TITLE 43. TRANSPORTATION

PART 10. TEXAS DEPARTMENT OF MOTOR VEHICLES

CHAPTER 211. CRIMINAL HISTORY OFFENSE AND ACTION ON LICENSE

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code, (TAC) §211.1 and §211.2; repeal of §§211.3 - 211.6; and new §§211.10 - 211.13. The proposed amendments, repeals, and new sections are necessary to: organize the rules into two subchapters for consistency with other chapters in TAC Title 43, clarify the types of licenses to which the chapter applies, clarify which crimes relate to the duties and responsibilities of these license holders, delete duplicative language found in statute, conform rule language with statutory changes, clarify existing requirements, and modernize language and improve readability. Proposed language also conforms with Senate Bill (SB) 224, 88th Legislature, Regular Session (2023), which amended the Penal Code to add felony offenses involving damage to motor vehicles during the removal or attempted removal of a catalytic converter. The proposed language implements SB 2587, 89th Legislature, Regular Session (2025), which clarified the persons from whom the department could require a fingerprint-based criminal history background check; and SB 1080, 89th Legislature, Regular Session (2025), which added circumstances in which a state agency is required to revoke a license upon imprisonment of the license holder.

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

Occupations Code, Chapter 53 and §§2301.651, 2302.104, 2302.105, and 2302.108, and Transportation Code, §503.034 and §503.038 authorize the department and its board to investigate and act on a license application, or on a license, when a person has committed a criminal offense. Chapter 211 allows the department to maintain fitness standards for license holders with prior criminal convictions while implementing the legislature's stated statutory intent in Occupations Code, §53.003 to enhance opportunities for a person to obtain gainful employment after the person has been convicted of an offense and discharged the sentence for the offense.

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

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

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

The proposed rule amendments also conform with SB 1080, 89th Legislature, Regular Session (2025) which amended Occupations Code, §53.021 effective May 27, 2025, to add circumstances in which a state agency must revoke a license upon imprisonment of a license holder, and SB 2587, 89th Legislature, Regular Session (2025), which amended Government Code, §411.12511, effective September 1, 2025, and clarified which persons the department could obtain fingerprint-based criminal history record information.

Proposed New Subchapter A, General Provisions

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

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

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

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

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

Proposed New Subchapter B, Criminal History Evaluation Guidelines and Procedures

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

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

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

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

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

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

Proposed new §211.10(c)(1)(I) would add that offenses of attempting or conspiring to commit any of the foregoing offenses are potentially disqualifying offenses because the person intended to commit an offense. This proposed new language incorporates language from current §211.3(d)(16). The language regarding conspiracies or attempts to commit the offenses must be included in the paragraph that applies to all license holders and the paragraph that applies to retail license types because the related crimes for each are proposed to be reorganized into separate paragraphs to improve readability.

Proposed new §211.10(c)(2)(E) would make felony offenses under Penal Code, §28.03 potentially disqualifying when a motor vehicle is damaged, destroyed, or tampered with during the removal or attempted removal of a catalytic converter. This new amendment aligns with SB 224, 88th Legislature, Regular Session (2023), which amended Penal Code, §28.03 to create a state jail felony for damage to a motor vehicle because of removal or attempted removal of the catalytic converter.

Proposed new §211.10(c)(2)(D) would incorporate §211.3(d)(12) and would add two additional offenses against the family: Penal Code, §25.04 and §25.08. Penal Code, §25.04 includes offenses involving the enticement of a child away from the parent or other responsible person, and Penal Code, §25.08 includes offenses related to the sale or purchase of a child. These offenses are relevant to the retail professions licensed by the department because parents frequently bring children to a dealership when considering a vehicle purchase, and a retail license holder may have unsupervised access to a child while a parent test-drives a vehicle or is otherwise engaged in viewing or inspecting a vehicle offered for sale. License holders also have access to the parent's motor vehicle records, including the family's home address. A person with a predisposition to commit these types of crimes would have the opportunity to engage in further similar conduct.

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

Proposed new §211.11 would incorporate language from current §211.4, with the addition of proposed new §211.11(a), which would clarify that the department will deny a pending application if an applicant or an applicant's representative as defined in §211.2(a)(2) is imprisoned. Occupations Code, §53.021(b) requires an agency to revoke a license holder's license on the license holder's imprisonment following a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision. Because the department also determines licensure eligibility based on individuals serving as representatives for the license holder, the department will consider the effect of imprisonment of those persons on a license holder. Because license revocation for a felony conviction is mandatory in Occupations Code, §53.021(b), the department must also deny a pending application. An applicant who is imprisoned may reapply once the applicant is no longer imprisoned and an applicant whose application is denied based on an imprisoned individual serving in a representative capacity may choose a different representative and reapply for licensure. Proposed new §211.11(b) would implement SB 1080, 89th Legislature (2025), which amended Occupations Code, §53.021 to require the department to revoke a license if the license holder is imprisoned following a felony conviction for an offense that directly relates to the duties and responsibilities of the licensed occupation, an offense in Code of Criminal Procedure, Article 42A.054, or a sexually violent offense in Code of Criminal Procedure, Article 62.001. Proposed amendments to new §211.11(b) would also incorporate the existing language from current §211.4(c) as phrased in Occupations Code, §53.021(b). Proposed new §211.11(c) incorporates language from current §211.4(d). Proposed new §211.11(d) incorporates language from current §211.4(c).

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

Proposed new §211.13(a) would incorporate the current language of §211.6(a) and would clarify that fingerprint requirements apply to "an applicant for a new or renewal license" to improve readability without changing meaning. Proposed §211.13(b) would move the introductory phrase "Unless previously submitted for an active license issued by the department," to proposed §211.13(c) to improve readability and to allow the department to further clarify submission requirements in §211.13(c). Proposed new §211.13(b)(1) would incorporate the language of current §211.6(b)(1) and would clarify that an applicant includes an owner, member, partner, or trust beneficiary. This is a clarification rather than an extension of the existing requirements for the fingerprinting of applicants, because each of these categories has an ownership interest in the license. If the owner is a trust, the license is a trust asset, and each beneficiary is an equitable owner of the trust's assets. It is necessary for the department to fingerprint trust beneficiaries along with other owners because doing so will prevent a bad actor with a history of criminal offenses that directly relate to the duties and responsibilities of a license holder from obtaining a license from the department by using a trust to hide the bad actor's identity and then using that license to perpetrate, or benefit from, fraudulent and criminal actions, or otherwise take advantage of the position of trust created by the license. These proposed amendments are consistent with Government Code, §411.12511, as amended by SB 2587, 89th Regular Session (2025).

Proposed new §211.13(b)(2) would incorporate the language of current §211.6(b)(2) and would clarify that a person acting in a representative capacity includes an officer, director, manager, trustee, principal, manager of business affairs, or other employee whose act or omission in the course or scope of the representation would be cause for denying, revoking, or suspending a license. The proposed language recognizes that many license holders are small businesses that may employ only one or a few employees and may assign or delegate key management tasks such as administering the temporary tag or license plate system for the license holder, and that a principal may be a representative and not necessarily an owner of the applicant. These proposed amendments are consistent with Government Code, §411.12511, as amended by SB 2587, 89th Regular Session (2025).

Proposed new §211.13(c) would incorporate the current language of §211.6(c) and the introductory phrase from §211.6(b), and would further clarify that the department will not require a person to submit fingerprints if the person previously submitted a complete and acceptable set of fingerprints, and the person remains fully enrolled in the Texas Department of Public Safety's (DPS) criminal history clearinghouse and validly subscribed in the federal criminal history database maintained by the Federal Bureau of Investigation (FBI). This clarification is important as DPS or the FBI may change the enrollment or subscription status of a person previously fingerprinted if, for example, a court expunges a crime from a person's criminal history record. If DPS or the FBI change a person's enrollment or subscription status, the department must require the person to be fingerprinted again, or the department will not be able to access that person's criminal history records for use in evaluating the license application.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the proposal will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Monique Johnston, Director of the Motor Vehicle Division, has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Ms. Johnston also determined that, for each year of the first five years the proposal is in effect, public benefits are anticipated, and that applicants and license holders will not incur costs to comply with the proposal. The anticipated public benefits include reduced opportunity for fraud and related crime, and improved public safety. Requiring fingerprints for a trust beneficiary will benefit the public by preventing bad actors with a history of criminal offenses that directly relate to the duties and responsibilities of a license holder from obtaining licenses by using a trust to hide their identity and then using those licenses to perpetrate, or benefit from, fraud and criminal actions, or otherwise take advantage of the position of trust created by the license.

Ms. Johnston anticipates that there will be no additional costs on regulated persons to comply with the submission and evaluation of information under this proposal because the rules do not establish any new requirements or costs for regulated persons unless the person commits a crime. The proposed requirement in §211.13(b)(1) for the fingerprinting of trust beneficiaries is a clarification of the existing requirement that applicant owners must be fingerprinted, as trust beneficiaries are equitable owners of the trust's assets. It therefore does not create a new fingerprinting requirement. Similarly, the proposed new language that allows the department to fingerprint an employee, who the applicant designates as an authorized representative in the application and whose acts or omission would be cause for denying, revoking, or suspending a license, is a clarifying example of "a person acting in a representative capacity" and not a new fingerprinting requirement. Additionally, Ms. Johnston anticipates that there will be no additional costs to regulated persons to comply with the fingerprint requirements under this proposal as the new section does not establish fees for fingerprinting or processing criminal background checks. Fees for fingerprinting and access to criminal history reports are established by DPS under the authority of Texas Government Code, Chapter 411.

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

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 for each year of the first five years the proposed repeal and amendments are in effect the amendments will not create or eliminate a government program; will not require the creation of new employee positions and will not require the elimination of existing employee positions; will not require an increase or decrease in future legislative appropriations to the department; will not require an increase in fees paid to the department; will create new regulations and expand existing regulations, as described in the explanation section of this proposal; will repeal existing regulations in §§211.3 - 211.6; will increase the number of individuals subject to the rule's applicability regarding fingerprinting; and will not significantly benefit or adversely affect the Texas economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

SUBCHAPTER A. GENERAL PROVISIONS

STATUTORY AUTHORITY. The department proposes amendments to Chapter 211 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, as amended by Senate Bill (SB) 2587, 89th Legislative Session (2025), which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302, Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, to revoke or suspend a license, to place on probation, or to reprimand a license holder if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302, Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.

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

§211.1. Purpose and Definitions.

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

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

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

(A) Transportation Code, Chapter 503;

(B) Occupations Code, Chapter 2301; or

(C) Occupations Code, Chapter 2302.[; or]

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

§211.2. Application of Chapter [ Subchapter].

(a) This chapter applies to the following persons:

(1) applicants and holders of any license; and

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

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

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502328

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

STATUTORY AUTHORITY. The department proposes repeals to Chapter 211 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, to revoke or suspend a license, to place on probation, or to reprimand a license holder if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; and Transportation Code, §1002.001, which authorizes the board to adopt or rules that are necessary and appropriate to implement the powers and the duties of the department.

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

§211.3. Criminal Offense Guidelines.

§211.4. Imprisonment.

§211.5. Criminal History Evaluation Letters.

§211.6. Fingerprint Requirements for Designated License Types.

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502329

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER B. CRIMINAL HISTORY EVALUATION GUIDELINES AND PROCEDURES

STATUTORY AUTHORITY. The department proposes new sections to Chapter 211 under Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, to revoke or suspend a license, to place on probation, or to reprimand a license holder if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.

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

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 July 10, 2025.

TRD-202502330

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

CHAPTER 215. MOTOR VEHICLE DISTRIBUTION

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Subchapter B. Licenses, Generally, §215.83 and proposes new §215.91; proposes amendments to Subchapter D, General Distinguishing Numbers and In-Transit Licenses, §§215.133, 215.140, 215.141, 215.144, 215.150 - 215.152, 215.155, and 215.158; and proposes new §215.163. These amendments and new sections are necessary to implement House Bill (HB) 718, 88th Legislature, Regular Session (2023), Senate Bill (SB) 1902, 89th Legislature, Regular Session (2025), HB 5629, 89th Legislature, Regular Session (2025) and SB 1818, 89th Legislature, Regular Session (2025).

HB 5629 and SB 1818 amend Occupations Code, Chapter 55, effective September 1, 2025, to change state agency licensing requirements for military service members, military veterans, and military spouses. Because these requirements apply to all licenses issued by the department, a new rule, §215.91, is proposed in Subchapter B, Licenses, Generally, which would apply to all licenses issued by the department under Occupations Code, Chapter 2301, and Transportation Code, Chapter 503. Proposed amendments to §215.83 would prevent any conflict or confusion with proposed new §215.91.

HB 718 amended Transportation Code, Chapter 503 to eliminate the use of temporary tags when purchasing a motor vehicle and replaced these tags with categories of license plates, effective July 1, 2025. HB 718 requires the department to determine new distribution methods, systems, and procedures, and set certain fees. Section 34 of HB 718 grants the department authority to adopt rules necessary to implement or administer these changes in law and required the department to adopt related rules by December 1, 2024. The department did so by publishing proposed rules in the April 26, 2024, issue of the Texas Register (49 TexReg 2717), and publishing adopted rules in the November 8, 2024, issue of the Texas Register (49 TexReg 8953). HB 718 required a Texas dealer, beginning July 1, 2025, to ensure that an assigned general issue license plate or set of license plates stayed with the vehicle if that vehicle is later sold to another Texas buyer.

However, SB 1902 changed that process to require a dealer to transfer a removed license plate to another vehicle of the same class within 10 days or dispose of the license plate according to department rules. SB 1902, effective July 1, 2025, requires the department to adopt implementing rules by October 1, 2025. Amendments to §§215.140, 215.141, 215.150 - 215.152, 215.155, and 215.158 are proposed to implement SB 1902.

In §215.151, amendments are also proposed to implement HB 718 to address circumstances in which the department would permit a dealer to mail or deliver a license plate or set of license plates to a buyer or a converter for attachment to a vehicle. These amendments are necessary because in prior rulemaking the department did not address circumstances in which a person other than a dealer should be able to affix a license plate to a vehicle because the vehicle is not at the dealer's location.

Proposed new §215.163, implements both HB 718 and SB 1902 to address license plate disposition when a license holder offers a vehicle for sale at auction or on consignment. This new rule is necessary because the department did not address disposition of license plates for these types of sales in prior rulemaking. During the rulemaking process, license holders raised questions about disposition of license plates when motor vehicles are sold at auctions or on consignment based on concerns that the department may require operational changes that would increase business costs. In November 2024, the department provided an early draft of this proposed new rule to the Motor Vehicle Industry Regulation Advisory Committee (MVIRAC). Committee members voted on formal motions and provided informal comments. The department incorporated input from this committee into this rule proposal, as well as comments from license holders that regularly hold or participate in motor vehicle auctions. In proposing this rule, the department seeks to minimize opportunities for license plate fraud related to auction and other consignment sales and to eliminate any unnecessary operational or cost impacts to license holders.

In June 2025, the MVIRAC reviewed drafts of the proposed revisions to §§215.141, 215.150, 215.151, 215.152, 215.155, 215.158, 215.163 and provided the department with feedback on those provisions. The department incorporated the feedback from the committee into this rule proposal.

Nonsubstantive amendments are proposed in §215.133 and §215.144 to modify language to improve readability by using consistent terminology.

EXPLANATION.

§215.83

Proposed amendments to §215.83 would delete subsection (i) and amend subsection (h) to replace specific requirements with a cross-reference to proposed new §215.91. These proposed amendments would ensure that the licensure requirements for military service members, military spouses and military veterans are consolidated into proposed new §215.91. These proposed amendments would thus avoid any confusion or conflict between §215.83 and proposed new §215.91.

§215.91

Proposed new §215.91(a) would implement Occupations Code, §55.002, which exempts an individual that holds a license from incurring a penalty for failing to renew a license in a timely manner because the individual was on active duty. Proposed new §215.91(b) would implement Occupations Code, §55.0041(a) and §55.0041(b), as amended by HB 5629 which require a state agency to issue a license to a military service member or military spouse within ten days if the member or spouse holds a current license issued by another state that is similar in the scope of practice to Texas requirements and is in good standing, or held the same Texas license within the past five years, if a military service member or military spouse submits an application and other required documents described in Occupations Code, §55.0041(b). Proposed new §215.91(b)(1) would describe the application and documents the military service member or military spouse must submit to the department. Proposed new §215.91(b)(2) would describe the department's review process after receiving an application and related documents, including confirming licensure and good standing in the other state and comparing licensing requirements to determine if the other state's requirements are similar in scope of practice. Proposed new §221.17(b)(2)(C) would state that the department will issue a provisional license upon receipt of a license application from a military service member, military veteran, or military spouse. This new provision would implement Occupations Code, §55.0041, as amended by SB 1818. Proposed new §215.91(b)(3) would inform an applicant that within 10 days, the department will either issue a license if the applicant meets the requirements in Occupations Code, §55.0041 or notify the applicant why the department is unable to issue a license. Proposed new §215.91(b)(3) would also inform an applicant that the license is subject to the requirements of this chapter and Occupations Code, Chapter 2301, and Transportation Code, Chapter 503, unless exempted or modified under Occupations Code, Chapter 55, consistent with Occupations Code, §55.0041(c). Proposed new §215.91(b) is necessary to implement Occupations Code, §55.0041 as amended by HB 5629. Proposed new §215.91(c) would inform a military service member, military veteran, or military spouse that this rule establishes requirements and procedures authorized or required by Texas law and does not affect any rights under federal law. Proposed new §215.91 would implement Occupations Code, Chapter 55, as amended by HB 5629, and would inform military service members, veterans, and military spouses regarding eligibility for special licensing consideration.

§215.133

Proposed amendments to §215.133(i), (j), and (k) would add "dealer" to describe the type of independent motor vehicle general distinguishing number (GDN) referenced in these subsections for consistency with phrasing in other rule subsections and to improve readability without changing meaning.

§215.140

A proposed amendment to §215.140(a)(6)(E) would delete a reference to dealer license plate storage requirements for assigned license plates for vehicles in inventory and add a reference to unassigned license plates. SB 1902 eliminated the requirement for a dealer to keep an inventory of assigned license plates. Instead, SB 1902 requires a dealer to keep a license plate removed from a sold vehicle and reassign that license plate to a sold vehicle of the same class within ten days or dispose of the license plate according to department rules.

§215.141

A proposed amendment to §215.141(a)(26) would expand the sanction for failure to securely store a license plate after July 1, 2025, to include failure to destroy a previously issued but not currently assigned license plate within the time prescribed by statute. This proposed amendment would implement SB 1902, which amended Transportation Code, §504.901 to require a dealer to either transfer a license plate removed from a vehicle to the same class of vehicle within ten days or dispose of the license plate no later than the tenth day after the license plate was removed from the vehicle.

A proposed amendment to §215.141(a)(34) would delete a sanction for failure to remove a license plate from a vehicle sold to an out-of-state buyer or from a vehicle sold for export and substitute a sanction for failure to remove a license plate from a vehicle as required by statute or rule. This proposed amendment is necessary to conform the language to the requirements of SB 1902, which requires dealers to remove a license plate from a vehicle that is transferred to or purchased by the dealer, and is necessary to conform with proposed new §215.163 which requires a dealer to remove a license plate from a vehicle in certain other circumstances such as before a vehicle is offered for sale at auction or on consignment.

§215.144

Proposed amendments to §215.144(i)(2) would add the phrase "GDN holder that acts as a " to clarify the type of motor vehicle auction referenced in subsection (i). Proposed amendments to §215.144(i)(2)(A) would substitute the phrase "before offering a vehicle for sale at auction" for "it offers for sale." These proposed amendments would improve readability by using consistent terminology without changing meaning.

§215.150

Proposed amendments to §215.150(a) and §215.150(e) would add a reference to a general issue license plate as a type of license plate that a buyer can transfer to a newly purchased vehicle, to implement SB 1902 because SB 1902 allows a dealer to transfer an existing buyer's general issue license plate to a purchased vehicle of the same class within ten days. A proposed amendment to §215.150(a)(2) would delete a reference to issuing a license plate if the vehicle did not come with a buyer's license plate because SB 1902 eliminated the requirement for a license plate to remain with a vehicle upon subsequent retail sale. A proposed amendment to §215.150(d)(3) would add a closed GDN to the list of circumstances in which a GDN dealer could no longer issue a buyer's license plate. The amendment recognizes that a dealer may choose to close a GDN issued by the department at any time, and after closure the person would not be a licensed GDN dealer under Transportation Code, Chapter 503, and therefore not authorized to issue a buyer's license plate or a buyer's temporary license plate. Proposed amendments to §215.150(f)(4) would delete a reference to license plates assigned to vehicles in inventory, delete unnecessary punctuation, and add a reference to unassigned license plates. SB 1902 eliminated the requirement for a dealer to keep an inventory of assigned license plates. Rather, SB 1902 requires a dealer to reassign a removed license plate within a ten-day window before disposing of the license plate.

