Proposed Rules Title 43

TITLE 43. TRANSPORTATION

PART 3. MOTOR VEHICLE CRIME PREVENTION AUTHORITY

CHAPTER 57. MOTOR VEHICLE CRIME PREVENTION AUTHORITY

43 TAC §§57.9, 57.14, 57.27, 57.29, 57.48, 57.50 - 57.52

INTRODUCTION. The Motor Vehicle Crime Prevention Authority (authority) proposes amendments to 43 Texas Administrative Code (TAC) Chapter 57, §§57.9, 57.14; 57.27, 57.29, 57.48, and 57.50 - 57.52.

The proposed amendments in Chapter 57 are necessary to bring the rules into alignment with statute; remove language that is redundant with statute; to clarify existing requirements; to modernize language; to improve readability through the use of consistent terminology; to clarify or delete unused, archaic, or inaccurate definitions, terms, and references or other language; to clarify existing requirements; and more specifically describe the authority's methods and procedures.

EXPLANATION. The authority is conducting a review of its rules in Chapter 57 in compliance with Government Code, §2001.039. Notice of the department's plan to review Chapter 57 is published in this issue of the Texas Register. As a part of the rule review, the authority is proposing necessary amendments as detailed in the following paragraphs.

A proposed amendment would add new proposed §57.9(f) to clarify that grantees who are in violation of the MVCPA's non-supplanting requirement may be required by the Board to return supplanted funds to the MVCPA.

A proposed amendment to §57.14(b)(4) would clarify that a projects eligible for grant funding to address a reduction in the sale of stolen auto parts can include projects designed to reduce the sale of stolen catalytic converters, in furtherance of SB 224, 89th Legislature, Regular Session (2023). Proposed new §57.14(b)(6) would add "preventing stolen motor vehicles from entering Mexico" as a project goal for which the MVCPA can provide grant funding, to align the rule with Transportation Code Chapter 1006.

Proposed amendments to §57.27(a)(1), (a)(2), (c), (d) and (f) would clarify language and improve readability without changing the meaning of the rule. Proposed new §57.27(f) clarifies that MVCPA grantees do not have a statutory right to a contested case proceeding to determine whether a deficient condition described in §57.27(a) exists or has been resolved.

Proposed amendments to §57.29(d) and (e) would modernize language and improve readability.

A proposed amendment to §57.48(b) would update the titles of two Comptroller of Public Accounts forms used by insurers to pay the MVCPA fee with correct language and would clarify that the forms may be obtained in electronic format on the Comptroller's website.

A proposed amendment to §57.50 would update the section title to reflect the official agency name of the Texas Department of Insurance. Proposed amendments to the body of the rule would align the section with Transportation Code Chapter 1006.

Proposed amendments to §57.51(a), (b), and (c) would add "designee," "MVCPA," and "MVCPA board" in several places to clarify the initial submission procedures for insurers requesting refund determinations. The proposed amendments would improve readability through the use of consistent terminology.

Proposed amendments to §57.52 would update the section title to clarify that both penalties and interest may be assessed for a late payment of the fee. Additionally, the proposed amendment would add the word "late" to the section title to clarify that a violation of the section can also occur for the late filing of the report of the fee and result in a penalty being assessed against an insurer.

A proposed amendment to §57.52(a) and (a)(1) would remove language concerning the late filing of the report of the fee from subsection (a) and place it in new subsection (b) for clarity and ease of reference. The amendments proposed for subsection (a) would clarify that an insurer shall be assessed a penalty for the late payment of the fee in accordance with Tax Code §111.061(a). New subsection (b) clarifies that a penalty of $50 will be assessed against an insurer for the late filing of the report of the fee. The $50 penalty for the late filing of a report follows the Texas Comptroller's Office current practice involving a late filing of a report by a taxpayer.

A proposed amendment to new §57.52(c)(1) would increase the time period in which an insurer may submit a prescribed form to the MVCPA director to appeal the assessment of penalties and/or interest against an insurer from thirty days to sixty days. Currently, billing statements are mailed out up to two weeks after the balance shows and some insurers have complained that they did not receive notification until after the thirty-day period expired. The amendment would allow insurers sufficient additional time to review the MVCPA director's decision and consider whether to appeal.

Additional non-substantive amendments are proposed throughout Chapter 57 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 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.

Director William Diggs 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. Diggs has also determined that for each year of the first five years the proposed amended sections are in effect, the anticipated public benefit as a result of enforcing or administering the amendments will be the simplification, clarification, and streamlining of agency rules.

Anticipated Cost to Comply with the Proposal. Mr. Diggs anticipates that there will be no costs to comply with the proposed amendments because the grant recipients can avoid the penalties and assessed costs described in the amendments proposed for §57.50 and §57.52(b) by complying with the rules and statutory requirements.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the authority has determined that the proposed amendments 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. Therefore, the authority is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

TAKINGS IMPACT ASSESSMENT. The authority 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 authority 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 authority or an increase or decrease of fees paid to the authority. The proposed amendments do not create a new regulation or expand or repeal a regulation. The amendments proposed to create new §57.52(c)(1) would limit a regulation by increasing the time an insurer has to appeal the assessment of penalties and/or interest from thirty days to sixty days. Lastly, the proposed amendments do not affect the number of individuals subject to Chapter 57'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 December 9, 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 are proposed under Transportation Code, §1006.101, which requires the authority to adopt rules to implement the authority's powers and duties.

CROSS REFERENCE TO STATUTE. The proposed amendments would implement Transportation Code §1006.001, and §1006.153.

§57.9.Nonsupplanting Requirement.

(a) State funds provided by this Act shall not be used to supplant state or local funds.

(b) Supplanting means the replacement of other funds with Motor Vehicle Crime Prevention Authority (MVCPA) grant funds. It shall also include using existing resources already available to a program activity as cash match.

(c) Positions which existed prior to new grant award approval and were funded from any source other than MVCPA grant funds are not eligible for grant funding or to be used as cash match.

(d) If a grant program is reduced by 20% or more from the previous year, and as a result, grant funded or match positions are transferred to other duties for the grant year, they may be returned to grant funding in the subsequent grant year. This exception is not available for any positions that have not been grant funded or used as match for more than one grant year.

(e)Each grantee shall certify that MVCPA funds have not been used to replace state or local funds that would have been available in the absence of MVCPA funds. The certification shall be incorporated in each grantee's expenditure report.

(f) Grantees that supplant funds may be required by the Board to return supplanted funds to the MVCPA.

§57.14.Approval of Grant Projects.

(a) The MVCPA board will approve funding for projects on an annual basis, subject to continuation of funding through state appropriations and availability of funds.

(b) To be eligible for consideration for funding, a project must be designed to support one of the following MVCPA program categories:

(1) Law Enforcement, Detection and Apprehension;

(2) Prosecution, Adjudication and Conviction;

(3) Prevention, Anti-Theft Devices;

(4) Reduction of the Sale of Stolen Vehicles or Parts, including catalytic converters; [~~and~~]

(5) Educational Programs and Marketing; and[.]

(6) Preventing stolen motor vehicles from entering Mexico.

§57.27.Withholding Funds from Grantees.

(a) The MVCPA may withhold funds from a grantee or projects operated by the grantee when:

(1) a determination is made that the grantee has failed to:

(A) comply with applicable federal or state laws, rules, regulations, policies, or the grant agreements on which the award of the grant is predicated;

(B) submit required reports on time;

(D) return any unused grant funds remaining on the expired grant within the required timeframe;

(E) use funds appropriately; or

(F) commence project operations within 45 days of the project start date; or

(2) a determination is made that the grantee has submitted reports or records with deficiencies, irregularities, or are delinquent.

(b) The MVCPA may reduce or withhold grant funds when MVCPA allocations are depleted or insufficient funds are allocated.

