TITLE 16. ECONOMIC REGULATION

PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION

CHAPTER 33. LICENSING

SUBCHAPTER A. APPLICATION PROCEDURES

16 TAC §33.5

The Texas Alcoholic Beverage Commission proposes amendments to §33.5, relating to Food and Beverage Certificate.

House Bill No. 2101, 85th Regular Session of the Texas Legislature amended Alcoholic Beverage Code (Code) §§25.13, 28.18, 32.23 and 69.16 to provide more uniform treatment of food and beverage certificates regardless of their associated primary permit or license.

For purposes of rule §33.5, one of the significant changes was to eliminate the requirement that the permit or license holder was responsible for food preparation. For some permits or licenses, the premises formerly had to be primarily a food service establishment. Under the Code as amended, food has to be available at the location (the designated physical address of the permitted or licensed premises), but the food need not be provided by the permit or license holder. And although permanent food service facilities are required, the location need not be primarily a food service establishment. The proposed amendments to rule §33.5 are intended to conform the rule to the new Code requirements. In addition, stylistic and grammatical changes are made throughout.

In addition to amending the rule to reflect the recent legislative changes, the commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There should be no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses and small businesses or persons regulated by the commission. There is no anticipated negative impact on local employment.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rule will accurately reflect the applicable provisions of the Alcoholic Beverage Code.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, or by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Thursday, October 26, 2017, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code.

The proposed amendments affect Alcoholic Beverage Code §§5.31, 25.13, 28.18, 32.23, and 69.16, and Government Code §2001.039.

§33.5.Food and Beverage Certificate.

(a) This rule relates to §§25.13, 28.18, 32.23 and 69.16 of the Texas Alcoholic Beverage Code.

(b) Each applicant for an original or renewal food and beverage certificate shall include all information required by the commission to insure compliance with all applicable statutes and rules [and regulations of the agency].

(c) Application for the certificate shall be upon forms prescribed by the commission.

(d) The biennial certificate fee for each location is $200.00 and must be submitted in the form of a cashier's check, U.S. postal money order, or company check made payable to the Texas Alcoholic Beverage Commission. A [The original] certificate expires [will expire] upon expiration or cancellation of the primary permit or license. No prorated certificate fees will be given and no refunds made for issuance of the food and beverage certificate for less than two years.

(e) The following words and terms, when used in this section, shall have the following meaning unless the context clearly indicates otherwise:

(1) Food service--cooking or assembling of food on the location [premise] primarily for [on-premise ] consumption at the location. Commercially pre-packaged items purchased off of the location [off-premise] which require no cooking or assembly do not constitute food service under this section.

(2) entrée--main dish or course of a meal.

[(3) Multiple entrées-at least eight different entrées per meal period must be available to customers.]

(3) [(4)] Food service facilities--a designated permanent portion of the licensed location, including commercial cooking equipment, [premises] where food is stored and prepared primarily for [on-premise] consumption at the location.

(4) [(5)] Premise--the designated area at a location that is licensed by the commission for the sale, service or delivery of alcoholic beverages [premise].

(5) [(6)] Location--the designated physical address of a premise, but also including all areas at that address where the permit or license holder may sell, serve or deliver alcoholic beverages for immediate consumption at the address, regardless of whether some of those areas are occupied by other businesses, as long as those businesses are contiguous [licensed premise].

(f) An applicant is qualified for a food and beverage certificate if the following conditions, in addition to other requirements, are satisfied:

(1) multiple entrées are available to customers; and

(2) permanent food service facilities are maintained at the location. [on the premises;]

[(3) with respect to retail dealer's on-premise licenses and wine and beer retailer's permits, the primary business on the premises is food service, as determined in accordance with subsection (q); and]

[(4) with respect to mixed beverage permits and private club registration permits, the applicant maintains food service on the premise.]

(g) The hours of operation for sale and service of food and of alcoholic beverages are the same except that food may be sold or served before or after the legal hours for sale of alcoholic beverages.

[(h) An applicant may present evidence to the executive director or the executive director's designee which demonstrates substantial compliance with subsections (f)(1) and (g). Approval may be granted when the executive director or the executive director's designee is satisfied that the operation is a food service establishment.]

(h) [(i)] If the applicant is a hotel that maintains separate area restaurants, lounges or bars, food service facilities must exist for each of the designated licensed premises.

(i) [(j)] An applicant for an original food and beverage certificate shall furnish the following, as well as any other information requested by the commission to ensure compliance:

(1) the menu or, if no menu is available, a listing of the food and beverage items;

(2) hours of operation of food service and hours of operation for sale or service of alcoholic beverages;

(3) sales data (including complimentary drinks, as recorded pursuant to subsection (n)(3)) or, if not available, a projection of sales. The sales data or projection of sales [or data] should include sufficient breakdown of revenues of food, alcoholic beverages and other major sales categories at the location;

(4) listing of commercial cooking equipment used in the preparation and service of food; and

(5) copies of floor plans of the location [licensed premises] indicating the licensed premise and permanent areas devoted primarily to the preparation and service of food.

(j) [(k)] Applicants for renewal of food and beverage certificates [whose primary permits are a wine and beer retailer's permit or a retail dealer's on-premise license] shall submit sales data described in subsection (n) [(o)]. The commission may request additional information or documentation to indicate that [the business at] the licensed location has permanent [is a food service establishment with] food service facilities for the preparation and service of multiple entrées.

(k) [(l)] The commission may review the operation at the location [licensed premises] to determine that [the applicant or holder of the food and beverage certificate has or is maintaining] food service with food service facilities for the preparation and service of multiple entrées is maintained. In doing so the commission may review such items as required in the original or renewal application as well as advertising, promotional items, changes in operations or hours, changes in floor plans, prominence of food items on the menu as compared to alcoholic beverages, name of the businesses at the location [business], number of transactions with food components, copies of city or county permits or certificates relating to the type of business operation, and any other item deemed necessary or applicable.

(l) [(m)] Failure to provide documentation requested or accurately maintain required records is prima facie evidence of non-compliance.

(m) [(n)] In verifying that [the certificate holder is maintaining] food service is being maintained at the location [as the primary business on the premises], the commission may examine all books, papers, records, documents, supplies and equipment of the certificate holder.