§215.151

Proposed amendments throughout §215.151(a) and in §215.151(c) would add a reference to a general issue license plate as a type of license plate that a buyer can transfer to a newly purchased vehicle. These amendments implement SB 1902 because SB 1902 allows a dealer to transfer an existing buyer's general issue license plate to a purchased vehicle within ten days. Proposed amendments to §215.151(a)(3) would delete a reference to when a dealer must, or a governmental agency may, issue a buyer's license plate to the buyer of a used vehicle, and replace that language with issuing a buyer's license plate when the buyer does not have a general issue, specialty, personalized or other qualifying license plate to transfer to the vehicle. These amendments implement SB 1902, which no longer requires a license plate to remain with a vehicle and allows a previously issued general issue license plate to be reassigned to a different vehicle of the same class within ten days.

A proposed amendment to §215.151(c) would delete a reference to a vehicle that has an assigned license plate because SB 1902 eliminated the requirement for a license plate to remain assigned to a vehicle upon subsequent retail sale. Proposed amendments to §215.151(c) would add language to require the removal of any previously assigned license plate and require the dealer to reassign that license plate to a vehicle of the same class within ten days before disposing of that license plate when a buyer provides a different qualifying license plate to be assigned to a purchased vehicle. This proposed amendment would implement the requirements for plate transfer or disposal by a dealer in Transportation Code, §504.901, as amended by SB 1902. Proposed amendments to §215.151(d) would implement the requirements of SB 1902 by adding language that would allow a dealer to reassign a license plate to a vehicle of the same class within ten days, and deleting references to providing an assigned license plate to a Texas retail buyer or Texas dealer and references to voiding plates for vehicles sold to out-of-state or exporting buyers. These proposed amendments are necessary because SB 1902 eliminated the requirement for a license plate to remain assigned to a vehicle upon subsequent retail sale and instead requires a dealer to dispose of any license plate that is not reassigned after ten days according to department rules.

Proposed amendments would add new §215.151(e) to describe circumstances in which a dealer is not required to secure or affix an assigned license plate to a vehicle after a lawful sale. Proposed new §215.151(e)(1) would allow a retail buyer who purchases a vehicle for direct delivery to the buyer to authorize the dealer in writing to mail or securely deliver the dealer-assigned buyer's license plate to the buyer. Proposed new §215.151(e)(1) is necessary to accommodate lawful sales in which vehicles are shipped directly to a retail buyer, which is common in multi-vehicle or fleet purchases. Proposed new §215.151(e)(2) would allow a retail buyer to authorize a dealer in writing to mail or securely deliver a license plate or set of license plates to a licensed converter who could then affix the assigned buyer's license plate to the vehicle once the vehicle is complete prior to delivery to the customer, or allow the converter to provide the license plate to the customer at vehicle delivery. Proposed new §215.151(e)(1) and new §215.151(e)(2) are necessary to facilitate delivery of a dealer-assigned buyer's license plate when a vehicle is sold in a retail transaction, but the purchased vehicle is not located at the dealer's licensed location.

§215.152

Proposed amendments to §215.152(c) and §215.152(d) would add "new" to describe the type of buyer's license plates that the department will be allocating to each dealer and would delete the term unassigned. These amendments would implement SB 1902, which amended Transportation Code, §504.901, to require a dealer to transfer an unassigned license plate to a purchased vehicle of the same class within 10 days or destroy the license plate.

A proposed amendment to §215.152(d)(4) would add "or decrease" to allow the department to decrease the annual allotment of license plates for dealers based on changes in the market, temporary conditions, or other relevant factors in the state, county, or other geographical or population area. For example, sales may decline during an economic recession, resulting in dealers needing fewer plates to assign to new cars. When this happens, the state should not incur the expense to manufacture or distribute license plates that will not be used, and a dealer should not be required to undergo the expense or effort to store and track a larger supply of license plates than what the dealer will likely use. To address this, a proposed amendment to §215.152(g) would allow a new dealer to request fewer buyer's license plates or buyer's temporary license plates than what would be allocated under §215.152(e).

Proposed new §215.152(i) describes the circumstances in which a dealer would not be eligible to receive a quarterly allocation of buyer's license plates delivered to the dealer's licensed physical location. These circumstances are: if the dealer's license has been closed, canceled, or revoked in a final order; if the department has issued a notice of department decision for a violation of premises requirements because the dealer appears to have abandoned the licensed location; if the dealer has been denied access to the temporary tag system or the license plate system; if a dealer fails a compliance review performed by the department under Transportation Code, §503.063(d); if the dealer's license expires during that quarter and a renewal application has not been submitted to the department; if a dealer does not have an owner or bona fide employee at the licensed location during posted business hours to accept a license plate delivery; or if a dealer fails to keep license plates or the license plate system secure. In accordance with Occupations Code, §2301.152, the department is responsible for reducing the opportunities for license plate fraud or misuse. This proposed new subsection is necessary for the department to fulfill that obligation.

Proposed new §215.152(j) would allow a dealer with an active license and access to the license plate database who is ineligible to receive a quarterly license plate allocation under subsection (i) to request that the department conduct a compliance review under Transportation Code, §503.063(d) to determine if the dealer is eligible to receive a future allocation. A dealer would be able to request a compliance review by submitting an email request to DealerCompliance@txdmv.gov, and the department will perform the requested compliance review within 14 days. This subsection would allow a dealer to become eligible for a future license plate allocation once the dealer passes a compliance review performed by the department, consistent with Transportation Code, §503.063(d).

Proposed new §215.152(k) would allow the department to require a dealer with an active license to obtain buyer's license plates from a county tax assessor-collector or department regional service center if the dealer is not eligible to receive license plates under §215.152(i). This proposed new subsection would allow a licensed dealer to continue to operate while the dealer addresses a security or other operational issue that would prevent the department from securely delivering license plates to the licensed location. A proposed amendment would reletter §215.152(i) to (l) to accommodate the three new proposed subsections described above.

A proposed amendment would add new §215.152(m), which would describe when a dealer may request fewer buyer's license plates or buyer's temporary license plates. A dealer may request fewer license plates after using less than 50 percent of the quarterly allocation of general issue license plates or buyer temporary license plates in a quarter, or after using less than 50 percent of the allotted annual maximum number of general issue license plates or buyer temporary license plates in a year. A dealer should not be required to undergo the expense or effort to store and track a significantly larger supply of license plates than what the dealer will use. Proposed amendments would reletter §215.152(j) to (n) and reletter remaining subsections accordingly to accommodate the new proposed subsections described above.

Proposed amendments to relettered §215.152(n) would add a reference to a dealer being able to request a decrease in a quarterly or annual allocation by submitting a request in the department's designated license plate system, and delete a reference to subsection (i). These amendments are necessary to inform a dealer how to request a decrease in a quarterly or annual buyer's license plate or buyer's temporary license plate allocation.

A proposed amendment to relettered §215.152(o) would add "or decrease" in recognition that a dealer may request a decrease in a maximum annual allotment. Proposed amendments throughout relettered §215.152(o) would delete "additional" to describe license plates because amendments to this rule are proposed to allow a dealer to request fewer license plates. A proposed amendment to relettered §215.152(o)(2) would delete the phrase "for more license plates" to describe the type of additional requests a dealer may submit because a dealer may submit additional requests for fewer license plates. A proposed amendment to relettered §215.152(o)(3)(D) would delete a reference to issuing no additional license plates because a dealer may request to reduce the number of license plates, and the department may deny that request. Proposed amendments to relettered §215.152(o)(3)(E)(ii) would delete a reference to additional license plates being added to the dealer's allocation and would substitute text to state that the dealer's allocation will be adjusted. These proposed amendments would recognize that a dealer's request for fewer license plates may be adjusted by the designated director in the department's Vehicle Titles and Registration Division. A proposed amendment to relettered §215.152(o)(3)(E)(ii) would add "informed about" to improve readability without changing meaning. A proposed amendment to relettered §215.152(o)(5) would delete a reference to additional license plates because this proposal would allow a dealer to submit a subsequent request for fewer license plates during a calendar year.

§215.155

Proposed amendments to §215.155(c) would delete §215.155(c)(2), which requires a selling dealer to provide a license plate to a purchasing dealer for placement on the vehicle at time of retail sale, and would modify related punctuation and numbering. These proposed amendments would implement SB 1902, which eliminated the requirement for an assigned license plate to stay with a vehicle upon a subsequent retail sale of the vehicle.

§215.158

Proposed amendments to §215.158(b) would delete a reference to removing a previously assigned buyer's license plate or other type of license plate for a vehicle sold to an out-of-state buyer or for another reason allowed by rule and would simplify the subsection to apply only when a dealer is required to void a previously assigned buyer's license plate from a vehicle. These proposed amendments would align the rule text with Transportation Code, §504.901, as amended by SB 1902, which requires a dealer to void a previously assigned buyer's license plate within 10 days unless the dealer has reassigned that license plate to another vehicle of the same class.

§215.163

Proposed new §215.163 would address how a license holder must manage a license plate or set of license plates for motor vehicles sold at auction or on consignment. Proposed new §215.163 is necessary to clarify license plate disposition and the reporting responsibilities of a dealer and a wholesale motor vehicle auction GDN holder when offering a motor vehicle for sale at a wholesale auction, and to clarify a dealer's responsibilities when offering a motor vehicle for sale at auction or on consignment at the dealer's licensed location consistent with the requirements of Transportation Code, §§503.063, 503.0633, and 504.901 as amended by HB 718 and SB 1902, effective July 1, 2025.

Proposed new §215.163(a) would address license plate disposition requirements for motor vehicles offered for sale at a wholesale motor vehicle auction, in which only dealers are allowed to purchase a motor vehicle under Transportation Code, §503.037. Proposed new §215.163(a) would require a wholesale motor vehicle auction GDN holder who receives a motor vehicle on consignment from a person who is not a GDN holder to remove and mark any license plate with the vehicle as void; and destroy, recycle, or return any license plate in keeping with the requirements of §215.158 (relating to General Requirements for Buyer's License Plates). Proposed new §215.163(a) is necessary to prevent Texas license plates from being distributed out-of-state or exported and used fraudulently. These proposed amendments are also consistent with Transportation Code, §503.063 and §504.901, as amended by HB 718 and SB 1902, which authorizes dealers to issue a buyer's license plate and access the license plate system but does not authorize motor vehicle auction license holders to do so.

Proposed new §215.163(b) would describe a dealer's license plate disposition responsibilities if a motor vehicle with a license plate is sold at a public auction, at which members of the public can bid on and purchase a motor vehicle. Proposed new §215.163(b) would require a dealer who is authorized to sell a consigned vehicle to return an assigned license plate to the vehicle's owner in keeping with Transportation Code §504.901(b), or destroy, recycle, or return the license plate in accordance with §215.158 (relating to General Requirements for Buyer's License Plates). The option for a dealer to destroy an assigned license plate is necessary because in some circumstances a dealer may be unable to return an assigned plate to the vehicle's owner. For example, a dealer could not do so if the vehicle's owner has died or the vehicle's owner relocated without a forwarding address. If a dealer offers a motor vehicle from the dealer's inventory for sale at a public auction, the dealer is required to remove and securely store the license plate before offering the vehicle for sale at a public auction as required in proposed 43 TAC §215.150(f) (relating to Dealer Authorization to Issue License Plates) and may reassign the license plate within ten days. If the purchaser is a Texas retail buyer, the dealer must issue a buyer's license plate to the purchaser and update the license plate database unless the buyer has a general issue, specialty, personalized, or other qualifying license plate to transfer, consistent with proposed amendments to 43 TAC §215.151 (relating to License Plate General Use Requirements). If the purchaser at the public auction is a dealer, export buyer, or out-of-state buyer, the selling dealer must not issue a buyer's license plate. Additionally, if the purchaser at an auction is an out-of-state buyer, the dealer may only issue a buyer's temporary license plate if the buyer requires this license plate to transport the vehicle to another state in accordance with Transportation Code, §503.063, as amended by HB 718, and with 43 TAC §215.150(c) (relating to Dealer Authorization to Issue License Plates). Proposed new §215.163(b) is necessary to clarify license plate disposition for different types of sales that can occur at a public auction and to minimize potential fraud or misuse of license plates that may occur, consistent with the requirements of Transportation Code, §503.063 and §504.901, as amended by HB 718 and SB 1902, and of proposed amendments to 43 TAC §§215.150, 215.151, and 215.158.

Proposed new §215.163(c) would implement dealer requirements for other types of consignment sales which occur at a dealer's licensed location and not at auction. Proposed new §215.163(c) is necessary to address license plate disposition for other types of consignment sales and to minimize potential fraud or misuse of license plates, consistent with the requirements of Transportation Code, §503.063 and §504.901, as amended by HB 718 and SB 1902, and the requirements of the department's adopted and proposed rules implementing HB 718. Proposed new §215.163(c)(1) would require a dealer to remove and return any license plate to the vehicle's owner. Proposed new §215.163(c)(1) would further clarify that a dealer may use its dealer's temporary license plate to demonstrate the consigned vehicle to a potential purchaser, in accordance with 43 TAC §215.138 (relating to Use of Dealer's License Plates).

Proposed new §215.163(c)(2) would align the requirements for dealer consignment sales with the general license plate disposition requirements in the department's rules implementing HB 718 adopted effective July 1, 2025. Proposed new §215.163(c)(2) would require a dealer, upon the sale of a consigned motor vehicle, to assign a license plate to a Texas retail buyer that purchases the vehicle unless the buyer has a general issue, specialty, personalized, or other qualifying license plate to transfer and to update the license plate database, consistent with 43 TAC §215.151 (relating to License Plate General Use Requirements). If the vehicle is sold to an out-of-state buyer, for export, or to a Texas dealer, a dealer may not issue a buyer's license plate and may only issue a buyer's temporary license plate if the out-of-state purchaser requires a license plate to transport the vehicle to another state for titling and registration in that jurisdiction.

Proposed new §215.163(c)(3) is necessary to clarify license plate disposition requirements for independent motor vehicle dealers whose business includes the sale of salvage vehicles or total loss vehicles as defined by the applicable insurance contract, and who may receive consignments from non-GDN holders such as insurance or finance companies. In these situations, an independent motor vehicle dealer must remove and destroy, recycle, or return the license plate as required in §215.158 (relating to General Requirements for Buyer's License Plates). Under Occupations Code, §2302.009, an independent motor vehicle dealer that acts as a salvage vehicle dealer or displays a motor vehicle as an agent of an insurance company must comply with Occupations Code, Chapter 2302, including the requirement to immediately remove any unexpired license plate. Requiring an independent motor vehicle dealer to either transfer or void, destroy, recycle, or return the license plate as required in §215.158 (relating to General Requirements for Buyer's License Plates) is necessary to reduce the risk of fraud or misuse of the plates, since salvage or total loss vehicles may not be driven on Texas roads. Proposed new §215.163(c) is necessary to minimize potential fraud or misuse of these license plates and is consistent with the requirements of Occupations Code, Chapter 2302, and Transportation Code, §503.063 and §504.901, as amended by HB 708 and SB 1902.

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

Monique Johnston, Director of the Motor Vehicle Division (MVD), Annette Quintero, Director of the Vehicle Titles and Registration Division (VTR), and Corrie Thompson, Director of the Enforcement Division (ENF), have determined that there will be not be a measurable effect on local employment or the local economy as a result of the proposal because the overall number of motor vehicle sales will not be affected.

PUBLIC BENEFIT AND COST NOTE. Ms. Johnston, Ms. Quintero, and Ms. Thompson have also determined that, for each year of the first five years amended and new sections are in effect, there are multiple public benefits anticipated because of the reduction in opportunities for license plate fraud, and that certain applicants and license holders may incur costs to comply with the proposal. The department prioritized the public benefits associated with reducing fraud and related crime and improving public health and safety, while carefully considering potential costs to license holders consistent with board and department responsibilities.

Anticipated Public Benefits. The public benefits anticipated as a result of the proposal include limiting the criminal activity of a small subset of dealers who may fraudulently obtain, sell, or issue license plates to persons seeking to engage in violent criminal activity, including armed robbery, human trafficking, and assaults on law enforcement, or to criminally operate uninsured and uninspected vehicles as a hazard to Texas motorists and the environment.

Anticipated Costs to Comply With The Proposal. Ms. Quintero anticipates that certain license holders may incur costs to comply with these proposed rules. In proposed new §215.151(e), a dealer could incur a fee to mail a license plate or set of license plates to a buyer or a converter when the buyer authorizes the dealer to do so in writing because the vehicle is being delivered directly to the buyer by a transporter or converter. Department research suggests that the average cost to mail a set of license plates is $10.10. Ms. Quintero has determined that the cost for a license holder to mail or otherwise securely transfer a license plate to a buyer or converter would be offset by a dealer's cost savings in not having to travel to a buyer's or converter's location to affix the assigned license plate, and is necessary to facilitate lawful sales in which the purchased vehicle is not at the dealer's licensed location. A dealer may choose to affix a buyer's license plate to a sold vehicle, or mail or securely transfer a license plate to a buyer or converter and can choose the method that is operationally efficient and cost effective. Industry stakeholders have requested this flexibility in affixing license plates to facilitate these types of vehicle sales.

Regarding proposed new §215.163, Ms. Quintero anticipates that while dealer GDN holders will not incur additional costs to comply with the proposed rule, wholesale motor vehicle auction GDN holders may incur costs to comply with this proposed rule. For dealers, proposed new §215.163 does not have any new cost requirements because the same requirements are already in place under other previously adopted rules or existing statutes.

However, this proposal may require wholesale motor vehicle auction GDN holders to make an operational change or incur a cost. The department can estimate certain associated costs. Proposed new §215.163 would require a wholesale motor vehicle auction GDN holder to permanently mark the front of license plates with the word "void" or a large "X". Department research suggests that the cost of a permanent marker is $1.35 per marker. Proposed new §215.163 would also require a wholesale motor vehicle auction GDN holder to destroy a void buyer's license plate, recycle a void plate with a registered metal recycler, or return the void plate to the department, or to a county tax assessor-collector. Aviation tin snips may be used to destroy a void license plate. Department research suggests that the cost of tin snips, which can cut metal, is approximately $18.50. A motor vehicle auction GDN holder may choose to recycle void license plates. Department research suggests that the cost of doing so through a metal recycler will vary by locality and the availability of local recycling facilities, with some regions benefitting from free curbside-pickup recycling programs and others requiring license holders to expend transportation costs to take the plates to a recycling facility. Department research also suggests that scrap aluminum, such as voided license plates, is currently worth an average of about $.65 per pound when sold to a metal recycler. Lastly, a motor vehicle auction GDN holder may return a void buyer's license plate to the department, including one of the regional service centers, or a county tax assessor-collector office, or mail a void plate to the department. Department research suggests that a typical average cost to mail a set of license plates is $10.10. The proposed rules provide a motor vehicle auction GDN holder with multiple options for responsible disposal of void license plates and each license holder may choose which option is least expensive or most convenient based on the license holder's operation. Ms. Quintero has reviewed the department research regarding the cost of marking and the options for destroying, recycling, or returning void license plates and has determined that these costs are reasonable and necessary to reduce the potential for fraudulent plate use and to protect the public, including law enforcement personnel. Indeed, it is possible that many wholesale motor vehicle auction GDN holders will incur no costs as a result of the proposed rule: the wholesale motor vehicle auction GDN holders who commented or provided informal feedback on the draft rule stated that they already have existing systems in place to collect and dispose of license plates and to report vehicle transfers using the currently available web-based tools.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS.

As required by Government Code, §2006.002, the department has determined that this proposal may have an adverse economic effect or disproportionate economic impact on small or micro-businesses. More specifically, the department believes that the requirements in proposed new §215.163 for wholesale motor vehicle auction GDN holders may have an adverse impact if any motor vehicle auction GDN holder is a small or micro-business. The department does not believe the costs associated with shipping plates when requested by a buyer under certain circumstances in proposed amended §215.151 will create an adverse economic impact because the department believes the costs will be completely offset by the savings for a dealer from not having to travel to a buyer's or converter's location to affix a license plate to a sold vehicle. The department has determined that the proposed amendments will not have an adverse economic effect on rural communities because rural communities are exempt from the requirement to hold a GDN under Transportation Code, §503.024.