(c) The MVCPA will notify grantees of deficient conditions prompting the [~~for~~] withholding of grant funds and the period of time within which to cure any deficiency.

(d) Grantees have 15 days after receiving a deficiency [~~deficient~~] notification to request an appeal.

(e) The MVCPA director or MVCPA board designee will determine the outcome of the grant appeal.

(f) Grant funds [~~Funds~~] will be released to a grantee when the MVCPA director or MVCPA board designee is provided with satisfactory evidence that the deficient conditions have been [~~are~~] corrected.

(g) An appeal under this section is not a contested case under Government Code, Chapter 2001.

§57.29.Termination for Cause.

(a) The MVCPA may terminate any grant for failure to comply with any of the following:

(1) applicable federal or state laws, rules, regulations, policies, or guidelines;

(2) terms, conditions, standards, or stipulations of grant agreements; or

(3) terms, conditions, standards, or stipulations of any other grant awarded to the grantee.

(b) Termination of grants for cause shall be based on finding that:

(1) deficient conditions make it unlikely that the objectives of the grant will be accomplished;

(2) deficient conditions cannot be corrected within a period of time adjudged acceptable by the MVCPA; or

(3) a grantee has acted in bad faith.

(d) Unexpended or unobligated funds awarded to a grantee shall[,] be returned to the MVCPA upon termination of a grant[~~, revert to the MVCPA~~].

(e) A grantee may be determined [~~adjudged~~] ineligible for a future grant award if a grant awarded to the grantee is terminated for cause.

§57.48.Motor Vehicle Years of Insurance Calculations.

(a) Each insurer, in calculating the fees established by Transportation Code §1006.153, shall comply with the following guidelines:

(1) The single statutory fee of $5 is payable on each motor vehicle for which the insurer provides insurance coverage during the calendar year regardless of the number of policy renewals; and

(2) When more than one insurer provides coverage for a motor vehicle during the calendar year, each insurer shall pay the statutory fee for that vehicle.

(3) "Motor vehicle insurance" as referred to in Transportation Code, Chapter 1006, means motor vehicle insurance as defined by the Insurance Code, Article 5.01(e). This definition shall be used when calculating the fees under this section.

(4) All motor vehicle or automobile insurance policies as defined by Insurance Code, Article 5.01(e), covering a motor vehicle shall be assessed the $5 fee except mechanical breakdown policies, garage liability policies, non-resident policies and policies providing only non-ownership or hired auto coverages.

(b) Insurers must report assessment information to the Comptroller using the [~~The~~] Insurance Motor Vehicle Crime Prevention Authority Semiannual Fee Report form and the Insurance [~~Instructions for the Computation of the~~] Motor Vehicle Crime Prevention Authority Semiannual Fee Report-July through December [of the Comptroller of Public Accounts are adopted by reference. The form and instructions are available from the Comptroller of Public Accounts, Tax Administration, P.O. Box 149356, Austin, Texas 78714-9356. Each insurer shall use this form and follow those instructions when reporting assessment information to the Comptroller].

§57.50.Report to Texas Department of Insurance.

If the MVCPA determines that an insurer failed to pay or intentionally underpaid the fee required by Transportation Code, §1006.153, the MVCPA shall notify the Texas Department of Insurance, and the Texas Department of Insurance may for that reason [~~with the request that the department~~] revoke the insurer's certificate of authority.

§57.51.Refund Determinations.

(a) An insurer that seeks a determination of the sufficiency or a refund of a semi-annual payment must file an amended report for each period and submit a written claim to the MVCPA director or the MVCPA board designee requesting [~~for~~] a determination or a refund not later than four years after the date the semi-annual payment was made to the state comptroller.

(b) The MVCPA director or the MVCPA board designee shall review the claim and obtain from the insurer any additional information, if any, that may be necessary or helpful to assist in the MVCPA determination. If an insurer refuses to provide the requested information, the refund shall be denied in whole or in part.

(c) The MVCPA director or the MVCPA board designee is authorized to employ or retain the services of a third party, such as the state comptroller, to assist in the determination. The MVCPA director or the MVCPA board designee shall prepare a written report to the MVCPA based on the director's or the designee's review and shall contain findings, conclusions, and a recommendation.

(d) The MVCPA shall base its determination on the documentary evidence considered by the director or the MVCPA board designee. The MVCPA decision shall be based on a majority vote of the MVCPA board. The MVCPA decision is final and is not subject to judicial review.

(e) Upon determining that an insurer is entitled to a refund, the MVCPA shall notify the comptroller and request the comptroller to draw warrants for the purpose of refunding overpayments.

§57.52.Assessment of Penalty and/or Interest for Late Payment of the Fee, Late Filing of Report; Appeal Procedures.

(a) Penalty for Late Payment of Fee [~~or Filing of Report~~].

(1) A penalty shall be assessed against an insurer for the delinquent payment of the fee required under Transportation Code §1006.153(b-1) [~~or the delinquent filing of any report of the fee required~~].

(2) The penalty for the delinquent payment of the fee [~~or late filing of the report~~] shall be assessed in accordance with Tax Code §111.061(a).

(3) Interest accrues in the manner described in Tax Code §111.060 on any fee paid after the due date.

(b) Penalty for Late Filing of the Report. A $50 penalty shall be assessed against an insurer for the delinquent filing of any report of the fee.

(1) An insurer that is assessed a penalty or interest by the MVCPA under Transportation Code §1006.153 may appeal the assessment by submitting an MVCPA prescribed form to the MVCPA Director within sixty (60) [~~thirty (30)~~] days of the date of the assessment.

(2) An insurer shall provide the MVCPA with any written documentation or evidence demonstrating the reasons for the late payment of the fee or late filing of the report.

(3) The MVCPA shall make a final decision on an insurer's appeal at a regularly scheduled open meeting of the MVCPA board. A final decision on the appeal shall be made by a majority vote of the MVCPA board.

(4) An appeal under this section is not a contested case under Government Code, Chapter 2001.

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 October 23, 2024.

TRD-202404969

David Richards

General Counsel

Motor Vehicle Crime Prevention Authority

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-1423

PART 10. TEXAS DEPARTMENT OF MOTOR VEHICLES

CHAPTER 210. CONTRACT MANAGEMENT

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes the repeal of 43 Texas Administrative Code (TAC) §§210.1, 210.2, and 210.3; and proposes new Subchapter A, General Provisions, §210.1 and §210.2, and new Subchapter C, Contract Management, §§210.41, 210.42, and 210.43. The proposed repeals and new sections are necessary as a part of the department's rule review to organize the rules to begin with the generally applicable provisions, to organize subsequent subchapters by subject matter, to delete duplicative language, to add a delegation of signature authority, and to bring the department's protest, claims and contract monitoring rules into alignment with statute, with the current rules of the Texas Comptroller of Public Accounts (Comptroller) in 34 TAC, Part 1, and with current department practices.

The proposed revisions to 43 TAC Chapter 210 would repeal all of Subchapter A, Purchase Contracts, concerning claims, protests and enhanced contract monitoring, to incorporate and reorganize the sections into proposed new Subchapters A and C. Proposed new Subchapter A, General Provisions, would provide definitions applicable to the entire chapter and contract signature authority applicable to all contracts. Proposed new Subchapter C, Contract Management, would incorporate language currently found in Subchapter A regarding claims, protests, and contract monitoring.

EXPLANATION. The department is conducting a review of its rules in Chapter 210 in compliance with Government Code, §2001.039. Notice of the department's intention to conduct this review is also published in this issue of the Texas Register. As a part of the review, the department is proposing necessary amendments, repeals, and new sections to update and streamline the rule text, bringing it into compliance with statute and with current department procedure.

Chapter 210 is proposed to be retitled "Procurement and Contracting" to more accurately reflect the scope of the chapter and to avoid any confusion with proposed new Subchapter C, Contract Management.

