance of a final order issued under this subchapter and a motion for rehearing filed in response to a final order.
(b) Except as provided by subsection (c) of this section and §224.29 of this title (relating to Delegation of Final Order Authority), the board has final order authority in a contested case filed under Occupations Code, Chapters 2301 or 2302, or under Transportation Code, Chapters 502, 503, 621-623, 643, 645, and 1001-1005.
(c) The hearings examiner has final order authority in a contested case filed under Occupations Code, §2301.204 or Occupations Code Chapter 2301, Subchapter M.
(d) A department determination and action denying access to the temporary tag database becomes final within 26 days of the date of the notice denying access to a database, unless the dealer or converter:
(1) requests a hearing regarding the denial of access, or
(2) enters into a settlement agreement with the department.
(e) Unless a timely motion for rehearing is filed with the appropriate final order authority as provided by law, an order shall be deemed final and binding on all parties. All administrative remedies are deemed to be exhausted as of the effective date of the final order.
(f) If a timely motion for rehearing is not filed, the final order shall be deemed final and binding in accordance with the provisions of Government Code, §2001.144.
(g) If a final and binding order includes an action on a license, the department may act on the license on the date the final order is deemed final and binding, unless the action is stayed by a court order.
§224.29.Delegation of Final Order Authority.
(a) In accordance with Occupations Code, §2301.154(c) and Transportation Code, §1003.005(b), except as provided by subsection (b) of this section, the director of the division that regulates the distribution and sale of motor vehicles is authorized to issue, where there has not been a decision on the merits, a final order in a contested case under Subchapters B and C, including, but not limited to a contested case resolved:
(1) by settlement;
(2) by agreed order;
(3) by withdrawal of the complaint;
(4) by withdrawal of a protest;
(5) by dismissal for want of prosecution including:
(A) failure of a complaining or protesting party to participate in scheduling mediation or to appear at mediation as required under Subchapter C of this chapter (relating to Contested Cases Between Motor Vehicle Industry License Holders or Applicants);
(B) failure of a complaining or protesting party to respond to department requests for information or scheduling matters;
(C) failure of a complaining or protesting party to dismiss a contested case that has been resolved by the parties;
(6) by dismissal for want of jurisdiction;
(7) by summary judgment or summary disposition;
(8) by default judgment; or
(9) when a party waives opportunity for a contested case hearing.
(b) In accordance with Occupations Code, §2301.704 and §2301.711, a hearings examiner is authorized to issue a final order in a contested case brought under Occupations Code, §2301.204 or §§2301.601-2301.613.
(c) In accordance with Transportation Code, §1003.005, the director of the department's Motor Carrier Division is delegated any power relating to a contested case, including the authority to issue a final order, in contested cases under Subchapter D of this chapter to the extent that delegation of such authority is not already provided by statute.
(d) In a contested case in which the board has delegated final order authority under subsection (a) or (c) of this section, a motion for rehearing shall be filed with and decided by the final order authority delegate.
§224.31.Cost of Record on Appeal.
(a) If a final decision in a contested case is appealed and the department is required to transmit to the court the original or a certified copy of the administrative record, or any part thereof, the appealing party shall pay the costs of preparation of the record, unless waived by the department in whole or in part.
(b) A charge imposed as provided by this section is a court cost and may be assessed by the court in accordance with the TRCP.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304816
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
43 TAC §224.50, 224.52, 224.54, 224.56, 224.58, 224.60, 224.62, 224.64
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders; ensure that the distribution, sale and lease of motor vehicles is conducted as required by statute and board rules; to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles; and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which authorizes the board to deny an application for a license, revoke or suspend a license, place on probation a person whose license has been suspended, or reprimand a licensee; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to one or more board members or certain department staff; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 502, 503, 1002, and 1003.
§224.50.Purpose and Scope.
This subchapter, and Subchapters A, E, and F, describe the procedures by which the department will adjudicate alleged violations of Occupations Code, Chapter 2301 and 2302, and Transportation Code, Chapter 503 brought by the department against a license applicant, license holder, or unlicensed person engaging in an activity or business that requires a license under these statutes.
§224.52.Cease and Desist Order; Delegation of Authority.
(a) When a person is alleged to be violating a provision of Occupations Code, Chapter 2301, or a board rule or order, the department may enter an interlocutory order requiring the person to cease and desist from the violation under the following procedures.
(1) In accordance with Occupations Code, §2301.154(c) and Transportation Code, §1003.005(b), the department's Enforcement Division director is delegated the authority to issue an interlocutory cease-and-desist order under the procedures established in this subsection.
(2) A person requesting an interlocutory cease-and-desist order must present a petition or complaint, verified by affidavit, containing a plain statement of the grounds for seeking the cease-and-desist order to the department's Enforcement Division director in accordance with the procedures set forth in §224.84 of this title (regarding Filing and Service of a Protest, Complaint, or Other Document). The department shall not issue an interlocutory cease-and-desist order without a verified petition or complaint that meets the requirements of this subsection.
(3) At least three days prior to entering an interlocutory order requiring a person to cease and desist, the department must send a letter notifying the person of the allegations against them to all current addresses for the person in the department's records by both electronic service and certified mail, return receipt requested.
(4) The notice letter must include a statement of the alleged conduct that forms the basis for the interlocutory cease-and-desist order and must provide the person the opportunity to show cause in writing within three days why the department should not issue a cease-and-desist order.
(5) In considering whether to issue an interlocutory cease-and-desist order, the department must determine if the conditions set forth in Occupations Code, §2301.802(b) are present and consider the person's written response, if any, to the letter notifying the person of the alleged violations. The department shall email a copy of the department's decision to the person in addition to sending a copy by certified mail, return receipt requested.
(6) Each interlocutory cease-and-desist order must include:
(A) the date and hour of issuance;
(B) a statement of which of the conditions in Occupations Code, §2301.802(b) the department determined were present to necessitate the cease-and-desist order;
(C) a notice of hearing at SOAH to determine the validity of the order;
(D) the reasons for its issuance; and
(E) a description in reasonable detail of the act or acts to be restrained.
(7) If the ALJ determines after a hearing that the cease-and-desist order should remain in place during the pendency of the contested case, the ALJ shall issue an interlocutory cease-and-desist order.
(8) An interlocutory cease-and-desist order remains in effect until vacated or incorporated in a final order.
(9) A party may immediately appeal an interlocutory cease-and-desist order issued by an ALJ to the board under §224.192 of this title (relating to Appeal of an Interlocutory Order) while the contested case is at SOAH.
(b) The department may issue a final cease-and-desist order if a person who is not licensed under Occupations Code, Chapter 2302 is found, after notice and opportunity for a hearing, to have violated that chapter or a rule or order adopted under that chapter. The department may also issue a final cease-and-desist order under Occupations Code, Chapter 2301 to a person found, after notice and opportunity for a hearing, to have violated that chapter, a board rule, or an order.
(1) If the department decides to seek a cease-and-desist order under subsection (b) of this section, the department will send a letter notifying the person of the allegations against them to all current addresses for the person in the department's records by both electronic service and certified mail, return receipt requested. The notice letter will contain:
(A) a summary of the factual allegations;
(B) a description of the statutory provision, rule or order the person is alleged to have violated;
(C) a description in reasonable detail of the act or acts to be restrained by the cease-and-desist order;
(D) a statement regarding the person's right to request a hearing;
(E) the procedure to request a hearing, including the deadline for filing; and
(F) notice to the person that the department will issue a cease-and-desist order that will become final on the date specified if the person fails to timely request a hearing.
(2) A person to whom a cease-and-desist notice letter under subsection (c) of this section is sent may file a written request for a hearing before a SOAH ALJ. The person must submit, in writing, a request for a hearing under this section to the department's contact listed in the notice letter provided under subsection (c)(1) of this section. The department must receive the request for a hearing within 26 days of the date the notice letter is mailed.
(3) If the person does not make a timely written request for a hearing within 26 days of the date the cease-and-desist letter is mailed, the allegations are deemed admitted on the 27th day and a final cease-and-desist order including sanctions may be issued by the final order authority.
(c) Once jurisdiction for the conduct of a contested case hearing transfers to SOAH, an ALJ may act on a party's motion regarding an existing cease-and-desist order issued by the department or consider a new motion for a cease-and-desist order by a party.
§224.54.Civil Penalty Assessment.
(a) Occupations Code, §2301.801 and §2302.354, and Transportation Code, §503.095 govern the amount of a civil penalty that may be assessed by the department against a license holder.
(b) In determining the amount of civil penalty to assess the department will consider the following aggravating factors:
(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of any prohibited act, and the harm or potential harm to the safety of the public;
(2) the economic damage to the public caused by the violation;
(3) any history of previous violations including whether the license holder previously entered into an agreed order with the department or otherwise received a warning or reduced penalty;
(4) the amount necessary to deter a future violation; and
(5) any other matter that justice may require, including:
(A) the number of violations or number of consumers harmed by violation(s);
(B) whether the consumer received a title;
(C) whether the license holder misused license plates or temporary tags;
(D) whether the license holder attempted to conceal a violation;
(E) whether the act constituting the violation was intentional, premeditated, knowing, or grossly negligent; and
(F) whether an order issued by the department was violated.
(c) In determining whether license revocation is appropriate, the department will consider the following factors:
(1) whether the license holder is unfit under standards governing the occupation, including qualifications for a license;
(2) whether the license holder made a material misrepresentation in any written communication or information provided to the department;
(3) whether the license holder willfully defrauded a purchaser;
(4) whether the license holder misused license plates or temporary tags, including whether the license holder attempted to use an internet-down tag to avoid inspection requirements;
(5) whether the license holder failed to fulfill a written agreement with a retail purchaser of a vehicle or motor vehicle; and
(6) whether the license holder failed to attend an approved dealer training seminar as ordered in an agreed final order.
(d) The department will consider the following mitigating factors in determining the amount of civil penalty to assess or whether license revocation is appropriate:
(1) acknowledgment by the licensee of any wrongdoing;
(2) willingness to cooperate with the department; and
(3) efforts to correct a violation.
