TITLE 16. ECONOMIC REGULATION

PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 85. VEHICLE STORAGE FACILITIES

16 TAC §85.710

The Texas Department of Licensing and Regulation (Department) proposes amendments to an existing rule at 16 Texas Administrative Code (TAC), Chapter 85, §85.710, regarding the Vehicle Storage Facilities program. These proposed changes are referred to as "proposed rule."

EXPLANATION OF AND JUSTIFICATION FOR THE RULE

The rules under 16 TAC Chapter 85 implement Texas Occupations Code, Chapter 2303, Vehicle Storage Facilities.

The proposed rule is responsive to a Rule Petition submitted by The American Property & Casualty Insurance Association as received by the Department on January 25, 2021. The Rule Petition concerned pre-arranged shipping transactions and proposed a definition of those transactions in the applicable Vehicle Towing and Booting (TOW) rules. The Petition also asserted that a definition was necessary to "expedite the clearance and processing of damaged and destroyed vehicles" from licensed Vehicle Storage Facilities (VSF).

During further discussions, Petitioner asserted that the release of damaged and destroyed vehicles is delayed by some VSFs disputing the right of a person or entity authorized by vehicle owners to obtain release of a vehicle. This includes VSFs disputing the authority of insurance companies and their contracted tow operators, as well as salvage pool operators and their contracted tow operators, to obtain release. Petitioner asserts that the delay in releasing vehicles causes a chain reaction that subsequently leads to the delay in the processing of auto claims and payments to insured vehicle owners.

The Department thoroughly reviewed and discussed Petitioner's proposed rule definition. Staff determined that based on the problem described by Petitioner, the proposed definition in the TOW rules would not address or resolve the problem. However, staff determined that an amendment to existing VSF release rules found at 16 TAC §85.710 would.

Accordingly, an amendment to 16 TAC §85.710 is necessary for the following reasons:

i) The problem described by Petitioner relates to ongoing and pervasive issues with insurance companies and salvage pool operators obtaining the release of vehicles from some licensed VSFs. Petitioner's proposed definition in the TOW rules will not resolve issues concerning the release of vehicles because the TOW rules are not applicable to 16 TAC Chapter 85 and VSF licensees.

ii) The problem described by Petitioner relates to who is considered an "authorized representative" of a vehicle owner for purposes of obtaining a vehicle release. The proposed amendment clarifies that the entities or persons who are "authorized representatives" specifically include a vehicle owner's insurance company or designee; a salvage pool operator as defined in Texas Occupations Code, Chapter 2302; and any other person designated by the vehicle owner. This clarification effectively prevents a VSF from refusing to release, or from delaying the release of, vehicles when a person other than the vehicle owner is attempting to secure release.

iii) The rule amendment clarifies that VSFs must release vehicles when all requirements under the rules are met and eliminates confusion over whether VSFs may refuse release when an insurance company or salvage pool operator is acting on behalf of a vehicle owner.

The amendment to 16 TAC §85.710 is proposed pursuant to a Rule Petition received by the Department on January 25, 2021. This rule is submitted for filing and publication in the Texas Register in accordance with the Texas Administrative Procedures Act (APA), Chapter 20, §20.15(d). The proposed rule is in accordance with the requirement to initiate or deny rulemaking within 60 days of receipt of a Rule Petition.

SECTION-BY-SECTION SUMMARY

The proposed rule amends 16 TAC §85.710, Release of Vehicles, as follows: i) makes technical and grammatical corrections to bring the rule in line with preferred plain-language adopted by the Department; ii) clarifies that "vehicle operators" are among the list of persons to whom VSFs must release vehicles when all release requirements are met; iii) clarifies that if a Department approved form is used as an instrument of release, it must be completed; iv) clarifies that VSFs must release vehicles to a vehicle owner, vehicle operator, or authorized representative even if the address of the person securing the release does not match the address contained on the vehicle's title or registration; and v) clarifies that an "authorized representative" of a vehicle owner does include an insurance company or its designee; a salvage pool operator; or any other person designated by the vehicle owner.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

Tony Couvillon, Policy Research and Budget Analyst, has determined that for each year of the first five years the proposed rule is in effect, there are no estimated additional costs or reductions in costs to state or local government as a result of enforcing or administering the proposed rule.