Repeal of Subchapter A. Purchase Contracts

The proposed repeal of §§210.1, 210.2 and 210.3 would allow for the reorganization of the chapter for clarity and ease of reference. Language from these sections is proposed to be incorporated into proposed new Subchapter C, Contract Management, §§210.41 - 210.43.

New Subchapter A. General Provisions

Proposed new Subchapter A would be titled General Provisions, consistent with the organization and naming conventions found in Chapters 215 and 221 of this title. It would include information that is generally applicable to the remainder of the chapter.

Proposed new §210.1 would add definitions to be applicable to the entire chapter. Definitions in Chapter 210 are currently set out for each section separately, creating confusion and inconsistency. The chapter-wide definitions proposed in new §210.1 would improve clarity, consistency, and readability for the entire chapter.

Proposed new §210.1(a) would add an interpretation provision and references to the State General Services and Purchasing Act and the Code Construction Act. It would provide that terms found in this chapter have the definitions set forth in those statutes unless otherwise specified or unless the context clearly requires a different meaning. This would allow for consistency and clarity among the department's rules and other relevant sources of authority.

Proposed new §210.1(b) would list specific definitions for words and terms used in Chapter 210. Proposed new §210.1(b)(1) would define "Act" as Government Code, Chapters 2151 - 2177, otherwise known as the State Purchasing and General Services Act, which governs purchases made by state agencies. Proposed new §210.1(b)(2) would add the same definition for "board" that currently appears in §210.2, which is proposed for repeal. Proposed new §210.1(b)(3) would add a new definition for "contract," which is more expansive and inclusive of the various types of contracts the department uses. Proposed new §210.1(b)(4) would similarly add a new definition for "contractor" to replace the definition of "vendor" in current §210.1(b)(5) for clarity and consistency, and to align with current department contract terminology. Proposed new §210.1(b)(5) would add a definition for "days" to clarify that throughout the chapter, "days" means calendar days rather than business or working days, to be consistent with how days are calculated in the Comptroller's procurement rules in 34 TAC, Part 1. Proposed new §210.1(b)(6) would define "department" for the whole chapter to create consistency and clarity. Proposed new §210.1(b)(7) would add a definition for "executive director" to identify the individual responsible for certain duties and authorities in this chapter. Proposed new §§210.1(b)(8), 210.1(b)(9), and 210.1(b)(10) would add definitions for "historically underutilized business," "interagency contract or agreement," and "interlocal contract or agreement" respectively, citing to the relevant defining statutes for clarity and consistency. "Purchase," is currently defined with slightly different wording in both §210.1(b)(4) and §210.1(b)(7), which are both proposed for repeal; proposed new proposed new §210.1(b)(11) would define "purchase" for the whole chapter to create consistency and clarity. Proposed new §210.1(b)(12) would add a new definition for "respondent" to replace the current definition of "interested party" in current §210.2(b)(6), because the proposed definition is more specific and in better alignment with current procurement terminology and department contract language.

Proposed new §210.2 would create a new delegation of signature authority. The department's board currently delegates contract approval and signature authority through action and a board resolution that incorporates department contract procedures. Proposed new §210.2 would eliminate the need for yearly board action on that item and reduce risk by providing a consistent standard that is transparent and readily accessible. It would also satisfy the requirement found in Government Code, §2261.254, that the governing body of a state agency must either sign or delegate signature authority for those contracts exceeding $1,000,000. The delegation would be applicable to all types of contracts and agreements and would allow the executive director to delegate authority further, as authorized by statute.

New Subchapter C. Contract Management.

Proposed new Subchapter C would incorporate and modify language from current §§210.1 - 210.3.

Proposed new §210.41 would incorporate language from current §210.1, concerning claims for purchase contracts. Proposed new §210.41 would not incorporate the definitions in current §210.1, because definitions are proposed to be reorganized into proposed new §210.1. Additionally, as compared to the language in current §210.1, proposed new §§210.41-.42 would replace the word "vendor" with either "contractor" or "respondent" depending on which is appropriate under the new definitions of those terms in proposed new §210.1(b), for consistency with agency contracting terminology. Proposed new §210.42 would also change the term "interested parties" in current §210.1 to "respondent," as defined in proposed new §210.1(b), for consistency and clarity. Proposed new §210.41 would include other non-substantive punctuation, grammatical, and organizational changes to the language in current §210.1. In proposed new §210.41 the word "mediation" is assigned the meaning set forth in Civil Practice and Remedies Code §152.023 and in §210.41(d)(3) the qualifications of the mediator are updated to be consistent with the Attorney General's model rule. Additionally, in proposed new §210.41(d)(4) additional potential mediation costs are addressed to be consistent with the Attorney General's model rules. In proposed new §210.41(e)(2), which incorporates language from current §210.1(f)(2), the word "shall" would be changed to "must" for clarity and consistency. Government Code, §311.016 defines the word "must" as "creates or recognizes a condition precedent," which is the intended meaning in proposed new §210.41(e)(2). The definitions in Government Code, §311.016 apply to Chapter 210 according to Government Code, §311.002(4).

Proposed new §210.42 would incorporate language concerning protests from current §210.2, except for the definitions, which are proposed to be reorganized into proposed new §210.1. Proposed new §210.42 would update language from current §210.2 to more accurately describe the department's procedures for protests of department purchases, and to make non-substantive punctuation, grammatical and organizational improvements. Proposed new §210.42(a) incorporates language from current §210.2, but updates the term "vendor" to "respondent" for clarity and consistency with the new definitions in proposed new §210.1.

Proposed new §210.42(b) would update the department's protest rules to be consistent with the Comptroller's current rules in 34 TAC Chapter 20, as Government Code, §2155.076 requires. Proposed new §210.42(b)(1) would only authorize vendors who have submitted a response to a department solicitation to file a protest. This aligns with the Comptroller's rules in 34 TAC Chapter 20, and limits protests to those who have proper standing. Proposed new §210.42(b) would describe the requirements for a properly filed protest, which is consistent with the language used in the Comptroller's rule, 34 TAC §20.535 regarding filing requirements for a protest.

Proposed new §210.42(c) would add deadlines for a protest to be filed timely, which would vary depending on the type of protest. This proposed language would replace current §210.2(c)(1), which has the same filing deadline regardless of protest type. The proposed new deadlines would be easier to determine and calculate accurately because they are based on the specific solicitation and award dates, whereas current §210.2(c)(1) is based on when the protestor "knew or should have known" an action had occurred. This change would algin proposed new §210.42 with the Comptroller's rule, 34 TAC §20.535, and would provide certainty and transparency in the protest process.

Proposed new §§210.42(d), (f), and (g) would incorporate language from current §§210.2(d), (e), and (f) but would only authorize the department's executive director or procurement director to move forward with a contract award or performance under a contract while a protest is pending, and would only authorize the department's procurement director to informally resolve a protest, or issue a written determination on a protest. Current §§210.2(d), (e), and (f) authorize the department's executive director's designee to take such actions. The procurement director is the department staff member with the most visibility into the procurement process by virtue of supervising the department's Purchasing Section, and is therefore in the best position to make initial decisions on matters involving purchasing decisions. Proposed new §§210.42(d), (f), and (g) would ensure that protest decisions are made by those with the most knowledge of and authority over the matter.

Proposed new §210.42(e) would address the actions the department may take on a protest, including the dismissal of an untimely protest or a protest that does not meet the filing requirements. This would allow the department increased efficiency in disposing of improper protests, so that it could focus its time and resources on resolving the protests that comply with the filing requirements.

Proposed new §210.42(g) would incorporate language from current §210.2(f), but would replace the term "interested parties" with the word "respondents" to align with the new definitions in proposed new §210.1 for clarity and consistency.