(e) The department will publish a disciplinary matrix on the department website to provide guidance to license holders on the sanctions that may be assessed for the most common violations.
§224.56.Notice of Department Decision.
(a) The department shall issue a Notice of Department Decision to a license applicant, license holder, or other person by certified mail, return receipt requested, to the last known address and email address upon a determination under Occupations Code, Chapters 2301 and 2302 or Transportation Code, Chapter 503 that:
(1) an application for a license should be denied; or
(2) an administrative sanction should be imposed.
(b) The last known address is the mailing address provided by the person in the department-designated licensing system.
(c) A Notice of Department Decision shall include:
(1) a statement describing the department decision and the effective date;
(2) a description of each alleged violation;
(3) a description of each administrative sanction being proposed;
(4) a statement which sets out the legal basis for each administrative sanction;
(5) a statement informing the license applicant, license holder, or other person of the right to request a hearing;
(6) the procedure to request a hearing, including the deadline for filing a request with the department and the acceptable electronic methods to request a hearing; and
(7) notice to the license applicant, license holder, or other person that the proposed decision and administrative sanctions in the Notice of Department Decision will become final on the date specified if the license applicant, license holder, or other person fails to timely request a hearing in accordance with subsection (d) of this section.
(d) To receive a hearing, the license applicant, license holder, or other person must submit a written request for a hearing under this section to the department. The department must receive a hearing request within 26 days of the date of the Notice of Department Decision for the request to be considered timely.
(e) If the department receives a timely request for a hearing, the department will contact the license holder and attempt to informally resolve the contested case. If the license holder and the department cannot informally resolve the contested case, the department will refer the contested case to SOAH to set a hearing date and will give notice to the license applicant, license holder, or other person of the date, time, and location of the hearing.
(f) If the license applicant, license holder, or other person does not make a timely request for a hearing or agree to settle the contested case within 26 days of the date of the Notice of Department Decision, the allegations are deemed admitted on the 27th day and a final order including sanctions may be issued by the final order authority.
§224.58.Denial of Dealer or Converter Access to Temporary Tag System.
(a) In this section "fraudulently obtained temporary tags from the temporary tag database" means misuse by a dealer or converter account user of the temporary tag database authorized under Transportation Code, §503.0626 or §503.0631 to obtain:
(1) an excessive number of temporary tags relative to dealer sales;
(2) temporary tags for a vehicle or vehicles not in the dealer's or converter's inventory (a vehicle is presumed not to be in the dealer's or converter's inventory if the vehicle is not listed in the relevant monthly Vehicle Inventory Tax Statement);
(3) access to the temporary tag database for a fictitious user or person using a false identity;
(4) temporary tags for a vehicle or a motor vehicle when a dealer is no longer operating at a licensed location; or
(5) temporary tags issued for a vehicle or a motor vehicle not located at a licensed location or a storage lot listed on the application.
(b) The department shall deny a dealer or converter access to the temporary tag database effective on the date the department sends notice electronically and by certified mail to the dealer or converter that the department has determined, directly or through an account user, that the dealer or converter has fraudulently obtained temporary tags from the temporary tag database. A dealer or converter may seek a negotiated resolution with the department by demonstrating the dealer or converter took corrective action or that the department's determination was incorrect.
(c) Notice shall be sent to the dealer's or converter's last known mailing address and last known email in the department-designated licensing system.
(d) A dealer or converter may request a hearing on the denial of access to the temporary tag database, as provided by Subchapter O, Chapter 2301, Occupations Code. The request must be in writing and the dealer or converter must request a hearing under this section. The department must receive the written request for a hearing within 26 days of the date of the notice denying access to the database. The request for a hearing does not stay the denial of access under subsection (b) of this section. A dealer or converter may continue to seek a negotiated resolution with the department after a request for hearing has been submitted under this subsection by demonstrating the dealer or converter took corrective action or that the department's determination was incorrect.
(e) The department may also issue a Notice of Department Decision stating administrative violations as provided in §224.56 of this title (relating to Notice of Department Decision) concurrently with the notice of denial of access under this section. A Notice of Department Decision may include notice of any violation, including a violation listed under subsection (a) of this section.
(f) A department determination and action denying access to the temporary tag database becomes final if the dealer or converter does not request a hearing or enter into a settlement agreement with the department within 26 days of the date of the notice denying access to a database.
§224.60.Filing and Service of Documents.
Each document required or allowed to be filed with the department under this subchapter must be filed electronically in a department-designated system or according to written instructions provided by the department.
§224.62.Referral to SOAH.
(a) If the department receives a timely request for a hearing and the parties are unable to informally resolve or dispose of the contested case, the department will refer the contested case to SOAH by filing a Request to Docket form and related documents as required under SOAH rules.
(b) When SOAH accepts the department's request to docket a contested case, jurisdiction transfers to SOAH.
§224.64.Notice of Hearing.
Once SOAH provides the department with the initial hearing date, time, and place, the department notifies the parties. The contested case proceeds according to Subchapter E of this chapter (relating to Contested Cases Referred to SOAH).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304819
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
43 TAC §§224.80, 224.82, 224.84, 224.86, 224.88, 224.90, 224.92, 224.94
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which authorizes the board to deny an application for a license, revoke or suspend a license, place on probation a person whose license has been suspended, or reprimand a licensee; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to one or more board members or certain department staff; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapter 2301; and Transportation Code, Chapters 503, 1002, and 1003.
§224.80.Purpose and Scope.
This subchapter, and Subchapters A, E, and F of this chapter describe the procedures by which the department will adjudicate a protest or complaint filed by a license holder against another license holder or license applicant under Occupations Code, Chapter 2301, Subchapters H, I, or J.
§224.82.Form of a Protest or Complaint.
(a) Protest. A franchised dealer that wishes to protest an application shall give notice in accordance with Occupations Code, Chapter 2301. The notice of protest shall:
(1) be in writing and signed by an owner or officer authorized to sign on behalf of the protesting dealer filing the notice;
(2) state the statutory basis upon which the protest is made;
(3) assert how the protesting dealer meets the standing requirements under §215.119 of this title (relating to Standing to Protest) to protest the application;
(4) include the notice of opportunity to protest sent to the dealer; and
(5) state that the protest is not made for purposes of delay or for any other purpose except for justifiable cause.
(b) Complaint. If a license holder wishes to file a complaint against another license holder under Occupations Code, Chapter 2301, Subchapters H, I, or J, the complaint must:
(1) be in writing and signed by an owner or officer authorized to sign on behalf of the complainant;
(2) state sufficient facts to enable the department and the party complained against to know the nature of the complaint and the specific problems or circumstances forming the basis of the claim for relief under the statute; and
(3) state the statutory provision under which the complaint is made.
§224.84.Filing and Service of a Protest, Complaint, or Other Document.
(a) A party must file and serve a complaint, protest, or other document required or allowed to be filed with the department under this subchapter electronically in the department-designated licensing system, and include a Certification of Responsibility, a form provided by the department.
(b) Once a docket number has been assigned to a contested case by either the department or SOAH, a party must include all assigned docket numbers on a pleading, motion, correspondence, or other document filed in the contested case.
§224.86.Review of a Protest or Complaint.
(a) The department will review a protest or complaint to determine whether:
(1) a hearing is appropriate under Occupations Code, Chapter 2301; Transportation Code, Chapter 503; or Board rule; and
(2) the protest or hearing document meets minimum requirements.
(b) If the department cannot determine whether a complaint meets minimum requirements, the department may contact the protestant, complainant, or other person for additional information.
(c) If the department determines that a protest or complaint meets minimum requirements, a protest or complaint will be processed in accordance with this subchapter.
§224.88.Docketing and Notice of a Protest or Complaint.
(a) If a protest or complaint meets minimum requirements, the department will docket the contested case and assign a docket number.
(b) The department will notify the contested case parties that a statutory stay under Occupations Code, §2301.803 is in effect.
(c) The department will assign a department mediator and notify the contested case parties. Within seven days of the department notice date, each party must either:
(1) accept the assigned department mediator; or
(2) decline the assigned department mediator and retain a private mediator and comply with the requirements of §224.90 of this title (relating to Mediation).
§224.90.Mediation.
(a) Except as provided by subsection (b) of this section, parties to a contested case filed under this subchapter are required to participate in mediation before the department will refer a contested case to SOAH for a hearing.
(b) This section does not limit the parties' ability to settle a case without mediation.
(c) The department will provide mediation services by a staff member qualified to serve as an impartial third party in accordance with Civil Practice and Remedies Code, Chapter 154.
(d) The mediation will conclude within 60 days of the date a contested case is assigned to a department mediator, unless the mediation deadline is extended. The department mediator may extend the mediation deadline based on a written request by a party or at the department mediator's discretion.
(e) If the parties do not agree on a mediation date within 30 days, the department mediator may set a date for mediation by notifying the parties in writing at least 10 days before the mediation date.
(f) At the discretion of the department mediator, a party may participate in scheduled mediation either in person or remotely using telephonic or videoconferencing technology.
(g) A party that declines to use the assigned department mediator shall:
(1) confer with each contested case party; and
(2) within 30 days of receiving notice from the department under §224.88 of the title (relating to Docketing and Notice of a Protest or Complaint), file with the department a joint notice of intent to retain a private mediator.
(h) The joint notice of intent to retain a private mediator must include:
(1) the name, address, email address, and telephone number of the private mediator agreed upon by the parties;
(2) a statement that the parties have entered into an agreement with the private mediator regarding the mediator's rate, method of compensation, and party responsibility for fee payment;
(3) an affirmation that the private mediator qualifies for appointment as an impartial third party in accordance with Civil Practice and Remedies Code, Chapter 154;
(4) a statement that the mediation will conclude within 60 days of the department's notice under §224.88 of the title, unless the mediation deadline is extended at the department's discretion; and
(5) the signature of each party or authorized representative.
(i) All communication and documents provided by a contested case party or invited person in a mediation are confidential and subject to the Governmental Dispute Resolution Act, Government Code, §2009.054.
