TITLE 43. TRANSPORTATION

PART 10. TEXAS DEPARTMENT OF MOTOR VEHICLES

CHAPTER 211. CRIMINAL HISTORY OFFENSE AND ACTION ON LICENSE

SUBCHAPTER A. CRIMINAL OFFENSE AND ACTION ON LICENSE

43 TAC §§211.1 - 211.5

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes new Chapter 211, Subchapter A, 43 TAC §211.1 - 211.5 concerning the review of criminal offenses and their effect on a licensing. The new sections implement licensing requirements in Occupations Code Chapters 53, 2301, and 2302, and Transportation Code Chapter 503, including amendments in House Bill 1342, 86th Legislature, Regular Session (2019); Senate Bill (SB) 604, 86th Legislature, Regular Session (2019); and SB 1217, 86th Legislature, Regular Session (2019).

In conjunction with this proposal, the department has proposed amendments to §215.89 and §221.15, §221.19, §221.111, and §221.112, and repeal of §215.88, §221.113, and §221.114, concerning licenses under Occupations Code Chapter 2301 and Chapter 2301 and Transportation Code Chapter 503 in this issue of the Texas Register.

EXPLANATION. Occupations Code Chapter 53 and §2301.651, §2302.104 and §2302.108, and Transportation Code §503.034 and §503.038 authorize the department and its board (board) to take action on an application for a license, or on a license, when a person has committed a criminal offense. The proposed new chapter creates a unified process to promote consistency, efficiency, and predictability in board and department decisions concerning the effect of a criminal offense on licensure and implements the Sunset Advisory Commission's Management Action 4.6, as stated in the Sunset Staff Report with Commission Decisions, 2018-2019, 86th Legislature (2019). The Sunset report directed the department to adopt criminal history evaluation rules consistent with Occupations Code Chapter 53, for salvage industry regulation.

The new sections allow the department to maintain fitness standards related to licensees 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 in evaluating whether a person's past criminal history can be considered in evaluating the person's fitness for licensing. Occupations Code §53.021 provides that a licensing authority may suspend or revoke a license, disqualify a person from receiving a license, or deny to 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. An offense's inclusion in Occupations Code §53.021(a)(2) and (3) applies to all license applications. It is the department's duty to determine those offenses that 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 the licensed occupation. However, conviction of an offense that 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 must publish guidelines relating to its practice under this chapter in accordance with Occupations Code §53.025.

Proposed new §211.1 establishes definitions for terms used in new subchapter A.

Proposed new §211.2(a) establishes the persons to whom subchapter applies. The list mirrors the list of persons currently subject to criminal history review under §215.88(c), which is proposed for repeal in a separate proposal published in this issue of the Texas Register.

Proposed new §211.2(b) establishes that the convictions in this subchapter include deferred adjudications deemed convictions under Occupations Code §53.0231.

Proposed new §211.3 publishes the department's criminal history guidelines as required under Occupations Code §53.025 and addressing the requirements of Occupations Code §§53.021, 53.022, and 53.023.

The licenses issued by the department create positions of trust. The department has defined in §211.1 "retail license types" that those licensee types 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. The term does not include manufacturers, distributors, and general distinguishing number holders for the following vehicle categories: ambulance, axle, bus, engine, fire truck/fire fighting vehicle, heavy duty truck, and transmission, and other license types that do not generally interact directly with the public.

The department has determined that retail license types, and the individuals who serve in representative capacities for them, also have as an occupation interaction with the general public, and 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 must comply with federal and state environmental and safety regulations. The department concluded that the types of activities these licensees engage in would involve the same categories of crimes related directly to the occupation.

The department has determined that 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, and transmission, and the individuals who serve in representative capacities for them, have as an occupation access to confidential information, conveyance, titling, and registration of private property, and must comply with federal and state environmental and safety regulations.

The department considers the following offenses relate to all license types:

(1) 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, because honesty, integrity, trustworthiness, and a willingness to comply with the law are characteristics necessary for a licensee. A predisposition the opportunity to commit further offenses.

(2) Offenses involving forgery, falsification of records, or perjury, because honesty, integrity, trustworthiness, and a willingness to comply with the law are characteristics necessary for a licensee. A predisposition the opportunity to commit further offenses.

(3) Offenses involving the offering, paying, or taking of bribes, kickbacks, or other illegal compensation, because they violate the trust inherent in the license and allow a person with a predisposition the opportunity to commit further offenses.

(4) Felony offenses against public administration, because honesty, integrity, trustworthiness, and a willingness to comply with the law are characteristics necessary for a licensee. Offenses of this nature reflect a lack of honesty, integrity, trustworthiness, and a willingness to comply with the law. Further, person involved in offenses of this nature would have an opportunity to impede investigations into unlawful or improper activities.

(5) Felony offenses under a state or federal statute or regulation involving the manufacture, sale, finance, distribution, repair, salvage, or demolition, of motor vehicles, because these statutes regulate the industry that the licensee is involved in and would present a person predisposed to such violations an opportunity for to commit an offense.

(6) Felony offenses under a state or federal statute or regulation related to emissions standards, waste disposal, water contamination, air pollution, or other environmental offenses because licensees have access to, store, use and dispose of hazardous materials and must maintain facilities in compliance with federal and state environmental and safety regulations presenting a person predisposed to such violations an opportunity for to commit an offense.

(7) Offenses committed while engaged in a licensed activity or on licensed premise, because the person has shown disregard for the license and a person with a predisposition for crimes involving such activities would have the opportunity to engage in further similar conduct.

(8) 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; because licensees have access to unregistered vehicles and are in a unique position to receive, sell or otherwise distribute illegal goods or substances. A person with a predisposition for crimes involving such activities would have the opportunity to engage in further similar conduct.

The department considers the following offenses relate retail license types only:(9) Felony offenses against real or personal property belonging to another, because licensees have the ability to affect property rights presenting a person predisposed to such violations an opportunity for to commit an offense.

(10) Offenses involving the sale or disposition of another person's real or personal property, because licensees have the ability to affect property rights presenting a person predisposed to such violations an opportunity for to commit an offense.

(11) A reportable felony offense conviction under Chapter 62, Texas Code of Criminal Procedure for which the person must register as a sex offender because licensees have direct contact with members of the general public often in settings with no one else present and access to an individual's motor vehicle records, including the individual's address. A person with a predisposition for crimes involving prohibited sexual conduct would have the opportunity to engage in further similar conduct.

(12) A felony stalking offense as described by Penal Code §42.072 because licensees have direct contact with members of the general public and access to an individual's motor vehicle records, including the individual's address. A person with a predisposition for crimes involving stalking would have the opportunity to engage in further similar conduct.

(13) An offense against the family as described by Penal Code §§25.02, 25.07, 25.072, or 25.11, because licensees have direct contact with members of the general public often in settings with no one else present and access to an individual's motor vehicle records, including the individual's address. A person with a predisposition for crimes involving prohibited sexual conduct or violence in violation of a court order would have the opportunity to engage in further similar conduct.

(14) Felony offenses against the person because licensees have direct contact with members of the general public often in settings with no one else present and access to an individual's motor vehicle records, including the individual's address. A person with a predisposition for violence would have the opportunity to engage in further similar conduct.

(15) Felony offenses involving 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, because licensees have direct contact with members of the general public including and access to an individual's motor vehicle records, including the individual's address. A person with a predisposition for crimes involving prohibited sexual conduct or acts with children would have the opportunity to engage in further similar conduct.

(16) Offenses of attempting or conspiring to commit any of the foregoing offenses applicable to the license type, because the offense was intended.

Proposed new §211.3(a) - (c) list the reasons the department has determined that certain offenses directly relate to the duties and responsibilities of the licensed occupation.

Proposed new §211.3(d) lists offenses that directly relate to the duties and responsibilities of the licensed occupation. The list is not exclusive; the department may determine, based on the factors set forth in Occupations Code §53.022, that an unlisted offense directly relates to the duties and responsibilities of the licensed occupation.

Proposed new §211.3(e) lists the factors that the department must consider in making its evaluation of the applicant's fitness for licensing.

Proposed new §211.3(f) states the requirement in new Occupations Code §53.0231(b)(2)(B) that it is the applicant's responsibility to provide evidence concerning the factors listed in §211.3(e).

Proposed new §211.4 addresses imprisonment of an applicant, license holder, or person listed otherwise listed in §211.2(a)(2). 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 licenses persons based on individuals serving in representative capacities, the department will also consider the effect of imprisonment of those persons on license holder. Because the revocation is mandatory, the factors and determinations listed in §211.3 do not apply to a person under this section.

Proposed new §211.5 implements Occupations Code §53.102 that allows a person to request that a licensing authority issue a criminal history evaluation letter regarding the person's eligibility for a license issued by that authority. As authorized in Occupations Code §53.105, §211.5 also proposes a fee in the amount of $100 to cover the cost of the review.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Linda M. Flores, Chief Financial Officer, has determined that for each year of the first five years the new sections 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. Daniel Avitia, Director of the Motor Vehicle Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Avitia has also determined that, for each year of the first five years the new sections are in effect, there are several public benefits anticipated because the proposed new chapter creates a unified process in line with Occupations Code Chapter 53 that will to promote consistency, efficiency, and predictability in board and department decisions concerning the effect of criminal offenses on licensure. In addition, certain independent motor vehicle dealer applicants will have the opportunity to request an evaluation of their prior criminal history before enrolling in an independent motor vehicle dealer training under Transportation Code §503.0296. Further, the department has determined those offenses that directly relate to the duties and responsibilities of the licensed occupations, establishing a standard that will protect the public.