Mr. Couvillon has determined that for each year of the first five years the proposed rule is in effect, there is no estimated increase or loss in revenue to the state or local government as a result of enforcing or administering the proposed rule.

Mr. Couvillon has determined that for each year of the first five years the proposed rule is in effect, enforcing or administering the proposed rule does not have foreseeable implications relating to costs or revenues of state governments.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. Couvillon has determined that the proposed rule will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code §2001.022.

PUBLIC BENEFITS

Mr. Couvillon has also determined that for each year of the first five-year period the proposed rule is in effect, the public benefit will be clarifying who is an authorized representative for purposes of the release of a stored vehicles, what instruments of release and forms of identification must be accepted for the required release of a stored vehicle, allowing vehicle owners, operators, and authorized representatives to obtain the release of a vehicle more easily and at less cost.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Couvillon has determined that for each year of the first five-year period the proposed rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURALCOMMUNITIES

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

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

The proposed rule does not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rule. For each year of the first five years the proposed rule will be in effect, the agency has determined the following:

1. The proposed rule does not create or eliminate a government program.

2. Implementation of the proposed rule does not require the creation of new employee positions or the elimination of existing employee positions.

3. Implementation of the proposed rule does not require an increase or decrease in future legislative appropriations to the agency.

4. The proposed rule does not require an increase or decrease in fees paid to the agency.

5. The proposed rule does not create a new regulation.

6. The proposed rule does not expand, limit, or repeal an existing regulation.

7. The proposed rule does not increase or decrease the number of individuals subject to the rule's applicability.

8. The proposed rule does not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

The Department has determined that no private real property interests are affected by the proposed rule and that the proposed rule does not restrict, limit, or impose a burden on an owner's rights to his or her private real property that would otherwise exist in the absence of government action. As a result, the proposed rule does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

PUBLIC COMMENTS

Comments on the proposed rule may be submitted electronically on the Department's website at https://ga.tdlr.texas.gov:1443/form/gcerules; by facsimile to (512) 475-3032; or by mail to Vanessa Vasquez, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The deadline for comments is 30 days after publication in the Texas Register.

STATUTORY AUTHORITY

The rule is proposed under Texas Occupations Code, Chapters 51 and 85, which authorize the Texas Commission of Licensing and Regulation, 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 proposed rule are those set forth in Texas Occupations Code, Chapters 51 and 85. No other statutes, articles, or codes are affected by the proposed rule.

§85.710.Release of Vehicles.

(a) Release of vehicles. The VSF must comply with the following requirements when releasing vehicles.

(1) The VSF must [shall] comply with all provisions of Texas Occupations Code, Chapter 2308, Subchapter J, relating to the rights of the owner of a stored vehicle, including providing the name, address, and telephone number of:

(A) each justice court in the county from which the vehicle was towed or, for booted vehicles, the county in which the parking facility is located, or the address of an Internet website maintained by the Office of Court Administration of the Texas Judicial System that contains the name, address, and telephone number of each justice court in that county; and

(B) the name, address and telephone number of the person or law enforcement agency that authorized the tow.

(2) The VSF must [shall] provide the owner or the owner's representative with a tow ticket. The tow ticket may be combined with a VSF Invoice, [;] provided[,] the combined tow ticket and VSF Invoice comply with the following requirements:

(A) tow charges must be separated from VSF storage charges and each category of charges must be preceded by a heading or label identifying the charges as "Tow Charges" or "Storage Charges";

(B) tow charges must appear on the combined statement of charges exactly as stated on the tow ticket prepared by the tow operator and provided to the VSF at the time the vehicle is presented for storage; and

(C) the combined statement of charges meet and contain all required elements of a separate VSF invoice and tow ticket, [;] provided the license number and name of the tow operator may be excluded.