(j) An agreement reached by the contested case parties in mediation shall be reduced to writing and signed by the parties.
(k) Within 10 days of the conclusion of a mediation, a mediator shall provide to the department and to the parties a written report stating:
(1) whether the parties attended and participated in the mediation;
(2) whether the matter settled in part or in whole;
(3) any unresolved issues remaining in the contested case; and
(4) any other stipulations or matters the parties agree to report.
(l) Upon receipt of the mediator's report required under this section, the department shall:
(1) enter an order disposing of resolved issues;
(2) refer unresolved issues to SOAH for a hearing on the merits; and
(3) inform SOAH whether a party refused to attend or participate in a mediation.
(m) If a party refused to participate or attend a mediation, an ALJ may recommend a sanction in the proposal for decision.
§224.92.Referral to SOAH.
(a) The department will refer to SOAH unresolved contested case issues by filing all forms and documents that are required under SOAH rules to docket a case.
(b) When SOAH accepts the department's request to docket, jurisdiction of the contested case transfers to SOAH.
§224.94.Notice of Hearing.
(a) Once SOAH provides the department with the initial hearing date, time, and place, the department will issue to the contested case parties a notice of hearing that complies with Occupations Code, §2301.705, Government Code, Chapter 2001, and 1 TAC §155.401.
(b) The contested case proceeds according to Subchapter E of this chapter (relating to Contested Cases Referred to SOAH).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304820
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under §623.272, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.102, which authorizes a motor carrier to comply with the requirements under Transportation Code, §643.101 through self-insurance if it complies with the requirements; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the process for an administrative hearing under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; and Transportation Code, Chapters 502, 621-623, 643, 645, 1002 and 1003.
§224.110.Purpose and Scope.
This subchapter and Subchapters A, E, and F of this chapter describe the procedures by which the department will adjudicate alleged violations and claims under Transportation Code, Chapters 502, 621-623, 643, and 645. These contested cases involve registrants under the International Registration Plan, motor carriers, motor carrier leasing businesses, motor transportation brokers, and household goods carriers. Contested cases involving persons operating oversize or overweight vehicles or moving oversize or overweight loads are also included.
§224.112.Definitions.
(a) The definitions contained in the relevant Transportation Code chapter apply to the contested cases under this subchapter.
(b) The definitions contained in Chapter 217 of this title (relating to Vehicle Titles and Registration), Chapter 218 of this title (relating to Motor Carriers), and Chapter 219 of this title (relating to Oversize and Overweight Vehicles and Loads) apply to the relevant contested cases under this subchapter.
§224.114.Cease and Desist Order.
(a) The department may issue a cease-and-desist order to a respondent:
(1) who engages or represents itself to be engaged in a motor carrier operation that is in violation of this chapter;
(2) to prevent a violation of Chapter 218 of this title (relating to Motor Carriers); or
(3) to protect public health and safety.
(b) The order shall:
(1) be delivered by personal delivery or registered or certified mail, return receipt requested, to the person's or entity's last known address;
(2) include:
(A) a summary of the factual allegations;
(B) a description of the statutory provision, rule or order the person is alleged to have violated;
(C) a description in reasonable detail of the act or acts to be restrained by the cease-and-desist; and
(3) state the effective date of the order.
(c) The department's cease and desist order is final, unless within ten days of the service of the order, the respondent files with the department a written request for hearing.
(d) If a request for hearing is filed, the department shall initiate a contested case with SOAH in accordance with Chapter 224, Subchapter E of this title (relating to Contested Cases Referred to SOAH).
(e) The cease-and-desist order shall remain in effect until the respondent comes into complete compliance with department directives and decisions, or unless otherwise provided by an order issued after final review by the department.
(f) If a respondent violates a cease-and-desist order, the department may:
(1) impose an administrative penalty against the respondent; or
(2) refer the matter to the appropriate authority to institute actions for:
(A) an injunction against violation of the cease-and-desist order;
(B) collection of any administrative penalty assessed by the department; or
(C) any other remedy provided by law.
(g) Nothing in this section precludes the department from imposing other administrative sanctions against the respondent while a cease-and-desist order is in effect.
§224.115.Administrative Penalty Assessment and Probation of Suspension.
(a) Amount of administrative penalty under Transportation Code, §623.271.
(1) Transportation Code, §623.271 governs the amount of an administrative penalty that the department may assess against a person or the holder of an oversize or overweight permit, as applicable.
(2) In an action brought by the department, the aggregate amount of administrative penalty shall not exceed $5,000 unless it is found that the person or the holder of the permit knowingly committed a violation.
(3) In an action brought by the department, if it is found that the person or the holder of the permit knowingly committed a violation, the aggregate amount of administrative penalty shall not exceed $15,000. "Knowingly" means actual awareness of the act or practice that is the alleged violation, or acting with deliberate ignorance of or reckless disregard for the violation involved. Actual awareness may be inferred from the conduct of the alleged violator or from the history of previous violations by the alleged violator.
(4) In an action brought by the department, if it is found that the person or the holder of the permit knowingly committed multiple violations, the aggregate amount of administrative penalty for the multiple violations shall not exceed $30,000.
(5) Each day a violation continues or occurs is a separate violation for purposes of imposing an administrative penalty.
(b) Amount of administrative penalty under Transportation Code, §623.272.
(1) Transportation Code, §623.272 governs the amount of an administrative penalty that the department may assess against a shipper.
(2) The amount of an administrative penalty imposed under this subsection is calculated in the same manner as the amount of an administrative penalty imposed under subsection (a) of this section.
(c) Amount of administrative penalty under Transportation Code, §643.251.
(1) Transportation Code, §643.251 governs the amount of an administrative penalty that the department may assess against a motor carrier that is required to register under Subchapter B of Chapter 643 of the Transportation Code and violates Transportation Code, Chapter 643 or a rule or order adopted under Chapter 643.
(2) In an action brought by the department, the aggregate amount of administrative penalty shall not exceed $5,000 unless it is found that the motor carrier knowingly committed a violation.
(3) In an action brought by the department, if it is found that the motor carrier knowingly committed a violation, the aggregate amount of administrative penalty shall not exceed $15,000. "Knowingly" means actual awareness of the act or practice that is the alleged violation, or acting with deliberate ignorance of or reckless disregard for the violation involved. Actual awareness may be inferred from the conduct of the alleged violator or from the history of previous violations by the alleged violator.
(4) In an action brought by the department, if it is found that the motor carrier knowingly committed multiple violations, the aggregate amount of administrative penalty for the multiple violations shall not exceed $30,000.
(5) Each day a violation continues or occurs is a separate violation for purposes of imposing an administrative penalty.
(d) Probation of suspension under Transportation Code, §643.252.
(1) Transportation Code, §643.252 authorizes the department to place on probation a motor carrier whose registration is suspended.
(2) In determining whether to probate a suspension of a motor carrier's registration, the department will consider the factors listed in Transportation Code, §643.251 regarding the amount of an administrative penalty.
(3) The department shall set the length of the probation based on the seriousness of the violation and previous violations by the motor carrier.
(4) The department will require that the motor carrier report monthly to the department any information necessary to determine compliance with the terms of the probation.
(e) The department will publish a disciplinary matrix on the department website to provide guidance to motor carriers on the penalties and sanctions that may be assessed for the most common violations.
§224.116.Administrative Proceedings.
(a) If the department decides to take an enforcement action under §218.16 of this title (relating to Insurance Requirements) for the revocation of self-insured status, §218.64 of this title (relating to Rates), §218.71 of this title (relating to Administrative Penalties), §219.121 of this title (relating to Administrative Penalties and Sanctions under Transportation Code, §623.271), §218.72 of this title (relating to Administrative Sanctions), or §219.126 of this title (relating to Administrative Penalty for False Information on Certificate by a Shipper), the department shall mail a Notice of Department Decision to the person by first class mail to the last known address as shown in department records. If the enforcement action falls under the Memorandum of Agreement with the Federal Motor Carrier Safety Administration (FMCSA) under §218.71, the department shall mail the Notice of Department Decision to the person by first class mail to the last known address as shown in FMCSA's records.
(b) The Notice of Department Decision shall include:
(1) a brief summary of the alleged violation or enforcement action being proposed;
(2) a statement describing each sanction, penalty, or enforcement action proposed;
(3) a statement informing the person of the right to request a hearing;
(4) a statement of the procedure a person must use to request a hearing, including the deadline for filing a request with the department and the acceptable methods to request a hearing; and
(5) a statement that a proposed penalty, sanction, or enforcement action will become final and take effect on a specific date if the person fails to request a hearing.
(c) A person must submit to the department a written request for a hearing to the address provided in the Notice of Department Decision not later than the 26th day after the date the notice is mailed by the department; however, this requirement does not apply to a contested case that falls under §218.64 and Transportation Code, §643.154.
(d) If a person submits a timely written request for a hearing or the contested case that falls under §218.64 and Transportation Code, §643.154, the department will contact the person and attempt to informally resolve the contested case. If the person and the department cannot informally resolve the contested case, the department will refer the contested case to SOAH to set a hearing date and will give notice of the time and place of the hearing to the person.
(e) Except as provided by Transportation Code, §643.154, if the person does not make a timely request for a hearing or agree to settle a contested case within 26 days of the date the Notice of Department Decision was mailed, the allegations are deemed admitted on the 27th day and a final order including sanctions and penalties may be issued by the final order authority.
(f) Except as provided by statute and the applicable provisions of this chapter, any SOAH proceeding is governed by Government Code, Chapter 2001 and 1 TAC Chapter 155, including the authority of the department to informally dispose of the contested case by stipulation, agreed settlement, consent order, or default. The department will follow the process set forth in Transportation Code, §643.2525 and the applicable provisions of this chapter when enforcing the federal laws and regulations cited in §218.71 to the extent authorized by applicable federal laws and regulations.
(g) The department and the person may informally resolve the contested case by entering into a settlement agreement or agreeing to stipulations at any time before the director issues a final order. However, the person must pay any penalty in full prior to the execution of a settlement agreement.