The cost analysis in the Public Benefit and Cost Note section of this proposal determined that the proposed new rule may result in additional costs for existing license holders. Based on data from the Comptroller and the Texas Workforce Commission, the department cannot determine if any wholesale motor vehicle auctions are small or micro-businesses but can estimate that most dealers are small or micro-businesses. The department has tried to minimize costs to both wholesale motor vehicle auction and dealer GDN holders. The proposed new requirements are designed to set minimum standards that will prevent license plate fraud and protect public health and safety and to allow these license holders to operate without incurring significant ongoing or unreasonable costs. These requirements do not include requirements that will cause a license holder to incur unnecessary or burdensome costs, such as employing additional persons.

Under Government Code, §2006.002, the department must perform a regulatory flexibility analysis. The department considered the alternatives of not adopting amendments, exempting small and micro-business license holders from these amendments, and adopting a limited version of these amendments for small and micro-business applicants and license holders. The department rejected all three options. The department reviewed licensing records, including records for license holders who have been denied access to the temporary tag system, and determined that small and micro-business license holders are largely the bad actors who have historically perpetrated fraud. The department, after considering the purpose of the authorizing statutes, does not believe it is feasible to waive or limit the requirements of the proposed amendments for small or micro-business GDN holders. Also, Government Code, §2006.002(c-1) does not require the department to consider alternatives that might minimize possible adverse impacts on small businesses and micro-businesses if the alternatives would not be protective of the health and safety of the state.

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

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed new sections and amendments are in effect, no government program would be created or eliminated. Implementation of the proposed new sections and amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or a decrease of fees paid to the department. The proposed rules create new regulations, specifically proposed new §215.91 and §215.163. It would limit existing regulations by allowing dealers to ship or deliver license plates to be affixed by others in certain situations in proposed amendments to §215.151, and by allowing for lesser license plate allocations in proposed amendments to §215.152. The proposed rule revisions would not expand or repeal an existing regulation. Lastly, the proposed new sections do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. 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. LICENSES, GENERALLY

STATUTORY AUTHORITY. The department proposes amendments and a new section to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Government Code, §411.122(d), which authorizes department access to criminal history record information maintained by DPS; Government Code, §411.12511, as amended by Senate Bill (SB) 2587, 89th Legislature (2025), which authorizes the department to obtain criminal history record information from DPS and the FBI for license applicants, license holders, and representatives whose act or omission would be cause for denying, revoking, or suspending a general distinguishing number or license issued under Transportation Code, Chapter 503, or Occupations Code, Chapters 2301 and 2302; Occupations Code, §55.004, as amended by House Bill (HB) 5629, 89th Legislature, which requires the department to adopt rules for the issuance of a license to military service members, military veterans, or military spouses that allow licensure if the applicant holds a current license issued by another state that is similar in scope to the license in Texas and is in good standing with that state's licensing authority, or has held a license in Texas within the preceding five years; Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Transportation Code, §503.002, which authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503; Transportation Code, §503.009, which authorizes the board to adopt rules for certain contested cases; Transportation Code, §503.0296, which requires the board to adopt a rule requiring that an applicant for an original or renewal general distinguishing number who proposes to be an independent motor vehicle dealer complete web-based education and training developed or approved by the department; Transportation Code, §503.033, which authorizes the board to adopt rules prescribe the form of the notice of a surety bond and the procedure by which a claimant may recover against the surety bond; Transportation Code, §503.061, which requires the board to adopt rules regulating the issuance of dealer's license plates; and Transportation Code, §§503.0626, 503.0631, and 503.0632, which require the board to adopt rules necessary to implement and manage the department's temporary tag databases; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.

The department also proposes amendments and a new rule under the authority of Transportation Code, §501.0041 and §502.0021; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.

Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502.

Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.

CROSS REFERENCE TO STATUTE. This proposed new section would implement Government Code, Chapters 411 and 2001; Occupations Code, Chapters 53, 55, and 2301; and Transportation Code, Chapters 501-503, and 1002.

§215.83. License Applications, Amendments, or Renewals.

(a) An application for a new license, license amendment, or license renewal filed with the department must be:

(1) filed electronically in the department-designated licensing system on a form approved by the department;

(2) completed by the applicant, license holder, or authorized representative who is an employee, a licensed attorney, or a certified public accountant;

(3) accompanied by the required fee, paid by credit card or by electronic funds transfer, drawn from an account held by the applicant or license holder, or drawn from a trust account of the applicant's attorney or certified public accountant; and

(4) accompanied by proof of a surety bond, if required.

(b) An authorized representative of the applicant or license holder who files an application with the department on behalf of an applicant or license holder may be required to provide written proof of authority to act on behalf of the applicant or license holder.

(c) The department will not provide information regarding the status of an application, application deficiencies, or pending new license numbers to a person other than a person listed in subsection (a)(2) of this section, unless that person files a written request under Government Code, Chapter 552.

(d) Prior to the expiration of a license, a license holder or authorized representative must electronically file with the department a sufficient license renewal application. Failure to receive notice of license expiration from the department does not relieve the license holder from the responsibility to timely file a sufficient license renewal application. A license renewal application is timely filed if the department receives a sufficient license renewal application on or before the date the license expires.

(e) An application for a new license, license amendment, or license renewal filed with the department must be sufficient. An application is sufficient if the application:

(1) includes all information and documentation required by the department; and

(2) is filed in accordance with subsection (a) of this section.

(f) If an applicant, license holder, or authorized representative does not provide the information or documentation required by the department, the department will issue a written notice of deficiency. The information or documentation requested in the written notice of deficiency must be received by the department within 20 calendar days of the date of the notice of deficiency, unless the department issues a written extension of time. If an applicant, license holder, or authorized representative fails to respond or fully comply with all deficiencies listed in the written notice of deficiency within the time prescribed by this subsection, the application will be deemed withdrawn and will be administratively closed.

(g) The department will evaluate a sufficient application for a new license, license amendment, or license renewal in accordance with applicable rules and statutes to determine whether to approve or deny the application. If the department determines that there are grounds for denial of the application, the department may pursue denial of the application in accordance with Subchapter G of this chapter (relating to Administrative Sanctions).

(h) The department will process an application for a new license, license amendment, or license renewal filed by a military service member, military spouse, or military veteran in accordance with Occupations Code, Chapter 55 and §215.91 of this title (relating to License Processing for Military Service Members, Spouses, and Veterans). [A license holder who fails to timely file a sufficient application for a license renewal because that license holder was on active duty is exempt from any increased fee or penalty imposed by the department for failing to renew the license in a timely manner.]

(i) [(j)] A license holder who timely files a sufficient license renewal application in accordance with subsection (d) of this section may continue to operate under the expired license until the license renewal application is determined in accordance with Government Code §2001.054.

(j) [(k)] A license holder who fails to timely file a sufficient license renewal application in accordance with subsection (d) of this section is not authorized to continue licensed activities after the date the license expires. A license holder may dispute a decision that a license renewal application was not timely or sufficient by submitting evidence to the department demonstrating that the license renewal application was timely and sufficient. Such evidence must be received by the department within 15 days of the date the department issues notice that a timely or sufficient license renewal application was not received by the department.

(k) [(l)] The department shall accept a late license renewal application up to 90 days after the date the license expires. In accordance with subsection (k) of this section, the license holder is not authorized to continue licensed activities after the date the license expires until the department approves the late license renewal application. If the department grants a license renewal under this section, the licensing period begins on the date the department issues the renewed license. The license holder may resume licensed activities upon receipt of the department's written verification or upon receipt of the renewed license.

(l) [(m)] If the department has not received a late license renewal application within 90 days after the date the license expires, the department will close the license. A person must apply for and receive a new license before that person is authorized to resume activities requiring a license.

(m) [(n)] A dealer's standard license plate issued in accordance with Transportation Code, Chapter 503, Subchapter C expires on the date the associated license expires, is canceled, or when a license renewal application is determined, whichever is later.

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 July 10, 2025.

TRD-202502331

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER D. GENERAL DISTINGUISHING NUMBERS AND IN-TRANSIT LICENSES

STATUTORY AUTHORITY. In addition to the rulemaking authority provided in Section 34 of HB 718, the department adopts amendments and new sections to Chapter 215 under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; Occupations Code, §2301.651, which gives the board authority to deny an application for a license, revoke or suspend a license, place on probation, or reprimand a licensee if the applicant or license holder is unfit, makes a material misrepresentation, violates any law relating to the sale, distribution, financing, or insuring of motor vehicles, willfully defrauds a purchaser, or fails to fulfill a written agreement with a retail purchaser of a motor vehicle; Transportation Code, §503.061, which allows the board to adopt rules regulating the issuance and use of dealer's license plates; Transportation Code, §503.0631, which requires the department to adopt rules to implement and manage the department's database of dealer-issued buyer's license plates; Transportation Code, §503.0633, which allows the department to establish the maximum number of license plates or sets of license plates a dealer may obtain annually under Transportation Code, §503.063 and §503.065; Transportation Code, §504.0011, which allows the board to adopt rules to implement and administer Chapter 504; Transportation Code, §520.0071, which requires the board to adopt rules classifying deputies performing titling and registration duties, the duties and obligations of these deputies, the type and amount of bonds that may be required by a county tax assessor-collector for a deputy performing titling and registration duties, and the fees that may be charged or retained by deputies; Transportation Code, §520.021, which allows the department to adopt rules and policies for the maintenance and use of the department's automated registration and titling system; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout this preamble.

The department also adopts amendments under the authority of Transportation Code, §§501.0041, 502.0021, 503.002, 504.0011, and 520.003; and Government Code, §2001.004 and §2001.054, in addition to the statutory authority referenced throughout this preamble.

Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the board to adopt rules for the administration of Transportation Code, Chapter 503. Transportation Code, §504.0011 authorizes the board to adopt rules to implement and administer Chapter 504. Transportation Code, §520.003 authorizes the department to adopt rules to administer Chapter 520.

Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.

CROSS REFERENCE TO STATUTE. These adopted new sections and amendments implement Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2305; and Transportation Code, Chapters 501 - 504, 520, and 1002.

§215.133. GDN Application Requirements for a Dealer or a Wholesale Motor Vehicle Auction.

(a) No person may engage in business as a dealer or as a wholesale motor vehicle auction unless that person has a valid GDN assigned by the department for each location from which the person engages in business. A dealer must also hold a GDN for a consignment location, unless the consignment location is a wholesale motor vehicle auction.

(b) Subsection (a) of this section does not apply to a person exempt from the requirement to obtain a GDN under Transportation Code §503.024.

(c) A GDN dealer or wholesale motor vehicle auction application must be on a form prescribed by the department and properly completed by the applicant as required under §215.83 of this title (relating to License Applications, Amendments, or Renewals). A GDN dealer or wholesale motor vehicle auction application must include all required information, required supporting documents, and required fees and must be submitted to the department electronically in the licensing system designated by the department. A GDN dealer or wholesale motor vehicle auction GDN holder renewing or amending its GDN must verify current license information, provide related information and documents for any new requirements or changes to the GDN, and pay required fees including any outstanding civil penalties owed the department under a final order. An applicant for a new dealer or wholesale motor vehicle auction GDN must provide the following:

(1) Required information:

(A) type of GDN requested;

(B) business information, including the name, physical and mailing addresses, telephone number, Secretary of State file number (as applicable), and website address, as applicable;

(C) contact name, email address, and telephone number of the person submitting the application;

(D) contact name, email address, and telephone number of a person who can provide information about business operations and the motor vehicle products or services offered;

(E) the name, social security number, date of birth, identity document information, and ownership percentage for each owner, partner, member, or principal if the applicant is not a publicly traded company;

(F) the name, social security number, date of birth, and identity document information for each officer, director, manager, trustee, or other representative authorized to act on behalf of the applicant if the applicant is owned in full or in part by a legal entity;

(G) the name, employer identification number, ownership percentage, and non-profit or publicly traded status for each legal entity that owns the applicant in full or in part;

(H) the name, social security number, date of birth, and identity document information of at least one manager or other bona fide employee who will be present at the established and permanent place of business if the owner is out of state or will not be present during business hours at the established and permanent place of business in Texas;

(I) if a dealer, the name, telephone number, and business email address of the account administrator for the temporary tag database prior to July 1, 2025, or for the license plate system on or after July 1, 2025, designated by the applicant who must be an owner or representative listed in the application;

(J) criminal history record information under the laws of Texas, another state in the United States, the United States, and any foreign jurisdiction for each person listed in the application, including offense description, date, and location;

(K) military service status;

(L) licensing history required to evaluate fitness for licensure under §215.89 of this title (relating to Fitness);

(M) information about the business location and business premises, including whether the applicant will operate as a salvage vehicle dealer at the location;

(N) history of insolvency, including outstanding or unpaid debts, judgments, or liens, unless the debt was discharged under 11 U.S.C. §§101 et seq. (Bankruptcy Act) or is pending resolution under a case filed under the Bankruptcy Act;

(O) signed Certification of Responsibility, which is a form provided by the department; and

(P) if a dealer, whether the applicant repairs a motor vehicle with a catalytic converter in Texas, and if so, the physical address where the repair is performed; and

(Q) any other information required by the department to evaluate the application under current law and board rules.

(2) A legible and accurate electronic image of each applicable required document:

(A) proof of a surety bond if required under §215.137 of this title (relating to Surety Bond);

(B) the certificate of filing, certificate of incorporation, or certificate of registration on file with the Secretary of State, as applicable;

(C) each assumed name certificate on file with the Secretary of State or county clerk;

(D) at least one of the following unexpired identity documents for each natural person listed in the application:

(i) driver license;

(ii) Texas Identification Card issued by the Texas Department of Public Safety under Transportation Code, Chapter 521, Subchapter E;

(iii) license to carry a handgun issued by the Texas Department of Public Safety under Government Code, Chapter 411, Subchapter H;

(iv) passport; or

(v) United States military identification card.

(E) a certificate of occupancy, certificate of compliance, or other official documentation confirming the business location complies with municipal ordinances, including zoning, occupancy, or other requirements for a vehicle business;

(F) documents proving business premises ownership, or lease or sublease agreement for the license period;

(G) business premises photos and a notarized affidavit certifying that all premises requirements in §215.140 of this title (relating to Established and Permanent Place of Business Premises Requirements) are met and will be maintained during the license period;

(H) evidence of franchise if applying for a franchised motor vehicle dealer GDN;

(I) proof of completion of the dealer education and training required under Transportation Code §503.0296, if applicable; and

(J) any other documents required by the department to evaluate the application under current law and board rules.

(3) Required fees:

(A) the fee for each type of license requested as prescribed by law; and

(B) the fee, including applicable taxes, for each dealer's standard plate, and dealer's temporary license plate on or after July 1, 2025, requested by the applicant as prescribed by law.

(d) An applicant for a dealer or wholesale auction GDN must also comply with fingerprint requirements in §211.6 of this title (relating to Fingerprint Requirements for Designated License Types), as applicable.

(e) An applicant for a GDN operating under a name other than the applicant's business name shall use the assumed name under which the applicant is authorized to do business, as filed with the Secretary of State or county clerk, and the assumed name of such legal entity shall be recorded by the applicant on the application using the letters "DBA." The applicant may not use a name or assumed name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public.

(f) A wholesale motor vehicle dealer GDN holder may sell or exchange vehicles with licensed or authorized dealers only. A wholesale motor vehicle dealer GDN holder may not sell or exchange vehicles at retail.

(g) An independent mobility motor vehicle dealer shall retain and produce for inspection all records relating to the license requirements under Occupations Code, §2301.002(17-b) and all information and records required under Transportation Code §503.0295.

(h) In evaluating a new or renewal GDN application or an application for a new GDN location, the department may require a site visit to determine if the business location meets the requirements in §215.140. The department will require the applicant or GDN holder to provide a notarized affidavit confirming that all premises requirements are met and will be maintained during the license period.

(i) A person holding an independent motor vehicle dealer GDN does not have to hold a salvage vehicle dealer's license to:

(1) act as a salvage vehicle dealer or rebuilder; or

(2) store or display a motor vehicle as an agent or escrow agent of an insurance company.

(j) A person holding an independent motor vehicle dealer GDN and performing salvage activities under subsection (i) must apply for a National Motor Vehicle Title Information System (NMVTIS) identification number and provide the number to the department in the GDN application.

(k) To be eligible for an independent motor vehicle dealer GDN, a person must complete dealer education and training specified by the department, except as provided in this subsection:

(1) once a person has completed the required dealer education and training, the person will not have to retake the dealer education and training for subsequent GDN renewals, but may be required to provide proof of dealer education and training completion as part of the GDN renewal process;

(2) a person holding an independent motor vehicle dealer GDN for at least 10 years as of September 1, 2019, is exempt from the dealer education and training requirement; and.

(3) a military service member, military spouse, or military veteran will receive appropriate credit for prior training, education, and professional experience and may be exempted from the dealer education and training requirement.

§215.140. Established and Permanent Place of Business Premises Requirements.

(a) A dealer must meet the following requirements at each licensed location and maintain the requirements during the term of the license. If multiple dealers are licensed at a location, each dealer must maintain the following requirements during the entire term of the license.

(1) Business hours for retail dealers.

(A) A retail dealer's office must be open at least four days per week for at least four consecutive hours per day and may not be open solely by appointment.

(B) The retail dealer's business hours for each day of the week must be posted at the main entrance of the retail dealer's office in a manner and location that is accessible to the public. The owner or a bona fide employee of the retail dealer shall be at the retail dealer's licensed location during the posted business hours for the purposes of buying, selling, exchanging, or leasing vehicles. If the owner or a bona fide employee is not available to conduct business during the retail dealer's posted business hours due to special circumstances or emergencies, a separate sign must be posted indicating the date and time the retail dealer will resume operations. Regardless of the retail dealer's business hours, the retail dealer's telephone must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine. A caller must be able to speak to a natural person or leave a message during these hours.

(2) Business hours for wholesale motor vehicle dealers. A dealer that holds only a wholesale motor vehicle dealer's GDN must post its business hours at the main entrance of the wholesale motor vehicle dealer's office in a manner and location that is accessible to the public. A wholesale motor vehicle dealer or bona fide employee shall be at the wholesale motor vehicle dealer's licensed location at least two weekdays per week for at least two consecutive hours per day. A wholesale motor vehicle dealer may not be open solely by appointment. Regardless of the wholesale motor vehicle dealer's business hours, the wholesale motor vehicle dealer's telephone must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine. A caller must be able to speak to a natural person or leave a message during these hours.

(3) Business sign requirements for retail dealers.

(A) A retail dealer must display a conspicuous, permanent sign with letters at least six inches in height showing the retail dealer's business name or assumed name substantially similar to the name reflected on the retail dealer's GDN under which the retail dealer conducts business. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.

(B) The sign must be permanently mounted at the physical address listed on the application for the retail dealer's GDN. A business sign is considered permanently mounted if bolted to an exterior building wall or bolted or welded to a dedicated sign pole or sign support permanently installed in the ground.

(C) A retail dealer may use a temporary sign or banner if that retail dealer can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.

(D) A retail dealer is responsible for ensuring that the business sign complies with municipal ordinances, and that any lease signage requirements are consistent with the signage requirements in this paragraph.

(4) Business sign requirements for wholesale motor vehicle dealers.

(A) Exterior Sign

(i) A wholesale motor vehicle dealer must display a conspicuous, permanent sign with letters at least six inches in height showing the wholesale motor vehicle dealer's business name or assumed name substantially similar to the name reflected on the wholesale motor vehicle dealer's GDN under which the wholesale motor vehicle dealer conducts business. Effective September 1, 2023, the sign must also include the statement that "Purchasers must be Licensed Dealers" in letters at least three inches in height. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.

(ii) The sign must be permanently mounted on the business property at the physical address listed on the application. A business sign is considered permanently mounted if bolted to an exterior building wall or bolted or welded to a dedicated sign pole or sign support permanently installed in the ground. A wholesale motor vehicle dealer may use a temporary exterior sign or banner if the wholesale motor vehicle dealer can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.