Proposed new §210.42(h) would update the department's protest rule to be consistent with the Comptroller's current rule, 34 TAC §20.538, as Government Code, §2155.076 requires. Proposed new §210.42(h) would require that appeals of a written determination be filed with the general counsel and that the general counsel may either make the final determination or refer it to the executive director for final determination. Additionally, proposed new §210.42(h) would replace the term "interested parties" in current §210.2(g) with the word "respondent" and would delete the word "working" before the word "days" to align with the new definitions proposed in new §210.1 for clarity and consistency.

Proposed new §210.43 would incorporate language from current §210.3 concerning enhanced contract monitoring. Proposed new §210.43 would be titled "Enhanced Contract or Performance Monitoring" to align with statutory language in Government Code, §2261.253. Proposed new §210.43 would replace the word "vendor" from current §210.3 with the word "contractor" throughout to align with the new definitions in proposed new §210.1. Additionally, as compared to the current language of §210.3, the language of proposed new §210.43(a) would add two additional factors to the risk assessment to determine which contracts require enhanced contract or performance monitoring: proposed new §210.43(a)(5) would add "special circumstances of the project," and proposed new §210.43(a)(6) would add "the scope of the goods, products or services provided under the contract." These additions would align with the current risk assessment tool used by the department's Purchasing Section.

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 sections 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. Brad Payne, Director of the Purchasing Section, 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. Payne has also determined that, for each year of the first five years new and repealed sections are in effect, there are several anticipated public benefits.

Anticipated Public Benefits. The public benefits anticipated as a result of the proposal include increased transparency, readability and clarity surrounding agency contracting processes and procedures.

Anticipated Costs to Comply with The Proposal. Mr. Payne 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 new sections and repeals will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because they do not make any changes affecting such entities. Also, many of the changes the department proposes in new §210.42 are required by Government Code, §2155.076, which requires state agencies to adopt rules that are consistent with the Comptroller's rules regarding protest procedures for resolving a vendor protest relating to purchasing issues. 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 new sections and repeals are in effect, no government program would be created or eliminated. Implementation of the proposed new sections 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 new sections §§210.1, 210.2, 210.41, 210.42, and 210.43 create new regulations, and the proposed repealed provisions, §§210.1, 210.2, and 210.3 repeal regulations. The proposed new sections and repeals do not expand or limit an existing regulation. Lastly, the proposed new sections and repeals do not affect the number of individuals subject to the applicability of the rules and will not affect this state's economy.

SUBCHAPTER A. PURCHASE CONTRACTS

43 TAC §§210.1 - 210.3

STATUTORY AUTHORITY. The department proposes the repeal of Chapter 210, Subchapter A, Purchase Contracts, under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles (board) 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, §2155.076, which requires state agencies, by rule, to develop and adopt protest procedures for resolving vendor protests relating to purchasing issues; Government Code, §2260.052(c), which requires state agencies to develop rules to govern negotiation and mediation of contract claims; Government Code, §2261.253(c), which requires state agencies, by rule, to establish a procedure to identify each contract that requires enhanced contract monitoring; and the statutory authority referenced throughout the preamble, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed repeals would implement Government Code, Title 10, Subtitle D; and Transportation Code, Chapters 1001 and 1002.

§210.1.Claims for Purchase Contracts.

§210.2.Protest of Department Purchases under the State Purchasing and General Services Act.

§210.3.Enhanced Contract Monitoring Program.

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 October 24, 2024.

TRD-202404975

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-4160

CHAPTER 210. PROCUREMENT AND CONTRACTING

SUBCHAPTER A. GENERAL PROVISIONS

43 TAC §210.1, §210.2

STATUTORY AUTHORITY. The department proposes new Subchapter A, §210.1 and §210.2 in Chapter 210 under Transportation Code, §1001.0411(b), which authorizes the executive director of the Texas Department of Motor Vehicles (department) to delegate duties or responsibilities; Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles (board) 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, §2260.052(c), which requires state agencies to develop rules to govern negotiation and mediation of contract claims; Government Code, §2161.003, which requires state agencies to adopt the Texas Comptroller of Public Accounts' historically underutilized business rules as their own rules; Government Code, §2261.254(d), which authorizes the board to delegate approval and signature authority for contracts; and the statutory authority referenced throughout the preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new sections would implement Government Code, Title 10, Subtitle D, and Chapters 771 and 791; and Transportation Code, Chapters 1001 and 1002.

§210.1.Definitions.

(a) As used throughout this chapter, the words and terms defined in the State Purchasing and General Services Act, Government Code, Title 10, Subtitle D, and the Code Construction Act, Government Code, Chapter 311 will have the same meaning defined therein, and each word or term listed in this chapter will have the meaning set forth herein, unless:

(1) its use clearly requires a different meaning; or

(2) a different definition is prescribed in this section, or for a particular section of this chapter or portion thereof.

(b) The following words and terms, when used in this chapter, will have the following meaning unless the context clearly indicates otherwise:

(1) Act--Government Code, Chapters 2151-2177, the State Purchasing and General Services Act.

(2) Board--The Board of the Texas Department of Motor Vehicles.

(3) Contract--A legally enforceable written agreement, including a purchase order, between the department and a contractor for goods, products, or services.

(4) Contractor--An individual or business entity that has a contract to provide goods, products, or services to the department.

(5) Days--Calendar days.

(6) Department--The Texas Department of Motor Vehicles.

(7) Executive director--The executive director of the department.

(8) Historically underutilized business (HUB)--A business as defined in Government Code, §2161.001(2).

(9) Interagency contract or Interagency agreement-- An agreement entered into under the Interagency Cooperation Act, Government Code, Chapter 771.

(10) Interlocal contract or Interlocal agreement-- An agreement entered into under the Interlocal Cooperation Act, Government Code, Chapter 791.

(11) Purchase--Any form of acquisition for goods, products, or services, including by lease or revenue contract, under the Act.

(12) Respondent--An individual or business entity that has submitted a bid, proposal, or other expression of interest in response to a specific solicitation for goods, products, or services.

§210.2.Delegation of Approval and Signature Authority.

(a) Purpose. The purpose of this section is to establish the approval authority and responsibilities for executing contracts required by the department.

(b) Applicability. This section applies to all contracts, interagency contracts, interlocal contracts, as well as informal letters of agreement, memoranda, and agreements.

(c) Board Delegation. The board delegates the following duties and authorities to the executive director of the department:

(1) the duty and authority to execute contracts, to include approving and signing contracts on behalf of the department;

(2) the authority to further delegate contract approval and signature authority to the executive director's designees for contracts with a dollar value up to and including $1,000,000; and

(3) the authority to further delegate contract approval and signature authority to a deputy executive director of the department for contracts with a dollar value exceeding $1,000,000 as allowed by Government Code, §2261.254.

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 October 24, 2024.

TRD-202404976

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-4160

SUBCHAPTER C. CONTRACT MANAGEMENT

43 TAC §§210.41 - 210.43

STATUTORY AUTHORITY. The department proposes new §§210.41, 210.42, and 210.43 in Chapter 210 under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles (board) 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, §2155.076, which requires state agencies, by rule, to develop and adopt protest procedures for resolving vendor protests relating to purchasing issues; Government Code, §2260.052(c), which requires state agencies to develop rules to govern negotiation and mediation of contract claims; Government Code, §2261.253(c), which requires state agencies, by rule, to establish a procedure to identify each contract that requires enhanced contract monitoring; and the statutory authority referenced throughout the preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new sections would implement Government Code, Title 10, Subtitle D; and Transportation Code, Chapters 1001 and 1002.

§210.41.Claims for Purchase Contracts.

(a) Purpose. Government Code, Chapter 2260, provides a resolution process for certain contract claims against the state. Chapter 2260 applies to contracts of the department entered into under the State Purchasing and General Services Act. This section governs the filing, negotiation, and mediation of a claim. When used in this section, the terms "contract" and "contractor" are defined in Government Code, §2260.001.