§224.118.Filing of Documents.
Each document required or allowed to be filed with the department under this subchapter must be filed according to written instructions provided by the department in the applicable notice under this subchapter.
§224.120.Registration Suspension Ordered Under Family Code.
(a) On receipt of a final order issued under Family Code, §§232.003, 232.008, or 232.009, regarding child support enforcement, the department will suspend:
(1) a certificate of registration issued under Chapter 218, Subchapter B (relating to Motor Carrier Registration); or
(2) the registration of an interstate motor carrier issued under §218.17 of this title (relating to Unified Carrier Registration System).
(b) The department will charge an administrative fee of $10 to a person whose registration is suspended under this section.
(c) A suspension under this section does not require the department to give notice or otherwise follow the administrative process provided under §224.116 of this title (relating to Administrative Proceedings).
(d) A registration suspended under this section may only be reinstated on receipt of an order issued under Family Code, §232.013.
§224.122.Appeal of Decision Regarding Assessment, Cancellation, or Revocation Under §217.56.
(a) Pursuant to §217.56(c)(2)(J)(iii) of this title (relating to Registration Reciprocity Agreements), a registrant may appeal the department's decision regarding an assessment, cancellation, or revocation.
(b) The appeal will be governed by Chapter 224, Subchapter E of this title (relating to Contested Cases Referred to SOAH).
(c) The registrant's appeal will be considered untimely if it is not received by the director of the department's Motor Carrier Division by the 26th day after the date of the department's decision. The department will not consider an untimely appeal.
(d) A timely appeal will abate the assessment pending a final order.
§224.124.Appeal of a Denial Under Transportation Code, §643.2526.
(a) Pursuant to Transportation Code, §643.2526, an applicant may appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643.
(b) The appeal will be governed by Chapter 224, Subchapter E of this title (relating to Contested Cases Referred to SOAH).
(c) The applicant's appeal will be considered untimely if it is not filed with the department by the 26th day after the date of the department's denial of the application. The department will not consider an untimely appeal.
(d) An application that is withdrawn under Transportation Code, §643.055 is not a denial of an application for the purposes of an appeal under Transportation Code, §643.2526.
§224.126.Appeal of a Denial of Self-Insured Status.
(a) Pursuant to §218.16(d) of this title (relating to Insurance Requirements), an applicant may appeal the denial of an application for self-insured status.
(b) The appeal will be governed by Chapter 224, Subchapter E of this title (relating to Contested Cases Referred to SOAH).
(c) The applicant's appeal will be considered untimely if it is not filed with the department by the 26th day after the date of the department's denial of the application. The department will not consider an untimely appeal.
§224.128.Referral to SOAH.
(a) The department will refer a contested case to SOAH by filing a Request to Docket form and related documents as required under SOAH rules as follows:
(1) if the department receives a timely request for a hearing and the parties are unable to informally resolve or dispose of the case;
(2) if the department receives a timely appeal under §§224.122, 224.124, or 224.126; or
(3) the contested case falls under §218.64 of this title (relating to Rates) and Transportation Code, §643.154.
(b) When SOAH accepts the department's Request to Docket, jurisdiction of the contested case transfers to SOAH.
§224.130.Notice of Hearing.
(a) Once SOAH provides the department with the initial hearing date, time, and place, the department will issue to the contested case parties a notice of hearing that complies with Government Code, Chapter 2001 and SOAH rules.
(b) The contested case proceeds according to Subchapter E of this chapter (relating to Contested Cases Referred to SOAH).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304821
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
43 TAC §§224.150, 224.152, 224.154, 224.156, 224.158, 224.162, 224.164, 224.166
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders; ensure that the distribution, sale and lease of motor vehicles is conducted as required by statute and board rules; to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles; and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which authorizes the board to deny an application for a license, revoke or suspend a license, place on probation a person whose license has been suspended, or reprimand a licensee; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under §623.272, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.102, which authorizes a motor carrier to comply with the requirements under Transportation Code, §643.101 through self-insurance if it complies with the requirements; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the process for an administrative hearing under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 502, 503, 621-623, 643, 645, and 1002-1005.
§224.150.Purpose and Scope.
(a) This subchapter describes department practice and procedures for referring a contested case to SOAH for a hearing, including a contested case under Subchapter B (relating to Motor Vehicle, Salvage Vehicle, and Trailer Industry Enforcement), Subchapter C (relating to Contested Cases Between Motor Vehicle Industry License Holders or Applicants), and Subchapter D (Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement) of this chapter.
(b) When SOAH accepts a referral from the department, jurisdiction of the contested case transfers to SOAH, and practice and procedure in contested cases heard by SOAH are addressed in:
(1) 1 TAC Chapter 155, and
(2) subchapter A and this subchapter, where not in conflict with SOAH rules.
(c) When SOAH disposes of a contested case, jurisdiction transfers from SOAH back to the department. The department will issue a final order under §224.29 of this title (relating to Delegation of Final Order Authority) or under Subchapter F of this chapter (relating to Board Procedures in Contested Cases).
§224.152.Referral to SOAH.
(a) The department shall refer contested cases to SOAH upon determination that a hearing is appropriate under Occupations Code, Chapter 2301 or 2302, or Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005, including contested cases relating to:
(1) an enforcement complaint on the department's own initiative;
(2) a notice of protest that has been timely filed in accordance with §215.106 of this title (relating to Time for Filing Protest);
(3) a protest filed under Occupations Code, §2301.360 or a protest or complaint filed under Occupations Code, Chapter 2301, Subchapters I or J;
(4) a department-issued cease and desist order; or
(5) any other contested matter that meets the requirements for a hearing at SOAH.
(b) The department will follow SOAH procedures to file a Request to Docket Case and related documents and request a setting of a hearing.
(c) SOAH will provide the department with the date, time, and place of the initial hearing.
§224.154.Notice of Hearing.
(a) In a contested case, each party is entitled to an opportunity for a hearing, in accordance with Government Code, §2001.051.
(b) The requirements for a notice of hearing in a contested case are provided by Government Code, §2001.052; Occupations Code, §2301.705; the SOAH rules; and Transportation Code, Chapter 623 or 643, as applicable.
(c) For service of parties outside of the United States, in addition to service under Occupations Code, §2301.265, the department may serve a notice of hearing by any method allowed under TRCP or that provides for confirmation of delivery to the party to the extent authorized by applicable law.
(d) The last known address of a license applicant, license holder, or other person is the last mailing address in department records or Federal Motor Carrier Safety Administration (FMCSA) records, as applicable.
(e) A notice of hearing issued by the department in a contested case shall comply with the requirements of Government Code, §2001.052(a).
(f) The department will serve a notice of hearing upon a license holder by certified mail return receipt requested to the last known address of the license holder or authorized representative, in accordance with Occupations Code, §2301.705.
(g) The department may serve a notice of hearing upon a person who is not a license holder by first class mail to the person's last known address as shown in department records or Federal Motor Carrier Safety Administration (FMCSA) records, as applicable.
(h) A notice of hearing in a contested case may be amended in accordance with Government Code, §2001.052(b).
§224.156.Reply to Notice of Hearing and Default Proceedings.
(a) A party may file a written reply or pleading to respond to all allegations. The written reply or responsive pleading must be filed with SOAH in accordance with SOAH rules and must identify the SOAH and department docket numbers, as reflected on the notice of hearing.
(b) Any party filing a reply or responsive pleading shall serve a copy of the reply or responsive pleading on each party or party's authorized representative in compliance with SOAH rules.
(c) A party may file an amended or supplemental reply or responsive pleading in accordance with SOAH rules.
(d) If a party properly noticed under this chapter does not appear at the hearing, a party appearing at the hearing may request that the ALJ dismiss the contested case from the SOAH docket. If the contested case is dismissed from the SOAH docket, the case may be presented to the final order authority for disposition pursuant to SOAH rules and §224.29 of this title (relating to Delegation of Final Order Authority).
§224.158.Amicus Briefs.
(a) An interested person may submit an amicus brief for consideration by the ALJ in a contested case by the deadline for filing exceptions in accordance with SOAH rules. A party may submit one written reply to the amicus brief no later than the deadline for filing replies to exceptions under SOAH rules.
(b) An amicus brief and a party's reply to amicus brief must be submitted to the ALJ and be served on all parties.
(c) The ALJ may amend the proposal for decision after considering an amicus brief or a party's reply to an amicus brief.
§224.162.Statutory Stay.
(a) A person affected by a statutory stay imposed by Occupations Code, Chapter 2301 may request a hearing before a SOAH ALJ to modify, vacate, or clarify the extent and application of the statutory stay.
(b) The ALJ shall hold a hearing on a motion to modify, vacate, or clarify a statutory stay, and prepare a written order, including a justification explaining why the statutory stay should or should not be modified, vacated, or clarified.
(c) A person affected by a statutory stay imposed by Occupations Code, Chapter 2301 may request a hearing before the board to modify, vacate, or clarify the extent and application of the statutory stay under §224.192 of this chapter (relating to Appeal of an Interlocutory Order) while the contested case is at SOAH.
§224.164.Issuance of a Proposal for Decision.
(a) After a hearing on the merits, the ALJ shall submit a proposal for decision in a contested case to the department and all parties.
(b) The parties may submit to the ALJ exceptions to the proposal for decision and replies to exceptions to the proposal for decision in accordance with the SOAH rules.
(c) The ALJ will review all exceptions and replies and notify the department and parties whether the ALJ recommends any changes to the proposal for decision.
(d) The parties are not entitled to file exceptions or briefs in response to an amended proposal for decision but may raise an issue before the board as allowed at the time of oral presentation under Subchapter F of this chapter.
§224.166.Transfer of Jurisdiction for Final Decision.
(a) A party may appeal an interlocutory order issued under Occupations Code, Chapter 2301 to the board under §224.192 of this title (relating to Appeal of an Interlocutory Order). SOAH retains jurisdiction on all other pending matters in the contested case, except as provided otherwise in this chapter.