Mr. Avitia 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 additional requirements or costs for regulated persons. Some applicants for certain independent motor vehicle licenses may request a preliminary evaluation of their criminal history under §211.5. If they do, the fee will be $100 per person. The preliminary review however, is not required, and must be weighed as a business decision against the cost of enrolling in an independent dealer training course (currently $149) and making the other necessary business investments (including a two-year lease and securing a surety bond) to apply for a license that may ultimately be denied. The department also considers that §211.3 sets forth those offenses that relate to the licensed occupations, and other offenses under Occupations Code §53.021.

The department determined the proposed fee based on its analysis of costs associated with performing the evaluation. Occupations Code §53.105 requires a fee adopted by a licensing authority to be in an amount sufficient to cover the cost of administering this subchapter. The department determined that its costs would be staff time per evaluation, the cost of background checks, and the initial cost to add this feature to the current eLICENSING system. The department estimates staff time of 4-7 hours for each evaluation resulting in a cost or $90 to $160 per evaluation. The department estimates that each background check through the Department of Public Safety would cost $1, or be incorporated in an existing fixed monthly third-party service provider fee. System implementation costs were not available. Total costs are estimated to be $91 to $161. The department believes the $100 fee is sufficient to cover the cost of administration.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that there may be an adverse economic effect or disproportionate economic impact on small or micro businesses as a result of the enforcement or administration of §211.5, based on the cost of the reviewrequest.

The department has determined that the proposed new sections will not have an adverse economic effect or a disproportionate economic impact on rural communities because new sections do not uniquely or disproportionately apply to residents of rural communities.

The department considered the following alternatives to minimize any adverse impact on small or micro businesses while still accomplishing the proposal's objectives:

(1) The department considered not proposing the new rules, but ultimately rejected this option because that would deny applicants the opportunity to make the business decision to request the review.

(2) The department also considered exempting small or micro businesses from the requirements of the rule, but ultimately rejected this option because a significant number of persons, if not almost all initial applicants, would be classified as a small or micro business because they would have less than six million dollars in receipts and less than 100 employees. The department has set the fee to cover the costs of the review as required under §53.105. As reviews may differ, the fee is based on an estimated average cost. Excluding a significant number of persons would increase the costs for other persons. Further, Occupations Code §53.105 does authorize an agency to charge different fees to different persons.

(3) Finally, the department also considered imposing a lesser fee on small or micro businesses, but ultimately rejected this option for the same reasons outlined in the second consideration above.

The department, after considering the purpose of the authorizing statutes, does not believe it is feasible to waive or modify the fee requirement of proposed §211.5.

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 section is in effect, the proposed rule:

- will not create or eliminate a government program;

- will not require the creation of new employee positions or the elimination of existing employee positions;

- will not require an increase or decrease in future legislative appropriations to the department;

- will not require an increase or decrease in fees paid to the department;

- will create new regulations in new Chapter 211;

- will not expand existing regulations;

- will replace existing regulation in §215.88 that is being repealed in a separate proposal published in this issue of the Texas Register;

- will not increase or decrease the number of individuals subject to the rule's applicability; and

- will not positively 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. CDT on July 27, 2020. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

STATUTORY AUTHORITY. The department proposes amendments to §§211.1 - 211.5 under Occupations Code §2301.155 and §2302.051, and Transportation Code §503.002 and §1002.001.

- Occupations Code §2301.155 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 §2302.051 authorizes the board to adopt rules as necessary to administer Occupations Code Chapter 2302.

- Transportation Code §503.002 authorizes the board to adopt rules that are necessary to administer Transportation Code Chapter 503.

- Transportation Code §1002.001,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. Occupations Code §§53.021, 53.022-53.025, 53.102, 53.104, 2301.651; 2301.651, §2302.104 and §2302.108, and Transportation Code §503.034 and §503.038.

§211.1.Definitions.

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;

(C) Occupations Code, Chapter 2302; 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 licensee types 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, and transmission.

§211.2.Application of 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 deemed to be a conviction under Occupations Code §53.021.

§211.3.Criminal Offense Guidelines.

(a) The licenses issued by the department create positions of trust. License holders provide services to members of the public. 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 engage in environmental and safety violations that endanger the public. In addition, licensure provides persons predisposed to commit assaultive or sexual crimes with greater opportunities to engage in such conduct.

(b) 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. The department shall consider the factors listed in the Occupations Code §53.022 in determining whether a criminal conviction directly relates to the duties and responsibilities of a licensee.

(c) The department has determined under the factors listed in Occupations Code §53.022 that offenses detailed in subsection (d) 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 (d) is in addition to those that are independently disqualifying under Occupations Code §53.021, including:

(1) an offense listed in Article 42A.054, Code of Criminal Procedure; or

(2) a sexually violent offense, as defined by Article 62.001, Code of Criminal Procedure.

(d) 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. Paragraphs (1) - (8) apply to all license types. Paragraphs (9) - (15) apply only to retail license types. Paragraph (16) applies to offenses applicable to a license type:

(1) 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;

(2) offenses involving forgery, falsification of records, or perjury;

(3) offenses involving the offering, paying, or taking of bribes, kickbacks, or other illegal compensation;

(4) felony offenses against public administration;

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

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

(7) offenses committed while engaged in a licensed activity or on licensed premises;

(8) 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;

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

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

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

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

(13) felony offenses against the person;

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

(15) 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

(16) offenses of attempting or conspiring to commit any of the foregoing offenses applicable to the license type.

§211.4.Imprisonment.

(a) Section 211.3 of this Chapter does not apply to persons who are imprisoned at the time the department considers the conviction.

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

(c) 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 licensee.

(d) 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).

§211.5.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.

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 June 15, 2020.

TRD-202002385

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665


CHAPTER 215. MOTOR VEHICLE DISTRIBUTION

SUBCHAPTER C. LICENSES, GENERALLY

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes the repeal of §215.88 and amendments to 43 TAC §215.89 to update licensing fitness rules under Occupations Code §2301.651 and Transportation Code §503.034, including implementation of Senate Bill (SB) 604, 86th Legislature, Regular Session, (2019). In conjunction with this proposal, the department has proposed new §§211.1 - 211.5, concerning criminal offense and action on licenses, and amendments to §§221.15, 221.19, 221.111, and 221.112, and repeal of §221.113 and §221.114, concerning salvage vehicle dealer licenses, in this issue of the Texas Register.

EXPLANATION. Occupations Code §2301.651 and Transportation Code §503.034 and 503.038 require the department and its board (board) to review the fitness of applicants for new and renewal licenses, and license holders. The proposed amendments to §215.89 update the requirements related to review of criminal history information, affiliations, and conform with statute. The repeal of §215.88 is necessary because the determination of an offense that directly relates to the duties or responsibilities of the licensed occupation has been moved to proposed new Chapter 211.

The proposed amendment to §215.89(b)(2) changes the reference from §215.88 to proposed new §211.3. The department has proposed new Chapter 211 in this issue of the Texas Register.

The proposed amendment to §215.89(b)(3) eliminates the reference to "criminal history information." The amendment conforms the requirement to Occupations Code §2301.651(a)(2) and Transportation Code §503.038(6), which do not limit consideration of material misstatements just to statements regarding criminal history information.

The proposed amendment to §215.89(b)(7) modifies the consideration to include assessments or penalties addressing the acquisition, sale, repair, rebuild, or reconstruction of a salvage motor vehicle or nonrepairable motor vehicle. The change is to conform review to the expansion of the license authority in SB 604.

The proposed amendment to §215.89(b)(8) changes the reference from §215.88 to proposed new §211.2.

The proposed amendments to §215.89(b)(9) and (10) clarify that the department is concerned with affiliations that allow for control of the license holder, and describe control as "the power to direct or cause the direction of the management, policies, and activities, of an applicant or license holder, whether directly or indirectly."

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Linda M. Flores, Chief Financial Officer, has determined that for each year of the first five years the proposed new section will be in effect, there will be no fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Daniel Avitia, Director of the Motor Vehicle Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Avitia has also determined that, for each year of the first five years the proposed new section is in effect, the public benefits include updating the licensing fitness reviews requirements to clarify affiliations that are applicable to licensing, conform to statute, and conform to a proposed amended criminal history review process under proposed new Chapter 211.

Mr. Avitia anticipates that there will be no additional costs on regulated persons to comply with these rules, because the rules do not establish any additional requirements or costs for the regulated person.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code §2006.002, the department has determined that the proposed new section will not have an adverse economic effect on small businesses, micro-businesses, or rural communities because the proposal imposes no additional requirements, and has no additional financial effect, on any small businesses, micro-businesses, or rural communities. 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 section is in effect, the proposed rule:

--will not create or eliminate a government program;

--will not require the creation of new employee positions or the elimination of existing employee positions;

--will not require an increase or decrease in future legislative appropriations to the department;

--will not require an increase or decrease in fees paid to the department;

--will not create new regulations;

--will not expand existing regulations;

--will repeal existing regulation §215.88, that is being replaced by new Chapter 211 in a separate proposal published in this issue of the Texas Register;

--will not increase or decrease the number of individuals subject to the rule's applicability; and

--will not positively 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. CDT on July 27, 2020. 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.