(b) Filing of claim. A contractor may file a notice of claim with the executive director within 180 days after the date of the event giving rise to the claim. The claim must contain:

(1) the nature of the alleged breach;

(2) any amount the contractor seeks as damages; and

(3) the legal theory supporting recovery.

(1) The executive director shall negotiate with the contractor to resolve the claim;

(2) Negotiations will begin no later than the 120th day after the date the claim is received by the department;

(3) Negotiations may be written or oral; and

(4) The executive director may afford the contractor an opportunity for a meeting to informally discuss the claim and provide the contractor with an opportunity to present relevant information.

(d) Mediation. The parties may agree to mediate a claim through an impartial party. For the purposes of this subchapter, "mediation" is assigned the meaning set forth in the Civil Practice and Remedies Code, §154.023. The mediation is subject to the provisions of the Governmental Dispute Resolution Act, Government Code, Chapter 2009. The parties may be assisted in the mediation by legal counsel or other individual.

(1) The department and the contractor may agree to nonbinding mediation;

(2) The department will agree to mediation if the executive director determines that mediation may speed resolution of the claim or otherwise benefit the department;

(3)The mediator shall possess the qualifications required under Civil Practice and Remedies Code §154.022;

(4) Unless otherwise agreed in writing, each party shall be responsible for its own costs incurred in connection with a mediation, including without limitation, costs of document reproduction, attorney's fees, consultant fees and expert fees, and the cost of the mediator shall be divided equally between the parties.

(e) Final offer.

(1) The executive director will make a final offer to the contractor within 90 days of beginning negotiations; and

(2) If the final offer is acceptable to the contractor, the contractor must advise the executive director in writing within 20 days of the date of the final offer. The department will forward a settlement agreement to the contractor for signature to resolve the claim.

(f) Contested case hearing. If the contractor is dissatisfied with the final offer, or if the claim is not resolved before the 270th day after the claim is filed with the department, then, unless the parties agree in writing to an extension of time, the contractor may file a request with the executive director for an administrative hearing before the State Office of Administrative Hearings to resolve the unresolved issues of the claim under the provisions of Government Code, Chapter 2260, Subchapter C.

§210.42.Protest of Department Purchases under the State Purchasing and General Services Act.

(a) Purpose. The purpose of this section is to provide a procedure for respondents to protest purchases made by the department. Purchases made by the Texas Procurement and Support Services division of the Texas Comptroller of Public Accounts' office on behalf of the department are addressed in 34 TAC, Part 1, Chapter 20.

(b) Filing of protest.

(1) A respondent who has submitted a written response to a department solicitation may file a written protest.

(2) The protest must contain:

(A) the specific statutory or regulatory provision the protestant alleges the solicitation, contract award or tentative award violated;

(B) a specific description of each action by the department that the protestant alleges violated the identified statutory or regulatory provision;

(i) sufficient documentation to establish that the protest has been timely filed; and

(ii) a description of the resulting adverse impact to the protestant, department and the state;

(D) a statement of any issues of law or fact that the protestant contends must be resolved;

(E) a statement of the protestant's argument and authorities that the protestant offers in support of the protest;

(F) an explanation of the subsequent action the protestant is requesting; and

(G) a statement that copies of the protest have been mailed or delivered to other identifiable respondents.

(3) The protest must be signed by an authorized representative of the protestant and the signature to the protest must be notarized.

(4) The protest must be filed in the time period specified in this section.

(5) The protest must be mailed or delivered to the department, to the attention of the procurement director.

(1) by the end of the posted solicitation period, if the protest concerns the solicitation documents or actions associated with the publication of solicitation documents;

(2) by the day of the award of a contract resulting from the solicitation, if the protest concerns the evaluation or method of evaluation for a response to the solicitation; or

(3) no later than 10 days after the notice of award, if the protest concerns the award.

(d) Suspension of contract award or performance. If a protest or appeal of a protest has been filed, then the department will not proceed with the contract award or performance under the contract resulting from the solicitation unless the executive director or procurement director makes a written determination that the contract award should be made or performance under the contract should proceed without delay to protect the best interests of the state and department.

(e) Action by department. Upon receipt of a protest, the department may:

(1) dismiss the protest if:

(A) it is not timely; or

(B) it does not meet the requirements of subsection (b) of this section; or

(2) consider the protest under the procedures in this section.

(f) Informal resolution. The procurement director may solicit written responses to the protest from other affected vendors and attempt to settle and resolve the protest by mutual agreement.

(g) Written determination. If the protest is not resolved by agreement, the procurement director will issue a written determination to the protesting party and other respondents, setting forth the reason for the determination. The procurement director may determine that:

(1) no violation has occurred; or

(2) a violation has occurred and it is necessary to take remedial action as appropriate to the circumstances, which may include:

(A) declare the purchase void;

(B) reverse the contract award; or

(h) Appeal.

(1) A protestant may appeal the determination of a protest, to the general counsel. An appeal must be in writing and received in the office of general counsel not later than 10 days after the date the procurement director sent written notice of their determination. The scope of the appeal shall be limited to review of the procurement director's determination.

(2) The general counsel may:

(A) refer the matter to the executive director for consideration and a final written decision that resolves the protest; or

(B) may issue a written decision that resolves the protest.

(3) An appeal that is not filed in a timely manner may not be considered unless good cause for delay is shown or the executive director determines that an appeal raises issues that are significant to agency procurement practices or procedures in general.

(4) A written decision of the executive director or general counsel shall be the final administrative action of the department.

§210.43.Enhanced Contract and Performance Monitoring.

(a) The department will apply risk assessment factors to its contracts as defined in Government Code, §2261.253 to identify those contracts that require enhanced contract or performance monitoring. The risk assessment may consider the following factors:

(1) dollar amount of the contract;

(2) total contract duration;

(3) contractor past performance;

(4) risk of fraud, abuse or waste;

(5) special circumstances of the project;

(6) the scope of the goods, products, or services provided under the contract;

(7) business process impact of failure or delay; and

(8) the board or executive director's request for enhanced contract or performance monitoring.

(b) The department's contract management office or procurement director will notify the board of the results of the risk assessment and present information to the board resulting from the enhanced contract or performance monitoring.

(c) The department's contract management office or procurement director must immediately notify the board of any serious issue or risk that is identified 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 October 24, 2024.

TRD-202404977

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-4160

CHAPTER 211. CRIMINAL HISTORY OFFENSE AND ACTION ON LICENSE

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code, (TAC) §211.1 and §211.2; repeal of §§211.3, 211.4, 211.5, and 211.6; and new sections §§211.10, 221.11, 221.12, and 211.13. The proposed amendments, repeals, and new sections are necessary to organize the rules into two subchapters for consistency with other chapters in TAC Title 43, to clarify the types of licenses to which the chapter applies, to clarify which crimes relate to the duties and responsibilities of these license holders, to delete duplicative language found in statute, to conform rule language with statutory changes; to clarify existing requirements, and to modernize language and improve readability. Proposed language also conforms with Senate Bill (SB) 224, 88th Legislature, Regular Session (2023), which amended the Penal Code to add felony offenses involving damage to motor vehicles during the removal or attempted removal of a catalytic converter.

EXPLANATION. The department is conducting a review of its rules under Chapter 211 in compliance with Government Code, §2001.039. Notice of the department's plan to conduct this review is also published in this issue of the Texas Register. As a part of the review, the department is proposing necessary amendments, repeals, and new sections as detailed in the following paragraphs.