(b) If a contested case includes a hearing on the merits, SOAH's jurisdiction transfers to the board when the ALJ confirms that the proposal for decision is final.
(c) Once jurisdiction transfers, no new testimony, witnesses, or information may be considered by the board or board delegate with final order authority.
(d) After SOAH transfers the SOAH administrative record to the department, the board or board delegate with final order authority will consider the contested case under the provisions of Subchapter F of this chapter (relating to Board Procedures in Contested Cases).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304822
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
43 TAC §§224.190, 224.192, 224.194, 224.196, 224.198, 224.200, 224.202, 224.204, 224.206
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders; ensure that the distribution, sale and lease of motor vehicles is conducted as required by statute and board rules; to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles; and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which authorizes the board to deny an application for a license, revoke or suspend a license, place on probation a person whose license has been suspended, or reprimand a licensee; Occupations Code, §2301.709, which requires the board to adopt rules that establish standards for reviewing a case under Subchapter O of Chapter 2301 of the Occupations Code; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which authorizes the department to impose an administrative penalty or revoke an oversize or overweight permit issued under Transportation Code, Chapter 623, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which authorizes the department to impose an administrative penalty on a shipper who violates a provision under §623.272, and states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.251, which authorizes the department to impose an administrative penalty against a motor carrier required to register under Subchapter B of Transportation Code, Chapter 643 that violates Chapter 643 or a rule or order adopted under Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §643.2525, which provides the process for an administrative hearing under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to one or more board members or certain department staff; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 502, 503, 621-623, 643, 645, and 1002-1005.
§224.190. Purpose and Scope.
This subchapter describes procedures for the board to review and issue a final order in a contested case in which:
(1) a SOAH ALJ has submitted a final proposal for decision for consideration by the board or board delegate with final order authority;
(2) a party has appealed an interlocutory cease-and-desist order issued by an ALJ; or
(3) a party affected by a statutory stay order issued by an ALJ requested a hearing to modify, vacate, or clarify the extent and application of the statutory stay order.
§224.192.Appeal of an Interlocutory Order.
(a) A party affected by an interlocutory cease-and-desist order or a statutory stay order under Occupations Code, Chapter 2301 may appeal the order to the board by submitting to the department's general counsel a motion requesting that the board modify, vacate, or clarify the order.
(b) The party requesting that the board modify, vacate, or clarify an order must also simultaneously serve the request on the other parties and the ALJ in accordance with §224.11 of this title (relating to Filing and Service of Documents).
(c) The board will consider the interlocutory appeal and issue a final order at a public meeting as soon as practicable. Notwithstanding the deadline listed in §224.196 of this title (relating to Request for Oral Presentation), the department shall give the parties written notice at least seven days prior to the board meeting at which the board is scheduled to consider the appeal. The notice shall notify the parties regarding the opportunity to attend and provide an oral presentation concerning an order before the board, and the opportunity to provide written materials to the board.
(1) Notwithstanding the deadline listed in §224.196, if a party seeks to provide an oral presentation at the board meeting, the party must submit a written request for an oral presentation to the department's contact listed in the notice provided under this subsection and copy all other parties in accordance with §224.11 at least three days prior to the date of the board meeting at which the board is scheduled to consider the party's contested case.
(2) Notwithstanding the deadline listed in §224.198 of this title (relating to Written Materials and Evidence), if a party wants to provide written materials at the board meeting, the party must provide the written materials to the department and all other parties in accordance with §224.11 at least three days prior to the date of the board meeting at which the board is scheduled to consider the party's contested case.
(d) An appeal to the board of an interlocutory cease-and-desist order or a statutory stay order is governed by Government Code, §2001.058(e).
§224.194.Contested Case Review.
(a) After SOAH submits a final proposal for decision and transfers SOAH's administrative record to the department, the board has jurisdiction and the record required to issue a final order and will review the contested case during the public session of a board meeting, in accordance with the APA.
(b) For a contested case in which the board has delegated final order authority to the Director of the Motor Carrier Division, a special public meeting may be scheduled.
§224.196.Request for Oral Presentation.
(a) At least 30 days prior to the scheduled date of a board meeting, the department shall notify the parties regarding the opportunity to attend and provide an oral presentation concerning a proposal for decision before the board. The department will deliver notice electronically to the last known email address provided to the department by the party or party's authorized representative in accordance with §224.11 of this title (relating to Filing and Service of Documents).
(b) If a party wants to make an oral presentation at the board meeting, a party must submit a written request for an oral presentation to the department's contact listed in the notice provided under subsection (a) of this section and copy all other parties in accordance with §224.11 at least 14 days prior to the date of the board meeting at which the party's contested case will be reviewed.
(c) If more than one party was not adversely affected by the proposal for decision, such parties may agree on the order of their presentations in lieu of the order prescribed under §224.202 of this title (relating to Order of Oral Presentations to the Board). The order of presentations will be determined under §224.202 of this title if the parties who were not adversely affected by the proposal for decision do not timely provide the department and the other parties with notice under subsection (b) of this section regarding their agreed order of presentation.
(d) If a party timely submits a written request for an oral presentation, that party may make an oral presentation at the board meeting. If a party fails to timely submit a written request for an oral presentation, that party shall not make an oral presentation at the board meeting.
(e) Section 206.22 of this title (relating to Public Access to Board Meetings) does not authorize a party to speak as a public commenter regarding the party's contested case before the board during the posted agenda item or during the open comment period.
§224.198.Written Materials and Evidence.
(a) If a party wants to provide written materials at the board meeting, the party must provide the written materials to the department and all other parties in accordance with §224.11 of this title (relating to Filing and Service of Documents) at least 21 days prior to the date of the board meeting. If a party fails to timely provide written materials to the department or any other party, the department shall not provide the written materials to the board and the party shall not provide the written materials to the board at the board meeting. Non-parties are not authorized to provide written materials to the board.
(b) For the purposes of this section, written materials are defined as language or images including photographs or diagrams, that are contained in the SOAH administrative record and recorded in paper form except as stated otherwise in this subsection. The language or images in the written materials must be taken without changes from the SOAH administrative record; however, proposed final orders and draft motions for possible board action are allowed to be included in a party's written materials even if they contain arguments or requests that aren't contained in the SOAH administrative record. Written materials shall be limited to evidence contained in the SOAH administrative record and consistent with the scope of the board's authority to act under Government Code, §2001.058(e) and Occupations Code, Chapters 2301 and 2302, and Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005, as applicable.
(c) All information in the written materials shall include a citation to the SOAH administrative record on all points to specifically identify where the information is located. The citations may be provided in an addendum to the written materials that is not counted against the 15-page limit under subsection (d) of this section; however, the addendum must not include any information other than a heading that lists the name of the party, the caption for the contested case, and text that lists the citations and page numbers.
(d) Written materials shall be 8.5 inches by 11 inches and single-sided. Written materials must be double-spaced and at least 12-point type if in text form. Written materials are limited to 15 pages per party. If a party provides the department with written materials that contain more pages than the maximum allowed, the department shall not provide the written materials to the board and a party shall not provide the written materials to the board at the board meeting.
§224.200.Oral Presentation Limitations and Responsibilities.
(a) A party to a contested case under review by the board shall limit oral presentation and discussion to evidence in the SOAH administrative record. Also, oral presentation and discussion shall be consistent with the scope of the board's authority to act under Government Code, §2001.058(e); Occupations Code, Chapters 2301 and 2302; and Transportation Code Chapter 502, 503, 621-623, 643, 645, or 1001-1005, as applicable.
(b) A party may argue that the board should remand the contested case to SOAH.
(c) Each party is responsible for objecting when another party attempts to make arguments or engage in discussion regarding evidence that is not contained in the SOAH administrative record.
(d) A party's presentation to the board is subject to the following limitations and conditions:
(1) Each party shall be allowed a maximum of 15 minutes for their oral presentation. The board chair may increase this time.
(2) No party is allowed to provide a rebuttal or a closing statement.
(3) An intervenor of record from the SOAH proceeding supporting another party shall share that party's time.
(4) Time spent by a party responding to a board question is not counted against their presentation time.
(5) During an oral presentation, a party to the contested case before the board may object that a party presented material or argument that is not in the SOAH administrative record. Time spent discussing such objections is not counted against the objecting party's time.
§224.202.Order of Oral Presentations to the Board.
(a) The department will present the procedural history and summary of the contested case.
(b) The party that is adversely affected may present first. However, the board chair is authorized to determine the order of each party's presentation if:
(1) it is not clear which party is adversely affected;
(2) it appears that more than one party is adversely affected; or
(3) different parties are adversely affected by different portions of the contested case under review.
(c) The other party or parties not adversely affected will then have an opportunity to make a presentation. If more than one party is not adversely affected, each party will have an opportunity to respond in alphabetical order based on the name of the party in the pleadings in the SOAH administrative record, except as stated otherwise in §224.196 of this title (relating to Request for Oral Presentation).
§224.204.Board Conduct and Discussion When Reviewing a Contested Case or Interlocutory Order.
(a) The board shall conduct its contested case review in compliance with Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; and Transportation Code Chapters 502, 503, 621, 623, 643, 645, or 1001-1005, as applicable, including the limitations on changing a finding of fact or conclusion of law made by a SOAH ALJ, and the prohibition on considering evidence outside of the SOAH administrative record.
(b) A board member may question a party or the department on any matter that is relevant to the proposal for decision; however, a question shall be consistent with the scope of the board's authority to take action under Government Code, §2001.058(e); Occupations Code, Chapters 2301 and 2302; and Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005, as applicable; a question must be limited to evidence contained in the SOAH administrative record; and the communication must comply with §224.5 of this title (relating to Prohibited Communication). In considering a contested case, a board member is authorized to ask a question regarding a request to remand the case to SOAH, including a remand to SOAH for further consideration of the evidence.