43 TAC §215.88

STATUTORY AUTHORITY. The department proposes the repeal of §215.88 under Occupations Code §2301.155. and Transportation Code §503.002 and §1002.001.

--Occupations Code §2301.155 authorizes the board of the Texas Department of Motor Vehicles to adopt rules as necessary or convenient to administer this chapter and to govern practice and procedure before the board.

--Transportation Code §503.002 authorizes the board to adopt rules that are necessary to administer Transportation Code Chapter 503.

--Transportation Code §1002.001, 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. Occupations Code 2301.651, and Transportation Code §503.034 and 503.038.

§215.88Criminal Offense and Action on License.

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 June 15, 2020.

TRD-202002388

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665


43 TAC §215.89

STATUTORY AUTHORITY. The department proposes amendments to §215.89 under Occupations Code §2301.155. and Transportation Code §503.002 and §1002.001.

--Occupations Code §2301.155 authorizes the board of the Texas Department of Motor Vehicles to adopt rules as necessary or convenient to administer this chapter and to govern practice and procedure before the board.

--Transportation Code §503.002 authorizes the board to adopt rules that are necessary to administer Transportation Code Chapter 503.

--Transportation Code §1002.001, 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. Occupations Code 2301.651, and Transportation Code §503.034 and 503.038.

§215.89.Fitness.

(a) In determining a person's fitness for a license issued or to be issued by the department under Transportation Code, Chapter 503 or Occupations Code, Chapter 2301, the board or department will consider:

(1) the requirements of Occupations Code, Chapter 53;

(2) the provisions of Occupations Code, §2301.651;

(3) any specific statutory licensing criteria or requirements;

(4) mitigating factors; and

(5) other evidence of a person's fitness, as allowed by law, including the standards identified in subsection (b) of this section.

(b) The board or department may determine that a person is unfit to perform the duties and discharge the responsibilities of a license holder and may, following notice and an opportunity for hearing, deny a person's license application or revoke or suspend a license if the person:

(1) fails to meet or maintain the qualifications and requirements of licensure;

(2) is convicted or deemed convicted by any local, state, federal, or foreign authority of an offense that directly relates to the duties or responsibilities of the licensed occupation as described in §211.3 [listed in §215.88(j) ] of this title (relating to Criminal Offense Guidelines [and Action on License]) or is convicted or deemed convicted of an offense that is independently disqualifying under Occupations Code §53.021 [containing elements that are substantially similar to the elements in the offenses in §215.88(j)];

(3) omits information or provides false, misleading, or incomplete information [regarding a criminal conviction] on an initial application, renewal application, or application attachment, for a license or other authorization issued by the department or by any local, state, or federal regulatory authority;

(4) is found to have violated an administrative or regulatory requirement based on action taken on a license, permit, or other authorization, including disciplinary action, revocation, suspension, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment, by the board, department, or any local, state, or federal regulatory authority;

(5) is insolvent or fails to obtain or maintain financial resources sufficient to meet the financial obligations of the license holder;

(6) is a corporation that fails to maintain its charter, certificate, registration, or other authority to conduct business in Texas;

(7) is assessed a civil penalty, administrative fine, fee, or similar assessment, by the board, department, or a local, state, or federal regulatory authority, for violation of a requirement governing or impacting the distribution or sale of a vehicle or a motor vehicle, or the acquisition, sale, repair, rebuild, reconstruction, or other dealing of a salvage motor vehicle or nonrepairable motor vehicle, and fails to comply with the terms of a final order or fails to pay the penalty pursuant to the terms of a final order;

(8) was or is a person described in §211.2 of this title (relating to Application of Subchapter) [a person defined by §215.88(c) or identified in §215.88(d), or a manager or affiliate of a sole proprietorship, partnership, corporation, association, trust, estate, or other legal entity] whose actions or omissions could be considered unfit, who is ineligible for licensure, or whose current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority has been subject to disciplinary action including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment;

(9) has an ownership, organizational, managerial, or other business arrangement, that would allow a person the power to direct or cause the direction of the management, policies, and activities, of an applicant or license holder, whether directly or indirectly, when the [interest with a] person [whose actions or omissions] could be considered unfit, [who is] ineligible for licensure, or whose current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority, has been subject to disciplinary action, including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment, by the board, department, or any local, state, or federal regulatory authority; or

[(10) is a business entity that is operated, managed, or otherwise controlled by a relative or family member and that person could be considered unfit, is ineligible for licensure, or whose current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority has been subject to disciplinary action, including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment; or]

(10) [(11)]is found in an order issued through a contested case hearing to be unfit or acting in a manner detrimental to the system of distribution or sale of motor vehicles in Texas, the economy of the state, the public interest, or the welfare of Texas citizens.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 15, 2020.

TRD-202002389

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665


SUBCHAPTER E. GENERAL DISTINGUISHING NUMBERS

43 TAC §§215.150 - 215.158

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 TAC §§215.150 - 215.158, concerning buyer's temporary tags issued by a federal, state, or local governmental agency. The amendments are necessary to implement Transportation Code §503.063(h), as added by House Bill 3760, 86th Legislature, Regular Session (2019), update forms in §215.153, and update §215.154 to conform with Transportation Code Chapter 551 and Chapter 551A related to golf carts and off-highway vehicles.

EXPLANATION. Transportation Code §503.063(h) authorizes a federal, state, or local governmental agency that is exempt from the requirement to obtain a dealer general distinguishing number to issue one temporary buyer's tag for a vehicle sold or otherwise disposed of by the governmental agency under state law. Transportation Code §503.063(h)(1) establishes that a governmental agency that issues such a temporary buyer's tag is subject to statutory provisions applicable to a dealer relating to the buyer's temporary tag database and the unauthorized reproduction, purchase, use, or sale of temporary tags. Transportation Code §503.063(h)(2) exempts the governmental agency from collecting the $5 registration fee for the tag.

Proposed amendments to §215.150 state the requirements of Transportation Code §503.063(h).

Proposed amendments to §215.151 require a federal, state, or local governmental agency to secure a temporary buyer's tag or preprinted Internet-down temporary tag issued under §215.150(c) in the same manner as a dealer.

Proposed amendments to §215.152 extend the requirements placed on dealers under that section to a federal, state, or local governmental agency.

Proposed amendments to §215.153 remove outdated requirements that do not apply to temporary tags created on-demand with the department's web-based application and available for printing at time of creation. The department also proposed updating the tag forms in the attached graphics to reflect current online forms.

Proposed amendments to §215.154 add golf carts and off-highway vehicles to vehicles that cannot be issued temporary tags because the vehicles are not eligible for registration by the public under Transportation Code §§502.140, 551.402, 551A.052.

Proposed amendments to §215.155 extend the requirements placed on dealers issuing buyer's temporary tags under that section to a federal, state, or local governmental agency. The proposed amendments also provide a federal, state, or local governmental agency, is not required to collect the $5 fee that dealers must collect under Transportation Code §503.063(g). The proposed amendments also clarify that the $5 fee must be paid to the county tax assessor collector. A dealer selling a vehicle to a Texas resident would submit the fee with the title transfer documents. A dealer selling the vehicle to a non-Texas resident must also submit the fee to the county tax assessor collector even though title transfer documents are not submitted. A federal, state, or local governmental agency selling to any person must also submit the fee, if collected, to the county tax assessor collector even though title transfer documents are not submitted by the agency on behalf of the buyer.

Proposed amendments to §215.156 extend the requirements placed on dealers to provide buyer's temporary tag receipts under that section to a federal, state, or local governmental agency.

Proposed amendments to §215.157 extend the requirements placed on dealers concerning preprinted Internet-down temporary tags with specific numbers and buyer's temporary tag receipts under that section to a federal, state, or local governmental agency.

Proposed amendments to §215.158 extend the requirements placed on dealers concerning the allocation and safekeeping of preprinted Internet-down temporary tags under that section to a federal, state, or local governmental agency.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Linda M. Flores, Chief Financial Officer, has determined that for each year of the first five years the proposed amendments will be in effect, there will be no revenue impact; only an internal eLICENSING and eTAG programming change. Therefore, for each year of the first five years the proposed amendments will be in effect, there will be no fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Jeremiah Kuntz, Director of the Vehicle Titles and Registration Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Kuntz has also determined that, for each year of the first five years the proposed amendments are in effect, the public benefits include increased clarity and consistency for a federal, state, or local governmental agency, issuing buyer's temporary tags, and reference the current internet forms. Adoption of the sections will implement Transportation Code §503.063(e) and allow federal, state, or local governmental agencies selling vehicles to issue valid buyer's temporary tags.