(n) [(o)] The following recordkeeping requirements apply to certificate holders [who hold a wine and beer retailer's permit, including railway cars and excursion boats, or a retail dealer's on-premise license]:

(1) records must be maintained to reflect separate totals for alcoholic beverage sales or service, food sales and other major sales categories at the location;

(2) purchase invoices must be maintained to reflect the total purchases of alcoholic beverages, food and other major purchase categories at the location;

(3) complimentary alcoholic beverages must be recorded and included in the total alcoholic beverage sales as if they were sold and clearly marked as being complimentary; and

(4) all records must be maintained for four years and made available to authorized representatives of the commission upon reasonable request.

(o) [(p)] In considering alcoholic beverage sales [for holders of mixed beverage permits, private club registration permits, private club exemption certificate permits and private club beer and wine permits], the dollar value of complimentary drinks shall be added to total sales or service of alcoholic beverages in determining the percentage of alcoholic beverage sales or service on the licensed premises.

(p) [(q)] In determining the permanent food service facilities requirement [primary business of retail dealer's on-premise licenses and wine and beer retailer's permits] under subsection (f)(2) [(3)], the gross receipts of all business entities sharing the location [premise] (as identified in the original or a supplemental application) will be considered. For audit purposes, it shall be the responsibility of the food and beverage certificate holder to provide financial and accounting records related to food, [and] alcohol, and other major sales categories of all business entities sharing the location. For audit purposes, if such information that is provided is deemed insufficient to determine if a permit or license holder qualifies for issuance of a food and beverage certificate at the location, the computation and determination of the percentage of alcohol sales or service fees to total gross receipts at the licensed location may be based upon any available records or information. [licensed premise.]

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 September 27, 2017.

TRD-201703874

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 206-3489


CHAPTER 45. MARKETING PRACTICES

SUBCHAPTER C. STANDARDS OF IDENTITY FOR MALT BEVERAGES

16 TAC §45.71

The Texas Alcoholic Beverage Commission proposes amendments to §45.71, relating to Definitions.

House Bill No. 2299, 85th Regular Session of the Texas Legislature amended Alcoholic Beverage Code §101.67 regarding testing of malt beverages to verify alcohol content. Prior to the House Bill No. 2299 amendments, such testing had to be conducted by an independent, reputable laboratory or by the commission. The amendments deleted the reference to the reputation of independent laboratories, and added another category of laboratories eligible to verify alcohol content, i.e., laboratories certified by the U.S. Alcohol and Tobacco Trade Bureau as qualified for the analysis of beer for export.

The proposed amendments to rule §45.71 would conform the rule to Alcoholic Beverage Code §101.67 by deleting the reference to reputation in the definition of an independent laboratory, and by adding a definition of qualified laboratory.

In addition to amending the rule to reflect the recent legislative change, the commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses and small businesses or persons regulated by the commission. There is no anticipated negative impact on local employment.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rule will accurately reflect the applicable provision of the Alcoholic Beverage Code.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, or by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Thursday, October 26, 2017, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code.

The proposed amendments affect Alcoholic Beverage Code §§5.31 and 101.67, and Government Code §2001.039.

§45.71.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Beer--A malt beverage containing one half of one percent or more of alcohol by volume and not more than 4.0% of alcohol by weight.

(2) Bottler--Any person who places malt beverages in containers.

(3) Brand label--The label carrying, in the usual distinctive design, the brand names of the malt beverage.

(4) Container--Any can, bottle, barrel, keg, or other closed receptacle, irrespective of size or of the material from which made, for use for the sale of malt beverages at retail. This provision does not in any way relax or modify §1.04(18) of the Alcoholic Beverage Code.

(5) Domestic malt beverages--A malt beverage manufactured in the United States.

(6) Gallon--United States gallon of 231 cubic inches of malt beverages at 39.2 degrees Fahrenheit (4 degrees Celsius). All other liquid measures used are subdivisions or multiples of the gallon as so defined.

(7) Independent laboratory--A laboratory that [which has a good reputation in the industry and] is not affiliated with the Texas Alcoholic Beverage Commission or with any entity regulated by the Texas Alcoholic Beverage Commission.

(8) Malt beverage--A beverage made by the alcoholic fermentation of an infusion or decoction, or combination of both, in potable brewing water, of malted barley with hops, or their parts, or their products, and with or without other malted cereals, and with or without the addition of unmalted or prepared cereals, other carbohydrates or products prepared therefrom, and with or without the addition of carbon dioxide, and with or without other wholesome products suitable for human consumption.

(9) Malt liquor--Any malt beverage containing more than 4.0% of alcohol by weight. In this subchapter, "malt liquor and "ale" have the same meaning.

(10) Qualified laboratory--A laboratory referenced in Alcoholic Beverage Code §101.67(a)(1)(B) that is equipped to perform all analyses required by the United States Alcohol and Tobacco Tax and Trade Bureau (TTB), or its successor agency, for beer to be certified for export and employs an individual who is certified by TTB to perform or supervise those required analyses.

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 September 27, 2017.

TRD-201703859

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 206-3489


16 TAC §45.85

The Texas Alcoholic Beverage Commission proposes amendments to §45.85, relating to Approval of Labels.

House Bill No. 2299, 85th Regular Session of the Texas Legislature amended Alcoholic Beverage Code §101.67, regarding testing of malt beverages to verify alcohol content. Prior to the House Bill No. 2299 amendments, such testing had to be conducted by an independent, reputable laboratory or by the commission. The amendments deleted the reference to the reputation of independent laboratories, and added another category of laboratories eligible to verify alcohol content, i.e., laboratories certified by the U.S. Alcohol and Tobacco Trade Bureau as qualified for the analysis of beer for export.

The proposed amendments to rule §45.85 would conform the rule to Alcoholic Beverage Code §101.67 by adding test results from qualified laboratories to those of independent laboratories which may be submitted in lieu of submitting a product sample in connection with an application for the approval of a label for a malt beverage.

In addition to amending the rule to reflect the recent legislative change, the commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses and small businesses or persons regulated by the commission. There is no anticipated negative impact on local employment.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rule will accurately reflect the applicable provision of the Alcoholic Beverage Code.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, or by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Thursday, October 26, 2017, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §101.67, and Government Code §2001.039.

§45.85.Approval of Labels.

(a) No beer, ale or malt liquor may be shipped into the state, imported into the state, manufactured and offered for sale in the state, or distributed, sold or stored in the state until a sample of the beverage has been analyzed and the label approved by the commission.