(B) Interior Sign

(i) If the wholesale motor vehicle dealer's office is located in an office building with one or more other businesses and an outside sign is not permitted by the property owner, a conspicuous permanent business sign permanently mounted on or beside the main door to the wholesale motor vehicle dealer's office with letters at least two inches in height is acceptable. Effective September 1, 2023, the sign must also include the statement that "Purchasers must be Licensed Dealers" in letters at least one inch in height.

(ii) An interior business sign is considered conspicuous if it is easily visible to the public within 10 feet of the main entrance of the wholesale motor vehicle dealer's office. An interior sign is considered permanent if made from durable material and has lettering that cannot be changed. An interior sign is considered permanently mounted if bolted or otherwise permanently affixed to the main door or nearby wall. A wholesale motor vehicle dealer may use a temporary interior sign or banner if the wholesale motor vehicle dealer can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.

(C) A wholesale motor vehicle dealer is responsible for ensuring that the business sign complies with municipal ordinances and that any lease signage requirements are consistent with the signage requirements in this paragraph.

(5) Office requirements for a retail dealer and a wholesale motor vehicle dealer.

(A) A dealer's office must be located in a building with a permanent roof and connecting exterior walls on all sides.

(B) A dealer's office must comply with all applicable municipal ordinances, including municipal zoning ordinances. The dealer is responsible for obtaining a certificate of occupancy, certificate of compliance, or other required document issued by a municipal government to show compliance, including a new certificate or document when the building is altered or remodeled, or when the building use changes.

(C) A dealer's office may not be located in a residence, apartment, hotel, motel, rooming house, or any room or building not open to the public.

(D) A dealer's office may not be located in a restaurant, gas station, or convenience store, unless the office has a separate entrance door that does not require a dealer's customer to pass through the other business.

(E) A dealer's office may not be virtual or provided by a subscription for office space or office services. Access to an office space or office services is not considered an established and permanent location.

(F) The physical address of the dealer's office must be in Texas and recognized by the U.S. Postal Service, be capable of receiving U.S. mail, and have an assigned emergency services property address. The department will not mail a dealer's or buyer's license plate to an out-of-state address and will only mail or deliver a license plate to a dealer's physical location.

(G) A portable-type office building may qualify as an office only if the building meets the requirements of this section and is not a readily moveable trailer or other vehicle.

(H) The dealer's office space must:

(i) include at least 100 square feet of interior floor space, exclusive of hallways, closets, or restrooms;

(ii) have a minimum seven-foot-high ceiling;

(iii) accommodate required office equipment; and

(iv) allow a dealer and customer to safely access the office and conduct business in private while seated.

(6) Required office equipment for a retail dealer and a wholesale motor vehicle dealer. At a minimum, a dealer's office must be equipped with:

(A) a desk;

(B) two chairs;

(C) internet access;

(D) a working telephone number listed in the business name or assumed name under which the dealer conducts business; and

(E) a locked and secured room or closet or at least one securely locked, substantially constructed safe or steel cabinet bolted or affixed to the floor or wall in such a way that the safe or steel cabinet cannot be readily removed and of sufficient size to store all dealer's and buyer's license plates in a dealer's possession including [both assigned plates for vehicles in inventory and] unissued and unassigned buyer's license plates.

(7) Number of retail dealers in one building. Not more than four retail dealers may be located in the same building. Each retail dealer located in the same building must meet the requirements of this section.

(8) Number of wholesale motor vehicle dealers in one office building. Not more than eight wholesale motor vehicle dealers may be located in the same office building. Each wholesale motor vehicle dealer located in the same office building must meet the requirements of this section.

(9) Office sharing prohibition for retail dealers and wholesale motor vehicle dealers. Unless otherwise authorized by the Transportation Code, a retail dealer and a wholesale motor vehicle dealer licensed after September 1, 1999, may not be located in the same building.

(10) Dealer housed with other business.

(A) If a person conducts business as a dealer in conjunction with another business owned by the same person and under the same name as the other business, the same telephone number may be used for both businesses. If the name of the dealer differs from the name of the other business, a separate telephone listing and a separate sign for each business are required.

(B) A person may conduct business as a dealer in conjunction with another business not owned by that person only if the dealer owns the property on which business is conducted or has a separate lease agreement from the owner of that property that meets the requirements of this section. The same telephone number may not be used by both businesses. The dealer must have separate business signs, telephone listings, and office equipment required under this section.

(C) A dealer's office must have permanent interior walls on all sides and be separate from any public area used by another business.

(11) Display area and storage lot requirements.

(A) A wholesale motor vehicle dealer is not required to have display space at the wholesale motor vehicle dealer's business premises.

(B) A retail dealer must have an area designated as display space for the retail dealer's inventory. A retail dealer's designated display area must comply with the following requirements.

(i) The display area must be located at the retail dealer's physical business address or contiguous to the retail dealer's physical address. The display area may not be in a storage lot.

(ii) The display area must be of sufficient size to display at least five vehicles of the type for which the GDN is issued. The display area must be reserved exclusively for the retail dealer's inventory and may not be used for customer parking, employee parking, general storage, or shared or intermingled with another business or a public parking area, a driveway to the office, or another dealer's display area.

(iii) The display area may not be on a public easement, right-of-way, or driveway unless the governing body having jurisdiction of the easement, right-of-way, or driveway expressly consents in writing to use as a display area. If the easement, right-of-way, or driveway is a part of the state highway system, use as a display area may only be authorized by a lease agreement.

(iv) If a retail dealer shares a display or parking area with another business, including another dealer, the dealer's vehicle inventory must be separated from the other business's display or parking area by a material object or barrier that cannot be readily removed. A barrier that cannot be readily removed is one that cannot be easily moved by one person and typically weighs more than 50 pounds. A material object or barrier must be in place on all sides except for the space necessary to allow for entry and exit of vehicle inventory.

(v) If a dealer's business location includes gasoline pumps or a charging station or includes another business that sells gasoline or has a charging station, the dealer's display area may not be part of the parking area for fuel or charging station customers and may not interfere with access to or from the gasoline pumps, fuel tanks, charging station, or fire prevention equipment.

(vi) The display area must be adequately illuminated if the retail dealer is open at night so that a vehicle for sale can be properly inspected by a potential buyer.

(vii) The display area may be located inside a building; however, if multiple dealers are displaying vehicles inside a building, each dealer's display area must be separated by a material object or barrier that cannot be readily removed. A barrier that cannot be readily removed is one that cannot be easily moved by one person and typically weighs more than 50 pounds. A material object or barrier must be in place on all sides except for the space necessary to allow for entry and exit of vehicle inventory.

(C) A GDN holder may maintain a storage lot only if the storage lot is not accessible to the public and no sales activity occurs at the storage lot. A sign stating the license holder's name, contact information, and the fact the property is a storage lot is permissible. A storage lot must be fenced or in an access-controlled location to be considered not accessible to the public. A GDN holder or applicant must disclose the address of a storage lot or the location of a vehicle in inventory upon request by the department.

(12) Dealers authorized to sell salvage motor vehicles. If an independent motor vehicle dealer offers a salvage motor vehicle for sale on the dealer's premises, the vehicle must be clearly and conspicuously marked with a sign informing a potential buyer that the vehicle is a salvage motor vehicle.

(13) Lease requirements. If the premises from which a dealer conducts business, including any display area, is not owned by the dealer, the dealer must maintain a lease that is continuous during the period of time for which the dealer's license will be issued. The lease agreement must be on a properly executed form containing at a minimum:

(A) the name of the property owner as the lessor of the premises and the name of the dealer as the tenant or lessee of the premises;

(B) the period of time for which the lease is valid;

(C) the street address or legal description of the property, provided that if only a legal description of the property is included, a dealer must attach a statement verifying that the property description in the lease agreement is the physical street address identified on the application as the physical address for the established and permanent place of business;

(D) the signature of the property owner as the lessor and the signature of the dealer as the tenant or lessee; and

(E) if the lease agreement is a sublease in which the property owner is not the lessor, the dealer must also obtain a signed and notarized statement from the property owner including the following information:

(i) property owner's full name, email address, mailing address, and phone number; and

(ii) property owner's statement confirming that the dealer is authorized to sublease the location and may operate a vehicle sales business from the location.

(14) Dealer must display GDN and bond notice. A dealer must display the dealer's GDN issued by the department at all times in a manner that makes the GDN easily readable by the public and in a conspicuous place at each place of business for which the dealer's GDN is issued. A dealer required to obtain a surety bond must post a bond notice adjacent to and in the same manner as the dealer's GDN is displayed. The notice must include the bond company name, bond identification number, and procedure by which a claimant can recover under the bond. The notice must also include the department's website address and notify a consumer that a dealer's surety bond information may be obtained by submitting a request to the department. If the dealer's GDN applies to more than one location, a copy of the GDN and bond notice must be displayed in each supplemental location.

(b) Wholesale motor vehicle auction premises requirements. A wholesale motor vehicle auction must comply with the following premises requirements:

(1) a wholesale motor vehicle auction GDN holder must hold a motor vehicle auction on a regular periodic basis at the licensed location, and an owner or bona fide employee must be available at the business location during each auction and during posted business hours. If the owner or a bona fide employee is not available to conduct business during the posted business hours due to special circumstances or emergencies, a separate sign must be posted indicating the date and time operations will resume.

(2) the business telephone must be answered from 8:00 a.m. to 5:00 p.m. weekdays by a bona fide employee, owner, answering service, voicemail service, or answering machine. A caller must be able to speak to a natural person or leave a message during these hours.

(3) a wholesale motor vehicle auction GDN holder must display a business sign that meets the following requirements:

(A) The sign must be a conspicuous, permanent sign with letters at least six inches in height showing the business name or assumed name substantially similar to the name reflected on the GDN under which the GDN holder conducts business. A business sign is considered conspicuous if it is easily visible to the public within 100 feet of the main entrance of the business office. A business sign is considered permanent only if it is made of durable, weather-resistant material.

(B) The sign must be permanently mounted at the physical address listed on the application for the wholesale motor vehicle auction GDN. A business sign is considered permanently mounted if bolted to an exterior building wall or bolted or welded to a dedicated sign pole or sign support permanently installed in the ground.

(C) An applicant may use a temporary sign or banner if the applicant can show proof that a sign that meets the requirements of this paragraph has been ordered and provides a written statement that the sign will be promptly and permanently mounted upon delivery.

(D) An applicant or holder is responsible for ensuring that the business sign complies with municipal ordinances, and that any lease signage requirements are consistent with the signage requirements in this paragraph.

(4) The business office of a wholesale motor vehicle auction GDN applicant and holder must meet the following requirements:

(A) The office must be located in a building with a permanent roof and connecting exterior walls on all sides.

(B) The office must comply with all applicable municipal ordinances, including municipal zoning ordinances. The wholesale motor vehicle auction is responsible for obtaining a certificate of occupancy, certificate of compliance, or other required document issued by a municipal government to show compliance, including a new certificate or document when the building is altered or remodeled, or when the building use changes.

(C) The office may not be located in a residence, apartment, hotel, motel, rooming house, or any room or building not open to the public.

(D) The office may not be located in a restaurant, gas station, or convenience store, unless the office has a separate entrance door that does not require a customer to pass through the other business.

(E) The office may not be virtual or provided by a subscription for office space or office services. Access to office space or office services is not considered an established and permanent location.

(F) The physical address of the office must be in Texas and recognized by the U.S. Postal Service, capable of receiving U.S. mail, and have an assigned emergency services property address.

(G) A portable-type office building may qualify as an office only if the building meets the requirements of this section and is not a readily moveable trailer or other vehicle.

(5) A wholesale motor vehicle auction GDN applicant and holder must have the following office equipment:

(A) a desk;

(B) a chair;

(C) internet access; and

(D) a working telephone number listed in the business name or assumed name under which business is conducted.

(6) A wholesale motor vehicle auction must meet the following display area and storage lot requirements:

(A) The area designated as display space for inventory must be located at the physical business address or contiguous to the physical address. The display area may not be in a storage lot.

(B) The display area must be of sufficient size to display at least five vehicles. Those spaces must be reserved exclusively for inventory and may not be used for customer parking, employee parking, general storage, or shared or intermingled with another business or a public parking area, or a driveway to the office.

(C) The display area may not be on a public easement, right-of-way, or driveway unless the governing body having jurisdiction of the easement, right-of-way, or driveway expressly consents in writing to use as a display area. If the easement, right-of-way, or driveway is a part of the state highway system, use as a display area may only be authorized by a lease agreement.

(D) If the business location includes gasoline pumps or a charging station or includes another business that sells gasoline or has a charging station, the display area may not be part of the parking area for fuel or charging station customers and may not interfere with access to or from the gasoline pumps, fuel tanks, charging station, or fire prevention equipment.

(E) The display area must be adequately illuminated if open at night so that a vehicle for sale can be properly inspected by a potential buyer.

(F) The display area may be located inside a building.

(G) A wholesale motor vehicle auction may maintain a storage lot only if the storage lot is not accessible to the public and no sales activity occurs at the storage lot. A sign stating the business name, contact information, and the fact the property is a storage lot is permissible. A storage lot must be fenced or in an access-controlled location to be considered not accessible to the public. A GDN holder or applicant must disclose the address of a storage lot or the location of a vehicle in inventory upon request by the department.

(7) A wholesale motor vehicle auction must meet the following lease requirements if the business premises, including any display area, is not owned by the wholesale motor vehicle auction:

(A) the applicant or holder must maintain a lease that is continuous during the period of time for which the GDN will be issued;

(B) The lease agreement must be on a properly executed form containing at a minimum:

(i) the name of the property owner as the lessor of the premises and the name of the GDN applicant or holder as the tenant or lessee of the premises;

(ii) the period of time for which the lease is valid;

(iii) the street address or legal description of the property, provided that if only a legal description of the property is included, a wholesale motor vehicle auction must attach a statement verifying that the property description in the lease agreement is the physical street address identified on the application as the physical address for the established and permanent place of business;

(iv) the signature of the property owner as the lessor and the signature of the applicant or holder as the tenant or lessee; and

(C) if the lease agreement is a sublease in which the property owner is not the lessor, the wholesale motor vehicle auction must also obtain a signed and notarized statement from the property owner including the following information:

(i) property owner's full name, email address, mailing address, and phone number; and

(ii) property owner's statement confirming that the wholesale motor vehicle auction is authorized to sublease the location and may operate a wholesale motor vehicle auction business from the location.

§215.141. Sanctions.

(a) The board or department may take the following actions against a license applicant, a license holder, or a person engaged in business for which a license is required:

(1) deny an application;

(2) revoke a license;

(3) suspend a license;

(4) assess a civil penalty;

(5) issue a cease and desist order; or

(6) or take other authorized action.

(b) The board or department may take action described in subsection (a) of this section if a license applicant, a license holder, or a person engaged in business for which a license is required:

(1) fails to maintain a good and sufficient bond or post the required bond notice if required under Transportation Code §503.033 (relating to Security Requirement);

(2) fails to meet or maintain the requirements of §215.140 of this title (relating to Established and Permanent Place of Business Premises Requirements);

(3) fails to maintain records required under this chapter;

(4) refuses or fails to comply with a request by the department for electronic records or to examine and copy electronic or physical records during the license holder's business hours at the licensed business location:

(A) sales records required to be maintained by §215.144 of this title (relating to Vehicle Records);

(B) ownership papers for a vehicle owned by that dealer or under that dealer's control;

(C) evidence of ownership or a current lease agreement for the property on which the business is located; or

(D) the Certificate of Occupancy, Certificate of Compliance, business license or permit, or other official documentation confirming compliance with county and municipal laws or ordinances for a vehicle business at the licensed physical location.

(5) refuses or fails to timely comply with a request for records made by a representative of the department;

(6) holds a wholesale motor vehicle dealer's license and

sells or offers to sell a motor vehicle to a person other than a licensed or authorized dealer;

(7) sells or offers to sell a type of vehicle that the person is not licensed to sell;

(8) fails to submit a license amendment application in the electronic licensing system designated by the department to notify the department of a change of the license holder's physical address, mailing address, telephone number, or email address within 10 days of the change;

(9) fails to submit a license amendment application in the electronic licensing system designated by the department to notify the department of a license holder's name change, or management or ownership change within 10 days of the change;

(10) issues more than one buyer's license plate or buyer's temporary license plate for a vehicle sold on or after July 1, 2025, or more than one temporary tag for a vehicle sold before July 1, 2025, for the purpose of extending the purchaser's operating privileges for more than 60 days;

(11) fails to remove a license plate or registration insignia from a vehicle that is displayed for sale;

(12) misuses a dealer's license plate, or a temporary tag before July 1, 2025;

(13) fails to display a dealer's license plate, or temporary tag before July 1, 2025, as required by law;

(14) holds open a title or fails to take assignment of a certificate of title, manufacturer's certificate, or other basic evidence of ownership for a vehicle acquired by the dealer, or fails to assign the certificate of title, manufacturer's certificate, or other basic evidence of ownership for a vehicle sold;

(15) fails to remain regularly and actively engaged in the business of buying, selling, or exchanging vehicles of the type for which the GDN is issued by the department;

(16) violates a provision of Occupations Code, Chapter 2301; Transportation Code Chapters 503 and 1001-1005; a board order or rule; or a regulation of the department relating to the sale, lease, distribution, financing, or insuring of vehicles, including advertising rules under Subchapter F of this chapter (relating to Advertising);

(17) is convicted of an offense that directly relates to the duties or responsibilities of the occupation in accordance with §211.3 of this title (relating to Criminal Offense Guidelines);

(18) is determined by the board or department, in accordance with §215.89 of this title (relating to Fitness), to be unfit to hold a license;

(19) has not assigned at least five vehicles in the prior 12 months, provided the dealer has been licensed more than 12 months;

(20) files or provides a false or forged:

(A) title document, including an affidavit making application for a certified copy of a title; or

(B) tax document, including a sales tax statement or affidavit;

(21) uses or allows use of that dealer's license or location for the purpose of avoiding a provision of Occupations Code, Chapter 2301; Transportation Code, Chapters 503 and 1001 - 1005; or other laws;

(22) omits information or makes a material misrepresentation in any application or other documentation filed with the department including providing a false or forged identity document or a false or forged photograph, electronic image, or other document;

(23) fails to remit payment as ordered for a civil penalty assessed by the board or department;

(24) sells a new motor vehicle without a franchised dealer's license issued by the department;

(25) fails to comply with a dealer responsibility under §215.150 of this title (relating to Dealer Authorization to Issue License Plates);

(26) on or after July 1, 2025, fails to securely store a license plate or fails to destroy a previously issued but currently unassigned license plate within the time prescribed by statute;

(27) fails to maintain a record of dealer license plates as required under §215.138 of this title (relating to Use of Dealer's License Plates);

(28) on or after July 1, 2025, fails to file or enter a vehicle transfer notice;

(29) fails to enter a lost, stolen, or damaged license plate in the electronic system designated by the department within the time limit prescribed by rule;

(30) violates any state or federal law or regulation relating to the sale of a motor vehicle;

(31) knowingly fails to disclose that a motor vehicle has been repaired, rebuilt, or reconstructed and issued a title under Transportation Code, §501.100 (relating to Application for Regular Certificate of Title for Salvage Vehicle);

(32) fails to issue a refund as ordered by the board or department; or

(33) fails to acquire or maintain a required certificate of occupancy, certificate of compliance, business license or permit, or other official documentation for the licensed location confirming compliance with county or municipal laws or ordinances or other local requirements for a vehicle business;

(34) on or after July 1, 2025, fails to remove a license plate from a vehicle as required by statute or rule [sold to an out-of-state buyer or from a vehicle sold for export]; or

(35) fails to keep or maintain records required under Occupations Code, Chapter 2305, Subchapter D or to allow an inspection of these records by the department.

§215.144. Vehicle Records.

(a) Purchases and sales records. A dealer and wholesale motor vehicle auction shall maintain a complete record of all vehicle purchases and sales for a minimum period of 48 months and make the record available for inspection and copying by the department during business hours.

(b) Independent mobility motor vehicle dealers. An independent mobility motor vehicle dealer shall keep a complete written record of each vehicle purchase, vehicle sale, and any adaptive work performed on each vehicle for a minimum period of 36 months after the date the adaptive work is performed on the vehicle. An independent mobility motor vehicle dealer shall also retain and produce for inspection all records relating to license requirements under Occupations Code, §2301.002(17-b) and all information and records required under Transportation Code §503.0295.

(c) Location of records. A dealer's record reflecting purchases and sales for the preceding 13 months must be maintained at the dealer's licensed location. Original titles are not required to be kept at the licensed location but must be made available to the agency upon reasonable request. A dealer's record for prior time periods may be kept off-site.