Mr. Kuntz anticipates that there will be no additional costs on regulated persons to comply with these rules. Transportation Code §503.063(h) authorizes a federal, state, or local governmental agency to issue a buyer's temporary tag under the requirements of Transportation Code §§503.063, 503.0631, and 503.067. Section 503.063 requires a dealer issuing a tag to issue the tag and have internet access. The requirements for issuing the tags and internet access exists in §§215.150 - 215.158 and are not changed by this proposal. The proposal requirements are extended to a federal, state, or local governmental agency, that make a business decision to issue a buyer's temporary tag to the purchaser of a qualifying vehicle.

Changes to preprinted Internet-down tags in §215.153 update the version in the rule to the current online version of the form. Thus, any stock of pre-printed tags are not affected by this proposal.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendments will not have an adverse economic effect on small businesses, micro-businesses, or rural communities because the proposal only affects federal, state, or local governmental agencies. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments are in effect, the proposed rule:

--will not create or eliminate a government program;

--will not require the creation of new employee positions or the elimination of existing employee positions;

--will not require an increase or decrease in future legislative appropriations to the department;

--will not require an increase or decrease in fees paid to the department;

--will not create new regulations;

--will expand existing regulations §§215.150 - 215.158 to implement Transportation Code §503.063(h);

--will not repeal existing regulations;

--will not increase or decrease the number of individuals subject to the rule's applicability, because the proposal extends requirements to federal, state, or local governmental agencies; and

--will not positively 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. CDT on July 27, 2020. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

STATUTORY AUTHORITY. The department proposes amendments to §§215.150 - 215.158 under Transportation Code §§503.002, 503.0626, 503.631, 503.069 and §1002.001.

--Transportation Code §503.002 authorizes the Texas Department of Motor Vehicles Board (board) to adopt rules for the administration of Transportation Code Chapter 503.

--Transportation Code §503.0626 authorizes the department to adopt rules and prescribe procedures as necessary to implement §503.0626.

--Transportation Code §503.0631 authorizes the department to adopt rules and prescribe procedures as necessary to implement this §503.0631.

--Transportation Code §503.069 provides that a license plate, other than an in-transit license plate, or a temporary tag issued under this chapter shall be displayed in accordance with department rules.

--Transportation Code §1002.001, 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. Transportation Code, §503.063.

§215.150.Authorization to Issue Temporary Tags.

(a) A dealer that holds a GDN may issue a dealer's temporary tag, buyer's temporary tag, or a preprinted Internet-down temporary tag for each type of vehicle the dealer is licensed to sell. A converter that holds a converter's license under Occupations Code, Chapter 2301 may issue a converter's temporary tag.

(b) A license holder may issue an applicable dealer's temporary tag, buyer's temporary tag, or converter's temporary tag until the license is canceled, revoked, or suspended.

(c) A federal, state, or local governmental agency that is exempt under Section 503.024 from the requirement to obtain a dealer general distinguishing number may issue one temporary buyer's tag, or one preprinted Internet-down temporary tag, in accordance with Transportation Code §503.063. A governmental agency that issues a temporary buyer's tag, or preprinted Internet-down temporary tag, under this subsection:

(1) is subject to the provisions of Transportation Code §503.0631 and §503.067 applicable to a dealer; and

(2) is not required to charge the registration fee under Transportation Code §503.063(g).

§215.151.Temporary Tags, General Use Requirements, and Prohibitions.

(a) A dealer shall secure a temporary tag to a vehicle in the license plate display area located at the rear of the vehicle, so that the entire temporary tag is visible and legible at all times, including when the vehicle is being operated.

(b) A federal, state, or local governmental agency shall secure a temporary buyer's tag or preprinted Internet-down temporary tag issued under 215.150(c) to a vehicle in the license plate display area located at the rear of the vehicle, so that the entire temporary tag is visible and legible at all times, regardless of whether the vehicle is being operated.

(c) [(b)] All printed information on a temporary tag must be visible and may not be covered or obstructed by any plate holder or other device or material.

(d) [(c)] A motor vehicle that is being transported using the full mount method, the saddle mount method, the tow bar method, or any combination of those methods in accordance with Transportation Code, §503.068(d), must have a dealer's temporary tag, a converter's temporary tag, or a buyer's temporary tag, whichever is applicable, affixed to the motor vehicle being transported.

§215.152.Obtaining Numbers for Issuance of Temporary Tags.

(a) A dealer, a federal, state, or local governmental agency, or a converter is required to have internet access to connect to the temporary tag databases maintained by the department.

(b) Except as provided by §215.157 of this title (relating to Advance Numbers, Preprinted Internet-down Temporary Tags), before a temporary tag may be issued and displayed on a vehicle, a dealer, a federal, state, or local governmental agency, or converter must:

(1) enter in the temporary tag database information about the vehicle, dealer, converter, or buyer, as appropriate; and

(2) obtain a specific number for the temporary tag.

§215.153.Specifications for All Temporary Tags.

(a) Information printed or completed on a temporary tag must be in black ink on a white background. Other than for a motorcycle, a completed buyer's, dealer's, converter's, or preprinted Internet-down temporary tag shall be six inches high and at least eleven inches wide. For a motorcycle, the completed buyer's, dealer's, converter's, or preprinted Internet-down temporary tag shall be four inches high and at least seven inches wide.

(b) A temporary tag must be:

(1) composed of plastic or other durable, weather-resistant material; or

(2) sealed in a two mil clear poly bag that encloses the entire temporary tag.

(c) [A dealer or converter may manually copy the information from the temporary tag database to a preprinted temporary tag template.] A temporary tag [completed in this manner] must[:]

[(1) display the information drawn in letters and numerals with a permanent, thick, black marking pen; and]

[(2)] comply with the specifications of the applicable temporary tag identified by the following appendices:

(1) [(A)] Appendix A-1 - Dealer's Temporary Tag - Assigned to Specific Vehicle;

Figure: 43 TAC §215.153(c)(1) (.pdf)

[Figure: 43 TAC §215.153(c)(2)(A)]

(2) [(B)] Appendix A-2 - Dealer's Temporary Tag - Assigned to Agent;

Figure: 43 TAC §215.153(c)(2) (.pdf)

[Figure: 43 TAC §215.153(c)(2)(B)]

(3) [(C)] Appendix B-1 - Buyer's Temporary Tag;

Figure: 43 TAC §215.153(c)(3) (.pdf)

[Figure: 43 TAC §215.153(c)(2)(C)]

(4) [(D)] Appendix B-2 - Preprinted Internet-down Temporary Tag; and

Figure: 43 TAC §215.153(c)(4) (.pdf)

[Figure: 43 TAC §215.153(c)(2)(D)]

(5) [(E)] Appendix C-1 - Converter's Temporary Tag.

Figure: 43 TAC §215.153(c)(5) (.pdf)

[Figure: 43 TAC §215.153(c)(2)(E)]

§215.154.Dealer's Temporary Tags.

(a) A dealer's temporary tag may be displayed only on the type of vehicle for which the GDN is issued and for which the dealer is licensed by the department to sell.

(b) A wholesale motor vehicle auction license holder that also holds a dealer GDN may display a dealer's temporary tag on a vehicle that is being transported to or from the licensed auction location.

(c) When an unregistered vehicle is sold to another dealer, the selling dealer shall remove the selling dealer's temporary tag. The purchasing dealer may display its dealer temporary tag or its metal dealer's license plate on the vehicle.

(d) A dealer's temporary tag may not be displayed on:

(1) a laden commercial vehicle being operated or moved on the public streets or highways; [or]

(2) on the dealer's service or work vehicles;[.]

(3) a golf cart as defined under Transportation Code Chapter 551; or

(4) an all-terrain vehicle, recreational off-highway vehicle, or a utility vehicle as defined under Transportation Code Chapter 551A.

(e) For purposes of this section, a dealer's service or work vehicle includes:

(1) a vehicle used for towing or transporting other vehicles;

(2) a vehicle, including a light truck, used in connection with the operation of the dealer's shops or parts department;

(3) a courtesy car;

(4) a rental or lease vehicle; and

(5) any boat trailer owned by a dealer or manufacturer that is used to transport more than one boat.

(f) For purposes of subsection (d) of this section, a vehicle bearing a dealer's temporary tag is not considered a laden commercial vehicle when the vehicle is:

(1) towing another vehicle bearing the same dealer's temporary tags; and

(2) both vehicles are being conveyed from the dealer's place of business to a licensed wholesale motor vehicle auction or from a licensed wholesale motor vehicle auction to the dealer's place of business.

(g) As used in this section, "light truck" has the meaning assigned by Transportation Code, §541.201.

(h) A dealer's temporary tag may not be used to operate a vehicle for the personal use of a dealer or a dealer's employee.

(i) A dealer's temporary tag must show its expiration date, which must not exceed 60 days after the date the temporary tag was issued.

(j) A dealer's temporary tag may be issued by a dealer to a specific motor vehicle in the dealer's inventory or to a dealer's agent who is authorized to operate a motor vehicle owned by the dealer.

(k) A dealer that issues a dealer's temporary tag to a specific vehicle must ensure that the following information is placed on the temporary tag:

(1) the vehicle-specific number from the temporary tag database;

(2) the year and make of the vehicle;

(3) the VIN of the vehicle;

(4) the month, day, and year of the temporary tag's expiration; and

(5) the name of the dealer.