(3) The VSF must release a vehicle to the owner, a vehicle operator, or an authorized representative when the owner, operator, or authorized representative pays all required fees at the location of a stored vehicle at any time between the hours listed on the facility information sign, as described in §85.1003; presents a Texas driver's license or other state or federally issued photo identification; and presents one of the following instruments of release: [The VSF shall allow the vehicle owner or authorized representative to obtain possession of the vehicle, including payment at the location of the stored vehicle, at any time between the hours listed on the facility information sign posted as described in §85.1003, upon payment of all fees due, presentation of valid identification (Texas drivers license or other state or federally issued photo identification), and upon presentation of:]

(A) a notarized power-of-attorney;

(B) a court order;

(C) a certificate of title;

(D) a tax collector's receipt and a vehicle registration renewal card accompanied by a conforming identification;

(E) name and address information corresponding to that contained in the files of the Texas Department of Motor Vehicles;

(F) a current automobile lease or rental agreement executed by the operator of the vehicle or a person holding a power of attorney executed by the person named in the lease agreement;

(G) appropriate identification of any state or federal law enforcement agency representative;

(H) a completed [the most recent version of a] department-approved form or electronic version of a department-approved form published on the department's website, www.tdlr.texas.gov; which the VSF must make available to the vehicle owner or person seeking possession of or access to the vehicle; or

(I) evidence of financial responsibility (insurance card), as required by Transportation Code §601.051, as an additional form of identification that establishes ownership or right of possession or control of the vehicle.

(4) A VSF must [may not refuse to] release a vehicle to the owner, a vehicle operator, or an authorized representative who [or operator of the vehicle or require a sworn affidavit of the owner or operator of the vehicle solely because the owner, or operator] presents valid photo identification issued by this state, another state, or a federal agency, even if the address that appears on the photo identification does not match [that includes a different address than] the address contained in the title and registration records of the vehicle.

(5) An authorized representative of an owner does include:

(A) the vehicle owner's insurance company or its designee;

(B) a salvage pool operator as defined in Texas Occupations Code, Chapter 2302; or

(C) any other person designated by the vehicle owner.

[(5) Paragraph (3) does not require a VSF to release a vehicle to the owner or operator of the vehicle if the owner or operator of the vehicle does not:]

[(A) pay the charges for services regulated under this chapter or Chapter 86 of this title, including charges for and associated with delivery or storage of the vehicle; and]

[(B) present valid photo identification issued by this state, another state, a federal agency or a foreign government].

(6) If a VSF [it] accepts vehicles 24 hours a day, the VSF must make [all VSFs shall have] vehicles available for release 24 hours a day and within one hour's notice.

(7) If a VSF does not accept vehicles 24 hours a day, the VSF [such facility] must have vehicles available for release within one hour between the hours of 8:00 a.m. and midnight, Monday-Saturday and from 8:00 a.m. to 5:00 p.m. on Sundays, except for nationally recognized holidays. It is not the intent of this section to require release of vehicles after midnight, and refusal to release after that time, even with notice after 11:00 p.m., is not a violation of this section.

(b) A VSF may not require an owner, operator or agent of an owner or operator of a vehicle to sign an authorization or release form to release the vehicle from the VSF if that form:

(1) changes the status of the law enforcement initiated tow from a nonconsent status to a consent tow status;

(2) changes the status of the storage resulting from a nonconsent tow from a nonconsent storage status to a consent storage status; or

(3) imposes any additional charges not regulated by the department.

(c) A person may not execute, submit or use a department-approved form or other document which contains a false, fictitious, dishonest, or fraudulent statement of a material fact used for the purpose of obtaining possession of or access to a motor vehicle stored by a facility licensed under Texas Occupations Code, Chapter 2303.

(1) For purposes of this section, a false, fictitious, dishonest, or fraudulent statement related to authorization from the vehicle owner to the person or entity named in the form or document is a material fact.

(2) Conduct found by the commission or the executive director by final order to have violated this section shall be deemed fraudulent and dishonest conduct.

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 March 26, 2021.

TRD-202101342

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: May 9, 2021

For further information, please call: (512) 463-3671