(d) Request for records. Within 15 days of receiving a request from a representative of the department, a dealer shall deliver a copy of the specified records to the address listed in the request. If a dealer has a concern about the origin of a records request, the dealer may verify that request with the department prior to submitting its records.

(e) Content of records. A dealer's complete record for each vehicle purchase or vehicle sale must contain:

(1) the date of the purchase;

(2) the date of the sale;

(3) the VIN;

(4) the name and address of the person selling the vehicle to the dealer;

(5) the name and address of the person purchasing the vehicle from the dealer;

(6) the name and address of the consignor if the vehicle is offered for sale by consignment;

(7) except for a purchase or sale where the Tax Code does not require payment of motor vehicle sales tax, a county tax assessor-collector receipt marked paid;

(8) a copy of all documents, forms, and agreements applicable to a particular sale, including a copy of:

(A) the title application;

(B) the work-up sheet;

(C) the front and back of the manufacturer's certificate of origin or manufacturer's statement of origin, unless the dealer obtains the title through webDEALER as defined in §217.71 of this title (relating to Automated and Web-Based Vehicle Registration and Title Systems);

(D) the front and back of the title for the purchase and the sale, unless the dealer enters or obtains the title through webDEALER as defined in §217.71 of this title;

(E) the factory invoice, if applicable;

(F) the sales contract;

(G) the retail installment agreement;

(H) the buyer's order;

(I) the bill of sale;

(J) any waiver;

(K) any other agreement between the seller and purchaser;

(L) the purchaser's photo identification;

(M) the odometer disclosure statement signed by the buyer, unless the vehicle is exempt; and

(N) the rebuilt salvage disclosure, if applicable.

(9) the original manufacturer's certificate of origin, original manufacturer's statement of origin, or original title for a motor vehicle offered for sale by a dealer which must be properly stamped if the title transaction is entered into webDEALER as defined in §217.71 of this title by the dealer;

(10) the dealer's monthly Motor Vehicle Seller Financed Sales Returns, if any; and

(11) if the vehicle sold is a motor home or a towable recreational vehicle subject to inspection under Transportation Code, Chapter 548, a copy of the written notice provided to the buyer at the time of the sale, notifying the buyer that the vehicle is subject to inspection requirements.

(f) Title assignments.

(1) For each vehicle a dealer acquires or offers for sale, the dealer must properly take assignment in the dealer's name of any:

(A) title;

(B) manufacturer's statement of origin;

(C) manufacturer's certificate of origin; or

(D) other evidence of ownership.

(2) Unless not required by Transportation Code, §501.0234(b), a dealer must apply in the name of the purchaser of a vehicle for the title and registration, as applicable, of the vehicle with a county tax assessor-collector.

(3) To comply with Transportation Code, §501.0234(f), a title or registration is considered filed within a reasonable time if filed within:

(A) 30 days of the vehicle sale date; or

(B) 45 days of the vehicle sale date for a dealer-financed transaction; or

(C) 60 days of the vehicle sale date for a vehicle purchased by a member or reserve member of the United States armed forces, Texas National Guard, or National Guard of another state serving on active duty.

(4) The dealer is required to provide to the purchaser the receipt for the title and registration application.

(5) The dealer is required to maintain a copy of the receipt for the title and registration application in the dealer's sales file.

(g) Out-of-state sales. For a sale involving a vehicle to be transferred out of state, the dealer must:

(1) within 30 days of the date of sale, either file the application for certificate of title on behalf of the purchaser or deliver the properly assigned evidence of ownership to the purchaser; and

(2) maintain in the dealer's record at the dealer's licensed location a photocopy of the completed sales tax exemption form for out of state sales approved by the Texas Comptroller of Public Accounts.

(h) Consignment sales. A dealer offering a vehicle for sale by consignment must have a written consignment agreement or a power of attorney for the vehicle, and shall, after the sale of the vehicle, take assignment of the vehicle in the dealer's name and, pursuant to subsection (f), apply in the name of the purchaser for transfer of title and registration, if the vehicle is to be registered, with a county tax assessor-collector. The dealer must, for a minimum of 48 months, maintain a record of each vehicle offered for sale by consignment, including the VIN and the name of the owner of the vehicle offered for sale by consignment.

(i) Public motor vehicle auctions.

(1) A GDN holder that acts as a public motor vehicle auction must comply with subsection (h) of this section.

(2) A GDN holder that acts as a public motor vehicle auction:

(A) is not required to take assignment of title of a vehicle before offering the vehicle [it offers] for sale at auction;

(B) must take assignment of title of a vehicle from a consignor prior to making application for title on behalf of the buyer; and

(C) must make application for title on behalf of the purchaser and remit motor vehicle sales tax within a reasonable time as defined in subsection (f) of this section.

(3) A GDN holder may not sell another GDN holder's vehicle at a public motor vehicle auction.

(j) Wholesale motor vehicle auction records. A wholesale motor vehicle auction license holder shall maintain, for a minimum of 48 months, a complete record of each vehicle purchase and sale occurring through the wholesale motor vehicle auction. The wholesale motor vehicle auction license holder shall make the record available for inspection and copying by the department during business hours.

(1) A wholesale motor vehicle auction license holder shall maintain at the licensed location a record reflecting each purchase and sale for at least the preceding 24 months. Records for prior time periods may be kept off-site.

(2) Within 15 days of receiving a department request, a wholesale motor vehicle auction license holder shall deliver a copy of the specified records to the address listed in the request.

(3) A wholesale motor vehicle auction license holder's complete record of each vehicle purchase and sale must, at a minimum, contain:

(A) the date of sale;

(B) the VIN;

(C) the name and address of the person selling the vehicle;

(D) the name and address of the person purchasing the vehicle;

(E) the dealer's license number of both the selling dealer and the purchasing dealer, unless either is exempt from holding a license;

(F) all information necessary to comply with the federal odometer disclosure requirements in 49 CFR Part 580;

(G) auction access documents, including the written authorization and revocation of authorization for an agent or employee, in accordance with §215.148 of this title (relating to Dealer Agents);

(H) invoices, bills of sale, checks, drafts, or other documents that identify the vehicle, the parties, or the purchase price;

(I) any information regarding the prior status of the vehicle such as the Reacquired Vehicle Disclosure Statement or other lemon law disclosures; and

(J) a copy of any written authorization allowing an agent of a dealer to enter the auction.

(k) Electronic records. A license holder may maintain a record in an electronic format if the license holder can print the record at the licensed location upon request by the department, except as provided by subsection (l) of this section.

(l) Use of department electronic titling and registration systems:

(1) webDEALER. A license holder utilizing the department's web-based title application known as webDEALER, as defined in §217.71 of this title (relating to Automated and Web-Based Vehicle Registration and Title Systems), shall comply with §217.74 of this title (relating to Access to and Use of webDEALER). Original hard copy titles are not required to be kept at the licensed location but must be made available to the department upon request.

(2) License Plate System. A license holder must comply with §215.151 of this title (relating to Buyer's License Plates General Use Requirements) regarding requirements to enter information into the department-designated electronic system for license plates.

§215.150. Dealer Authorization to Issue License Plates.

(a) A dealer that holds a GDN must issue a buyer's license plate for a vehicle type the dealer is authorized to sell to:

(1) a buyer of a new vehicle to be titled and registered in Texas, unless the buyer has a general issue license plate or a specialty, personalized, or other qualifying license plate eligible to be assigned to the vehicle with approval of the department; or

(2) a buyer of a used vehicle to be titled and registered in Texas if [a buyer's license plate did not come with the vehicle and] the buyer does not have a general issue license plate or a specialty, personalized, or other qualifying license plate eligible to be assigned to the vehicle with approval of the department.

(b) Notwithstanding subsection (a), a dealer that holds a GDN is not required to issue a buyer's license plate to a vehicle sold to a commercial fleet buyer authorized as a Dealer Deputy under §217.166 of the title (relating to Dealer Deputies).

(c) A dealer that holds a GDN must issue a buyer's temporary license plate to an out-of-state buyer for a vehicle that is to be registered in accordance with the laws of the buyer's state of residence.

(d) A dealer may issue a license plate under Transportation Code §503.063 until:

(1) the department denies access to the license plate system under Transportation Code §503.0633(f) and §224.58 of this title (relating to Denial of Dealer Access to License Plate System);

(2) the dealer issues the maximum number of license plates authorized under Transportation Code, §503.0633(a) - (d); or

(3) the GDN is closed, canceled, revoked, or suspended.

(e) A governmental agency that is exempt under Transportation Code, §503.024 from the requirement to obtain a dealer general distinguishing number may issue a buyer's license plate or a buyer's temporary license plate to the buyer of a vehicle owned by the governmental agency unless the buyer has a general issue license plate or a specialty, personalized, or other qualifying license plate that is eligible to be assigned to the vehicle with approval of the department. A governmental agency that issues a buyer's license plate or buyer's temporary license plate under this subsection:

(1) is subject to the provisions of Transportation Code §503.0631 and §503.0671 applicable to a dealer; and

(2) is not required to charge the registration fee authorized under Transportation Code §503.063(g) and specified in §215.155(g) of this title (relating to Buyer's License Plates).

(f) A dealer is responsible for all use of and access to all license plates in the dealer's possession and the license plate system under the dealer's account, including access by any user or unauthorized person. Dealer duties include monitoring license plate storage and issuance, managing account access, and taking timely and appropriate actions to maintain license plate and system security, including:

(1) establishing and following reasonable password policies, including preventing the sharing of passwords;

(2) limiting authorized users to owners and bona fide employees with a business need to access license plates and the license plate system;

(3) removing users who no longer have a legitimate business need to access the system;

(4) securing all license plates, including [license plates assigned to vehicles in inventory,] dealer's license plates[,] and unissued or unassigned buyer's license plates, by storing license plates in a locked and secured room or closet or one or more securely locked, substantially constructed safes or steel cabinets bolted or affixed to the floor or wall of sufficient size to store all dealer and buyer's license plates in a dealer's possession, and by promptly marking and destroying, recycling, or returning void license plates as required under §215.158 of this title (relating to General Requirements for Buyer's License Plates; and

(5) securing equipment used to access the license plate system.

§215.151. License Plate General Use Requirements.

(a) If a buyer purchases a vehicle to be registered in Texas, a dealer must secure, or a government agency may secure, a license plate to the vehicle in accordance with §217.27 of this title (relating to Vehicle Registration Insignia) and update the license plate system accordingly.

(1) A dealer must secure, or a governmental agency may secure, a buyer-provided license plate on the purchased vehicle if a buyer provides a general issue, or specialty, personalized, or other qualifying license plate that is eligible to be assigned to the vehicle with approval of the department and update the license plate system accordingly.

(2) A dealer must issue a buyer's license plate to the buyer if a buyer purchases a new vehicle from a dealer and the buyer does not have a general issue, specialty, personalized, or other qualifying license plate to transfer to the vehicle.

(3) A dealer must issue, or a governmental agency may issue, a buyer's license plate to a buyer purchasing a used vehicle if [the vehicle does not have an assigned license plate in the license plate system or the assigned license plate is missing or damaged and] the buyer does not have a general issue, specialty, personalized, or other qualifying license plate to transfer to the vehicle.

(b) If a non-resident buyer purchases a vehicle to be titled and registered in accordance with the laws of the buyer's state of residence, a dealer must issue, or a governmental agency may issue, a buyer's temporary license plate and secure the temporary license plate to the rear of a vehicle in accordance with §217.27 of this title and update the license plate system accordingly.

(c) If [a vehicle has an assigned license plate and] the buyer provides a general issue, specialty, personalized, or other qualifying license plate to transfer to the vehicle, a dealer must update the license plate status in the license plate system, remove any previously assigned general issue [ mark the] license plate and reassign that license plate to a vehicle of the same class within ten days, before marking as void and destroy, recycle, or return the license plate as required in §215.158 of the title (relating to General Requirements for Buyer's License Plates).

(d) A dealer, including a wholesale dealer, must remove a buyer's license plate from a purchased vehicle and store the license plate in a secure location in accordance with §215.150(f) of this title (relating to Dealer Authorization to Issue License Plates). [Upon vehicle sale,] The [the] dealer must update the license plate database and may:

(1) reassign the [provide the assigned] license plate to a vehicle of the same class within 10 days if purchased by a Texas retail buyer [that purchases the vehicle]; or

(2) [if the vehicle is sold to a Texas dealer, securely transfer the assigned license plate to the purchasing dealer; or]

[(3)] [if the vehicle is sold to an out-of-state buyer or for export,] mark the license plate as void and destroy, recycle, or return the license plate as required in §215.158 of this title.

§215.152. Obtaining Dealer-Issued Buyer's License Plates.

(a) A dealer or governmental agency is required to have internet access to connect to webDEALER and the license plate system maintained by the department and is responsible for verifying receipt of license plates in the license plate system.

(b) Except as provided by §215.157 of this title (relating to Issuing Buyer's License Plates and License Plate Receipts When Internet Not Available) before a license plate may be issued or secured on a vehicle, a dealer or governmental agency must enter in the license plate system true and accurate information about:

(1) the vehicle;

(2) the buyer; and

(3) the license plate number issued or assigned to the vehicle.

(c) The department will inform each dealer annually of the maximum number of new buyer's license plates the dealer is authorized to obtain during the calendar year under Transportation Code, §503.063, including:

(1) an allotment of [unassigned] buyer's license plates to be issued to a buyer of a vehicle that is to be titled and registered in Texas, and

(2) a separate allotment of buyer's temporary license plates to be issued to a non-resident buyer for a vehicle that will be registered and titled in another state.

(d) The department will calculate a dealer's maximum annual allotment of new [unassigned] buyer's license plates and buyer's temporary license plates based on the following formula:

(1) Vehicle title transfers, sales, or license plate issuance data determined from the department's systems from the previous fiscal year;

(2) the total value of paragraph (1) of this subsection will be increased by a multiplier based on the dealer's time in operation giving a 10 percent increase for each year the dealer has been in operation up to 10 years; and

(3) the total value of paragraph (2) of this subsection will be increased by a multiplier that is the greater of:

(A) the dealer's actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of in-state or out-of-state sales transactions processed through the department-designated registration and title system or license plate system, except that it may not exceed 200 percent; or

(B) the statewide actual growth rate percentage identified from the preceding two fiscal years, calculated by the growth of the number of relevant transactions processed through the department-designated registration and title system or license plate system, not less than zero, to determine the dealer's annual allotment; and

(4) the department may increase or decrease the annual allotment for dealers in the state, in a geographic or population area, or in a county, based on:

(A) changes in the market;

(B) temporary conditions that may affect sales; and

(C) any other information the department considers relevant.

(e) A dealer licensed after the commencement of a calendar year shall be allocated the number of buyer's license plates and buyer's temporary plates allocated in this subsection prorated on all or part of the remaining months until the commencement of the calendar year after the dealer's initial license expires. The initial allocations shall be as determined by the department in granting the license, but not more than:

(1) 200 buyer's license plates and 100 buyer's temporary license plates for a franchised dealer unless the dealer provides credible information indicating that a greater number of buyer's license plates is warranted based on anticipated sales, and growth, to include new and used vehicle sales, including information from the manufacturer or distributor, or as otherwise provided in this section.

(2) 100 buyer's license plates and 48 buyer's temporary license plates for a nonfranchised dealer unless the dealer provides credible information indicating that a greater number of license plates is warranted based on anticipated sales as otherwise provided in this section.

(f) An existing dealer that is:

(1) moving its operations from one location to a different location will continue with its allotment of buyer's license plates and buyer's temporary license plates and not be allocated license plates under subsection (e) of this section;

(2) opening an additional location will receive a maximum allotment of buyer's license plates and buyer's temporary license plates based on the greater of the allotment provided to existing locations, including franchised dealers opening additional locations for different line makes, or the amount under subsection (e) of this section;

(3) purchased as a buy-sell ownership agreement will receive the maximum allotment of buyer's license plates and buyer's temporary license plates provided to the location being purchased and not be allocated license plates under subsection (e) of this section; and

(4) inherited by will or laws of descent will receive the maximum allotment of buyer's license plates and buyer's temporary license plates provided to the location being inherited and not be allocated license plates under subsection (e) of this section.

(g) A new dealer may also provide credible information supporting a request for additional or fewer buyer's license plates and buyer's temporary license plates to the amount allocated under subsection (e) of this section based on:

(1) franchised dealer, manufacturer, or distributor sales expectations;

(2) a change in GDN required by death or retirement, except as provided in subsection (f) of this section;

(3) prior year's sales by a dealer moving into the state; or

(4) other similar change of location or ownership that indicates some continuity in existing operations.

(h) The annual allotment of buyer's issue license plates and buyer's temporary license plates will each be divided by four and allocated to a dealer on a quarterly basis, unless a dealer sells only antique or special interest vehicles as defined by Transportation Code, §683.077(b), in which case each allocation may be divided by two and allocated on a half-yearly basis. A dealer's remaining unissued license plates at the end of the allocation period will count towards the dealer's next allotment.

(l) [(i)] A dealer may request more buyer's license plates or buyer's temporary license plates:

(1) after using 50 percent of the quarterly allocation of general issue plates or buyer temporary plates, a dealer may request an advance on the next quarter's allotment; or

(2) after using 50 percent of the allotted annual maximum number of general issue plates or buyer temporary plates a dealer may request an increase in the annual allotted number of license plates.

(n) [(j)] To receive more buyer's license plates or buyer's temporary license plates or to request a decrease in a quarterly or annual allocation [under subsection (i)], a dealer must submit a request in the department's designated license plate system.

(o) [(k)] A dealer requesting an increase or decrease in the maximum annual allotment of buyer's license plates or buyer's temporary license plates must provide information demonstrating the need for additional license plates results from business operations, including anticipated needs, as required by Transportation Code, §503.0633(c). Information may include documentation of sales and tax reports filed as required by law, information of anticipated need, or other information of the factors listed in Transportation Code, §503.0633(b).

(1) The department shall consider the information presented and may consider information not presented that may weigh for or against granting the request that the department in its sole discretion determines to be relevant in making its determination. Other relevant information may include information of the factors listed in Transportation Code, §503.0633(b), the timing of the request, and the requestor's license plate activity.

(2) The department may allocate a lesser or greater number of [additional] license plates than the amount requested. Allocation of a lesser or greater number of [additional] license plates is not a denial of the request. Allocation of [additional ] license plates under this paragraph does not limit the dealer's ability to submit additional requests [ for more license plates].

(3) If a request is denied, the denial will be sent to the dealer by email to the requestor's email address.

(A) A dealer may appeal the denial to the designated director in the Vehicle Titles and Registration Division.

(B) The appeal must be requested though the designated license plate system within 15 days of the date the department emailed the denial to the dealer.

(C) The appeal may discuss information provided in the request but may not include additional information.

(D) The designated director in the Vehicle Titles and Registration Division will review the appeal and any additional statements concerning the information submitted in the original request and render an opinion within 15 days of receiving the appeal. The designated director in the Vehicle Titles and Registration Division may decide to deny the appeal [and issue no additional license plates] or award an amount of [additional] license plates that is lesser, equal to, or greater than the request.

(E) The requesting dealer will be notified as follows:

(i) If the designated director in the Vehicle Titles and Registration Division decides to deny the appeal, the department will contact the requesting dealer by email regarding the decision and options to submit a new request with additional relevant credible supporting documentation or to pursue a claim in district court; or

(ii) If the designated director in the Vehicle Titles and Registration Division awards an amount of [additional] license plates that is lesser, equal to, or greater than the request, the [additional license plates will be added to the] dealer's allocation will be adjusted and the dealer will be contacted by email regarding the decision, informed that the request has not been denied, and informed about options to submit a new request.

(4) The designated director in the Vehicle Titles and Registration Division's decision on appeal is final.

(5) Once a denial is final, a dealer may only submit a subsequent request [for additional license plates] during that calendar year if the dealer is able to provide additional information not considered in a prior request.

(p) [(l)] A change in the allotment under subsection (i) of this section does not create a dealer base for subsequent year calculations.

(q) [(m)] The department may at any time initiate an enforcement action against a dealer if license plate system activity suggests that misuse or fraud has occurred as described in Transportation Code §503.0633(f) or §503.0671.

§215.155. Buyer's License Plates.