(b) An applicant for label approval under this section must hold a brewer's or non-resident brewer's permit, a manufacturer's or non-resident manufacturer's license, or a brewpub license issued by the commission.

(c) An applicant must submit to the commission an application on the form prescribed by the commission and a $25 application fee for each size requested on the application. The application must be accompanied by:

(1) a legible copy of the certificate of label approval issued by the United States Department of the Treasury; and

(2) an actual label that is affixed to the product as shipped, sold, or marketed, or an exact color copy of the label.

(d) A sample of the beverage must be submitted to the commission for analysis to verify alcohol content. A product analysis provided by an independent laboratory or a qualified laboratory may be submitted in lieu of the actual sample. If an application is for a label revision, a sample of the beverage must be submitted to the commission for analysis to verify alcohol content if the analysis on file is older than 5 years. A product analysis provided by an independent laboratory or a qualified laboratory may be submitted in lieu of the actual sample if the analysis on file is older than 5 years.

(e) Permissible Label Revisions. An application for label approval is a permissible revision or amendment if it includes only the changes described in paragraphs (1) - (9). All mandatory label information must be legible and appear on a contrasting background. Any changes made under this section must not violate this subchapter of the Alcoholic Beverage Code, and must conform to the general requirements specified by this subchapter. Any changes in spelling must not change the meaning of the previously approved label

(1) Add or delete any non-mandatory label information, including text, illustrations, graphics, and ingredients.

(2) Reposition any label information, including text, illustrations, and graphics.

(3) Change the color of the background or text, the shape, or the proportionate size of labels.

(4) Change the type size or font or make appropriate changes to the spelling (including punctuation marks and abbreviations) of words.

(5) Change to the type of container or net contents statement.

(6) Add, delete, or change optional information referencing awards, medals or a rating or recognition provided by an organization as long as the rating or recognition reflects simply the opinion of the organization and does not make a specific substantive claim about the product or its competitors.

(7) Add, delete, or change holiday or seasonal-themed graphics, artwork, or salutations.

(8) Add, delete, or change promotional sponsorship-themed graphics, logos, artwork, dates, event locations or other sponsorship-related information.

(9) Add, delete or change references to a year or date.

(f) This section implements Alcoholic Beverage Code §101.41 and §101.67, pursuant to the requirements of Alcoholic Beverage Code §5.38 and the authority of Alcoholic Beverage Code §5.31.

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 September 27, 2017.

TRD-201703861

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 206-3489


PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 85. VEHICLE STORAGE FACILITIES

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 85, §§85.201, 85.204, 85.206, 85.450, 85.451, 85.650, 85.703, 85.704, 85.722, 85.800 and 85.1003; and proposes the repeal of §85.205 and §85.452, regarding the Vehicle Storage Facilities program.

The Texas Legislature enacted Senate Bill 1501, Senate Bill 2065, House Bill 1247 and House Bill 2615, 85th Legislature, Regular Session (2017). Collectively these bills remove fencing requirements; eliminate dual licensure and associated fees; eliminate periodic and risk-based inspections and associated fees; relax certain signage requirements; as well as clarify required notices and databases; and update the advisory board composition. The proposed amendments and repeals are necessary to implement the legislative changes.

The Towing and Storage Advisory Board met on September 22, 2017, to review a draft of these proposed rules and recommended publishing in the Texas Register.

The proposed amendments to §85.201 remove fencing requirements in the licensure process.

The proposed amendments to §85.204 eliminate dual licensure and allow a person to work at a VSF if they have meet one of 4 criteria.

The proposed repeal of §85.205 eliminates dual licensure requirements.

The proposed amendments to §85.206 eliminate dual licensure.

The proposed amendments to §85.450 remove risk based inspections from general inspection rules.

The proposed amendments to §85.451 remove periodic inspections.

The proposed repeal of §85.452 removes language relating to risk based inspections.

The proposed amendments to §85.650 change the composition of the advisory board.

The proposed amendments to §85.703 relate to notice requirements and databases that must be used to find vehicle owners, lien holders, etc.

The proposed amendments to §85.704 relate to the second notice requirement.

The proposed amendments to §85.722 clean up the language to bring it in line with other rules.

The proposed amendments to §85.800 eliminates fees related to dual licensure and risk-based inspections.

The proposed amendments to §85.1003 relax some of the signage requirements.

Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed rules are in effect, the effect on state costs and revenue is as follows:

The elimination of providing fence height in §85.201 will not affect state costs and revenue. A Vehicle Storage Facility (VSF) is still required to have a fence, but the applicant does not need to include the dimensions of the fence as part of the application process.

There is no effect on local government costs and revenue.

The elimination of dual licensure in §§85.204 - 85.206 will not affect state costs and revenue. An anticipated decrease in revenue will occur in the TOW Program while the VSF Program remains unaffected.

There is no effect on local government costs and revenue.

The elimination of risk-based and periodic inspections in §§85.450 - 85.452 will not affect state costs and revenue. No risk-based inspections have ever been performed, or charged for, in the VSF Program.

There is no effect on local government costs and revenue.

The composition of the Advisory Board in §85.650; the relaxing of signage requirements in §85.1003; and the elimination of fees related to dual licensure and risk-based inspections in §85.800 will not affect state costs and revenue.

There is also no effect on local government costs and revenue.

Notice requirements and mandated use of particular databases to find vehicle owners and lien holders in §85.703 and §85.704, as well as the clean-up of rules relating to storage fees and other charges in §85.722 will not likely affect state or local costs and revenue.

There may be less revenue for local or state governmental entities if a VSF uses an authorized private entity to obtain information related to a vehicle owner or operator and if the private entity charges less than the governmental entity would have for the same service. However, there may not be any actual loss if the authorized private entity charges an amount equal to or above the government entity. In that instance, there is no financial incentive to use a private entity.

Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, there is no direct benefit to the public. The proposed rules relate to the internal operation of licensed VSFs and the Advisory Board only. These rules do not present a direct benefit or loss to the public.

Mr. Francis has determined that for each year of the first five-year period the proposed rules are in effect, there is no impact on small and micro-business or rural communities.

Proposed rules §85.703 and §85.704 may have an unknown fiscal impact on VSFs who do not timely send notices to vehicle owners and operators. VSFs in violation of the notice requirements will lose daily storage fee revenues until such time as a late notice is sent. However, loss of daily storage fee revenues can be minimized or entirely avoided by a VSFs timely compliance with notice requirements.