Occupations Code, Chapter 53 and §§2301.651, 2302.104, 2301.105, and 2302.108, and Transportation Code, §503.034 and §503.038 authorize the department and its board to investigate and act on a license application, or on a license, when a person has committed a criminal offense. Chapter 211 allows the department to maintain fitness standards for license holders with prior criminal convictions while implementing the legislature's stated statutory intent in Occupations Code, §53.003 to enhance opportunities for a person to obtain gainful employment after the person has been convicted of an offense and discharged the sentence for the offense.

The department must follow the requirements of Occupations Code, Chapter 53 to determine whether a person's past criminal history can be considered in evaluating the person's fitness for licensing.

Occupations Code, §53.021 gives a licensing authority the power to suspend or revoke a license, to disqualify a person from receiving a license, or to deny a person the opportunity to take a licensing examination on the grounds that the person has been convicted of: (1) an offense that directly relates to the duties and responsibilities of the licensed occupation; (2) an offense listed in Article 42A.054, Code of Criminal Procedure; or (3) a sexually violent offense, as defined by Article 62.001, Code of Criminal Procedure. The department's evaluation of past criminal history applies to all license applications. Under Occupations Code, §53.021(a)(1), the department is responsible for determining which offenses directly relate to the duties and responsibilities of a particular licensed occupation.

Occupations Code, §53.022 sets out criteria for consideration in determining whether an offense directly relates to the duties and responsibilities of the licensed occupation. Based on those criteria, the department has determined that certain offenses directly relate to the duties and responsibilities of an occupation licensed by the department. However, conviction of an offense that directly relates to the duties and responsibilities of the licensed occupation or is listed in Occupations Code, §53.021(a)(2) and (3) is not an automatic bar to licensing; the department must consider the factors listed under Occupations Code, §53.023 in making its fitness determination. The factors include, among other things, the person's age when the crime was committed, rehabilitative efforts, and overall criminal history. The department is required to publish guidelines relating to its practice under this chapter in accordance with Occupations Code, §53.025.

Proposed New Subchapter A, General Provisions

Chapter 211 currently contains only one subchapter. The proposed amendments would divide Chapter 211 into two subchapters. A proposed amendment would retitle Subchapter A "General Provisions," consistent with the organization and naming conventions found in Chapters 215 and 221 of this title. This proposed amendment would provide consistency and improve readability because Chapter 211 applies to the same applicants and license holders as Chapters 215 and 221. Sections 211.1 and 211.2 are proposed for inclusion in retitled Subchapter A for consistency and ease of reference.

A proposed amendment to the title of §211.1 would add "Purpose and" to the section title to indicate that proposed amendments to this section include the purpose for the chapter in addition to definitions. This proposed change would place the chapter purpose description in the same subchapter and in the same order as similar language in Chapters 215 and 221 of this title for improved understanding and readability. Proposed new §211.1(a) would describe the purpose of Chapter 211 by incorporating existing language in current §211.3(a). The proposed amendments would add at the end of the paragraph the obligation for the department to review criminal history of license applicants before issuing a new or renewal license and the option for the department to act on the license of an existing license holder who commits an offense during the license period, consistent with Occupations Code, Chapter 53 and §§2301.651, 2302.104, 2302.105, and 2302.108, and Transportation Code, §503.034 and §503.038, and existing department procedures.

A proposed amendment to §211.1 would reorganize the current definitions into a subsection (b). Proposed amendments to §211.1(2) would delete references to "registration, or authorization," add an "or" to §211.1(2)(B), delete an "or" and add sentence punctuation in §211.1(2)(C), and delete §211.1(2)(D). These proposed amendments would clarify that Chapter 211 only applies to licenses issued by the department under Transportation Code, Chapter 503 and Occupations Code, Chapters 2301 and 2302, and does not apply to registrations the department may issue under the authority of another Transportation Code chapter. Registrations or permits that the department issues under other Transportation Code chapters do not currently require a review of an applicant's criminal history. Proposed amendments to §211.1(3) would delete the current list of specific retail license types and define the term "retail" by listing only those license types that are not considered to be retail. This proposed amendment would shorten the sentence to improve readability without changing the meaning or scope of the definition. Additionally, this proposed amendment would eliminate the need to update the rule if a future statutory change created a new type of vehicle or changed the name of an existing vehicle type.

A proposed amendment to the title of §211.2 would substitute "Chapter" for "Subchapter" for consistency with the rule text. A proposed amendment in §211.2(b) would add a comma after Occupations Code for consistency in punctuation.

The remaining sections in Subchapter A are proposed for repeal as each of these sections are proposed for inclusion in new Subchapter B.

Proposed New Subchapter B, Criminal History Evaluation

A proposed amendment would add a new subchapter, Subchapter B. Criminal History Evaluation Guidelines and Procedures. Proposed for inclusion in new Subchapter B are new sections §§211.10- 211.13. These new proposed sections would contain the guidelines and procedures rule language currently found in §§211.3-211.6 with the addition of the proposed changes described below.

Proposed new §211.10 would include the rule text of current §211.3 with changes as follows. Current §211.3(a) would be deleted because that language has been incorporated into proposed new §211.1(a), which describes the purpose of Chapter 211. Proposed new §211.10(a) would incorporate the language of current §211.3(b), except for the two paragraphs at the end of that subsection which duplicate a statutory requirement in Occupations Code, §53.022 and do not need to be repeated in rule. Proposed new §211.10(b) would recodify language that is currently in §211.3(c), except for §§211.3(c)(1) and (2), which are redundant and unnecessary statutory references.

Proposed new §211.10(c) would incorporate §211.3(d) with the following changes. Proposed new §211.10(c) would add a comma to correct missing punctuation after "Occupations Code" and would delete three sentences that specify which offenses apply to a license type. Proposed new §211.10(c) would include clarifying paragraph numbers: paragraph (1) would identify offenses that apply to all license types, and paragraph (2) would separate and identify additional offenses that apply only to retail license types. The proposed new language would add clarity and improve readability. Proposed new language would divide the offense categories currently in §211.3(d)(1) - (16) between the new paragraphs as relettered subparagraphs of §§211.10(c)(1) and (2).

Proposed new §211.10(c)(1)(B), would incorporate language currently in §211.3(d)(2) and add language to clarify that offenses involving forgery, falsification of records, or perjury include the unauthorized sale, manufacturing, alteration, issuance, or distribution of a license plate or temporary tag. This proposed clarifying language provide additional notice to applicants and license holders that the department considers forging or falsification of license plates or temporary tags to be a serious and potentially disqualifying offense.

Proposed new §211.10(c)(1)(E) would incorporate language currently in §211.3(d)(5) and add possession and dismantling of motor vehicles to the list of felony offenses under a state or federal statute or regulation that could potentially be disqualifying. Proposed new §211.10(c)(1)(E) would also include "motor vehicle parts" to clarify that disqualifying felony offenses include crimes related to motor vehicle parts as well as to motor vehicles. These proposed clarifications are important due to the increasing frequency of motor vehicle parts theft, including catalytic converters, tailgates, batteries, and wheel rims and tires.

Proposed new §211.10(c)(1)(G) would incorporate language currently in §211.3(d)(7) and would clarify that an offense committed while engaged in a licensed activity or on a licensed premises includes falsification of a motor vehicle inspection required by statute. This clarification is important because emissions inspections in certain counties are required by law and harm the health and safety of Texas citizens if not performed.

Proposed new §211.10(c)(1)(I) would add that offenses of attempting or conspiring to commit any of the foregoing offenses are potentially disqualifying offenses because the person intended to commit an offense. This proposed new language incorporates language from current §211.3(d)(16) and is necessary to add because the offenses that apply to all license holders and the additional offenses that only apply to retail license types are proposed to be reorganized into separate paragraphs to improve readability, so the language regarding conspiracies or attempts to commit the offenses must be repeated in each paragraph to provide notice of these potentially disqualifying offenses.