(a) A dealer may issue and secure a buyer's license plate or a buyer's temporary license plate only on a vehicle:

(1) from the selling dealer's inventory; and

(2) that can be legally operated on the public streets and highways; and

(3) for which a sale or lease has been consummated; and

(4) that has a valid inspection in accordance with Transportation Code Chapter 548, unless:

(A) an inspection is not required under Transportation Code §503.063(i) or (j); or

(B) the vehicle is exempt from inspection under Chapter 548.

(b) A dealer may not issue a buyer's general issue or temporary license plate to the buyer of a vehicle that is to be titled but not registered.

(c) For a wholesale transaction,[:]

[(1)] a dealer may not issue a buyer's license plate; rather the purchasing dealer places on the motor vehicle its own:

(1) [(A)] dealer's temporary license plate; or

(2) [(B)] dealer's standard or personalized prestige license plate.

(d) A buyer's temporary license plate 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) A dealer shall charge a buyer a fee of $10, unless the vehicle is exempt from payment of registration fees under Transportation Code, §502.453 or §502.456. A dealer shall remit the fee to the county with the title transfer application for deposit to the credit of the Texas Department of Motor Vehicles fund. If the vehicle is sold by a dealer to an out-of-state resident:

(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 designated electronic 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.

(f) A governmental agency may charge a buyer a fee of $10 unless the vehicle is exempt from payment of registration fees under Transportation Code, §502.453 or §502.456. If collected by a governmental agency, the fee must be sent to the county for deposit to the credit of the Texas Department of Motor Vehicles fund.

§215.158. General Requirements for Buyer's License Plates.

(a) A dealer or governmental agency is responsible for the safekeeping of all license plates in the dealer's or governmental agency's possession consistent with the requirements in §215.150 of this title (relating to Dealer Authorization to Issue License Plates). A dealer or governmental agency shall report any loss, theft, or destruction of a buyer's license plate or buyer's temporary license plate to the department in the system designated by the department within 24 hours of discovering the loss, theft, or destruction.

(b) When a dealer is required to [remove and] void a previously assigned buyer's license plate or other type of license plate from a vehicle [sold to an out-of-state buyer or for another reason allowed by rule], the dealer shall render a void plate unusable by permanently marking the front of the plate with the word "VOID" or a large "X"; and within 10 days:

(1) destroy the license plate; or

(2) recycle the license plate using a metal recycler registered under Occupations Code, Chapter 1956; or

(3) return the license plate to the department or county tax assessor-collector.

(c) A dealer or governmental agency must return all license plates in the dealer's possession to the department within 10 days of closing the associated license or within 10 days of the associated license being revoked, canceled, or closed by the department.

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502332

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

CHAPTER 217. VEHICLE TITLES AND REGISTRATION

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Subchapter B, Motor Vehicle Registration, §§217.27, 217.52, and 217.53; and Subchapter I, Processing and Handling Fees, §217.185.

The proposed amendments are necessary to implement legislation, to clarify rule language, and to remove a fee discount that is no longer necessary to incentivize online registration transactions.

EXPLANATION.

Proposed amendments to §217.27(c)(2)(B) would delete references to Transportation Code, §548.102, the language pertaining to an outstanding inspection period, and the language regarding an application for registration in the name of the purchaser. Proposed amendments would also insert reference to Transportation Code, §502.044(a-1) for the authority to register certain motor vehicles for a period of 24 consecutive months. These proposed amendments are necessary to implement Senate Bill (SB) 1729, 89th Legislature, Regular Session (2025), which amended Transportation Code, §502.044 to designate a motor vehicle registration period of 24 consecutive months for new passenger cars and light trucks sold in Texas or purchased by a commercial fleet buyer described by Transportation Code, §501.0234(b)(4) for use in Texas. The proposed amendments to §217.27(c)(2)(B) are also necessary to delete references to Transportation Code, §548.102 because House Bill (HB) 3297, 88th Legislature, Regular Session (2023) repealed Transportation Code, §548.102, pertaining to the initial two-year inspection period for passenger cars and light trucks.

Proposed amendments to §217.52(n)(1)(B) would clarify that the fee for restyling a multi-year vendor specialty license plate to an embossed license plate is $75, regardless of whether the specialty license plate from which the person is restyling was embossed or non-embossed. This reflects the higher costs of the embossing process on the new plate, which the department's vendor incurs regardless of whether the original plate that the person is seeking to replace was embossed. When current §217.52(n)(1)(B) was originally adopted, embossed plates were new and all restyling to an embossed plate was from a non-embossed plate. As embossed plates become more prevalent, this proposed clarification of the rule is necessary to prevent confusion and accurately reflect the fee for the restyling of an embossed plate to a new style of embossed plate.

Proposed amendments to §217.53 are necessary to implement SB 1902, 89th Legislature, Regular Session (2025), which amended Transportation Code, §504.901 to require a motor vehicle dealer who has purchased a vehicle to remove the assigned general-issue license plates from the vehicle and either transfer the license plates within 10 days to another motor vehicle purchased from their inventory, or destroy the plates. Proposed amendments to §217.53(a) would modify the language to require a dealer, upon receiving a motor vehicle in their inventory by sale or transfer, to remove the plates and remove and dispose of the registration insignia from the vehicle. A proposed amendment to §217.53(a) would also clarify that the dealer must either transfer or dispose of the general-issue license plates removed from the motor vehicle in accordance with 43 TAC §215.151(d), relating to License Plate General Use Requirements. In addition, a proposed amendment would add standard language to state that §215.151(d) is contained in Title 43.

SB 1902 amended Transportation Code, §504.901(b) to require a seller in a transaction where neither party holds a general distinguishing number (GDN) to remove the license plates from the vehicle, and to permit the seller to transfer the removed license plates to another vehicle titled in the seller's name. Proposed amendments to §217.53(b) would implement SB 1902 by deleting the requirement for general issue license plates to remain with a motor vehicle following the sale or transfer of the motor vehicle where neither party in the transaction is a dealer, and replacing it with language requiring the seller or transferor to remove license plates from the motor vehicle. The proposed amendments to §217.53(b) would implement SB 1902 by giving sellers the option of transferring the license plates to a motor vehicle titled in their name as long as the motor vehicle is of the same classification as the motor vehicle the license plates were removed from, and upon acceptance of a request made to a county tax assessor-collector through an application filed under Transportation Code, §501.023 or §502.040.

Proposed amendments to §217.53(c) would implement SB 1902 by requiring that the seller of the vehicle render unusable and dispose of any license plates that are not transferred to another vehicle. An additional amendment to §217.53(c) would create consistency and clarity across the department's rules by replacing a vague description of acceptable plate destruction with specific allowable methods for destroying or disposing of license plates, paralleling the requirements for dealers under §215.158(b) of this title, relating to General Requirements for Buyer's License Plates.

The language in Transportation Code, §504.901(b), as amended by SB 1902, that requires the seller of a motor vehicle, in a transaction where neither party is a dealer, to remove the license plates from the vehicle, is very similar to the language that existed in that statue prior to the amendments of HB 718, 88th Legislative Session (2023). Proposed amendments to §217.53(d) would implement SB 1902 by reverting back to a portion of the language that existed in §217.53(c) prior to the amendments that the department adopted in December 2024 to implement HB 718. The proposed amendments to §217.53(d) would inform a purchaser of a motor vehicle, where neither party is a dealer and the seller has removed the license plates, of the option to secure a vehicle transit permit under Transportation Code, §502.492. This permit would allow the purchaser to operate the motor vehicle legally on the public roadways from the location where they purchased it to their home or to get it titled and registered.

A proposed amendment to §217.185(a)(3) would eliminate the $1 discount on registration transactions processed through Texas by Texas (TxT) or the department's Internet Vehicle Title and Registration Service (IVTRS). The proposed amendment is necessary to address increased costs for processing registration transactions. The current processing and handling fee, and associated online discount, were established in 2016 and implemented in January 2017. The online discount was created to incentivize Texans to use the online system. Subsequently, the department deployed TxT, which is a mobile application through which a registrant may renew their vehicle registration. Since 2017, the fee and online discount amounts have remained the same, while costs for processing registration transactions throughout the state have increased. In accordance with Transportation Code, §502.1911, the processing and handling fee set by rule must be "sufficient to cover the expenses associated with collecting registration fees." The cumulative inflation rate from January 2017 to January 2025 is over 34%, which has translated into increased costs for information technology infrastructure and staffing to support registration transactions statewide. Moreover, the incentive to get Texans to adopt the online system has worked and is no longer needed: around 30% of registration renewal transactions went through TxT and IVTRS in the past three years. Eliminating the discount for transactions processed online will help support the increased costs of collecting registration fees. The established registration fees would remain the same, and this proposal only seeks to eliminate the online registration discount in the amount of $1 per registered vehicle per year.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Annette Quintero, 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.

Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years that the proposed amendments to §217.27 and §217.53 will be in effect, there will be no fiscal impact to state or local governments as a result of the enforcement or administration. There will be no foreseeable impact on costs or revenue.

Ms. Bowman has determined that for each year of the first five years that the proposed amendments to §217.52 are in effect, there will be no significant fiscal impact on state or local governments. The proposed amendments to §217.52 clarify that the fee for restyling an embossed specialty plate to another embossed specialty plate is $75 rather than $50, which is the fee to restyle non-embossed plates. This $25 difference in the applicable fee will not result in significant revenue for state government because the embossed plate program is new and the numbers of embossed plates in circulation are small: the state has not yet collected any fees for restyling an embossed specialty plate to another embossed specialty plate so the clarification of the fee cannot create a change in revenue, and only 9,262 vehicles statewide currently have embossed specialty plates. Even if every owner of a vehicle with an embossed specialty plate decided to restyle it to another embossed specialty plate in the same year, the proposed amendments to §217.52 would result in a statewide total revenue increase of only $231,550 per year. The proposed amendments to §217.52 will have no impact on costs to state or local government.

Ms. Bowman has determined that for each year of the first five years the proposed amendments to §217.185 will be in effect, there will be a fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Elimination of the $1.00 online discount will result in additional revenue to the state in the amount of approximately $6,000,000 per year. The proposed amendments to §217.185 will have no impact to costs to state or local government.

PUBLIC BENEFIT AND COST NOTE. Ms. Quintero and Ms. Bowman have also determined that, for each year of the first five years proposed amendments are in effect, there are several public benefits anticipated and no significant economic costs for persons required to comply with the rules.

Anticipated Public Benefits. The proposed amendments to §217.27 would clarify and prevent confusion about the board's rules regarding two-year registration for new vehicles. The proposed amendments to §217.52 would clarify the fees for restyling a vendor specialty license plate to an embossed plate to prevent confusion for the public. The proposed amendments to §217.53 would clarify and provide easy reference for the public on what to do with the license plates on their vehicle when they sell it, and how to get a temporary permit when they buy a vehicle without plates. The proposed amendments to §217.185 would ensure sufficient funding for the department to continue to provide efficient and accessible vehicle registration services, online, by mail and in-person.

Anticipated Costs to Comply with the Proposal. Ms. Quintero anticipates that only the proposed amendments to §217.185 will create a cost to comply, and that cost would not be significant. The cost to comply with the proposed amendments to §217.185 would only be $1 per year for persons who register their vehicles online, due to the loss of the $1 online discount. The proposed amendments to §217.27 and §217.53 do not create any costs. Compliance is not required for the cost to restyle a vendor specialty plate to an embossed plate style under the proposed amendments to §217.52 because a person can avoid the cost by choosing not to restyle their vendor specialty plate.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. The department does not anticipate an adverse economic impact to small business, micro-businesses or rural communities as a result of the proposed amendments to §§217.27, 217.52 and 217.53. Regarding the proposed amendments in §217.185, the department anticipates an adverse economic effect on small businesses and micro-businesses that own vehicles and renew the registration for those vehicles online. There will be no adverse impact on rural communities from the proposed amendments since rural governments are exempt from vehicle registration fees under Transportation Code, Chapter 502, Subchapter J.

Of the 3.3 million estimated small and micro-businesses in Texas identified in the 2024 U.S. Small Business Administration Report, it is unknown precisely how many own and register vehicles. However, based on the industries represented in the data, it is reasonable to assume that approximately 64% (or 2.1 million) would have dedicated vehicles registered by the business. Online registration transactions make up approximately 30% of total registrations, suggesting that even if every small and micro-business of that estimated 2.1 million with a dedicated vehicle renewed their registrations online, the total would be approximately 739,000, with an expected adverse economic impact of only $1 per vehicle registered online, per year.

Under Government Code, §2006.002, the department must perform a regulatory flexibility analysis for the proposed amendments to §217.185. The department considered alternatives of not adopting the amendments to §217.185, exempting small and micro-businesses from these amendments, and adopting an online discount of less than $1 for small and micro-business applicants. The department rejected all three options. Foregoing or reducing the revenue created by removing the $1 online discount for 739,000 small and micro-businesses would leave the vehicle registration system underfunded and unable to cover costs, which would in turn make vehicle registration less efficient and less reliable, causing negative repercussions for law enforcement's ability to identify and track vehicles and for vehicle safety. The department, after considering the purpose of the authorizing statutes that require it to "set the fee in an amount that…is sufficient to cover expenses associated with collecting registration fees," does not believe it is feasible to waive or limit the requirements of the proposed amendments for small or micro-business GDN dealers.

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

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or a decrease of fees paid to the department. The proposed amendments to §217.52 may result in an increase of fees paid to the department as embossed plates becomes more prevalent and restyling from an embossed plate to another embossed plate becomes more common. The proposed amendments to §217.185 will create an increase of $6,000,000 in fees paid to the department. The proposed amendments to §217.185 would not result in an increase or decrease of a fee, however they would remove an optional online transaction discount, resulting in the department retaining a higher percentage of the unchanged fee. The proposed amendments would not create a new regulation or repeal a regulation. The proposed amendments to §217.52 would expand an existing regulation by including restyling from an embossed plate to another embossed plate design. The proposed amendments to §217.185 would limit an existing regulation by removing the $1 online discount from registration fees. Lastly, the proposed amendments do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

SUBCHAPTER B. MOTOR VEHICLE REGISTRATION

STATUTORY AUTHORITY. The department proposes amendments to §§217.27, 217.52, and 217.53 under Transportation Code, §502.0021, which gives the department the authority to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.044, as amended by Senate Bill 1729, 89th Regular Session (2025), to designate a registration period of 24 consecutive months for certain passenger cars and light trucks; Transportation Code, §504.0011, which gives the board authority to implement and administer Transportation Code, Chapter 504, License Plates; Transportation Code, §504.010, which authorizes the department to adopt rules governing the issuance and placement of license plates on motor vehicles; Transportation Code, §504.0051, which gives the department authority to issue personalized license plates and forbids the department from issuing replacement personalized license plates unless the vehicle owner pays the statutory fee required under Transportation Code, §504.007; Transportation Code, §504.007, which states that replacement license plates can only be issued if the vehicle owner pays the statutory fee; Transportation Code, §504.6011, which authorizes the sponsor of a specialty license plate to reestablish its specialty license plate under Subchapter J of Transportation Code, Chapter 504, and for the board to establish the fees under Transportation Code, §504.851; Transportation Code, §504.851(a), which allows the department to contract with a private vendor to provide specialty and personalized license plates; Transportation Code, §504.851(b)-(d), which authorize the board to establish fees by rule for the issuance or renewal of personalized license plates that are marketed and sold by the vendor as long as the fees are reasonable and not less than the amounts necessary to allow the department to recover all reasonable costs associated with the procurement, implementation and enforcement of the vendor's contract; Transportation Code, §504.851(i), which requires a contract entered into by the department and a private vendor for the marketing and sale of specialty license plates to allow the vendor to establish a range of premium embossed specialty license plates to be sourced, marketed, and sold by the private vendor; the rulemaking authority provided under Section 3 of Senate Bill 1902, 89th Legislature (2025); and Transportation Code §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department, as well as the statutes referenced throughout the this preamble.

CROSS REFERENCE TO STATUTE. Transportation Code, Chapters 502, 504, and 1002.

§217.27. Vehicle Registration Insignia.

(a) On receipt of a complete initial application for registration with the accompanying documents and fees, the department will issue vehicle registration insignia to be displayed on or kept in the vehicle for which the registration was issued for the current registration period.

(1) If the vehicle has a windshield, the vehicle registration insignia shall be attached to the inside lower left corner of the vehicle's front windshield in a manner that will not obstruct the vision of the driver, unless the vehicle is registered under Transportation Code, Chapter 504, Subchapter B-1.

(2) If the vehicle has no windshield, the vehicle registration insignia shall be attached to the rear license plate unless the vehicle is registered under Transportation Code, Chapter 504, Subchapter B-1, except that registration receipts, retained inside the vehicle, may provide the record of registration for vehicles with permanent trailer plates.

(3) If the vehicle is registered under Transportation Code, Chapter 504, Subchapter B-1, the registration receipt, symbol, tab, or other device prescribed by and issued by the department must be retained with the vehicle and may provide the record of registration for vehicles with a digital license plate. The expiration month and year must appear digitally on the electronic visual display of the rear digital license plate.

(4) If the vehicle is registered as a former military vehicle as prescribed by Transportation Code, §504.502, the vehicle's registration number shall be displayed instead of displaying a symbol, tab, or license plate.

(A) Former military vehicle registration numbers shall be displayed on a prominent location on the vehicle in numbers and letters of at least two inches in height.

(B) To the extent possible, the location and design of the former military vehicle registration number must conform to the vehicle's original military registration number.

(b) Unless otherwise prescribed by law, each vehicle registered under this subchapter:

(1) must display two license plates that are clearly visible, readable, and legible, one at the exterior front and one at the exterior rear of the vehicle that are securely fastened at the exterior front and rear of the vehicle in an upright horizontal position of not less than 12 inches from the ground, measuring from the bottom; or

(2) must display one plate that is securely fastened at or as close as practical to the exterior rear of the vehicle in a position not less than 12 inches from the ground, measuring from the bottom if the vehicle is a road tractor, motorcycle, trailer or semitrailer, except that a vehicle described by Transportation Code, §621.2061 may place the rear plate so that it is clearly visible, readable, and legible.

(c) Each vehicle registered under this subchapter must display license plates:

(1) assigned by the department for the period; or

(2) validated by a registration insignia issued by the department for a registration period consisting of 12 consecutive months at the time of application for registration, except that:

(A) vehicles described by Transportation Code, §502.0024 may obtain a registration insignia for a period consisting of 12, 24, 36, 48 or 60 consecutive months on payment of all fees for each full year of registration; and

(B) vehicles may be registered for 24 consecutive months in accordance with Transportation Code, §502.044(a-1) [ §548.102] on payment of all fees for each year of registration .[, regardless of the number of months remaining on the inspection at the time of registration, provided:]

(d) The department may cancel any license plate issued with a personalized license plate number if the department subsequently determines or discovers that the personalized license plate number did not comply with this section when the license plate was issued, or if due to changing language usage, meaning, or interpretation, the personalized license plate number no longer complies with this section. When reviewing a personalized license plate number, the department need not consider the applicant's subjective intent or declared meaning. The department will not issue any license plate containing a personalized license plate number that meets one or more of the following criteria:

(1) The license plate number conflicts with the department's current or proposed general issue license plate numbering system.

(2) The director or the director's designee finds that the personalized license plate number may be considered objectionable. An objectionable license plate number may include words, phrases, or slang in any language; phonetic, numeric, or reverse spelling; acronyms; patterns viewed in mirror image; or code that only a small segment of the community may be able to readily decipher. An objectionable pattern may be viewed as:

(A) indecent (defined as including a direct reference or connotation to a sexual act, sexual body parts, excreta, or sexual bodily fluids or functions. Additionally, the license plate number "69" is prohibited unless used with the full year (1969) or in combination with a reference to a vehicle;

(B) vulgar, directly or indirectly (defined as profane, swear, or curse words);

(C) derogatory, directly or indirectly (defined as an expression that is demeaning to, belittles, or disparages any person, group, race, ethnicity, nationality, gender, or sexual orientation. "Derogatory" may also include a reference to an organization that advocates the expressions described in this subparagraph);

(D) a direct or indirect negative instruction or command directed at another individual related to the operation of a motor vehicle;

(E) a direct or indirect reference to gangs, illegal activities, implied threats of harm, or expressions that describe, advertise, advocate, promote, encourage, glorify, or condone violence, crime, or unlawful conduct;

(F) a direct or indirect reference to controlled substances or the physiological state produced by such substances, intoxicated states, or a direct or indirect reference that may express, describe, advertise, advocate, promote, encourage, or glorify such substances or states;

(G) a direct representation of law enforcement or other governmental entities, including any reference to a public office or position exclusive to government; or

(H) a pattern that could be misread by law enforcement.