Additionally, the elimination of notice provided by VSFs to law enforcement in instances of abandoned vehicles may save VSFs a $10 notification fee per vehicle. However, it is noted that law enforcement agencies do not accept or actively enforce the payment of the fee. Therefore, an accurate assessment of how much money VSFs may save, if any, is unknown.

Since the agency has determined that the rule will have no adverse economic effect on small or micro businesses preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

Texas Government Code §2001.0045 requires state agencies to determine if a proposed rule has a fiscal impact that imposes a cost on regulated persons, including another state agency, a special district, or a local government.

Mr. Francis has determined that none of the proposed rules will impose costs on regulated persons, including another state agency, a special district, or a local government.

Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) 475-3032, or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

16 TAC §§85.201, 85.204, 85.206, 85.450, 85.451, 85.650, 85.703, 85.704, 85.722, 85.800, 85.1003

The amendments are proposed under Texas Occupations Code, Chapters 51 and 2303, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51 and 2303. No other statutes, articles, or codes are affected by the proposal.

§85.201.License Requirements--Vehicle Storage Facility License.

To be eligible for a VSF license, an applicant must:

(1) - (9) (No change.)

(10) state the VSF's storage capacity;

[(11) state the height of any fence enclosing the VSF and the date it was installed;]

(11) [(12)] include a statement indicating whether the facility has an all weather surface, signs posted in the proper locations, and lighting, as required by these rules; and

(12) [(13)] adopt the model drug testing policy provided in these rules or file an alternate drug testing policy for approval under these rules.

§85.204.License Requirements--Vehicle Storage Facility Employee License.

(a) To be eligible for a VSF employee license, an applicant must:

(1) submit a completed application on a department-approved form;

(2) pay the fee required under §85.800;

(3) successfully pass a criminal background check; and

(4) if the applicant for renewal has within the preceding 12-month period tested positive for drugs under §85.725, the applicant must submit a negative drug test to the department.

(b) A person may not work at a VSF unless the individual holds: [a license issued under this chapter. A VSF may not employ a person unless the person holds a license issued by the department.]

(1) a license issued under this chapter;

(2) an incident management towing operator's license under §2308.153;

(3) a private property towing operator's license under §2308.154; or

(4) a consent towing operator's license under §2308.155.

(c) A VSF may not employ a person to work at the VSF unless the person holds a license issued under this chapter or under Chapter 86.

(d) [(c)] For purposes of this chapter, persons operating or managing a VSF as a sole proprietor or other unincorporated business organization are employees of the VSF and required to obtain a VSF employee license or otherwise be licensed under this chapter or under Chapter 86. §85.206.License Requirements--Vehicle Storage Facility Employee License Renewal[; Dual Vehicle Storage Facility Employee and Towing Operator License].

(a) To renew a VSF employee license [or dual VSF employee and towing operator license,] an applicant must:

(1) submit a completed application on a department-approved form;

(2) pay the applicable fee required under §85.800;

(3) successfully pass a criminal background check; and

(4) if the applicant for renewal has within the preceding 12-month period tested positive for drugs under §85.725, the applicant must submit a negative drug test to the department.

(b) - (c) (No change.)

§85.450.Inspections--General.

(a) All VSFs shall be inspected periodically[, according to a risk-based schedule,] or as a result of a complaint. These inspections will be performed to determine compliance with the requirements of the Act and these rules. In addition, the department may make information available to VSF owners and managers on best practices for risk-reduction techniques.

(b) - (d) (No change.)

§85.451.Periodic Inspections.

(a) - (d) (No change.)

[(e) Based on the results of the periodic inspection, a VSF may be moved to a risk-based schedule of inspections. The department will notify the owner of the VSF, in writing, if the facility becomes subject to the risk-based inspection schedule and the scheduled frequency of inspection.]

§85.650.Towing and[,] Storage[, and Booting] Advisory Board.

(a) The advisory board consists of the nine [ten] members appointed by the chairman of the commission with the approval of the commission. The nine [ten] members include:

(1) one representative of a towing company operating in a county with a population of less than one-million;

(2) one representative of a towing company operating in a county with a population of one-million or more;

(3) one representative [owner] of a vehicle storage facility located in a county with a population of less than one-million;

(4) one representative [owner] of a vehicle storage facility located in a county with a population of one-million or more;

(5) one peace [law enforcement] officer from a county with a population of less than one-million;

(6) one peace [law enforcement] officer from a county with a population of one-million or more;

(7) one parking facility representative [owner];

(8) one representative of a member insurer, as defined by §462.004, Insurance Code, of the Texas Property and Casualty Insurance Guaranty Association who writes [property and casualty insurers who write] automobile insurance in this state; and

(9) one person who operates both a towing company and a vehicle storage facility. [one member of a booting company; and]

[(10) one public member.]

(b) - (g) (No change.)

§85.703.Responsibilities of Licensee--Notice to Vehicle Owner or Lienholder.

(a) [Applicability.] If a vehicle is removed by the vehicle owner or authorized representative within 24 hours after the VSF receives the vehicle, notification as described in subsections (b) - (j) [(i)] does not apply.

(b) The registered [Notification to owners of registered vehicles. Registered] owners and lien holders of a vehicle accepted at a VSF [towed vehicles] shall be notified in the following manner.

(1) If [Vehicles registered in Texas. After accepting for storage] a vehicle is registered in Texas, the VSF shall notify the vehicle's current registered owner and primary lien holder by certified mail, return receipt requested, registered, or electronic certified mail, within five days, but in no event sooner than within 24 hours of receipt of the vehicle.

(2) If [Vehicles not registered in Texas. After accepting for storage] a vehicle is not registered in Texas, the VSF shall notify the vehicle's [current] registered owner and all recorded lien holders within 14 days, but [in] no [event] sooner than within 24 hours of receipt of the vehicle.

(c) The operator of a VSF shall send the notice required by subsection (b)(1) and (2) to an address obtained by mail or electronically from:

(1) The governmental entity responsible for maintaining the motor vehicle title and registration database for the state in which the vehicle is registered or

(2) A private entity authorized by the governmental entity to obtain title, registration, and lienholder information using a single vehicle identification number search obtained through a secure access portal to the government entity's motor vehicle records.

[(c) It is a defense to an action initiated by the department for violation of this section that the facility has attempted unsuccessfully and in writing or electronically to obtain information from the governmental entity with which the vehicle is registered by requesting the names and addresses of registered owners and lien holders based on the license plate number and vehicle identification number.]