Proposed new §211.10(c)(2)(E) would make felony offenses under Penal Code, §28.03 potentially disqualifying when a motor vehicle is damaged, destroyed, or tampered with during the removal or attempted removal of a catalytic converter. This new amendment aligns with Senate Bill (SB) 224, 88th Legislature, Regular Session (2023), which amended Penal Code, §28.03 to create a state jail felony for damage to a motor vehicle because of removal or attempted removal of the catalytic converter. Proposed new §211.10(c)(2)(D) would incorporate §211.3(d)(12) and would add two additional offenses against the family: Penal Code, §25.04 and §25.08. Penal Code, §25.04 includes offenses involving the enticement of a child away from the parent or other responsible person, and Penal Code, §25.08 includes offenses related to the sale or purchase of a child. These offenses are relevant to the retail professions licensed by the department because parents frequently bring children to a dealership when considering a vehicle purchase, and a retail license holder may have unsupervised access to a child while a parent test-drives a vehicle or is otherwise engaged in viewing or inspecting a vehicle offered for sale. License holders also have access to the parent's motor vehicle records, including the family's home address. A person with a predisposition to commit these types of crimes would have the opportunity to engage in further similar conduct.

Proposed new §211.10(c)(2)(F) would incorporate the language of current §211.3(d)(13), and clarify that the department would consider any offense against the person to be potentially be disqualifying, would add a reference to Penal Code, Title 5, and would further clarify that an offense in which use of a firearm resulted in fear, intimidation, or harm of another person would be included in the list of potentially disqualifying crimes. Additionally, proposed new §211.10(c)(2)(F) would clarify that a felony offense of driving while intoxicated which resulted in harm to another person may also be potentially disqualifying. The department considers these offenses to be related to the occupations of retail license holders because these license holders have direct contact with members of the public during vehicle test drives or other settings in which no one else is present, and retail license holders have access to an individual's motor vehicle records, including the individual's home address. A person with a predisposition for violence would have the opportunity in these situations to engage in further similar conduct. These proposed amendments would further clarify which offenses against a person the department considers directly related to the licensed occupation and therefore potentially disqualifying. The department's consideration of these crimes is subject to certain limitations in Occupations Code, Chapter 53.

Proposed new §211.11 would incorporate language from current §211.4, with the addition of proposed new §211.11(a), which would clarify that the department will deny a pending application if an applicant or an applicant's representative as defined in §211.2(a)(2) is imprisoned. Occupations Code, §53.021(b) requires an agency to revoke a license holder's license on the license holder's imprisonment following a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision. Because the department also determines licensure eligibility based on individuals serving as representatives for the license holder, the department also considers the effect of imprisonment of those persons on a license holder. Because the revocation for a felony conviction is mandatory in Occupations Code, §53.021(b), the department must also deny a pending application. An applicant who is imprisoned may reapply once the applicant is no longer imprisoned and an applicant whose application is denied based on an imprisoned individual serving in a representative capacity may choose a different representative and reapply for licensure. Proposed new §211.11(b) would substitute "of" for "or" to correct a typographical error made at adoption of §211.4. Proposed new §211.11(c) incorporates language from current §211.4(d). Proposed new §211.11(d) incorporates language from current §211.4(c).

Proposed new §211.12 would incorporate without change the language in current §211.5 that addresses the procedure for a person to obtain a criminal history evaluation letter from the department. This process allows a person to request an evaluation prior to applying for a license if the person so desires.

Proposed new §211.13(a) would incorporate the current language of §211.6(a) and would clarify that fingerprint requirements apply to "an applicant for a new or renewal license" to improve readability without changing meaning. Proposed new §211.13(b)(1) would incorporate the language of current §211.6(b)(1) and would clarify that a trust beneficiary is a person who may be required by the department to submit a set of fingerprints to the Texas Department of Public Safety as part of the application process for those license types. This is a clarification rather than an extension of the existing requirements for the fingerprinting of owner applicants, because a trust beneficiary is an equitable owner of the trust's assets. It is necessary for the department to fingerprint trust beneficiaries along with other owners because doing so will prevent a bad actor with a history of criminal offenses that directly relate to the duties and responsibilities of a license holder from obtaining a license from the department by using a trust to hide the bad actor's identity and then using that license to perpetrate, or benefit from, fraudulent and criminal actions, or otherwise take advantage of the position of trust created by the license.

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, 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, public benefits are anticipated, and that applicants and license holders will not incur costs to comply with the proposal. The anticipated public benefits include reduced opportunity for fraud and related crime, and improved public safety. Requiring fingerprints for a trust beneficiary will 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 by using a trust to hide their identity and then using those licenses to perpetrate, or benefit from, fraud and criminal actions, or otherwise take 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 submission and evaluation of information under this proposal because the rules do not establish any new requirements or costs for regulated persons unless the person commits a crime. The proposed requirement in §211.13(b)(1) for the fingerprinting of trust beneficiaries is a clarification of the existing requirement that applicant owners must be fingerprinted, as trust beneficiaries are equitable owners of the trust's assets. It therefore does not create a new fingerprinting requirement. Additionally, 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.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that this proposal will not have an adverse economic effect or disproportionate economic impact on small or micro businesses. The department has also 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 license under Transportation Code, §503.024. Therefore, under Government Code, §2006.002, the department is not required to perform a regulatory flexibility analysis.

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 not require an increase in fees paid to the department; will create new regulations and expand existing regulations, as described in the explanation section of this proposal; will repeal existing regulations in §§211.3 - 211.6; will increase the number of individuals subject to the rule's applicability regarding fingerprinting of trust beneficiaries; and will not significantly benefit or adversely affect the Texas economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. Central Standard Time on December 9, 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

43 TAC §211,1. §211.2

STATUTORY AUTHORITY. The department proposes amendments to Chapter 211 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 general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; 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, to revoke or suspend a license, to place on probation, or to reprimand a license holder 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; 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.

CROSS REFERENCE TO STATUTE. Government Code, Chapter 411; Occupations Code, Chapters 53, 2301 and 2302; Transportation Code, Chapters 503 and 1002; Penal Code, Chapters 25, 28, 43, 49 and Title 5; and Code of Criminal Procedure, Article 42A and 62.

§211.1.Purpose and Definitions.

(a) The licenses issued by the department create positions of trust. License holder services involve access to confidential information; conveyance, titling, and registration of private property; possession of monies belonging to or owed to private individuals, creditors, and governmental entities; and compliance with federal and state environmental and safety regulations. License holders are provided with opportunities to engage in fraud, theft, money laundering, and related crimes, and to endanger the public through violations of environmental and safety regulations. Many license holders provide services directly to the public, so licensure provides persons predisposed to commit assaultive or sexual crimes with greater opportunities to engage in such conduct. To protect the public from these harms, the department shall review the criminal history of license applicants before issuing a new or renewal license and may take action on a license holder who commits an offense during the license period based on the guidelines in this chapter.

(b) When used in this chapter, the following words and terms have the following meanings, unless the context clearly indicates otherwise.

(1) "Department" means the Texas Department of Motor Vehicles.

(2) "License" means any license [~~, registration, or authorization,~~] issued by the department under:

(A) Transportation Code, Chapter 503;

(B) Occupations Code, Chapter 2301; or

~~[(D) any other license, registration, or authorization, that the department may deny or revoke because of a criminal offense of the applicant or license holder.]~~

(3) "Retail license types" means those license [~~holder~~ ] types which require holders to [~~that~~] interact directly with the public, [including salvage dealers, converters, independent mobility motor vehicle dealers, lease facilitators, and general distinguishing number holders for the following vehicle categories: all-terrain vehicle, light truck, motorcycle, motorhome, moped /motor scooter, medium duty truck, neighborhood vehicle, other, passenger auto, recreational off-highway vehicle, and towable recreational vehicle,] but does not include other license types that do not generally interact directly with the public, including manufacturers, distributors, and general distinguishing number holders for the following vehicle categories: ambulance, axle, bus, engine, fire truck/fire fighting vehicle, heavy duty truck, transmission, wholesale motor vehicle dealer, and wholesale motor vehicle auction.