(3) The license plate number is currently on a license plate issued to another owner.

(e) Notwithstanding the provisions of this section, the department may issue license plates with personalized license plate numbers that refer to:

(1) military branches, military rank, military units, military equipment, or status; or

(2) institutions of higher education, including military academies, whether funded privately, by the state, or by the federal government.

(f) A decision to cancel or not to issue a license plate with a personalized license plate number under subsection (d) of this section may be appealed to the executive director of the department or the executive director's designee within 20 days of notification of the cancellation or non-issuance. All appeals must be in writing, and the requesting party may include any written arguments, but shall not be entitled to a contested case hearing. The executive director or the executive director's designee will issue a decision no later than 30 days after the department receives the appeal, unless additional information is sought from the requestor, in which case the time for decision is tolled until the additional information is provided. The decision of the executive director or the executive director's designee is final and may not be appealed to the board. An appeal to the executive director or the executive director's designee is denied by operation of law 31 days from the receipt of the appeal, or if the requestor does not provide additional requested information within ten days of the request.

(g) The provisions of subsection (a) of this section do not apply to vehicles registered with annual license plates issued by the department.

(h) A person whose initial application has been denied will receive a refund if the denial is not appealed in accordance with subsection (f) of this section. If an existing license plate with a personalized license plate number has been canceled, the person may choose a new personalized license plate number that will be valid for the remainder of the term, or the remaining term of the canceled license plate will be forfeited.

§217.52. Marketing of Specialty License Plates through a Private Vendor.

(a) Purpose and scope. The department will enter into a contract with a private vendor to market department-approved specialty license plates in accordance with Transportation Code, Chapter 504, Subchapter J. This section sets out the procedure for approval of the design, purchase, and replacement of vendor specialty license plates. In this section, the license plates marketed by the vendor are referred to as vendor specialty license plates.

(b) Application for approval of vendor specialty license plate designs.

(1) Approval required. The vendor shall obtain the approval of the board for each license plate design the vendor proposes to market in accordance with this section and the contract entered into between the vendor and the department.

(2) Application. The vendor must submit a written application on a form approved by the executive director to the department for approval of each license plate design the vendor proposes to market. The application must include:

(A) a draft design of the specialty license plate;

(B) projected sales of the license plate, including an explanation of how the projected figure was determined;

(C) a marketing plan for the license plate including a description of the target market;

(D) a licensing agreement from the appropriate third party for any design or design element that is intellectual property; and

(E) other information necessary for the board to reach a decision regarding approval of the requested vendor specialty license plate.

(c) Review and approval process. The board will review vendor specialty license plate applications. The board:

(1) will not consider incomplete applications; and

(2) may request additional information from the vendor to reach a decision.

(d) Board decision.

(1) Decision. The decision of the board will be based on:

(A) compliance with Transportation Code, Chapter 504, Subchapter J;

(B) the proposed license plate design, including:

(i) whether the design meets the legibility and reflectivity standards established by the department;

(ii) whether the design meets the standards established by the department for uniqueness to ensure that the proposed license plate complies with Transportation Code, §504.852(c);

(iii) whether the license plate design can accommodate the International Symbol of Access (ISA) as required by Transportation Code, §504.201(f);

(iv) the criteria designated in §217.27 of this title (relating to Vehicle Registration Insignia) as applied to the design;

(v) whether a design is similar enough to an existing license plate design that it may compete with the existing license plate sales; and

(vi) other information provided during the application process.

(2) Public comment on proposed design. All proposed license plate designs will be considered by the board as an agenda item at a regularly or specially called open meeting. Notice of consideration of proposed license plate designs will be posted in accordance with Office of the Secretary of State meeting notice requirements. Notice of each license plate design will be posted on the department's Internet web site to receive public comment at least 25 days in advance of the meeting at which it will be considered. The department will notify all specialty license plate organizations and the sponsoring agencies who administer specialty license plates issued in accordance with Transportation Code, Chapter 504, Subchapter G, of the posting. A comment on the proposed design can be submitted in writing through the mechanism provided on the department's Internet web site for submission of comments. Written comments are welcome and must be received by the department at least 10 days in advance of the meeting. Public comment will be received at the board's meeting.

(e) Final approval and specialty license plate issuance.

(1) Approval. The board will approve or disapprove the specialty license plate application based on all of the information provided pursuant to this subchapter in an open meeting.

(2) Application not approved. If the application is not approved, the applicant may submit a new application and supporting documentation for the design to be considered again by the board if:

(A) the applicant has additional, required documentation; or

(B) the design has been altered to an acceptable degree.

(3) Issuance of approved specialty license plates.

(A) If the vendor's specialty license plate is approved, the vendor must submit the non-refundable start-up fee before any further design and processing of the specialty license plate.

(B) Approval of the specialty license plate does not guarantee that the submitted draft specialty license plate design will be used. The board has final approval of all specialty license plate designs and will provide guidance on the submitted draft design to ensure compliance with the format and specialty license plate specifications.

(f) Redesign of vendor specialty license plates.

(1) On receipt of a written request from the vendor, the department will allow a redesign of a vendor specialty license plate.

(2) The vendor must pay the redesign administrative costs as provided in the contract between the vendor and the department.

(g) Multi-year vendor specialty license plates. Purchasers will have the option of purchasing vendor specialty license plates for a one-year, a three-year, or a five-year period.

(h) License plate categories and associated fees. The categories and the associated fees for vendor specialty license plates are set out in this subsection.

(1) Custom license plates. Custom license plates include license plates with a variety of pre-approved background and character color combinations that may be personalized with either three alpha and two or three numeric characters or two or three numeric and three alpha characters. Generic license plates on standard white sheeting with the word "Texas" that may be personalized with up to six alphanumeric characters are considered custom license plates before December 2, 2010. The fees for issuance of Custom and Generic license plates are $150 for one year, $400 for three years, and $450 for five years.

(2) T-Plates (Premium) license plates. T-Plates (Premium) license plates may be personalized with up to seven alphanumeric characters, including the "T," on colored backgrounds or designs approved by the department. The fees for issuance of T-Plates (Premium) license plates are $150 for one year, $400 for three years, and $450 for five years.

(3) Luxury license plates. Luxury license plates may be personalized with up to six alphanumeric characters on colored backgrounds or designs approved by the department. The fees for issuance of luxury license plates are $150 for one year, $400 for three years, and $450 for five years.

(4) Freedom license plates. Freedom license plates include license plates with a variety of pre-approved background and character color combinations that may be personalized with up to seven alphanumeric characters. The fees for issuance of freedom license plates are $195 for one year, $445 for three years, and $495 for five years.

(5) Background-only license plates. Background-only license plates include non-personalized license plates with a variety of pre-approved background and character color combinations and may be embossed or non-embossed.

(A) The fees for issuance of non-embossed, background -only license plates are $50 for one year, $130 for three years, and $175 for five years.

(B) Except as stated in subsection (h)(9)(C), the fees for embossed, background-only license plates are $125 for one year, $205 for three years, and $250 for five years.

(6) Vendor souvenir license plates. Vendor souvenir license plates are replicas of vendor specialty license plate designs that may be personalized with up to 24 alphanumeric characters. Vendor souvenir license plates are not street legal or legitimate insignias of vehicle registration. The fee for issuance of souvenir license plates is $40.

(7) Auction. The vendor may auction department-approved license plate numbers for one, three, or five year terms with options to renew indefinitely at the current price established for a one, three, or five year luxury category license plate. The purchaser of the auction license plate number may select from the vendor background designs, including any embossed license plate designs, at no additional charge at the time of initial issuance. The auction license plate number may be moved from one vendor design plate to another vendor design license plate as provided in subsection (n)(1) of this section. The auction license plate number may be transferred from owner to owner as provided in subsection (l)(2) of this section.

(8) Embossed, personalized specialty license plates. The vendor may sell embossed, personalized specialty license plates with a variety of pre-approved background and character color combinations that may be personalized with up to seven alphanumeric characters. Except as stated in subsection (h)(7) of this section, the fees for issuance of embossed, personalized specialty license plates are $270 for one year, $520 for three years, and $570 for five years. Except as stated in subsection (h)(9)(C) of this section, the fees under subsection (h)(9) of this section do not apply to an embossed, personalized specialty license plate.

(9) Personalization and specialty license plate fees.

(A) The fee for the personalization of license plates applied for prior to November 19, 2009 is $40 if the license plates are renewed annually.

(B) The personalization fee for license plates applied for after November 19, 2009 is $40 if the license plates are issued pursuant to Transportation Code, Chapter 504, Subchapters G and I.

(C) If the license plates are renewed annually, the personalization and specialty license plate fees remain the same fee as at the time of issuance if a sponsor of a specialty license plate authorized under Transportation Code, Chapter 504, Subchapters G and I signs a contract with the vendor in accordance with Transportation Code, Chapter 504, Subchapter J, even if the board approves the specialty license plate to be an embossed specialty license plate design.

(i) Payment of fees.

(1) Payment of specialty license plate fees. The fees for issuance of vendor specialty license plates will be paid directly to the state through vendor and state systems for the license plate category and period selected by the purchaser. A person who purchases a multi-year vendor specialty license plate must pay upon purchase the full fee which includes the renewal fees.

(2) Payment of statutory registration fees. To be valid for use on a motor vehicle, the license plate owner is required to pay, in addition to the vendor specialty license plate fees, any statutorily required registration fees in the amount as provided by Transportation Code, Chapter 502, and this subchapter.

(j) Refunds. Fees for vendor specialty license plate fees will not be refunded after an application is submitted to the vendor and the department has approved issuance of the license plate.

(k) Replacement.

(1) Application. An owner must apply directly to the county tax assessor-collector for the issuance of replacement vendor specialty license plates and must pay the fee described in paragraphs (2) or (3) of this subsection, whichever applies.

(2) Lost or mutilated vendor specialty license plates. To replace vendor specialty license plates that are lost or mutilated, the owner must pay the statutory replacement fee provided in Transportation Code, §504.007.

(3) Optional replacements. An owner of a vendor specialty license plate may replace vendor specialty license plates by submitting a request to the county tax assessor-collector accompanied by the payment of a $6 fee.

(4) Interim replacement tags. If the vendor specialty license plates are lost or mutilated to such an extent that they are unusable, replacement specialty license plates may be remanufactured. The county tax assessor-collector will issue interim replacement tags for use until the replacements are available. The owner's vendor specialty license plate number will be shown on the interim replacement tags.

(5) Stolen vendor specialty license plates. The county tax assessor-collector will not approve the issuance of replacement vendor specialty license plates with the same license plate number if the department's records indicate that the vehicle displaying that license plate number was reported stolen or the license plates themselves were reported stolen to law enforcement.

(l) Transfer of vendor specialty license plates.

(1) Transfer between vehicles. The owner of a vehicle with vendor specialty license plates may transfer the specialty license plates between vehicles by filing an application through the county tax assessor-collector if the vehicle to which the specialty license plates are transferred:

(A) is titled or leased in the owner's name; and

(B) meets the vehicle classification requirements for that specialty license plate.

(2) Transfer between owners. Vendor specialty license plates may not be transferred between persons unless the specialty license plate number was initially purchased through auction as provided in subsection (h)(7) of this section. An auctioned license plate number may be transferred as a specialty license plate or as a virtual pattern to be manufactured on a new background as provided under the restyle option in subsection (n)(1) of this section. In addition to the fee paid at auction, the new owner of an auctioned license plate number or plate will pay the department a fee of $25 to cover the cost of the transfer, and complete the department's prescribed application at the time of transfer.

(m) Gift license plates.

(1) A person may purchase license plates as a gift for another person if the purchaser submits a statement that provides:

(A) the purchaser's name and address;

(B) the name and address of the person who will receive the license plates; and

(C) the vehicle identification number of the vehicle on which the license plates will be displayed or a statement that the license plates will not be displayed on a vehicle.

(2) To be valid for use on a motor vehicle, the recipient of the license plates must file an application with the county tax assessor-collector and pay the statutorily required registration fees in the amount as provided by Transportation Code, Chapter 502, and this subchapter.

(n) Restyled vendor specialty license plates. A person who has purchased a multi-year vendor specialty license plate may request a restyled license plate at any time during the term of the plate.

(1) For the purposes of this subsection, "restyled license plate" is a vendor specialty license plate that has a different style from the originally purchased vendor specialty license plate but:

(A) is within the same price category, except if the license plate number was purchased through auction and has the same alpha-numeric characters and expiration date as the previously issued multi-year license plates; or

(B) is restyling [from a non-embossed specialty license plate style] to an embossed specialty license plate style and has the same alpha-numeric characters and expiration date as the previously issued multi-year license plates.

(2) The fee for each restyled license plate is:

(A) $50 for restyling under subsection (n)(1)(A) of this section; or

(B) $75 for restyling under subsection (n)(1)(B) of this section.

§217.53. Disposition of License Plates and Registration Insignia upon Sale or Transfer of Motor Vehicle.

(a) Upon the sale or transfer of a motor vehicle to a dealer, the dealer shall remove the license plates and remove and dispose of the registration insignia from the motor vehicle. The dealer shall transfer or dispose of the removed [and retain the assigned] general issue license plates [for disposition at the time of a subsequent purchase] in accordance with §215.151(d) of this title (relating to License Plate General Use Requirements)[ , and the dealer shall remove and dispose of the registration insignia as provided in Transportation Code, §502.491].

(b) Upon the sale or transfer of a motor vehicle in which neither party is a dealer, the [general issue] license plates shall be removed from [remain with] the motor vehicle by the seller or transferor [as provided in Transportation Code, §504.901]. The removed license plates may be transferred to another motor vehicle if the following requirements are met:

(c) License plates that are not transferred to another motor vehicle as described in subsection (b) of this section within 10 days after the date the license plate is removed from the motor vehicle [A license plate other than a general issue license plate shall be removed by the owner of a motor vehicle that is sold or transferred. Removed license plates may be transferred if eligible; otherwise,] must be rendered unusable by permanently marking the front of the plate with the word "VOID" or a large "X" and: [disposed of in a manner that renders the license plates unusable or that ensures the license plates will not be available for fraudulent use on a motor vehicle].

(d) A person who obtains a motor vehicle in a transaction described by subsection (b) of this section may obtain one vehicle transit permit (temporary single-trip permit), as provided by Transportation Code, §502.492, through the department's website at www.txdmv.gov. [If the purchaser at a retail sale chooses to obtain replacement general issue license plates, the replaced license plates must be disposed of in a manner that renders the license plates unusable or that ensures the license plates will not be available for fraudulent use on a motor vehicle.]

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502336

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER I. PROCESSING AND HANDLING FEES

STATUTORY AUTHORITY. The department proposes amendments to §217.185 under Transportation Code, §502.0021, which gives the department the authority to adopt rules to administer Transportation Code, Chapter 502; Transportation Code §502.1911, which authorizes the board to adopt rules to set registration processing and handling fees, and Transportation Code §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.

CROSS REFERENCE TO STATUTE. Transportation Code, Chapters 502 and 1002.

§217.185. Allocation of Processing and Handling Fees.

(a) For registration transactions, except as provided in subsection (b) of this section, the fee amounts established in §217.183 of this title (relating to Fee Amount) shall be allocated as follows:

(1) If the registration transaction was processed in person at the office of the county tax assessor-collector or mailed to an office of the county tax assessor-collector:

(A) the county tax assessor-collector may retain $2.30; and

(B) the remaining amount shall be remitted to the department.

(2) If the registration transaction was processed through the department or the TxFLEET system or is a registration processed under Transportation Code, §§502.0023, 502.091, or 502.255; or §217.46(b)(5) of this title (relating to Commercial Vehicle Registration):

(A) $2.30 will be remitted to the county tax assessor-collector; and

(B) the remaining amount shall be retained by the department.

(3) If the registration transaction was processed through Texas by Texas (TxT) or the department's Internet Vehicle Title and Registration Service (IVTRS), [the fee established in §217.183 of this title is discounted by $1]:

(A) Texas Online receives the amount set pursuant to Government Code, §2054.2591, Fees;

(B) the county tax assessor-collector may retain $.25; and

(C) the remaining amount shall be remitted to the department.

(4) If the registration transaction was processed by a limited service deputy or full service deputy appointed by the county tax assessor-collector in accordance with Subchapter H of this chapter (relating to Deputies):

(A) the deputy may retain:

(i) the amount specified in §217.168(c) of this title (relating to Deputy Fee Amounts). The deputy must remit the remainder of the processing and handling fee to the county tax assessor-collector; and

(ii) the convenience fee established in §217.168, if the registration transaction is processed by a full service deputy;

(B) the county tax assessor-collector may retain $1.30; and

(C) the county tax assessor-collector must remit the remaining amount to the department.

(5) If the registration transaction was processed by a dealer deputy appointed by the county tax assessor-collector in accordance with Subchapter H of this chapter (relating to Deputies):

(A) the deputy must remit the processing and handling fee to the county tax assessor-collector;

(B) the county tax assessor-collector may retain $2.30; and

(C) the county tax assessor-collector must remit the remaining amount to the department.

(b) For transactions under Transportation Code, §§502.093 - 502.095, the entity receiving the application and processing the transaction collects the $4.75 processing and handling fee established in §217.183:

(1) the entity may retain $4.25;

(2) the entity must remit the remaining amount to the department; and

(3) a full service deputy processing a special registration permit or special registration license plate transaction may not charge a convenience fee for that transaction.

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 July 10, 2025.

TRD-202502337

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

CHAPTER 220. AUTOMATED MOTOR VEHICLES

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes new 43 Texas Administrative Code (TAC) Chapter 220, Automated Motor Vehicles; Subchapter A, General Provisions, §220.1 and §220.3; Subchapter B, Authorization to Operate an Automated Motor Vehicle, §§220.20, 220.23, 220.26, 220.28, and 220.30; and Subchapter C, Administrative Sanctions, §220.50, concerning automated motor vehicles.

The proposed new Chapter 220 is necessary to implement Senate Bill 2807, 89th Legislature, Regular Session (2025), which requires a person to hold an automated motor vehicle authorization to operate one or more automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in Texas without a human driver.

EXPLANATION.

Subchapter A. General Provisions

Proposed new §220.1 would provide the purpose and scope of proposed new Chapter 220. Proposed new §220.3 would specify that the definitions for proposed new Chapter 220 are the definitions contained in Transportation Code, Chapter 545, Subchapter J.

Subchapter B. Authorization to Operate an Automated Motor Vehicle

Proposed new §220.20 would provide the purpose and scope of proposed new Subchapter B regarding the form and manner of an application for authorization to operate one or more automated motor vehicles, as well as the requirements to update certain documents, under Transportation Code, §545.456.

Proposed new §220.23 would prescribe the form and manner by which a person may apply to the department for authorization to operate one or more automated motor vehicles, as required by Transportation Code, §545.456(a). The application requirements are similar to the application requirements in the department's rules for other programs, such as operating authority for a motor carrier under 43 TAC Chapter 218. However, the application requirements under §220.23 were customized to comply with Transportation Code, §545.456 and to obtain information that the department needs to comply with new Chapter 220 and Transportation Code, §545.456 and §545.459. The requirement for the applicant to provide the business entity type and Texas Secretary of State file number, as applicable, will assist the department in identifying the applicant and verifying certain application information as necessary.

The vehicle descriptive information specified in proposed new §220.23(b)(1)(B) is consistent with certain data fields that are included on Form 130-U, which is the department's Application for Texas Title and/or Registration. The information required under proposed new §220.23 may also help law enforcement determine whether an automated motor vehicle is operating under an authorization issued by the department under Transportation Code, §545.456, so the law enforcement officer can determine whether to issue a citation to the owner of the vehicle or the authorization holder under Transportation Code, §545.454(b).

Proposed new §220.26 would prescribe the requirements and process regarding an authorized holder's obligation to provide the department with updated documents under Transportation Code, §545.456(e) and §545.456(f)(2). Proposed new §220.26(b)(3) would impose a five-day deadline for an authorization holder to electronically submit an updated or current document when the department requests the authorization holder for an updated or current document under Transportation Code, §545.456(f)(2). The five-day deadline under §545.456(f)(2) is different than the deadline under §545.456(e) to address situations in which the department needs an updated or current document more quickly than 30 days, such as when the operation of an automated motor vehicle endangers the public as stated in Transportation Code, §545.459(a) and (b), or when a law enforcement officer needs updated or current documents to determine whether an automated motor vehicle is operating under an authorization issued by the department under Transportation Code, §545.456. However, proposed new §220.26(b)(3) would also authorize the department to grant an extension on the five-day deadline in response to a written request from the authorization holder.