(d) [Date of notification.] Notification has [will be considered to have] occurred when the United States Postal Service places its postmark on the return receipt and is [to be] timely [filed] if:

(1) the postmark indicates that the notice was mailed within the period described by subsection (a) or (b); or

(2) the notice was published as provided for by subsection (f) [(e)].

(e) If a VSF sends a notice required under this section after the time mandated by subsection (b)(1) or (2):

(1) The deadline for sending any subsequent notice is based on the date that notice was actually sent to the vehicle owner and any lien holders;

(2) A VSF may not charge the daily storage fee permissible under Tex. Occ. Code §2303.155(b)(3) until 24 hours after it has sent the notice required under this section.

(f) [(e)] [Notice by publication. ] Notice required under this section [to the registered owner and the primary lienholder of a vehicle towed to a VSF] may be completed [provided] by publication in a newspaper of general circulation in the county in which the vehicle is stored if:

(1) the vehicle is registered in another state;

(2) the VSF [operator of the storage facility] submits to the governmental entity that is responsible for maintaining the motor vehicle title and registration database for the state in which the vehicle is registered, or to a private entity that is authorized by the governmental entity to access title, registration, or lienholder information, [with which the vehicle is registered] a written or electronic request for information relating to the identity of the registered owner and any lienholder of record.

(3) If mailed, such requests shall be correctly addressed, with sufficient postage, and sent by certified mail, or electronic certified mail, return receipt requested, to the governmental entity with which the vehicle is registered requesting information relating to the identity of the last known registered owner and any lienholder of record.

(4) [(3)] the identity of the registered owner cannot be determined;

(5) [(4)] the registration does not contain an address for the registered owner; or

(6) [(5)] the operator of the storage facility cannot reasonably determine the identity and address of each lienholder.

(g) [(f)] Notice by publication is not required if each notice sent in accordance with this section [subsection (b)] is returned because:

(1) the notice was unclaimed or refused; or

(2) the person to whom the notice was sent moved without leaving a forwarding address.

(h) [(g)] Only one notice is required to be published for an abandoned nuisance vehicle.

(i) [(h)] [Form of notifications. ] All mailed notifications must be correctly addressed; mailed with sufficient postage; and sent by certified mail, return receipt requested, registered, or electronic certified mail.

(1) All mailed notifications shall state:

(A) the full licensed name of the VSF where the motor vehicle is located, its street address and telephone number, and the hours the vehicle can be released to the vehicle owner;

(B) the daily storage rate, the type and amount of all other charges assessed, and the statement, "Total storage charges cannot be computed until vehicle is claimed. The storage charge will accrue daily until vehicle is released";

(C) the first date for which a storage fee is assessed;

(D) the date the vehicle will be transferred from the VSF and the address to which the vehicle will be transferred if the operator will be transferring a vehicle to a second lot because the vehicle has not been claimed within a certain time;

(E) the date the vehicle was accepted for storage and from where, when, and by whom the vehicle was towed;

(F) the VSF license number preceded by the words "Texas Department of Licensing and Regulation Vehicle Storage Facility License Number" or "TDLR VSF Lic. No.";

(G) a notice of the towed vehicle owner's right under the Texas Occupations Code, Chapter 2308, to challenge the legality of the tow involved; and

(H) the name, mailing address, and toll-free telephone number of the department for purposes of directing questions or complaints.

(2) All published notifications shall state:

(A) the full name, street address, telephone number, and VSF license number [of the VSF], and the Department's internet address;

(B) a description of the vehicle; and

(C) the total amount of charges assessed against the vehicle.

(3) Notices published in a newspaper may contain information for more than one towed vehicle.

(j) [(i)] If authorized, a notification fee may not be charged unless actual notice has been given as required under this section. [the notification is actually sent or performed before the vehicle is released.]

§85.704.Responsibilities of licensee--Second Notice; Consent to Sale.

[(a) If a vehicle is not claimed by a person permitted to claim the vehicle or is not taken into custody by a law enforcement agency under Chapter 683, Transportation Code, before the 15th day after the date notice is mailed or published under §85.703, the operator of the VSF shall send a second notice to the registered owner and the primary lienholder of the vehicle.]

(a) [(b)] If a vehicle is not claimed by a person permitted to claim the vehicle before the 10th day after the date notice is mailed or published under §85.703, the operator of the VSF shall consider the vehicle to be abandoned and, if required by the law enforcement agency with jurisdiction where the vehicle is located, must report the [send notice of] abandonment to the [a] law enforcement agency. If the law enforcement agency notifies the VSF that the agency will send notices and dispose of the abandoned vehicle under Subchapter B, Chapter 683, Transportation Code, the VSF shall pay the fee required under §683.031, Transportation Code.

(b) If the vehicle is not claimed, the second notice shall be sent no earlier than the 15th day, and no later than the 21st day, after the date the first notice is mailed or published under §85.703. The operator of a VSF shall send a second notice to the registered owner and each recorded lienholder of the vehicle if the facility:

(1) was not required to make a report under subsection (a); or

(2) has made a required report under subsection (a) and the law enforcement agency:

(A) has notified the facility that the law enforcement agency will take custody of the vehicle;

(B) has not taken custody of the vehicle; or

(C) has not responded to the report.

(c) If the VSF sends a second notice after the 21st day on which the first notice was mailed or published, it may not charge a daily storage fee authorized under §85.722(d) until 24 hours after the second notice is mailed or published.

(d) [(c)] Notice under this section must include:

(1) the information listed in §85.703(h)(1)(A) - (H);

(2) a statement of the right of the facility to dispose of the vehicle under subsections (a) and (b);

(3) a statement that the failure of the owner or lienholder to claim the vehicle and personal property before the 30th day after the date the notice if provided is:

(A) a waiver by that person of all right, title, or interest in the vehicle and personal property; and

(B) a consent to the sale of the vehicle at a public sale.

(e) [(d)] Notwithstanding subsection (a) [(b)], if publication is required for notice under this section, the notice must include:

(1) the information listed in §85.703(h)(2); and

(2) a statement that the failure of the owner or lienholder to claim the vehicle before the date of the sale is:

(A) a waiver of all right, title, and interest in the vehicle;

(B) and a consent to the sale of the vehicle at a public sale.

(f) [(e)] The operator shall pay any excess proceeds to the person entitled to those proceeds.