(c) A board member may use personal expertise in the industry to understand a contested case and make effective decisions, consistent with the scope of the board's authority to act under Government Code, §2001.058(e); Occupations Code, Chapters 2301 and 2302; and Transportation Code Chapters 502, 503, 621-623, 643, 645, or 1001-1005, as applicable. However, a board member is not an advocate for a particular industry. A board member is an impartial public servant who takes an oath to preserve, protect, and defend the Constitution and laws of the United States and Texas.
§224.206.Final Orders.
(a) A final decision or order in a contested case reviewed by the board or board delegate with final order authority shall be in writing and shall be signed by the board chair or board delegate, as applicable.
(b) The department shall email a copy of the final order to the parties in the contested case in addition to sending a copy of the final order certified mail, return receipt requested.
(c) The provisions of Government Code, Chapter 2001, Subchapter F govern:
(1) the issuance of a final order issued under this subchapter; and
(2) motions for rehearing filed in response to a final order.
(d) A decision or order in a contested case is final in accordance with Government Code, §2001.144.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304824
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665
STATUTORY AUTHORITY. The department proposes new Chapter 224 under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Occupations Code, §2301.152, which authorizes the board to provide for compliance with warranties; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301; Occupations Code, §2301.602, which requires the board to adopt rules for the enforcement and implementation of Subchapter M of Occupations Code, Chapter 2301; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble.
CROSS REFERENCE TO STATUTE. These new rules would implement Government Code, Chapter 2001; Occupations Code, Chapter 2301; and Transportation Code, Chapters 1002 and 1003.
§224.230.Purpose, Scope, and Definitions.
(a) Subchapter A and this subchapter apply to contested cases filed under Occupations Code, §2301.204 or Subchapter M, to the extent they do not conflict with state law, rule, or court order.
(b) The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Case advisor--A department staff member responsible for evaluating, investigating, and mediating lemon law and warranty performance complaints prior to a hearing.
(2) Comparable motor vehicle--A new motor vehicle, with comparable mileage, from the same manufacturer, distributor, or converter's product line and the same model year or newer as the motor vehicle to be replaced or as reasonably equivalent to the motor vehicle to be replaced.
(3) Lemon law--Refers to Occupations Code, Chapter 2301, Subchapter M (§§2301.601-2301.613).
(4) Warranty performance--Refers to Occupations Code, §2301.204.
§224.232.Filing a Complaint.
(a) The department will provide information concerning the complaint procedure and a complaint form to a person requesting assistance. A person may call the department or visit the department website for information or to file a complaint electronically.
(b) A complaint alleging a violation of Occupations Code, §2301.204 or Subchapter M, must be in writing and signed by the complainant, and:
(1) state sufficient facts to enable the department and the party complained against to know the nature of the complaint and the specific problems or circumstances forming the basis of the claim for relief under the lemon law or warranty performance statute;
(2) provide the following information:
(A) the name, address, and telephone number of the motor vehicle owner;
(B) the make, model, year, and Vehicle Identification Number or VIN of the motor vehicle;
(C) the type of warranty coverage;
(D) the name and address of the dealer or other person from whom the motor vehicle was purchased or leased, including the name and address of the vehicle lessor, if applicable;
(E) the original date of delivery of the motor vehicle to the owner and in the case of a demonstrator, the date the motor vehicle was placed into demonstrator service;
(F) the motor vehicle mileage at the time when:
(i) the motor vehicle was purchased or leased;
(ii) problems with the motor vehicle were first reported; and
(iii) the complaint was filed;
(G) the name of the dealer or the name of the manufacturer's, converter's, or distributor's agent to whom the problems were first reported;
(H) identification of the motor vehicle's existing problems and a brief description of the history of problems and repairs on the motor vehicle, including:
(i) the date and mileage of each repair; and
(ii) a copy of each repair order where possible;
(I) the date the motor vehicle manufacturer, distributor, or converter first received written notice of the alleged defect or nonconformity;
(J) the date and results of the motor vehicle inspection, if the motor vehicle was inspected by the manufacturer, distributor, or converter; and
(K) any other information the complainant deems relevant to the complaint.
(c) A person may file a complaint with the department:
(1) by mail sent to the mailing address listed on the department website at TxDMV.gov, or
(2) electronically in the Motor Vehicle Dealer Online Complaint System which may be accessed on the department website.
(d) Before investigating a claim, the department may require the complainant to provide additional information necessary to evaluate whether the department has jurisdiction to pursue the complaint.
(e) The following provisions apply to lemon law complaints.
(1) The filing fee required under the lemon law should be paid when the complaint is submitted to the department and may be paid online by credit card if filing a claim electronically or by check if mailing a complaint to the department. The filing fee is nonrefundable, but a complainant that prevails in a case is entitled to reimbursement of the filing fee from the nonprevailing party. Failure to pay the filing fee when submitting a complaint will delay the start of the 150-day period in paragraph (3) of this subsection and may result in dismissal of the complaint.
(2) A lemon law proceeding commences on the date the filing fee is received by the department.
(3) If the hearings examiner has not issued an order within 150 days after the commencement of the lemon law proceeding in accordance with paragraph (2) of this subsection, the department shall notify the parties by certified mail that the complainant may file a civil action in state district court to seek relief under the lemon law. The notice will inform the complainant of the complainant's right to continue the lemon law complaint with the department. The department shall extend the 150-day period upon request of the complainant or if a delay in the proceedings is caused by the complainant.
(f) The following provisions apply to warranty performance complaints (repair-only relief).
(1) A filing fee is not required for a complaint that is subject to a warranty performance claim.
(2) A complaint may be filed with the department in accordance with this section if the defect in the motor vehicle subject to the warranty performance complaint was reported to the manufacturer, distributor, or converter prior to the expiration of the warranty period.
(3) If the defect is not resolved pursuant to §224.238 of this title (relating to Mediation; Settlement or Referral for Hearing), the department will schedule a hearing to be conducted in accordance with Government Code, Chapter 2001, subject to Occupations Code, Chapter 2301, Subchapter O and this subchapter.
(4) A hearings examiner will issue a final order on a warranty performance complaint. A party who disagrees with the order may oppose the order in accordance with §224.264 of this title (relating to Final Orders).
§224.234.Complaint Review.
(a) A case advisor will review a complaint to determine if the department has jurisdiction to consider the complaint and whether the complaint meets the minimum statutory requirements for a lemon law or a warranty performance complaint.
(b) If a case advisor cannot determine if the department has jurisdiction or whether a complaint meets the lemon law or warranty performance minimum statutory requirements, the case advisor will contact the complainant for additional information.
(c) The case advisor will notify the complainant if the department does not have jurisdiction over the complaint.
(d) If a case advisor determines that the department has jurisdiction and the complaint meets the minimum lemon law or warranty performance requirements, the complaint will be processed in accordance with this subchapter.
§224.236.Notification to Manufacturer, Distributor, or Convertor.
(a) Once a case advisor determines that a complaint meets the minimum statutory requirements the case advisor will:
(1) notify the appropriate manufacturer, distributor, or converter of the complaint and request a response; and
(2) provide a copy of the complaint to the selling dealer and any other dealer involved with the complaint and may request a response.
(b) Upon request by the department, the manufacturer shall provide a copy of the warranty for the motor vehicle subject to the lemon law or warranty performance complaint.
(c) The case advisor will provide a copy of any responses or documents received from the manufacturer, distributor, or converter to the complainant.
§224.238.Mediation; Settlement or Referral for Hearing.
(a) A case advisor will attempt to settle or resolve a lemon law or warranty performance complaint through nonbinding mediation before a hearing on the complaint is scheduled.
(b) The parties must participate in the nonbinding mediation process in good faith.
(c) In a case filed under Occupations Code, §2301.204 or §§2301.601-2301.613, a case advisor shall qualify for appointment as an impartial third party in accordance with Civil Practice and Remedies Code, Chapter 154.
(d) If the parties cannot resolve the complaint, a case advisor will refer the complaint for a hearing with a hearings examiner.
§224.240.Notice of Hearing.
(a) Each party is entitled to an opportunity for a hearing, in accordance with Government Code, §2001.051.
(b) A notice of hearing in a contested case shall comply with the requirements of Government Code, §2001.052(a) and the department shall serve the notice upon the parties by certified mail, return receipt requested to the last known address of a party or the party's authorized representative in accordance with Occupations Code, §2301.705.
(c) The last known address of a party is the last mailing address provided to the department.
(d) A notice of hearing in a contested case may be amended in accordance with Government Code, §2001.052(b).
§224.242.Motions.
(a) Unless made during a contested case hearing, each motion in a contested case shall be in writing and shall state:
(1) the relief sought; and
(2) the specific reasons and grounds for the relief requested.
(b) A motion not made during a contested case hearing shall be filed with the hearings examiner and a copy shall be served on all parties or their authorized representatives at least five days prior to the hearing absent a showing of good cause.
(c) A motion is not granted until it has been ruled on by the hearings examiner, even if the motion is uncontested or agreed.
§224.244.Service of Documents.
(a) A copy of each document filed in a contested case shall be served upon all parties or their authorized representatives by sending a copy properly addressed to each party by:
(1) first-class mail; or
(2) email.
(b) A copy of each document must also be filed with the department by:
(1) email;
(2) fax; or
(3) first-class mail.
(c) A certificate of service shall accompany each document.
§224.246.Presiding Official.
(a) Hearings examiner. A hearings examiner will preside over a hearing for a lemon law or warranty performance complaint.
(b) Powers and duties. A hearings examiner shall conduct fair hearings and shall take all necessary action to administer the disposition of contested cases. A hearings examiner's powers include, but are not limited to the authority to:
(1) administer oaths;
(2) examine witnesses;
(3) rule upon the admissibility of evidence;
(4) rule upon motions; and
(5) regulate the course of the contested case hearing and the conduct of the parties and their authorized representative.
(c) Expert Inspection. If a hearings examiner determines that an expert opinion may assist in arriving at a decision, a hearings examiner may have the motor vehicle in question inspected by an expert prior to the hearing. An inspection under this subsection shall be made only upon prior notice to all parties, who shall have the right to be present at the inspection. A copy of any findings or report from the expert inspection will be provided to all parties before or at the hearing.