§211.2.Application of Chapter [~~Subchapter~~].

(a) This chapter applies to the following persons:

(1) applicants and holders of any license; and

(2) persons who are acting at the time of application, or will later act, in a representative capacity for an applicant or holder of a license, including the applicant's or holder's officers, directors, members, managers, trustees, partners, principals, or managers of business affairs.

(b) In this chapter a "conviction" includes a deferred adjudication that is considered to be a conviction under Occupations Code, §53.021(d).

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 October 24, 2024.

TRD-202404979

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-4160

43 TAC §§211.3 - 211.6

STATUTORY AUTHORITY. The department proposes repeals to Chapter 211 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 general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; 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, to revoke or suspend a license, to place on probation, or to reprimand a license holder 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; 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 or rules that are necessary and appropriate to implement the powers and the duties of the department.

§211.3.Criminal Offense Guidelines.

§211.4.Imprisonment.

§211.5.Criminal History Evaluation Letters.

§211.6.Fingerprint Requirements for Designated License Types.

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 October 24, 2024.

TRD-202404978

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-4160

SUBCHAPTER B. CRIMINAL HISTORY EVALUATION GUIDELINES AND PROCEDURES

43 TAC §§211.10 - 211.13

STATUTORY AUTHORITY. The department proposes new sections to Chapter 211 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 general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; 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, to revoke or suspend a license, to place on probation, or to reprimand a license holder 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; 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.

§211.10.Criminal Offense Guidelines.

(a) Under Occupations Code, Chapter 53, the department may suspend or revoke an existing license or disqualify an applicant from receiving a license because of a person's conviction of a felony or misdemeanor if the crime directly relates to the duties and responsibilities of the licensed occupation.

(b) The department has determined under the factors listed in Occupations Code, §53.022 that offenses detailed in subsection (c) of this section directly relate to the duties and responsibilities of license holders, either because the offense entails a violation of the public trust, issuance of a license would provide an opportunity to engage in further criminal activity of the same type, or the offense demonstrates the person's inability to act with honesty, trustworthiness, and integrity. Such offenses include crimes under the laws of another state, the United States, or a foreign jurisdiction, if the offense contains elements that are substantially similar to the elements of an offense under the laws of this state. The list of offenses in subsection (c) of this section is in addition to offenses that are independently disqualifying under Occupations Code, §53.021.

(c) The list of offenses in this subsection is intended to provide guidance only and is not exhaustive of the offenses that may relate to a particular regulated occupation. After due consideration of the circumstances of the criminal act and its relationship to the position of trust involved in the particular licensed occupation, the department may find that an offense not described below also renders a person unfit to hold a license based on the criteria listed in Occupations Code, §53.022.

(1) the following offenses apply to all license types:

(A) offenses involving fraud, theft, deceit, misrepresentation, or that otherwise reflect poorly on the person's honesty or trustworthiness, including an offense defined as moral turpitude;

(B) offenses involving forgery, falsification of records, perjury, or the unauthorized sale, manufacturing, alteration, issuance, or distribution of a license plate or temporary tag;

(D) felony offenses against public administration;

(E) felony offenses under a state or federal statute or regulation involving the manufacture, sale, finance, distribution, repair, salvage, possession, dismantling, or demolition, of motor vehicles or motor vehicle parts;

(F) felony offenses under a state or federal statute or regulation related to emissions standards, waste disposal, water contamination, air pollution, or other environmental offenses;

(G) offenses committed while engaged in a licensed activity or on licensed premises, including the falsification of a motor vehicle inspection required by statute;

(H) felony offenses involving the possession, manufacture, delivery, or intent to deliver controlled substances, simulated controlled substances, dangerous drugs, or engaging in an organized criminal activity; and

(I) offenses of attempting or conspiring to commit any of the foregoing offenses.

(2) the following additional offenses apply to retail license types:

(A) felony offenses against real or personal property belonging to another;

(B) offenses involving the sale or disposition of another person's real or personal property;

(C) a reportable felony offense conviction under Chapter 62, Texas Code of Criminal Procedure for which the person must register as a sex offender;

(D) an offense against the family as described by Penal Code, §§25.02, 25.04, 25.07, 25.072, 25.08, or 25.11;

(E) felony offenses under Penal Code, §28.03 involving a motor vehicle that is damaged, destroyed, or tampered with during the removal or attempted removal of a catalytic converter;

(F) offenses against the person under Penal Code, Title 5, including offenses in which use of a firearm resulted in fear, intimidation, or harm of another person, and in Penal Code, Chapter 49, a felony offense of driving while intoxicated that resulted in the harm of another person;

(G) a felony stalking offense as described by Penal Code, §42.072;

(H) a felony offense against public order and decency as described by Penal Code §§43.24, 43.25, 43.251, 43.26, 43.261, or 43.262; and

(I) offenses of attempting or conspiring to commit any of the foregoing offenses.

(d) When determining a person's present fitness for a license, the department shall also consider the following evidence:

(1) the extent and nature of the person's past criminal activity;

(2) the age of the person when the crime was committed;

(3) the amount of time that has elapsed since the person's last criminal activity;

(4) the conduct and work activity of the person before and after the criminal activity;

(5) evidence of the person's rehabilitation or rehabilitative effort while incarcerated or after release;

(6) evidence of the person's compliance with any conditions of community supervision, parole, or mandatory supervision; and

(7) other evidence of the person's present fitness, including letters of recommendation.

(e) It is the person's responsibility to obtain and provide to the licensing authority evidence regarding the factors listed in subsection (d) of this section.

§211.11.Imprisonment.

(a) The department shall deny a license application if the applicant or a person described by §211.2(a)(2) of this chapter (relating to Application of Chapter) is imprisoned while a new or renewal license application is pending.

(b) The department shall revoke a license upon the imprisonment of a license holder following a felony conviction or revocation of felony community supervision, parole, or mandatory supervision.

(c) A person currently imprisoned because of a felony conviction may not obtain a license, renew a previously issued license, or act in a representative capacity for an application or license holder as described by §211.2(a)(2).

(d) The department may revoke a license upon the imprisonment for a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision of a person described by §211.2(a)(2) of this chapter who remains employed with the license holder.

§211.12.Criminal History Evaluation Letters.

(a) Pursuant to Texas Occupations Code, Chapter 53, Subchapter D, a person may request that the department evaluate the person's eligibility for a specific occupational license regulated by the department by:

(1) submitting a request on a form approved by the department for that purpose; and

(2) paying the required Criminal History Evaluation Letter fee of $100.

(b) The department shall respond to the request not later than the 90th day after the date the request is received.

§211.13.Fingerprint Requirements for Designated License Types.

(a) The requirements of this section apply to an applicant for a new or renewal license for the license types designated in Chapter 215 or Chapter 221 of this title as requiring fingerprints for licensure.

(b) Unless previously submitted for an active license issued by the department, the following persons may be required to submit a complete and acceptable set of fingerprints to the Texas Department of Public Safety and pay required fees for purposes of obtaining criminal history record information from the Texas Department of Public Safety and the Federal Bureau of Investigation:

(1) a person, including a trust beneficiary, applying for a new license, license amendment due to change in ownership, or license renewal; and

(2) a person acting in a representative capacity for an applicant or license holder who is required to be listed on a licensing application, including an officer, director, member, manager, trustee, partner, principal, or manager of business affairs.

(c) After reviewing a licensure application and licensing records, the department will notify the applicant or license holder which persons in subsection (b) of this section are required to submit fingerprints to the Texas Department of Public Safety.

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 October 24, 2024.

TRD-202404980

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: December 8, 2024

For further information, please call: (512) 465-4160