(l) A dealer that issues a dealer's temporary tag to an agent must ensure that the following information is placed on the temporary tag:

(1) the specific number from the temporary tag database;

(2) the month, day, and year of the temporary tag's expiration; and

(3) the name of the dealer.

§215.155.Buyer's Temporary Tags.

(a) A buyer's temporary tag may be displayed only on a vehicle that can be legally operated on the public streets and highways and for which a sale has been consummated.

(b) A buyer's temporary tag may be displayed only on a vehicle that has a valid inspection in accordance with Transportation Code Chapter 548, unless the vehicle is exempt from inspection under Chapter 548.

(c) For a wholesale transaction, the purchasing dealer places on the motor vehicle its own:

(1) dealer's temporary tag; or

(2) metal dealer's license plate.

(d) A buyer's temporary tag is valid until the earlier of:

(1) the date on which the vehicle is registered; or

(2) the 60th day after the date of purchase.

(e) The dealer, or federal, state, or local governmental agency, must ensure that the following information is placed on a buyer's temporary tag that the dealer issues:

(1) the vehicle-specific number obtained from the temporary tag database;

(2) the year and make of the vehicle;

(3) the VIN of the vehicle;

(4) the month, day, and year of the expiration of the buyer's temporary tag; and

(5) the name of the dealer or federal, state, or local governmental agency.

(f) A dealer shall charge a buyer a fee of $5 for the buyer's temporary tag or Internet-down buyer's temporary tag issued, unless the vehicle is exempt from payment of registration fees under Transportation Code, §502.453 or §502.456 [or an all-terrain vehicle or recreational off-highway vehicle under Transportation Code, §502.140 or Transportation Code, Chapter 663]. A federal, state, or local governmental agency may charge a buyer a fee of $5 for the buyer's temporary tag or Internet-down buyer's temporary tag issued, unless the vehicle is exempt from payment of registration fees under Transportation Code, §502.453 or §502.456, or is a vehicle described in §215.15(d)(3) or (4) of this chapter (relating to Dealer's Temporary Tags). The fee shall be remitted by a dealer to the county in conjunction with the title transfer, and, if collected, by a federal, state, or local government agency, to the county, for deposit to the credit of the Texas Department of Motor Vehicles fund, unless the vehicle is sold by a dealer to an out-of-state resident, in which case:

(1) the dealer shall remit the entire fee to the department for deposit to the credit of the Texas Department of Motor Vehicles fund if payment is made through the department's electronic title system; or

(2) the dealer shall remit the fee to the county for deposit to the credit of the Texas Department of Motor Vehicles fund.

§215.156.Buyer's Temporary Tag Receipt.

A dealer, or federal, state, or local government agency, must provide a buyer's temporary tag receipt to the buyer of each vehicle for which a buyer's temporary tag is issued, regardless of whether the buyer's temporary tag is issued using the temporary tag database or if the tag is a preprinted Internet-down temporary tag. The dealer, or federal, state, or local governmental agency, may print the image of the buyer's temporary tag receipt issued from the temporary tag database or create the form using the same information. The dealer, or federal, state, or local governmental agency, shall instruct the buyer to keep a copy of the buyer's temporary tag receipt in the vehicle until the vehicle is registered in the buyer's name and until metal plates are affixed to the vehicle. The buyer's temporary tag receipt must include the following information:

(1) the issue date of the buyer's temporary tag;

(2) the year, make, model, body style, color, and VIN of the vehicle sold;

(3) the vehicle-specific temporary tag number;

(4) the expiration date of the temporary tag;

(5) the date of the sale;

(6) the name of the issuing dealer and the dealer's license number or the name of the issuing federal, state, or local governmental agency; and

(7) the buyer's name and mailing address.

§215.157.Advance Numbers, Preprinted Internet-down Temporary Tags.

(a) In accordance with Transportation Code, §503.0631(d), a dealer, or a federal, state, or local government agency, may obtain an advance supply of preprinted Internet-down temporary tags with specific numbers and buyer's temporary tag receipts to issue in lieu of buyer's temporary tags if the dealer is unable to access the internet.

(b) If a dealer, or a federal, state, or local government agency, is unable to access the internet at the time of a sale, the dealer, or a federal, state, or local government agency, must complete the preprinted Internet-down temporary buyer's tag and buyer's temporary tag receipt by providing details of the sale, signing the buyer's temporary tag receipt, and retaining a copy. The dealer, or a federal, state, or local government agency, must enter the required information regarding the sale in the temporary tag database not later than the close of the next business day that the dealer has access to the internet. The buyer's temporary tag receipt must include a statement that the dealer, or a federal, state, or local government agency, has internet access but, at the time of the sale, the dealer, or a federal, state, or local government agency, was unable to access the internet or the temporary tag database.

§215.158.General Requirements and Allocation of Preprinted Internet-down Temporary Tag Numbers.

(a) The dealer, or a federal, state, or local government agency, is responsible for the safekeeping of preprinted Internet-down temporary tags and shall store them in a secure place. The dealer, or a federal, state, or local government agency, shall report any loss, theft, or destruction of preprinted Internet-down temporary tags to the department within 24 hours of discovering the loss, theft, or destruction.

(b) A dealer, or a federal, state, or local government agency, may use a preprinted Internet-down temporary tag up to 12 months after the date the preprinted Internet-down temporary tag is created. A dealer, or a federal, state, or local government agency, may create replacement preprinted Internet-down temporary tags up to the maximum allowed, when:

(1) a dealer, or a federal, state, or local government agency, uses one or more preprinted Internet-down temporary tags and then enters the required information in the temporary tag database after access to the temporary tag database is again available; or

(2) a preprinted Internet-down temporary tag expires.

(c) The number of preprinted Internet-down temporary tags that a dealer, or federal, state, or local government agency, may create is equal to the greater of:

(1) the number of preprinted Internet-down temporary tags previously allotted by the department to the dealer or a federal, state, or local government agency;

(2) 30; or

(3) 1/52 of the dealer's, or federal, state, or local government agency's, total annual sales.

(d) For good cause shown, a dealer, or a federal, state, or local government agency, may obtain more than the number of preprinted Internet-down temporary tags described in subsection (c) of this section. The director of the Vehicle Titles and Registration Division of the department or that director's delegate may approve, in accordance with this subsection, an additional allotment of preprinted Internet-down temporary tags for a dealer, or a federal, state, or local government agency, if the additional allotment is essential for the continuation of the dealer's, or a federal, state, or local government agency's, business. The director of the Vehicle Titles and Registration Division of the department, or a federal, state, or local government agency, or that director's delegate will base the determination of the additional allotment of preprinted Internet-down temporary tags on the dealer's, or a federal, state, or local government agency's, past sales, inventory, and any other factors that the director of the Vehicle Titles and Registration Division of the department or that director's delegate determines pertinent, such as an emergency. A request for additional preprinted Internet-down temporary tags must specifically state why the additional preprinted Internet-down temporary tags are necessary for the continuation of the applicant's business.

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 June 12, 2020.

TRD-202002375

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665


CHAPTER 217. VEHICLE TITLES AND REGISTRATION

SUBCHAPTER C. REGISTRATION AND TITLE SYSTEMS

43 TAC §217.74

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 TAC §217.74, concerning access to the department's webDEALER online system (webDEALER). The amendments are necessary to implement Transportation Code §520.005(e) as added by Senate Bill (SB) 604, 86th Legislature, Regular Session (2019).

EXPLANATION. This proposal is necessary to implement Transportation Code §520.005(e), as enacted in SB 604, and required to be effective not later than September 1, 2020 in Section 4.08 of SB 604. Transportation Code §520.005(e) requires each county assessor-collector to make available to motor vehicle dealers the electronic system designed by the department that allows a motor vehicle dealer to submit a title and registration application online in the name of the purchaser of a motor vehicle. The requirement is included within the Sunset Advisory Commission's Change in Statute Recommendation 5.2, as stated in the Sunset Staff Report with Commission Decisions, 2018-2019, 86th Legislature (2019), which directly refers to webDEALER.

To implement Transportation Code §520.005(e), it is necessary to amend §217.74 to conform with the requirements of Transportation Code §520.005(e), including changing county tax assessor-collector's use of webDEALER and requiring each county tax assessor-collector to grant motor vehicle dealers access to webDEALER. In addition, the department is implementing enhancements to webDEALER to support the expansion required by Transportation Code §520.005(e), which include efficiencies and throughput improvements. The amendments to §217.74 do not add fees or change processing requirements for county tax assessor-collectors or users; or change the access process for users who are not motor vehicle dealers.

The proposed amendments to §217.74(a) change the requirement for a county tax assessor-collector to use webDEALER from permissive to mandatory. The amendment is necessary to implement the requirement that each county tax assessor-collector must allow motor vehicle dealers access to webDEALER.

The proposed amendment to §217.74(b) creates a reference to new §217.74(c), which addresses motor vehicle dealer access to webDEALER. The amendment does not change access to webDEALER by persons who are not motor vehicle dealers or the ability of county tax assessor-collectors to authorize that access.