(d)Recusal.
(1) If a hearings examiner determines that the hearings examiner should be recused from a particular contested case hearing, the hearings examiner shall withdraw from the contested case by giving notice on the record and by notifying the chief hearings examiner.
(2) A party may file a motion to recuse the hearings examiner. The motion to recuse shall be supported by an affidavit setting forth the alleged grounds for disqualification. A copy of the motion shall be served on the hearings examiner who shall have 10 days to reply, and a copy shall be served on all parties or their authorized representatives.
(3) If the hearings examiner contests the alleged grounds for disqualification, the chief hearings examiner shall promptly determine the validity of the grounds alleged and render a decision.
(e) Substitution of hearings examiner. If the hearings examiner is disqualified, dies, becomes disabled, or withdraws during any contested case proceeding, the chief hearings examiner may appoint another hearings examiner to preside over the remainder of the contested case proceeding.
§224.248.Hearing Continuance.
(a) A continuance of the contested case hearing will be granted by the hearings examiner only upon a showing of good cause.
(b) A motion for continuance of a contested case hearing shall be filed and served on all parties at least five days before the hearing date, except when good cause is shown to consider a motion for continuance filed after the deadline.
§224.250.Conduct of Hearing.
(a) Each party in a contested case shall have the right to notice, cross examination, present evidence, object, make a motion or argument, and all other rights essential to a fair contested case hearing. Except as provided by this chapter or in the notice of hearing, the TCRP as applied to non-jury civil cases shall be applicable to hearings in contested cases as far as reasonably practical.
(b) Parties, representatives, and other participants in a contested case shall:
(1) conduct themselves with dignity;
(2) show courtesy and respect for one another and the hearings examiner;
(3) follow any additional guidelines of decorum prescribed by the hearings examiner; and
(4) adhere to the time schedule.
(c) If a participant violates this section, the hearing examiner may:
(1) issue a warning;
(2) recess the hearing; or
(3) exclude a person from the contested case hearing for such period and upon such conditions as are just.
§224.252.Hearings.
(a) Depositions, interrogatories, and requests for admission shall not be allowed.
(b) When possible, an in-person hearing will be held in the city in which the complainant resides. A hearing may also be conducted by telephone or videoconference.
(c) A hearing will be scheduled at the earliest date possible, provided that a 10-day notice or other notice required by law is given to all parties.
(d) A hearing will be conducted expeditiously by a hearings examiner in accordance with Government Code, Chapter 2001, subject to Occupations Code, Chapter 2301, and this subchapter.
(e) If a party fails to appear for the hearing, relief may be granted to the party that appears.
(f) Absent a showing of good cause, a complaint may be dismissed if the complainant repeatedly fails to respond or communicate with the department.
(g) The complainant shall have the burden of proof by a preponderance of the evidence.
(h) Hearings will be conducted informally. A party has a right to be represented by an attorney at a hearing, although an attorney is not required. A party who intends to be represented at a hearing by an attorney or other authorized representative must notify the hearings examiner and any other party in writing at least five business days prior to the hearing. Failure to provide notice will result in postponement of the hearing if requested by another party.
(i) Subject to a hearings examiner ruling, a party may present that party's case in full, including testimony from witnesses and documentary evidence such as repair orders, warranty documents, and the motor vehicle sales contract.
(j) With written approval of the hearings examiner, a hearing may be conducted by written submission only or by telephone or videoconference.
(k) Upon notice to the parties, a hearings examiner may conduct a hearing or prehearing conference by telephone or videoconference.
(l) Except for a hearing conducted by written submission, a party may be questioned by another party at the discretion of the hearings examiner.
(m) Except for a hearing conducted by written submission, telephone, or videoconference, the complainant may bring the motor vehicle in question to the hearing so that the motor vehicle may be inspected and test driven by Respondent.
(n) Except for a hearing conducted by written submission, a hearing will be recorded by the hearings examiner. A copy of the recording will be provided to any party upon request and upon payment of the cost of the copy as provided by statute or rules.
§224.254.Evidence.
(a) General. The TRE shall apply in all contested cases, in accordance with Government Code, Chapter 2001.
(b) Documents in department files. The hearings examiner may take official notice of documents or information in the department's files, in accordance with Government Code, Chapter 2001.
(c) Exhibits. Exhibits shall be limited to the relevant and material issues involved in a particular contested case. If an offered exhibit has been excluded after objection and the party offering the exhibit withdraws the offer, the hearings examiner shall return the exhibit. If the excluded exhibit is not withdrawn, it shall be given an exhibit number for identification and be included in the record only for the purpose of preserving the exception together with the hearings examiner's ruling.
(d) Evidence may be stipulated by agreement of allparties.
§224.256.Objections and Exceptions.
A party is not required to make a formal exception to a ruling of the hearings examiner.
§224.258.Final Order Authority.
(a) The hearings examiner has final order authority in a contested case filed under Occupations Code, §2301.204 or Occupations Code, Chapter 2301, Subchapter M.
(b) This authority includes a contested case in which a case is resolved:
(1) by settlement;
(2) by agreed order;
(3) by withdrawal of the complaint;
(4) by dismissal for want of prosecution or continued failure to communicate with the department;
(5) by dismissal for want of jurisdiction;
(6) by summary judgment or summary disposition;
(7) by a default judgment; or
(8) when a party waives the opportunity for a contested case hearing.
§224.260.Lemon Law Relief Decisions.
(a) Unless otherwise indicated, this section applies to decisions that relate to lemon law complaints. Decisions shall give effect to the presumptions provided in Occupations Code, §2301.605, where applicable.
(1) If a hearings examiner finds that the manufacturer, distributor, or converter is not able to conform the motor vehicle to an applicable express warranty by repairing or correcting a defect in the complainant's motor vehicle, creating a serious safety hazard or substantially impairing the use or market value of the motor vehicle after a reasonable number of attempts, and that the affirmative defenses provided under Occupations Code, §2301.606 are not applicable, the hearings examiner shall issue a final order to the manufacturer, distributor, or converter to:
(A) replace the motor vehicle with a comparable motor vehicle; or
(B) accept the return of the motor vehicle from the owner and refund the full purchase price of the motor vehicle to the owner, less a reasonable allowance for the owner's use of the motor vehicle and any other allowances or refunds payable to the owner.
(2) In a decision in favor of the complainant, the hearings examiner will, to the extent possible, accommodate the complainant's request with respect to replacement or repurchase of the motor vehicle.
(b) This subsection applies only to the repurchase of motor vehicles.
(1) When a refund is ordered, the purchase price shall be the total purchase price of the motor vehicle, excluding the amount of any interest, finance charge, or insurance premiums. The refund amount to the motor vehicle owner shall include reimbursement of the amount of the lemon law complaint filing fee paid by, or on behalf of, the motor vehicle owner. The refund shall be made payable to the motor vehicle owner and to any lienholder, respective to each person's ownership interest in the motor vehicle.
(2) There is a rebuttable presumption that the expected useful life of a motor vehicle is 120,000 miles. Except in cases where the preponderance of the evidence shows the motor vehicle has a longer or shorter expected useful life than 120,000 miles, the reasonable allowance for the owner's use of the motor vehicle shall be the sums of the amounts obtained by adding subparagraphs (A) and (B) of this paragraph.
(A) The product obtained by multiplying the total purchase price, as defined in paragraph (1) of this subsection, of the motor vehicle by a fraction having as its denominator 120,000 and having as its numerator the number of miles that the motor vehicle traveled from the time of delivery to the owner to the date of the date of the first report of the defect or condition forming the basis of the repurchase order; and
(B) 50% of the product obtained by multiplying the total purchase price by a fraction having as its denominator 120,000 and having as its numerator the number of miles that the motor vehicle traveled after the first report of the defect or condition forming the basis of the repurchase order through the date of the hearing.
(3) There is a rebuttable presumption the expected useful life of a towable recreational vehicle is 5,475 days or 15 years. Except in cases where a preponderance of the evidence shows that the vehicle has a longer or shorter expected useful life than 5,475 days or 15 years, the reasonable allowance for the owner's use of the towable recreational vehicle shall be the sum of the amount obtained by adding subparagraphs (A) and (B) of this paragraph.
(A) The product obtained by multiplying the total purchase price, as defined in paragraph (1) of this subsection, of the towable recreational vehicle by a fraction having as its denominator 5,475 days or 15 years and having as its numerator the number of days from the time of delivery to the owner to the first report of the defect or condition forming the basis of the repurchase order.
(B) 50% of the product obtained by multiplying the purchase price by a fraction having as its denominator 5,475 days or 15 years and having as its numerator the number of days of ownership after the date of the first report of the defect or condition forming the basis of the repurchase order through the date of the hearing.
(C) Any day or part of a day that the vehicle is out of service for repair will be deducted from the numerator in determining the reasonable allowance for use of a towable recreational vehicle in this paragraph.
(c) This subsection applies only to the repurchase of a leased motor vehicle.
(1) Except in cases involving unusual and extenuating circumstances supported by a preponderance of the evidence, when a refund of the total purchase price of a leased motor vehicle is ordered, the refund shall be allocated and paid to the lessee and the vehicle lessor, respectively, in accordance with subparagraphs (A) and (B) of this paragraph.
(A) The lessee shall receive the total of:
(i) all lease payments previously paid by the lessee to the vehicle lessor under the terms of the lease; and
(ii) all sums previously paid by the lessee to the vehicle lessor in connection with entering into the lease agreement, including, but not limited to any capitalized cost reduction, down payment, trade-in, or similar cost, plus sales tax, license, registration fees, and other documentary fees, if applicable.
(B) The vehicle lessor shall receive the total of:
(i) the actual price paid by the vehicle lessor for the motor vehicle, including tax, title, license, and documentary fees, if paid by the vehicle lessor and evidenced in a bill of sale, bank draft demand, tax collector's receipt, or similar instrument; and
(ii) an additional 5.0% of the purchase price plus any amount or fee paid by the vehicle lessor to secure the lease or interest in the lease.