§85.722.Responsibilities of Licensee--Storage Fees and Other Charges.

(a) For the purposes of this section, "VSF [operator]" includes a garage, parking lot, or other facility that is:

(1) owned by a governmental entity; and

(2) used to store or park at least 10 vehicles each year.

(b) (No change.)

(c) Notification fee.

(1) A VSF may not charge a vehicle owner or authorized representative more than $50 for notification under these rules. If a notification must be published, and the actual cost of publication exceeds 50% of the notification fee, the VSF [operator] may recover the additional amount of the cost of publication. The publication fee is in addition to the notification fee.

(2) If a vehicle is removed by the vehicle owner or authorized representative within 24 hours after the date the VSF receives the vehicle, notification is not required by these rules.

(3) If a vehicle is removed by the vehicle owner or authorized representative before notification is sent or within 24 hours from the time VSF receives the vehicle, the VSF [operator] may not charge a notification fee to the vehicle owner.

(d) Daily storage fee. A VSF [operator] may not charge less than $5.00 or more than $20 for each day or part of a day for storage of a vehicle that is 25 feet or less in length. A VSF [operator] shall charge a fee of $35 for each day or part of a day for storage of a vehicle that exceeds 25 feet in length.

(1) A daily storage fee may be charged for any part of the day, except that a daily storage fee may not be charged for more than one day if the vehicle remains at the VSF less than 12 hours. In this paragraph a day is considered to begin and end at midnight.

(2) A VSF that has accepted into storage a vehicle registered in this state shall not charge for more than five days of storage fees until a notice, as prescribed in §85.703 of these rules, is mailed or published.

(3) A VSF [operator] that has accepted into storage a vehicle not registered in Texas shall not charge for more than five days of storage before the date the request for owner information is sent to the appropriate governmental entity or to the private entity authorized by that governmental entity to obtain title, registration, and lienholder information using a single vehicle identification number inquiry. [Such requests shall be correctly addressed, with sufficient postage, and sent by certified mail, or electronic certified mail, return receipt requested, to the governmental entity with which the vehicle is registered requesting information relating to the identity of the last known registered owner and any lienholder of record.]

(4) A VSF [operator] shall charge a daily storage fee after notice, as prescribed in §85.703, is mailed or published for each day or portion of a day the vehicle is in storage until the vehicle is removed and all accrued charges are paid.

(e) Impoundment fee. A VSF [operator] may charge a vehicle owner or authorized representative an impoundment [Impoundment] fee not to exceed $20. [if Impoundment is performed in accordance with these rules. The Impoundment fee may not exceed $20.] If the VSF [operator] charges a fee for impoundment [Impoundment], the written bill for services must specify the exact services performed for that fee and the dates those services were performed.

(f) Governmental or law enforcement fees. A VSF [operator ] may collect from a vehicle owner or authorized representative any fee that must be paid to a law enforcement agency, the agency's authorized agent, or a governmental entity.

(g) Environmental hazard fee. A VSF [operator] may collect from a vehicle owner or authorized representative a fee in an amount set by the commission for the remediation, recovery, or capture of an environmental or biological hazard.

(h) Additional fees. A VSF [operator] may not charge additional fees related to the storage of a vehicle other than fees authorized by these rules or a nonconsent-towing fee authorized by Texas Occupations Code, §2308.2065.

§85.800.Fees.

(a) Application fees.

(1) - (2) (No change.)

[(3) Dual Vehicle Storage Facility and Tow Operator License]

[(A) Original Application--$150]

[(B) Expedited Dual License--$75]

[(C) Renewal--$150]

(b) (No change.)

[(c) Risk-based Inspections--$150]

(c) [(d)] Late renewals fees for licenses under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees).

(d) [(e)] All fees are nonrefundable [except as provided for by commission rules or statute].

§85.1003.Technical Requirements--Storage Lot Signs.

(a) Facility information. All VSFs shall have a clearly visible and readable sign located at the [its] main entrance. The [Such] sign shall have letters at least 2 inches in height, with a contrasting background, [shall] be readable [visible] at 10 feet, and [shall] contain the following information:

(1) the registered name of the storage lot, as it appears on the VSF license;

(2) street address;

(3) the telephone number for the owner to contact in order to obtain release of the vehicle;

(4) the facility's hours, within one hour of which vehicles will be released to vehicle owners; and

(5) the storage lot's state license number preceded by the phrase "VSF License Number."

(b) (No change.)

(c) Nonconsent towing fees schedule. All VSFs shall [conspicuously] place a clearly visible and readable sign where payment to the VSF is made[, at the place of payment,] which states [in 1-inch letters that]:

(1) "Nonconsent tow fees schedules available on request." The VSF shall provide a copy of a nonconsent towing fees schedule on request; and

(2) The nonconsent towing fees provided for viewing and to the vehicle owner or representative must match the nonconsent towing fees authorized by this chapter or Texas Occupations Code §2308.2065.

(d) - (f) (No change.)

[(g) A vehicle storage facility accepting a nonconsent towed vehicle shall post a sign in one inch letters stating "Nonconsent tow fee schedules available on request." The vehicle storage facility shall provide a copy of a nonconsent towing fee schedules on request.]

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

Filed with the Office of the Secretary of State on October 2, 2017.

TRD-201703973

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 463-3306


16 TAC §85.205, §85.452

The repeals are proposed under Texas Occupations Code, Chapters 51 and 2303, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51 and 2303. No other statutes, articles, or codes are affected by the proposal.

§85.205.Licensing Requirements--Dual Vehicle Storage Facility Employee and Towing Operator License.

§85.452.Risk-based Inspections.

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

Filed with the Office of the Secretary of State on October 2, 2017.

TRD-201703974

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 463-3306


CHAPTER 86. VEHICLE TOWING AND BOOTING

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 86, §§86.10, 86.450, 86.451, 86.650, 86.705 and 86.800; and proposes the repeal of §§86.212, 86.213, and 86.452, regarding the Vehicle Towing and Booting program.

The Texas Legislature enacted Senate Bill 1501, Senate Bill 2065, and House Bill 2615 during the 85th Legislature, Regular Session (2017). Collectively, these bills eliminate dual licensure and the towing operator training license, as well as the associated fees. They also eliminate risk-based inspections; establish guidelines for towing in an apartment complex; and update the advisory board composition. The proposed amendments and repeals are necessary to implement the legislative changes mandated by these statutes.