The proposed new §217.74(c) states the requirement that a county tax assessor-collector must allow motor vehicle dealers to access webDEALER. To clarify the term motor vehicle dealer as used in Transportation Code §520.005(e), the subsection refers to "a holder of a general distinguishing number."

The proposal does not provide county tax assessor-collectors a direct right to terminate a motor vehicle dealer's access to webDealer. The department will pursue action as necessary. A county tax assessor-collector who suspects possible fraud, waste, or abuse by a motor vehicle dealer may submit a request to the department for review and possible investigation under the red flag process.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Linda M. Flores, Chief Financial Officer, has determined that for each year of the first five years the proposed amendments will be in effect, there will be no fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Jeremiah Kuntz, Director of the Vehicle Titles and Registration Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Kuntz has also determined that, for each year of the first five years the proposed amendments and new sections are in effect, the public benefits include increased use of webDEALER resulting in greater efficiency and reduced costs for county tax assessor-collectors and motor vehicle dealers.

Mr. Kuntz anticipates that there will be no additional costs on regulated persons to comply with these rules. The rules do not establish any additional fee or change existing webDEALER processes. Statute requires county tax assessor-collectors to provide dealers with access to webDEALER, and as such any related costs do not result from this rule. In addition, the department provides the county tax assessor-collectors with access to webDEALER at no charge. Finally, motor vehicle dealers are not charged an additional fee if they decide to use webDEALER. A motor vehicle dealer's choice to use webDEALER would be a business decision of the motor vehicle dealer and not a requirement of this rule.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendments will not have an adverse economic effect on small businesses, micro-businesses, or rural communities because the proposal amends §217.74 to conform with the requirements of Transportation Code §520.005(e) and does not create additional costs or requirements. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments and new sections are in effect, the proposed rule:

--will not create or eliminate a government program;

--will not require the creation of new employee positions or the elimination of existing employee positions;

--will not require an increase or decrease in future legislative appropriations to the department;

--will not require an increase or decrease in fees paid to the department;

--will not create new regulations;

--will expand existing regulation §217.74 to implement Transportation Code §520.005(e);

--will not repeal existing regulations;

--will not increase or decrease the number of individuals subject to the rule's applicability; and

-- will not positively 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. CDT on July 27, 2020. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

STATUTORY AUTHORITY. The department proposes amendments to §217.74 under Transportation Code §§501.0041, 502.0021, 520.003, and §1002.001.

--Transportation Code §501.0041 authorizes the department to adopt rules to administer Transportation Code Chapter 501.

--Transportation Code §502.0021 authorizes the department to adopt rules to administer Transportation Code Chapter 502.

--Transportation Code §520.003 authorizes the department to adopt rules to administer Transportation Code Chapter 520.

--Transportation Code §1002.001, 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. Transportation Code §§501.022, 501.023, 501.0234, and 520.005.

§217.74.Access to and Use of webDEALER.

(a) Each [At the discretion of a] county tax assessor-collector shall [, the county may] request access to, and accept title applications submitted through, webDEALER. A county tax assessor-collector must utilize webDEALER in order to accept a title application in the county as provided by subsections [subsection] (b) and (c) of this section.

(b) Except as provided in subsection (c) of this section, a [A] person who wishes to become a user of webDEALER must contact each entity to whom they submit title applications for authorization to utilize webDEALER. A user must receive authorization from each entity, including each county tax assessor-collector, to whom the user submits title applications. Title applications submitted to the department require the authorization by the department.

(c) A holder of a general distinguishing number (holder) who wishes to become a user of webDEALER must contact each county tax assessor-collector to whom they submit title applications for webDEALER access. The county must provide the holder access. A holder must obtain access from each county tax assessor-collector to whom the user submits title applications.

(d) [(c)] A county tax assessor-collector may authorize a deputy appointed by the county tax assessor-collector in accordance with Subchapter H of this chapter (relating to Deputies) to utilize webDEALER.

(e) [(d)] A person authorized under subsection (b) of this section may have their authorization to use webDEALER revoked, rescinded, or cancelled at any time, with no notice, at the discretion of a county tax assessor-collector or the department.

(f) [(e)] When submitting a title application through webDEALER, a user must:

(1) stamp the word "SURRENDERED" across the front, face and the next open assignment or reassignment space of any secure title document or other acceptable ownership evidence as determined by the department in:

(A) arial font;

(B) black ink; and

(C) a size of 1/4" height x 2 1/4" length;

(2) retain the physical document described in paragraph (1) of this subsection for a minimum of four calendar years from the date of submitting a scanned copy of the stamped title document using the webDEALER system; and

(3) submit any documents required to be submitted with the title application with a scanned resolution of at least 200 dots per inch (DPI).

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 June 12, 2020.

TRD-202002377

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-;5665


CHAPTER 221. SALVAGE VEHICLE DEALERS

The Texas Department of Motor Vehicles (department) proposes amendments to Transportation Code §221.15 relating required license application information; §221.19 related to change of a license holder's name or ownership; §221.111 related to denial of license; and §221.112 related to license suspension, revocation and administrative penalties. The department also proposes to repeal §221.113 and §221.114. The changes update licensing application, fitness, denial, suspension, revocation, and penalty rules under Occupations Code Chapter 2302, and remove references to salvage vehicle agents and salvage vehicle dealer endorsements to implement Senate Bill (SB) 604, 86th Legislature, Regular Session, (2019).

In conjunction with this proposal, the department has proposed new §§211.1 - 211.5 concerning criminal offense and action on licenses, and amendments to §215.89 and repeal of §215.88 concerning licenses under Occupations Code Chapter 2301 and Transportation Code Chapter 503, in this issue of the Texas Register.

EXPLANATION. The proposed amendments to §§221.15, 221.19, 221.111, and 221.112, update and clarify requirements, and establish references concerning the review of criminal history information under proposed new Chapter 211 that has been proposed in accordance with Occupations Code Chapter 53 and the Sunset Advisory Commission's Management Action 4.6, as stated in the Sunset Staff Report with Commission Decisions, 2018-2019, 86th Legislature (2019).

The Sunset report directs the department to adopt criminal history evaluation rules consistent with Occupations Code Chapter 53, for salvage industry regulation. Occupations Code §53.021, authorizes a licensing authority to suspend or revoke a license, or disqualify a person from receiving a license, if the person has been convicted of a felony or misdemeanor that directly relates to the duties and occupations of the licensed occupation. Proposed new Chapter 211 addresses the requirements under Occupations Code Chapter 53 for licenses issued under Chapter 215 and 221.

Under Occupations Code §2302.104, an application for a salvage dealer license must include a statement of the previous history, record, and associations of the applicant to the extent sufficient to establish, to the satisfaction of the department, the business reputation and character of the applicant. Under Occupations Code §2302.105, the department may not issue a license until the department completes an investigation of the applicant's qualifications.

The proposed amendment to §221.15(2) eliminate references to salvage vehicle dealer license endorsements and salvage vehicle agents to conform with changes in SB 604. The paragraphs are renumbered accordingly.

The proposed amendments to §221.15(9) revise the statement to conform with the requirements of Occupations Code §2302.104.

The proposed amendments to §221.15(12) identify the persons who will be considered in the license review under Occupations Code §2302.104.

The proposed amendments to §221.15(13) clarify that the department is concerned with affiliations that allow for control of the license holder, and describe control as "the power to direct or cause the direction of the management, policies, and activities, of an applicant or license holder, whether directly or indirectly."

The proposed amendment to §221.15(14) clarifies which persons are required to submit criminal history information. Criminal history information will be evaluated under proposed new Chapter 211, as addressed in amendments §221.111(a)(3) and §221.112(16).

The proposed amendment to §221.15(15) clarifies that the department collects professional history information to determine business reputation as required in Occupations Code §2302.104.

Section 221.19 requires license holders to keep certain information current with the department. Proposed amendments to 221.19 clarify what types of organizational changes require notice to the department. These changes include a change in entity type, addition of a new person for whom criminal and professional history information would be required, or a business arrangement that extends control of the license holder to other persons for whom criminal and professional history information would be required.

The amendment to §221.19(c) establishes that the license holder is not required to submit a new application, but just the information that is necessary to address the change. The proposed amendment to §221.19(c) also removes requirements related to a 50% change of ownership, because that is unnecessary based on the proposed amendment to §221.19(b). Finally, the proposed amendment to §221.19 extends the period for compliance to 30 days after the event.

The proposed amendment to §221.111(a) clarifies that the section applies to the board or department's review of an application for issuance or renewal of a license. The proposed amendment to §221.111(a) also replaces "shall" with "may" to clarify that the department's action is discretionary. A license may be denied based on an applicant's prior criminal history after weighing the factors in Occupations Code Chapter 53 and proposed new §211.3, or for reasons authorized in Occupations Code Chapter 2302 and this chapter.

The proposed amendments to §221.111(a)(2) clarify the persons the department will consider in making its evaluation, and in what actions.

The proposed amendments §221.111(a)(3) clarify the persons who will be subject to criminal history review and the offenses that will be reviewed.

The proposed amendment to §221.111(a)(4) clarifies that the department will consider the circumstances related to the revocation of a prior license in its evaluation of fitness for a license under this chapter. The amendment also deletes language addressing the prohibition on applying for a license within one year following revocation of the license under Occupations Code §2302.108. That provision is addressed in proposed §221.111(c).