(C) A credit reflecting all of the payments made by the lessee shall be deducted from the actual purchase price that the manufacturer, distributor, or converter is required to pay the vehicle lessor, as specified in subparagraph (B)(i) and (ii) of this paragraph.
(2) When the hearings examiner orders a manufacturer, distributor, or converter to refund the purchase price in a leased vehicle transaction, the motor vehicle shall be returned to the manufacturer, distributor, or converter with clear title upon payment of the sums indicated in paragraph (1)(A) and (B) of this subsection. The vehicle lessor shall transfer title of the motor vehicle to the manufacturer, distributor, or converter, as necessary to effectuate the lessee's rights. The lease shall be terminated without penalty to the lessee.
(3) Refunds shall be made to the lessee, vehicle lessor, and to any lienholder, respective to their ownership interest in the motor vehicle. The refund to the lessee under paragraph (1)(A) of this subsection shall be reduced by a reasonable allowance for the lessee's use of the motor vehicle. A reasonable allowance for use shall be computed in accordance with subsection (b)(2) or (3) of this section, using the amount in paragraph (1)(B)(i) of this subsection as the applicable total purchase price.
(d) This subsection applies only to replacement of motor vehicles.
(1) Upon a hearing examiner's issuance of a final order to a manufacturer, distributor, or converter to replace a motor vehicle, the manufacturer, distributor, or converter shall:
(A) promptly authorize the exchange of the complainant's motor vehicle with the complainant's choice of any comparable motor vehicle; and
(B) instruct the dealer to contract the sale of the selected comparable motor vehicle with the complainant under the following terms.
(i) The sales price of the comparable motor vehicle shall be the vehicle's Manufacturer's Suggested Retail Price or Distributor's Suggested Retail Price (MSRP/DSRP), as applicable;
(ii) The trade-in value of the complainant's motor vehicle shall be the MSRP/DRSP, as applicable, at the time of the original transaction, less a reasonable allowance for the complainant's use of the complainant's motor vehicle.
(iii) The reasonable allowance for replacement relief shall be calculated in accordance with subsection (b)(2) and (3) of this section.
(2) Upon a replacement of a complainant's motor vehicle, the complainant shall be responsible for payment or financing of the reasonable allowance for use of the complainant's vehicle, any outstanding liens on the complainant's vehicle, and applicable taxes and fees associated with the new sale of a comparable motor vehicle, excluding documentary fees.
(A) If the comparable motor vehicle has a higher MSRP/DSRP, as applicable, than the complainant's vehicle, the complainant shall be responsible at the time of sale to pay or finance the difference in the two vehicles' MSRPs/DSRPs, as applicable, to the manufacturer, converter or distributor.
(B) If the comparable motor vehicle has a lower MSRP/DSRP, as applicable, than the complainant's vehicle, the complainant will be credited the difference in the MSRP/DSRP, as applicable, between the two motor vehicles. The difference credited shall not exceed the amount of the calculated reasonable allowance for use for the complainant's vehicle.
(3) The complainant is responsible for obtaining financing, if necessary, to complete the transaction.
(4) The replacement transaction, as described in paragraphs (2) and (3) of this subsection, shall be completed as specified in the final order. If the replacement transaction cannot be completed within the ordered time period, the manufacturer shall repurchase the complainant's motor vehicle in accordance with the repurchase provisions of this section. If repurchase relief occurs, a party may request calculation of the refund price by the hearings examiner.
(e) If the hearings examiner finds that a complainant's motor vehicle does not qualify for replacement or repurchase, the hearings examiner may enter an order requiring repair work to be performed or other action taken to obtain compliance with the manufacturer's, converter's, or distributor's warranty obligations.
(f) If the motor vehicle is substantially damaged or if there is an adverse change in the motor vehicle's condition beyond ordinary wear and tear, from the date of the hearing to the date of repurchase, and the parties are unable to agree on an amount allowed for such damage or condition, either party may request reconsideration by the hearings examiner of the refund amount contained in the final order.
(g) In any award in favor of a complainant, the hearings examiner may require the dealer involved to reimburse the complainant, manufacturer, distributor, or converter for the cost of any items or options added to the motor vehicle by the dealer if one or more of those items or options contributed to the defect that is the basis for the final order. This subsection shall not be interpreted to require a manufacturer, distributor, or converter to repurchase a motor vehicle due to a defect or condition that was solely caused by an item or option added by the dealer.
§224.262.Incidental Costs.
(a) When a refund of the purchase price or replacement of a motor vehicle is ordered, the complainant shall be reimbursed for certain incidental costs incurred by the complainant from loss of use of the motor vehicle because of the defect or nonconformity which is the basis of the complaint. The costs must be reasonable and verifiable. Reimbursable incidental costs include, but are not limited to the following costs:
(1) alternate transportation;
(2) towing;
(3) telephone calls or mail charges directly attributable to contacting the manufacturer, distributor, converter, or dealer regarding the motor vehicle;
(4) meals and lodging necessitated by the motor vehicle's failure during out-of-town trips;
(5) loss or damage to personal property;
(6) attorney fees if the complainant retains counsel after notification that the respondent is represented by counsel; and
(7) items or accessories added to the motor vehicle at or after purchase, less a reasonable allowance for use.
(b) Incidental costs shall be included in the final refund amount required to be paid by a manufacturer, distributor, or converter to a prevailing complainant, or in the case of a motor vehicle replacement, shall be tendered to the complainant at the time of replacement.
(c) When awarding reimbursement for the cost of items or accessories presented under subsection (a)(7) of this section, the hearings examiner shall consider the permanent nature, functionality, and value added by the items or accessories and whether the items or accessories are original equipment manufacturer (OEM) parts or non-OEM parts.
§224.264.Final Orders.
(a) A hearings examiner shall prepare a final order as soon as possible, but not later than 60 days after the hearing is closed, or as otherwise provided by law. The final order shall include the hearings examiner's findings of fact and conclusions of law. The final order shall be sent by the department to all parties by certified mail.
(b) A party who disagrees with the final order may file a motion for rehearing in accordance with Government Code, Chapter 2001, subject to Occupations Code, Chapter 2301, Subchapter O. A motion for rehearing of a final order must:
(1) be filed with the chief hearings examiner;
(2) include the specific reasons, exceptions, or grounds asserted by a party as the basis of the request for a rehearing; and
(3) recite, if applicable, the specific findings of fact, conclusions of law, or any other portions of the final order to which the party objects.
(c) Replies to a motion for rehearing must be filed with the chief hearings examiner in accordance with Government Code, Chapter 2001, subject to Occupations Code, §2301.713.
(d) If the chief hearings examiner or designee grants a motion for rehearing, the parties will be notified by mail and a rehearing will be scheduled promptly. After rehearing, a final order shall be issued with any additional findings of fact or conclusions of law, if necessary to support the final order.
(e) A hearings examiner may issue a final order granting the relief requested in a motion for rehearing or requested in a reply to a motion for rehearing without the need for a rehearing.
(f) If a motion for rehearing is denied, the chief hearings examiner or designee will issue a final order and notify the parties.
§224.266.Compliance with Order Granting Relief.
(a) Compliance with a final order will be monitored by the department.
(b) A complainant is not bound by a final order.
(c) If a complainant does not accept the final order, the proceeding before the hearings examiner will be deemed concluded and the complaint file closed.
(d) If the complainant accepts the final decision, then the manufacturer, distributor, or converter, and the dealer to the extent of the dealer's responsibility, if any, shall immediately take such action as is necessary to implement the final order.
(e) If a manufacturer, distributor, or converter replaces or repurchases a motor vehicle pursuant to a final order, then the manufacturer, distributor, or converter shall, prior to the resale of such motor vehicle, retitle the vehicle in Texas and shall:
(1) issue a disclosure statement on a form provided by or approved by the department; and
(2) affix a department-approved disclosure label in a conspicuous location in or on the motor vehicle.
(f) The disclosure statement and disclosure label required under subsection (e) of this section shall accompany the motor vehicle through the first retail purchase. No person holding a license or GDN issued by the department under Occupations Code, Chapter 2301 or Transportation Code, Chapter 503 shall remove or cause the removal of the disclosure label until delivery of the motor vehicle to the first retail purchaser.
(g) A manufacturer, distributor, or converter shall provide to the department the name, address, and telephone number of the transferee to whom the manufacturer, distributor, or converter transfers the motor vehicle on the disclosure statement within 60 days of a transfer. A dealer that sells the vehicle to the first retail purchaser shall return the completed disclosure statement to the department within 60 days of the sale.
(h) The manufacturer, distributor, or converter must repair the defect or condition in the motor vehicle that resulted in the vehicle being reacquired and issue a basic warranty excluding non-original equipment manufacturer items or accessories, for a minimum of 12 months or 12,000 miles, whichever comes first. The warranty shall be provided to the first retail purchaser of the motor vehicle.
(i) In the event this section conflicts with the terms contained in a cease and desist order, the terms of the cease and desist order shall prevail.
(j) The failure of any manufacturer, distributor, converter, or dealer to comply with a final order within the time period prescribed in the order may subject the manufacturer, converter, distributor, or dealer to formal action by the department, including the assessment of civil penalties of up to $10,000 per day per violation or other sanctions prescribed by Occupations Code, Chapter 2301.
§224.268.Judicial Appeal of a Final Order.
(a) A party who has exhausted all administrative remedies may appeal a final order in a Travis County district court under Government Code, Chapter 2001, and subject to Occupations Code, §2301.609.
(b) A party appealing a final order must serve a copy of the petition for judicial review on the department and all parties of record. After service of the petition and within the time allowed for filing an answer, the department shall transmit to the reviewing court the original or a certified copy of the entire record of the proceeding. If the court orders that new evidence be presented to a hearings examiner, the hearings examiner may modify the findings and decision or order by reason of the new evidence and shall transmit the additional record to the court.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on December 15, 2023.
TRD-202304826
Laura Moriaty
General Counsel
Texas Department of Motor Vehicles
Earliest possible date of adoption: January 28, 2024
For further information, please call: (512) 465-5665