The Towing and Storage Advisory Board met on September 22, 2017, to review a draft of these proposed rules and recommended publishing in the Texas Register.

The proposed amendments to §86.10 update the name of the advisory board, removes the definition of Property Owner's Association, and renumber the section accordingly.

The proposed repeal of §86.212 eliminates dual licensure and its associated requirements.

The proposed repeal of §86.213 eliminates the towing operator training license and its associated requirements.

The proposed amendments to §86.450 remove references to the risk-based inspection schedule.

The proposed amendments to §86.451 remove reference to risk-based inspections.

The proposed repeal of §86.452 eliminates risk-based inspections.

The proposed amendments to §86.650 update the composition of the advisory board.

The proposed amendments to §86.705 create rules relating to towing in an apartment complex for repairs or renovations to the parking facility.

The proposed amendments to §86.800 remove dual licensure and tow operator training license fees.

Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed new rules are in effect, the financial impact will be as follows:

Repeal of dual licensure pursuant to §§86.212, 86.213, and 86.800 will result in a net loss to the State in revenue of $191,350 in the first year; $208,550 in the second year; $227,300 in the third year; $2476, 800 in the fourth year; and $270,100 in the fifth year.

There is no anticipated fiscal impact on local government costs and revenue.

Repeal of risk-based inspections and associated requirements pursuant to §§86.450, 86.451, and 86.452 will have no effect on state or local government costs and revenue.

The remaining rule amendments relating to §§86.10, 86.650, and 86.705 will have no effect on state or local government costs and revenue.

Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, the public will benefit by the creation of rules in §86.705 relating to an apartment complex's ability to tow cars to another location within the complex's parking facility in the event that the facility requires repairs or renovations.

The public will benefit because vehicle owners and operators will no longer have to travel to an off-site Vehicle Storage Facility (VSF) to obtain vehicles towed because of repairs or renovations to the parking facility; will no longer have to pay VSF fees; will have tow fees capped at $50; and cannot be charged for tows necessitated by emergency repairs to the parking facility.

The remaining rules have no effect on the public.

Mr. Francis has determined that for each year of the first five-year period the proposed new rules are in effect, the elimination of dual licensure in §86.212 and the tow operator training license in §86.213 will allow each operator who previously obtained a dual license to save $50 a year on licensing fees.

He has also determined that there may be minimal costs to parking facility owners by the implementation of notice requirements to vehicle owners and operators in §86.705 and through possible off-sets to towing companies/operators who may only collect a limited tow fee directly from consumers. The tow fee is limited to an amount which cannot exceed 75 percent of the established private property tow fee for these types of tows.

Additionally, although §86.705 does not impose any costs on tow companies or operators, they could experience decreased revenue because of the above-mentioned cap on towing fees. VSFs may also see decreased revenue because they will no longer receive vehicles towed under this rule.

The effect on small and micro-business is unknown. A decrease in revenue to VSF's will depend on how many cars, if any, a VSF currently receives after tows from apartment complexes that are performed in furtherance of improvements and repairs.

Additionally, any decrease in revenue to tow companies or operators will depend on whether the tow companies or operators receive any off-sets from apartment complexes to compensate them for costs above 75 percent of the established private property tow fee. It also depends on whether there are contractual agreements between apartment complexes and tow companies/operators to tow within an apartment complex parking facility for a flat fee that does not exceed the cap.

Accordingly, although there might be some decreases in revenues to both VSFs and tow companies/operators, the decrease is speculative and an estimated dollar amount cannot be provided.

Mr. Francis has also determined that there will not be an adverse economic impact on rural communities. Rural communities do not regulate towing or vehicle storage.

Since the agency has determined that the rule will have an unknown and speculative adverse economic effect on small and micro business, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

Texas Government Code §2001.0045 requires state agencies to determine if a proposed rule has a fiscal impact that imposes a cost on regulated persons, including another state agency, a special district, or a local government.

Mr. Francis has determined that there is no cost on regulated persons, including another state agency, a special district or a local government by any of the proposed rules amendments and additions.

Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) 475-3032, or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

16 TAC §§86.10, 86.450, 86.451, 86.650, 86.705, 86.800

The amendments are proposed under Texas Occupations Code, Chapters 51 and 2308, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51 and 2308. No other statutes, articles, or codes are affected by the proposal.

§86.10.Definitions.

The following words and terms, when used in this chapter will have the following meanings, unless the context clearly shows otherwise:

(1) Advisory board--The Towing and [,] Storage[, and Booting] Advisory Board.

(2) - (18) (No change.)

[(19) Property owners' association--Has the meaning assigned by §202.001, Property Code.]

(19) [(20)] Public roadway--A public street, alley, road, right-of-way, or other public way, including paved and unpaved portions of the right-of-way.

(20) [(21)] Tow truck--A motor vehicle, including a wrecker, equipped with a mechanical device used to tow, winch, or otherwise move another motor vehicle. The term does not include:

(A) a motor vehicle owned and operated by a governmental entity, including a public school district;

(B) a motor vehicle towing:

(i) a race car;

(ii) a motor vehicle for exhibition; or

(iii) an antique motor vehicle;

(C) a recreational vehicle towing another vehicle;

(D) a motor vehicle used in combination with a tow bar, tow dolly, or other mechanical device if the vehicle is not operated in the furtherance of a commercial enterprise;

(E) a motor vehicle that is controlled or operated by a farmer or rancher and used for towing a farm vehicle; or

(F) a motor vehicle that:

(i) is owned or operated by an entity the primary business of which is the rental of motor vehicles; and

(ii) only tows vehicles rented by the entity.

(21) [(22)] Towing company--An individual, association, corporation, or other legal entity that controls, operates, or directs the operation of one or more tow trucks over a public roadway in this state but does not include a political subdivision of the state.

(22) [(23)] Towing operator--The person to which the department issued a towing operator license.

(23) [(24)] Unauthorized vehicle--A vehicle parked, stored, or located on a parking facility without the consent of the parking facility owner.

(24) [(25)] Vehicle--A device in, on, or by which a person or property may be transported on a public roadway. The term includes an operable or inoperable automobile, truck, motorcycle, recreational vehicle, or trailer but does not include a device moved by human power or used exclusively on a stationary rail or track.