The proposed amendment to §221.111(a)(5) focuses the review on control, specifically an ownership, organizational, managerial, or other business arrangement, that would "allow a person the power to direct, management, policies, or activities, of the applicant or license holder, whether directly or indirectly." The references to family members are removed. While a family member could be a person described in the proposed amendment, the person would not be included on the basis that they were a family member.

The proposed amendment to §221.111(a)(6) focuses the review on prior disciplinary activity against specified persons with prior administrative action against a license. The proposed amendment deletes language referencing applicants with a child support payment delinquency, which would be handled as required under Family Code Chapter 232.

The proposed amendment to §221.111(b) clarifies that an applicant may request an administrative hearing when the department pursues denial of an application.

The proposed amendment to §221.111(c) addresses Occupations Code §2302.108, which expressly prohibits a person whose license is revoked from applying for a new license before the first anniversary of the date of the revocation. The department will reject such an application.

The proposed amendment to §221.112 clarifies that either the board or the department may take action on a license that has been issued by the Motor Vehicle Division for certain acts or omissions.

The proposed amendment to §221.112(1) clarifies that action on a license may be made for failing to meet qualifications and requirements.

The proposed amendment to §221.112(2) clarifies that the board or department may take action on a person's license if the person violates laws relating to other sectors of the industry for which a license issued by the Motor Vehicle Division is required.

The proposed amendment to §221.112(3) corrects the spelling of "willfully."

The proposed amendment to §221.112(6) clarifies that a person may not engage in business without the required license and eliminates a reference to salvage vehicle dealer license endorsements.

The proposed amendments to §§221.112(12), 221.112(15), and 221.112(20) correct the spelling of "nonrepairable."

The proposed amendment to §221.112(8) clarifies specific information that must be reported by a license holder to the department within 30 days of a change.

The proposed amendment to §221.112(9) clarifies that any changes made under §221.19(b) must be reported to the department within 30 days.

The proposed amendment to §221.112(10) removes the requirement to notify the department that a salvage vehicle agent has been terminated. The following paragraphs are renumbered accordingly.

The proposed amendments to §§221.112(13) - 221.112(15) correct punctuation and grammatical errors, and clarify that action may be taken on a license for a person's violation of law or board rules relating to the motor vehicle industry for which the board has jurisdictional authority.

The proposed amendment to §221.112(16) clarifies the persons who will be subject to criminal history review and the offenses that will be reviewed.

The proposed amendment to §221.112(19) clarifies that a license holder must pay all administrative penalties imposed by the department, not just those imposed under Occupations Code Chapter 2302.

The proposed amendment to §221.112(20) clarifies that the board or department may take action on a license if a person is engaging in business without a license that is required under Occupations Code Chapter 2301 or Chapter 2302 or Transportation Code Chapter 503. Additionally, the amendment corrects a punctuation error.

Repeal of §221.113, Suspension or Refusal to Renew Due to Failure to Pay Court Ordered Child Support, is required under Family Code Chapter 232.

Repeal of §221.114, Re-application after Revocation of License, is proposed because the subject matter is now found in §221.111(b).

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Linda M. Flores, Chief Financial Officer, has determined that for each year of the first five years the proposed new section will be in effect, there will be no fiscal impact to state or local governments as a result of the enforcement or administration of the proposal.

Daniel Avitia, Director of the Motor Vehicle Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Avitia has also determined that, for each year of the first five years the proposed new section is in effect, the public benefits include updating the licensing fitness reviews requirements to clarify affiliations that are applicable to licensing, conform to statute, and conform to a proposed amended criminal history review process under proposed new Chapter 211.

Mr. Avitia anticipates that there will be no additional costs on regulated persons to comply with these rules, because the rules do not establish any additional requirements or costs for the regulated person.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code §2006.002, the department has determined that the proposed new section will not have an adverse economic effect on small businesses, micro-businesses, or rural communities because the proposal imposes no additional requirements, and has no additional financial effect, on any small businesses, micro-businesses, or rural communities. 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 section is in effect, the proposed rule:

- will not create or eliminate a government program;

- will not require the creation of new employee positions or the elimination of existing employee positions;

- will not require an increase or decrease in future legislative appropriations to the department;

- will not require an increase or decrease in fees paid to the department;

- will not create new regulations;

- will not expand existing regulations;

- will repeal existing regulations §221.113 and §221.114;

- will not increase or decrease the number of individuals subject to the rule's applicability; and

- will not positively 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. CDT on July 27, 2020. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

SUBCHAPTER B. LICENSING

43 TAC §221.15, §221.19

STATUTORY AUTHORITY. The department proposes amendments to §§221.15 and §221.19, under Occupations Code §2301.155 and §2302.051, and Transportation Code and §1002.001.

- Occupations Code §2301.155 authorizes the board of the Texas Department of Motor Vehicles to adopt rules as necessary or convenient to administer Occupations Code Chapter 2301 and to govern practice and procedure before the board.

- Occupations Code §2302.051 authorizes the board to adopt rules as necessary to administer Occupations Code Chapter 2302.

- Transportation Code §1002.001, 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. Occupations Code §2302.104 and §2302.108.

§221.15.Required License Application Information.

The following information must be provided on each salvage vehicle dealer application:

(1) the full legal name of the applicant;

[(2) the endorsement or endorsements that are being applied for;]

(2) [(3)] the full business address, including number, street, municipality, county, and zip code for each location where the applicant will conduct business under the license if each location is in the same county;

(3) [(4)] the business telephone number and email address;

(4) [(5)] the mailing address;

(5) [(6)] a statement acknowledging that the department will consider the applicant's designated mailing address the applicant's last known address for [all] department communication, including service of process under Subchapter E of this chapter (relating to Administrative Procedures). The designated mailing address will be considered applicant's last known address until such time that the mailing address is changed in the licensing records of the department after the license holder submits an amendment to change the license holder's mailing address;

(6) [(7)] all assumed names as registered with the secretary of state or county clerk, as applicable;

(7) [(8)] if applying as a sole proprietor, the social security number, address and telephone number for the sole proprietor;

(8) [(9)] if applying as a general partnership, the social security number, address and telephone number for each of the general partners;

(9) [(10)] if applying as a limited partnership, limited liability company, or corporation, the full name, social security number, address and telephone number for each officer or director of the corporation, each member, officer, or manager of the limited liability company, each partner, and each officer of the limited partnership, including the information for the general partner based on the type of entity [or limited liability company];

(10) [(11)] the state sales tax number;

(11) [(12)] the National Motor Vehicle Title Information System (NMVTIS) number evidencing that the applicant is registered with NMVTIS;

(12) [(13)] a statement indicating whether the applicant or any person described in §211.2 of this Chapter has previously applied for a license under this chapter or the salvage vehicle dealer licensing laws of another jurisdiction, the result of the previous application, and whether the applicant, including a person described in §211.2 of this Chapter, has ever been the holder of a license issued by the department or another jurisdiction that was revoked, suspended, or subject of an order issued by the board or by another jurisdiction to pay an administrative penalty that remains unpaid;

(13) [(14)] a statement indicating whether the applicant has an ownership, organizational, affiliation, or other business arrangement that would allow a person to direct the management, policies, or activities of an applicant or license holder, whether directly or indirectly, who [is owned, operated, managed, or otherwise controlled by or affiliated with a person, including a family member, corporate officer, entity or shareholder that] was the holder of a license issued by the department or by another jurisdiction that was revoked, suspended, or subject of an order issued by the board or by another jurisdiction to pay an administrative penalty that remains unpaid;

(14) [(15)] details of the criminal history of the applicant and any person described in §211.2 of this Chapter [a statement indicating whether the applicant, any owner, corporate officer, partner or director has ever been convicted of a felony, and, if so, whether it has been at least three years since the termination of the sentence, parole, mandatory supervision, or probation for the felony conviction];

(15) details of the professional information of the applicant and any person described in §211.2 of this Chapter;

(16) a statement that the applicant at the time of submitting the application is in compliance, and, after issuance of a license, will remain in compliance, with all ordinances and rules of the municipality or county of each location where the applicant will conduct business; and

(17) an acknowledgement that the applicant understands, [and] is, and will remain in compliance with all state and federal laws relating to the licensed activity.

§221.19.Change of License Holder's Name, [or] Ownership, or Control.

(a) A license holder shall notify the department to amend its license within 30 [10] days of a change in the license holder's business name. Upon submission of an amendment to change the business name, the department shall reflect the new business name in the department's records. The dealer shall retain the same salvage vehicle dealer license number except if the business name change is the result of a change in the type of entity being licensed, such as a sole proprietorship becoming a corporation, or if the ownership of the business changes as discussed in subsection (b) [(c)] of this section.

(b) A salvage vehicle dealer shall notify the department by submitting a request for license amendment within 30 [10] days of [prior to] a change to:

(1) the entity type of the applicant or license holder;

(2) the departure or addition of any person reported to the department in the original license application or most recent renewal application, including any person described in §211.2 of this Chapter;

(3) an ownership, organizational, managerial, or other business arrangement that would allow the power to direct or cause the direction of the management and policies and activities of an applicant or license holder, whether directly or indirectly, to be established in or with a person not described in paragraph (1) or (2) of this subsection [of ownership].

(c) The license-holder must submit to the department a notice of change and all information needed for that specific license modification. [Upon notification of a change of more than 50% of the ownership, the department shall:]

[(1) cancel the existing license; and any salvage dealer agent licenses authorized by the salvage vehicle dealer; and]

[(2) require that an original application and required fees be submitted by the new owner(s). Any of the new owners' salvage vehicle agents must also apply for a new license and submit the applicable fees.]

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 June 15, 2020.

TRD-202002390

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665


SUBCHAPTER F. ADMINISTRATIVE SANCTIONS

43 TAC §221.111, §221.112

STATUTORY AUTHORITY. The department proposes amendments to §221.111 and §221.112 under Occupations Code §2301.155 and §2302.051, and Transportation Code and §1002.001.

- Occupations Code §2301.155 authorizes the board of the Texas Department of Motor Vehicles to adopt rules as necessary or convenient to administer Occupations Code Chapter 2301 and to govern practice and procedure before the board.

- Occupations Code §2302.051 authorizes the board to adopt rules as necessary to administer Occupations Code Chapter 2302.

- Transportation Code §1002.001, 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. Occupations Code §2302.104 and §2302.108.

§221.111.Denial of License.

(a) The board or department may [shall] deny an application for [issuance of] a license or a renewal of a license under Occupations Code Chapter 53 or Chapter 2302, and §211.3 of this title (relating to Criminal Offense Guidelines) or this chapter [salvage vehicle dealer license or a salvage vehicle agent license], if:

(1) all the information required on the application is not complete;

(2) the applicant or any owner, officer, director, or other person described in §211.2 of this title (relating to Application of Subchapter) [of its owners, officers, or directors] made a false statement, [or] material misrepresentation, or a material omission, on the application to issue, renew, or amend a license;

(3) the applicant, or any owner, officer, director, or other person described in §211.2 of this Chapter, has been [of its owners, officers, or directors have been] convicted, or deemed convicted by any local, state, federal, or foreign authority, of an offense that directly relates to the duties or responsibilities of the licensed occupation as described in §211.3 of this title or is convicted of an offense that that is independently disqualifying under Occupations Code §53.021 [of a felony for which less than three (3) years have elapsed since the termination of the sentence, parole, mandatory supervision, or probation];

(4) the applicant's or any owner's, officer's, director's, or other person described in §211.2of this Chapter, [of its owners', officers', or directors'] previous [salvage vehicle dealer or salvage vehicle agent] license was revoked [and the first anniversary of the date of revocation has not occurred];

(5) the applicant or license holder has an ownership, organizational, managerial, or other business arrangement that would allow a person the power to direct, management, policies, or activities, of the applicant or license holder, whether directly or indirectly, who is unfit, ineligible for license, or has been subject to disciplinary action, including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, or similar assessment for a current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority [is an immediate family member, such as a spouse, child, parent, grandparent, niece, nephew, uncle, or aunt, of a previously licensed salvage vehicle dealer whose license has been revoked, and the business location is the same as the location of the revoked salvage vehicle dealer]; or

(6) the applicant, or any owner, officer, or director, or other person described in §211.2 of this Chapter unfit to hold the license, is ineligible for licensure, or whose current or previous license, permit, or other authorization issued by any local, state, or federal regulatory authority has been subject to disciplinary action, including suspension, revocation, denial, corrective action, cease and desist order, or assessment of a civil penalty, administrative fine, fee, or similar assessment. [is delinquent in any court ordered obligation to pay child support.]

(b) If the department denies an application for a license to be issued under the authority of Occupations Code Chapter 2302 [application is denied], the applicant may request an administrative hearing in the manner specified in §221.91 of this title (relating to Notice of Department Decision).

(c) In accordance with Occupations Code §2302.108, the board or department shall reject any application for issuance of a new license under Occupations Code Chapter 2302 filed by a person whose license is revoked before the first anniversary of the date of revocation.

§221.112.Suspension, Revocation and Administrative Penalties.

The board or department may suspend or revoke a license or impose an administrative penalty if the license holder:

(1) fails to meet or maintain the qualifications and requirements for a license;

(2) violates any law relating to the purchase, sale, exchange, storage, or distribution of motor vehicles, including salvage motor vehicles and nonrepairable [and non-repairable] motor vehicles;

(3) willfully [wilfully] defrauds a purchaser;

(4) fails to maintain purchase, sales, and inventory records as required by Occupations Code, Chapter 2302, or this chapter;

(5) refuses to permit, or fails to comply with a request by the department to examine, during normal business hours, the license holder's records as required by Occupations Code, Chapter 2302, or this chapter;

(6) engages in motor vehicle or salvage business without the required license [endorsement];

(7) engages in business as a salvage vehicle dealer at a location for which a license has not been issued by the department;

(8) fails to notify the department of a change of the salvage vehicle dealer's legal business entity name, assumed name, mailing address, email address, physical address or location within 30 [10] days of such change by submitting [requesting and obtaining from the department] an amendment to the [salvage vehicle dealer's] license;

(9) fails to notify the department of a change described in §221.19(b) of this chapter (relating to Change of License Holder's Name, Ownership, or Control) as required in that section [of the salvage vehicle dealer's name or salvage vehicle dealer's ownership within 10 days of such change by requesting and obtaining from the department an amendment to the salvage vehicle dealer's license];

(10) [fails to notify the department of the termination of a salvage vehicle agent within 10 days after such termination];

[(11)] fails to remain regularly and actively engaged in the business for which the salvage vehicle dealer license is issued;

(11) [(12)] sells more than five (5) nonrepairable [non-repairable] motor vehicles or salvage motor vehicles to the same person in a casual sale during a calendar year;

(12) [(13)]) violates any [of the] provision of Occupations Code Chapters 2301 or [, Chapter] 2302, Transportation Code [,] Chapters 501, 502, or 503, or any board rule or order promulgated under those statutes;

(13) [(14)] uses or allows use of the salvage vehicle dealer's [or salvage vehicle agent's] license or business location for the purpose of avoiding the requirements of [the license holder or another person avoiding ] Occupations Code Chapters 2301 or [, Chapter] 2302, Transportation Code, Chapters 501, 502 or 503, or any board rule or order promulgated under those statutes;

(14) [(15)] violates any law, ordinance, rule or regulation governing the purchase, sale, exchange, or storage, of salvage motor vehicles or nonrepairable [, and non-repairable] motor vehicles;

(15) [(16)] sells or offers for sale a nonrepairable [non-repairable] motor vehicle [vehicles] or a salvage motor vehicle [vehicles] from any location other than the [a licensed] salvage vehicle dealer's licensed business location [that has been approved by the department];

(16) [(17)] is, or any owner, officer, director, or other person described in §211.2, is convicted, or deemed convicted by any local, state, federal, or foreign authority ,of an offense that directly relates to the duties or responsibilities of the licensed occupation as described in §211.3 of this title (relating to Criminal Offense Guidelines) or an offense that that is independently disqualifying under Occupations Code §53.021 [of any a felony] after initial issuance or renewal of the salvage vehicle dealer license, or that has not been reported to the department as required [or salvage vehicle agent license, or less than three (3) years have elapsed since the termination of the sentence, parole, mandatory supervision, or probation for a felony conviction of the license holder];

(17) [(18)] makes a false statement, material misrepresentation, or material omission in any application or other information filed with the department;

(18) [(19)] fails to timely remit payment for administrative penalties imposed by the department [under Occupations Code, §2302.354 and this section];

(19) [(20)] engages in business without a license required under Occupations Code [,] Chapters 2301 or 2302, or Transportation Code [,] Chapter 503;

(20) [(21)] operates a salvage motor vehicle or a nonrepairable [non-repairable] motor vehicle on the public highways or allows another person to operate a salvage motor vehicle or a nonrepairable [non-repairable ] motor vehicle on public highways;

(21) [(22)] dismantles a salvage motor vehicle or non-repairable motor vehicle; or

(22) [(23)] deals in used automotive parts as more than an incidental part of the salvage vehicle dealer's primary business.

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 June 15, 2020.

TRD-202002391

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665


SUBCHAPTER F. ADMINISTRATIVE SANCTIONS

43 TAC §221.113, §221.114

STATUTORY AUTHORITY. The department proposes repeal of §221.113 and §221.114 under Occupations Code §2301.155 and §2302.051, and Transportation Code and §1002.001.

- Occupations Code §2301.155 authorizes the board of the Texas Department of Motor Vehicles to adopt rules as necessary or convenient to administer Occupations Code Chapter 2301 and to govern practice and procedure before the board.

- Occupations Code §2302.051 authorizes the board to adopt rules as necessary to administer Occupations Code Chapter 2302.

- Transportation Code §1002.001, 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. Occupations Code §2302.104 and §2302.108.

§221.113.Suspension or Refusal to Renew Due to Failure to Pay Court-ordered Child Support.

§221.114.Re-application after Revocation of License.

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 June 15, 2020.

TRD-202002392

Tracey Beaver

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: July 26, 2020

For further information, please call: (512) 465-5665