(25) [(26)] Vehicle owner--A person:

(A) named as the purchaser or transferee in the certificate of title issued for the vehicle under Chapter 501, Transportation Code;

(B) in whose name the vehicle is registered under Chapter 502, Transportation Code, or a member of the person's immediate family;

(C) who holds the vehicle through a lease agreement;

(D) who is an unrecorded lienholder entitled to possess the vehicle under the terms of a chattel mortgage; or

(E) who is a lienholder holding an affidavit of repossession and entitled to repossess the vehicle.

(26) [(27)] Vehicle storage facility--A vehicle storage facility, as defined by Texas Occupations Code, §2303.002 that is operated by a person who holds a license issued under Texas Occupations Code, Chapter 2303 to operate the facility.

§86.450.Inspections--General.

(a) A towing company shall be inspected periodically[, according to a risk-based schedule,] or as a result of a complaint. These inspections are performed to determine compliance with the requirements of the Act and these rules. In addition, the department may make information available to licensees and managers on best practices for risk-reduction techniques.

(b) - (d) (No change.)

§86.451.Periodic Inspections.

(a) - (d) (No change.)

[(e) Based on the results of the periodic inspection, a towing company may be moved to a risk-based schedule of inspections. The department will notify the owner of the towing company, in writing, if the company becomes subject to the risk-based inspection schedule and the scheduled frequency of inspection.]

§86.650.Towing [,] and Storage [, and Booting] Advisory Board.

(a) The advisory board consists of the nine [ten] members appointed by the chairman of the commission with the approval of the commission. The nine [ten] members include:

(1) one representative of a towing company operating in a county with a population of less than one-million;

(2) one representative of a towing company operating in a county with a population of one-million or more;

(3) one representative [owner] of a vehicle storage facility located in a county with a population of less than one-million;

(4) one representative [owner] of a vehicle storage facility located in a county with a population of one-million or more;

(5) one peace [law enforcement] officer from a county with a population of less than one-million;

(6) one peace [law enforcement] officer from a county with a population of one-million or more;

(7) one parking facility representative [owner];

(8) one representative of a member insurer, as defined by §462.004, Insurance Code, of the Texas Property and Casualty Insurance Guaranty Association who writes [property and casualty insurers who write] automobile insurance in this state; and

(9) one person who operates both a towing company and a vehicle storage facility. [one member of a booting company; and]

[(10) one public member.]

(b) - (g) (No change.)

§86.705.Responsibilities of Towing Company--Standards of Conduct.

(a) - (m) (No change.)

(n) A vehicle owner or operator may request that the vehicle be taken to another location.

(o) if a parking facility serves an apartment complex or other residential housing for which parking is restricted to residents and guests, the owner or authorized agent of the parking facility may authorize vehicles to be towed from one location on the parking facility to another location on the same parking facility under the following rules:

(1) A vehicle may only be towed from one location on a parking facility to another location on the same parking facility to permit the parking facility owner to make repairs or improvements upon the parking facility or property served by the parking facility.

(2) Prior to a vehicle being towed and relocated by a towing company under this section, the parking facility shall provide written notice to all residents that repairs or improvements are planned. The notice shall be in conformity with Texas Property Code §92.0131(d). These rules do not affect any rights or obligations created by Texas Property Code §92.0131, nor allow possession of the vehicle to be withheld or impaired.

(3) The notice shall be provided at least 10 calendar days in advance and at a minimum state:

(A) the areas of the parking facility where parking is prohibited for the duration of repairs or improvements;

(B) the date and time after which vehicles may no longer be parked in the specified areas;

(C) the date and time when the areas will be available for parking in the future, or if not known, how residents will be notified that the areas are again available for parking after completion of repairs or improvements;

(D) that vehicles will be towed without the consent of the vehicle owner or operator and at their expense, if vehicles are parked in the designated areas at any time after notice is given and work is completed;

(E) the location at the same parking facility to which the vehicle will be moved;

(F) if the vehicle is towed from the designated area after the date and time provided in the notice and prior to the areas being reopened for parking, the tow fee charged to the vehicle owner or operator shall not exceed 75 percent of the private property tow fee established under Texas Occupations Code, Section 2308.0575;

(G) a telephone number for contacting the parking facility owner or authorized agent to enable a person to recover a vehicle which has been relocated under this section.

(4) Except when repairs or improvements are immediate and unforeseeable, or as authorized by a peace officer, a vehicle may not be towed and relocated within a parking facility or on parking facility property without actual written notice to every affected resident as mandated in this section.

(5) If, due to an immediate and unforeseeable need to make repairs or improvements, it is not possible to give 10 calendar days written notice, each affected resident shall receive written notice as soon as the need for repairs or improvements is known.

(6) The owner or operator of any authorized vehicle which is towed from one location on a parking facility to another location on the same parking facility without 10 days written notice may not be charged for the tow.

(7) The towing company and tow truck operator performing the relocation of vehicles within a parking facility are responsible for creating and maintaining a tow ticket for each vehicle relocated under this section as required by law. In addition to §86.705(g) and §86.709, the tow ticket shall state the name of the individual who authorized the vehicles relocation and the date when the parking facility or authorized agent gave notice to the owner or operator of each vehicle relocated.

(8) A peace officer is authorized to direct the relocation of a vehicle from one location within a parking facility to another location within the parking facility to further public safety.

§86.800.Fees.

(a) Application Fees

(1) - (2) (No change.)

(3) Operator License

(A) Original Application--$100

(B) Renewal--$100

(C) Duplicate License--$25

(D) Operator License Amendment--$25

[(E) Training License--$25]

[(4) Dual Vehicle Storage Facility License and Towing Operator]

[(A) Original Application--$150]

[(B) Expedited Dual License--$75]

[(C) Renewal--$150]

[(b) Risk-based inspections--$150]

(b) [(c)] Late renewal fees for licenses and permits issued under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees).

(c) [(d)] All fees are nonrefundable except as provided for by commission rules or statute.

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

Filed with the Office of the Secretary of State on October 2, 2017.

TRD-201703975

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 463-3306


16 TAC §§86.212, 86.213, 86.452

The repeals are proposed under Texas Occupations Code, Chapters 51 and 2308, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51 and 2308. No other statutes, articles, or codes are affected by the proposal.

§86.212.Licensing Requirements--Dual Vehicle Storage Facility Employee and Towing Operator License.

§86.213.Licensing Requirements--Towing Operator Training License.

§86.452.Risk-based Inspections.

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

Filed with the Office of the Secretary of State on October 2, 2017.

TRD-201703976

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: November 12, 2017

For further information, please call: (512) 463-3306