Proposed new §220.26(b)(4) would require the authorization holder to submit any requests for an extension prior to the department's deadline for the updated or current document. A request for an extension after the deadline has passed is not a reasonable request. Proposed new §220.26(b)(4) would also require an extension request to be sent to the designated address listed in the department's request to the authorization holder for an updated or current document. This will allow the department flexibility in determining how best to staff and monitor communications with authorization holders. Proposed new §220.26(b)(5) would require the authorization holder's request for an extension to contain an explanation on why five days is not reasonable, why the authorization holder needs more time (including the specific deadline the authorization holder is requesting), and whether the authorization holder's requested deadline is likely to result in harm to the public health, safety, or welfare. Automated motor vehicles are a new and evolving technology. The authorization holder is in the best position to know about the automated motor vehicles that it operates and the automated motor vehicle industry in general. The authorization holder is in the best position to articulate its reasons for an extension on the five-day deadline.

Proposed new §220.28 would provide clarity to the automated motor vehicle industry regarding the computation of time under proposed new Chapter 220, as well as under Transportation Code, §545.456 and §545.459, by aligning the computation with Government Code, §311.014 and specifying calendar days rather than business days.

Proposed new §220.30 would require a written statement and certification required by Transportation Code, §545.456 to contain an authorized signature to ensure that the statement and certification are accurate and enforceable. An electronic signature is legally acceptable under Business and Commerce Code, §322.007.

Subchapter C. Administrative Sanctions

Proposed new §220.50 would state that the department's rules regarding administrative sanctions for authorization holders are located in Chapter 224 of the department's rules. This proposed new section is consistent with other department rules, which state where to find the department's rules relating to adjudicative practice and procedure as a courtesy to the regulated industries and others.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the new sections will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Jimmy Archer, Director of the Motor Carrier Division (MCD), has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Archer has also determined that, for each year of the first five years the new sections are in effect, there are several anticipated public benefits and no costs of compliance.

Anticipated Public Benefits. The public benefits anticipated as a result of the proposal include the safety of the traveling public, and consistent requirements for the automated motor vehicle industry operating in Texas. The application requirements for an authorization under proposed new §220.23, as well as updates to the documents under proposed new §220.26, would provide information to the department that the department needs to impose administrative sanctions against an authorization holder under Chapter 224 of this title, including the suspension, revocation, or cancellation of the authorization, if the department determines that the operation of the automated motor vehicle on a highway or street in this state endangers the public. The information that an applicant must provide to the department under proposed new §220.23, as well as updates to the documents under proposed new §220.26, would provide information for law enforcement to determine whether to issue a citation to the owner or the authorization holder for a violation of traffic or motor vehicle laws related to the vehicle under Transportation Code, §545.454(b).

The proposed new rules in Chapter 220 would provide consistency for the automated motor vehicle industry operating in Texas because the language in proposed new §220.23 would prescribe certain information that an applicant for authorization under Transportation Code, §545.456 must provide to the department, as well as the form by which a person may apply for such authorization, and the form by which an authorization holder shall update a document described by Transportation Code, §545.456(b)(1), (2), or (3).

Anticipated Costs To Comply With The Proposal. Mr. Archer anticipates that there will be no costs to comply with these proposed rules. The proposed rules do not impose a fee on an applicant for authorization under Transportation Code, §545.456. Also, most of the application requirements are specified by Transportation Code, §545.456.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed new sections will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the rules do not create costs beyond those required by statute. In addition, the requirements under proposed new Chapter 220 are created to ensure the safety of the traveling public in this state, which falls under the exception in Government Code, §2006.002(c-1). Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

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

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed new sections are in effect, a new government program would be created. Implementation of the proposed new sections would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed new sections create new regulations, and do not expand, limit or repeal existing regulations. Lastly, the proposed new sections do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

SUBCHAPTER A. GENERAL PROVISIONS

STATUTORY AUTHORITY. The department proposes new sections under Transportation Code, §545.456, which requires the board by rule to prescribe the form and manner by which a person may apply to the department for authorization to operate automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in this state without a human driver; Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new sections would implement Transportation Code, Chapter 545, Subchapter J, and §1002.001; and Government Code, Chapter 2001.

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502341

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER B. AUTHORIZATION TO OPERATE AN AUTOMATED MOTOR VEHICLE

STATUTORY AUTHORITY. The department proposes new sections under Transportation Code, §545.456, which requires the board by rule to prescribe the form and manner by which a person may apply to the department for authorization to operate automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in this state without a human driver; Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new sections would implement Transportation Code, Chapter 545, Subchapter J, and §1002.001; and Government Code, Chapter 2001.

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502342

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER C. ADMINISTRATIVE SANCTIONS

STATUTORY AUTHORITY. The department proposes this new section under Transportation Code, §545.456, which requires the department to prescribe the form and manner by which an authorization holder must update a document described by Transportation Code, §545.456(b)(1) through (3); Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new section would implement Transportation Code, Chapter 545, Subchapter J, and §1002.001; and Government Code, Chapter 2001.

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502343

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

CHAPTER 221. SALVAGE VEHICLE DEALERS

SUBCHAPTER B. LICENSING

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Subchapter B, Licensing; §221.17, License Processing for Military Service Members, Spouses, and Veterans. These proposed amendments are necessary to implement House Bill (HB) 5629, 89th Legislature (2025), and Senate Bill (SB) 1818, 89th Regular Session (2025), both of which become effective on September 1, 2025. HB 5629 amended Occupations Code, §55.004 and §55.0041 to change the standard for comparing licensing requirements in other states with Texas requirements and to change license request submission requirements, and added new §55.0042, which describes the standards for when the department may consider an applicant to be in good standing with a licensing authority in another state.

EXPLANATION.

Proposed amendments to §221.17(b)(1)(A) would require a military service member or military spouse to submit to the department a complete application for licensure. This proposed amendment is necessary to implement Occupations Code, §55.0041(b), as amended by HB 5629, which requires a military service member or military spouse to submit an application in a form prescribed by the agency and deletes a requirement to provide a notice. A proposed amendment to §221.17(b)(1)(B) would delete an unnecessary conjunction. To implement Occupations Code, §55.0041(b)(2), as amended by HB 5629, proposed amendments to §221.17(b)(1)(C) would add a requirement for an applicant who is a military spouse to submit a copy of the marriage license to the department and would delete a requirement for a military service member or military spouse to submit documentation demonstrating that the military service member or military spouse is licensed and in good standing in another jurisdiction for the relevant business or occupation. A proposed amendment would add new §221.17(b)(1)(D) to require a notarized affidavit as required by Occupations Code, §55.0041(b)(3), as amended by HB 5629. Proposed amendments to §221.17(b)(2) would substitute "application" for "notice" and update a reference to paragraph (1) consistent with proposed amendments to §221.17(b)(1) and to implement Occupations Code, §55.0041, as amended by HB 5629. Proposed amendments to §221.17(b)(2) and §221.17(b)(3) would substitute "state" for "jurisdiction" consistent with Occupations Code, §55.0041, as amended by HB 5629. Proposed amendments to §221.17(b)(2)(B) and §221.17(b)(3) would replace the phrase "substantially equivalent" to implement Occupations Code, §55.0041, as amended by HB 5629, by describing the revised standard for comparing the license requirements in another state with Texas requirements. Proposed amendments would add new §221.17(b)(2)(C) to state that the department will issue a provisional license upon receipt of a license application from a military service member, military veteran, or military spouse. These amendments would implement Occupations Code, §55.0041, as amended by SB 1818. Proposed amendments to §221.17(b)(3) would add a reference to license eligibility if the applicant was previously licensed in good standing in Texas in the last five years, would add language that the department will notify an applicant why the department is currently unable issue a license, and would change the time for the department to act on an application submitted by a military service member or military spouse from 30 days to 10 days to implement with Occupations Code, §55.0041, as amended by HB 5629.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Monique Johnston, Director of the Motor Vehicle Division (MVD), has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Ms. Johnston has also determined that, for each year of the first five years the amended section is in effect, the public may benefit because these amendments may encourage military service members or military spouses to apply for a license and build a business serving Texas citizens.

Anticipated Public Benefits. The public benefits anticipated as a result of the proposal include economic benefits resulting from increasing the number of licensed businesses that serve Texas citizens.

Anticipated Costs to Comply With The Proposal. Ms. Johnston anticipates that there will be no costs to comply with these rules.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by the Government Code, §2006.002, the department has determined that the proposed amendments will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because rural communities are not subject to licensing requirements and the proposal does not require any additional costs for license holders. The department has an electronic licensing system available to all applicants that allows an applicant to apply online for a license and upload any required documents. This rule proposal does not impact small businesses or micro-businesses. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

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

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease in fees paid to the department. The proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. Lastly, the proposed amendments do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

STATUTORY AUTHORITY. The department proposes amendments to Chapter 221 under Occupations Code, §2302.051, which authorizes the board to adopt rules as necessary to administer Occupations Code, Chapter 2302; Occupations Code, §2302.052, which assigns the board a duty to set reasonable and necessary application fees, license fees, renewal fees, and other fees as required to implement Chapter 2302; Occupations Code, §2302.103, which requires a salvage vehicle dealer to apply for a license on a form prescribed by the department and pay an application fee; Occupations Code, §2302.104, which prescribes content that must be included in an application; Occupations Code, §2302.105, which requires the department to complete an investigation of the applicant's qualifications before issuing a license; Occupations Code, §2302.108, which authorizes the department to deny, suspend, revoke, or reinstate a license issued under Chapter 2302 consistent with the requirements of Government Code, Chapter 2001; and Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and the duties of the department.

The department also proposes amendments and under the authority of Transportation Code, §§501.0041, 502.0021, and 503.002; and Government Code, §§2001.004, and 2001.039, and 2001.054, in addition to the statutory authority referenced throughout this preamble.

Transportation Code, §501.0041 authorizes the department to adopt rules to administer Transportation Code, Chapter 501. Transportation Code, §502.0021 authorizes the department to adopt rules to administer Transportation Code, Chapter 502. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code, Chapter 503.

Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Government Code, §2001.039 requires state agencies to readopt, readopt with amendments, or repeal a rule as the result of reviewing the rule. Government Code, §2001.054 specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license.

CROSS REFERENCE TO STATUTE. These rule revisions would implement Government Code, Chapter 2001; Occupations Code, Chapters 53, 55, and 2302; and Transportation Code, Chapters 501-503, and 1002.

§221.17. License Processing for Military Service Members, Spouses, and Veterans

(a) The department will process a license, amendment, or renewal application submitted for licensing of a military service member, military spouse, or military veteran in accordance with Occupations Code, Chapter 55. A license holder who fails to timely file a sufficient renewal application because the license holder was on active duty is exempt from any increased fee or penalty imposed by the department.

(b) A military service member or military spouse may engage in a business or occupation for which a department issued license is required if the military service member or military spouse meets the requirements of Occupations Code, §55.0041 and this section.

(1) A military service member or military spouse must submit to the department:

(A) a complete application [notice of the military service member or military spouse's intent to engage in a business or occupation in Texas for which a department issued license is required];

(B) proof of the military service member being stationed in Texas and a copy of the military service member or military spouse's military identification card; [and]

(C) if the applicant is a military spouse, a copy of the military spouse's marriage license; and [documentation demonstrating that the military service member or military spouse is licensed and in good standing in another jurisdiction for the relevant business or occupation.]

(2) Upon receipt of the application [notice ] and documentation required by paragraph (1) [paragraphs (1)(B) and (1)(C)] of this subsection, the department shall:

(A) confirm with the other licensing state [ jurisdiction] that the military service member or military spouse is currently licensed and in good standing for the relevant business or occupation; and

(B) conduct a comparison of the other state's [ jurisdiction's] license requirements, statutes, and rules with the department's licensing requirements to determine if the requirements are similar in scope of practice; and [substantially equivalent.]

(3) If the department confirms that a military service member or military spouse is currently licensed in good standing in another state [jurisdiction] with [substantially equivalent] licensing requirements that are similar in scope and practice, or was licensed in good standing in Texas in the last five years, the department shall issue a license to the military service member or military spouse for the relevant business or occupation, or notify the applicant why the department is currently unable to issue a license pursuant to Occupations Code, §55.0041(b-1), within 10 [30] days. The license is subject to the requirements of this chapter and Occupations Code, Chapter 2302 in the same manner as a license issued under the standard application process, unless exempted or modified under Occupations Code, Chapter 55.

(c) This section establishes requirements and procedures authorized or required by Occupations Code, Chapter 55, and does not modify or alter rights that may be provided under federal law.

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 July 10, 2025.

TRD-202502333

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

CHAPTER 224. ADJUDICATIVE PRACTICE AND PROCEDURE

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Chapter 224, Adjudicative Practice and Procedure; Subchapter A, General Provisions, §§224.1, 224.5, 224.27, and 224.29; proposes amendments to Subchapter D, Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement, §224.110; proposes amendments to Subchapter E, Contested Cases Referred to SOAH, §§224.150, 224.152, 224.164, and 224.166; proposes amendments to Subchapter F, Board Procedures in Contested Cases, §§224.190, 224.194, 224.198, 224.200, and 224.204; proposes new Subchapter H, Automated Motor Vehicle Authorizations, §§224.290, 224.292, and 224.294; and proposes new Subchapter I, Motor Carrier Division Director Procedures in Contested Cases, §§224.310, 224.312, 224.314, 224.316, 224.318, 224.320, 224.322, 224.324, and 224.326, concerning adjudicative practice and procedure. The amendments and new sections are necessary to implement Senate Bill (SB) 2807, 89th Legislature, Regular Session (2025) regarding administrative sanctions against an automated motor vehicle authorization holder; to provide the requirements when the director of the department's Motor Carrier Division is the final order authority; to provide procedures regarding a special public meeting at which the director of the department's Motor Carrier Division is authorized to review a contested case; and to clean up the rule text.

SB 2807 amends Subchapter J of Chapter 545 of the Transportation Code regarding the operation of automated motor vehicles. The SB 2807 amendments include a requirement for a person to receive and maintain authorization from the department to operate an automated motor vehicle to transport property or passengers in furtherance of a commercial enterprise on a highway or street in Texas without a human driver.

EXPLANATION.

Subchapter A. General Provisions

Proposed amendments to §224.1 would implement SB 2807 by expanding the scope of the subchapter to include the adjudication of a contested case arising under Transportation Code, §545.459(k) regarding the suspension, revocation, or cancellation of an authorization under Transportation Code, §545.456; the imposition of a restriction on the operation of the automated motor vehicle under Transportation Code, §545.459(k); and the rescission of a suspension, revocation, or cancellation of an authorization, or the removal of a restriction on the operation of the automated motor vehicle under Transportation Code, §545.459(k). Proposed amendments to §224.1 would also modify punctuation and language to address the added reference to Transportation Code, §545.459(k).

Proposed amendments to §224.5 would add references to the department's final order authority in subsections (a) and (b) to clean up the rule text to clarify that it applies to the department's Motor Carrier Division Director in contested cases arising under Transportation Code, Chapter 643. The term "final order authority" is defined in §224.3 as the person with authority under statute or a board rule to issue a final order. Although §224.5 currently refers to a board delegate in subsections (a) and (b), the authority of the department's Motor Carrier Division Director to issue final orders under Transportation Code, Chapter 643 was provided by the department's executive director under Transportation Code, §643.001(2), rather than by delegation of the board. These proposed amendments would clarify that Government Code, §2001.061, regarding the prohibition against ex parte communications concerning a contested case, apply to a contested case under Transportation Code, Chapter 643 for which the department's Motor Carrier Division Director has final order authority.

Under proposed amendments to §224.27 and §224.29, and under proposed new §224.294(j), the final order authority for contested cases under Transportation Code, §545.459(k) would be the department's Motor Carrier Division Director or the board, depending on whether the administrative law judge from the State Office of Administrative Hearings (SOAH) issued a proposal for decision and whether the proposal for decision is for a default proceeding under 1 TAC §155.501. If the SOAH administrative law judge issued a proposal for decision that is not based on a default proceeding at SOAH, the board is the final order authority for the contested case. If the proposal for decision is based on a default proceeding at SOAH or if there is not a proposal for decision, the department's Motor Carrier Division Director is the final order authority for the contested case, including contested cases resolved under 1 TAC §155.503 (Dismissal) or Government Code, §2001.056 (Informal Disposition of Contested Cases).

A proposed amendment to §224.27(b) would implement SB 2807 by stating that the board has final order authority under a contested case filed under Transportation Code, §545.459(k), except as provided by §224.29. Proposed amendments to §224.27 would also modify language and punctuation due to the proposed reference to Transportation Code, §545.459(k).

A proposed amendment to §224.29(c) would delete a reference to "any power relating to a contested case" because §224.29 is specifically about final order authority. Other sections in Chapter 224 govern other authority regarding a contested case, such as §224.13, which sets out the authority for certain department staff to issue a subpoena or commission to take a deposition in a contested case. A proposed amendment to §224.29(c) would also delete a comma due to the proposed deletion of language from this subsection. In addition, a proposed amendment to §224.29(c) would clarify that Transportation Code, §643.001(2) is the other statutory authority under which final order authority may be delegated to the director of the department's Motor Carrier Division.

Proposed amendments to §224.29 would add new subsection (d) to delegate authority to the department's Motor Carrier Division Director to issue a final order under Transportation Code, §545.459(k) in a contested case in which the administrative law judge at SOAH has not submitted a proposal for decision to the department for consideration by the final order authority, and a contested case in which the administrative law judge at SOAH submitted a proposal for decision regarding a default proceeding to the department for consideration by the final order authority, as explained above. This delegation is authorized by Transportation Code, §1003.005. In addition, proposed amendments to §224.29 would re-letter current subsection (d) to subsection (e), and update references in that subsection due to the proposed addition of new subsection (d).

Subchapter D. Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement

A proposed amendment to §224.110 regarding the purpose and scope of Subchapter D would replace the reference to Subchapter F with a reference to proposed new Subchapter I regarding the procedures in contested cases in which the director of the department's Motor Carrier Division, rather than the board, is the final order authority.

Subchapter E. Contested Cases Referred to SOAH

A proposed amendment to §224.150(a) would add a reference to proposed new §224.294, relating to suspension, revocation, or cancellation of authorization under Transportation Code, §545.459 to operate one or more automated motor vehicles. The proposed amendments to §224.150(a) would modify the scope of Subchapter E of Chapter 224 to include contested cases involving authorizations to operate autonomous vehicles. This change is necessary to implement SB 2807 because Transportation Code, §545.459(k) states that an authorization holder who is aggrieved by an action of the department under Transportation Code, §545.459(h) may submit a written request for a hearing at SOAH. Also, Transportation Code, §545.459(l) states that the contested case provisions of Government Code, Chapter 2001 apply to a proceeding under Transportation Code, §545.459(k).

A proposed amendment to §224.150(c) would add a reference to new Subchapter I of Chapter 224, regarding procedures in contested cases when the board is not the final order authority. The language in current Subchapter F regarding board procedures in contested cases includes certain terms, such as "board chair," as well as certain references, such as a reference to a board meeting under 43 TAC §206.22, that do not apply to the final order authority of the department's Motor Carrier Division Director under this chapter or Transportation Code, Chapter 643. Proposed new Subchapter I would include modified language from current Subchapter F to address the procedures in contested cases when the board is not the final order authority, so it is necessary to propose amendments to §224.150(c) to reference proposed new Subchapter I of Chapter 224.

A proposed amendment to §224.152(a) would implement SB 2807 by adding a reference to Transportation Code, §545.459(k) regarding the department's requirement to refer contested cases to SOAH when an authorization holder timely submits a written request for a hearing.

Proposed amendments to §224.164(d) would authorize a party to a contested case to raise an issue regarding a final proposal for decision before the department's Motor Carrier Division Director during oral presentation at a special public meeting, if any, under proposed new Subchapter I of Chapter 224. This would allow parties in contested cases that are decided by the department's Motor Carrier Division Director the same right to raise issues with a final proposal for decision as parties in a case decided by the board if a special public meeting is held.

Proposed amendments to §224.166(b) and (d) would refer to the department's Motor Carrier Division Director under Chapter 224, and a proposed amendment to §224.166(d) would refer to proposed new Subchapter I of Chapter 224 regarding the transfer of jurisdiction from SOAH to the person with final order authority. These changes are necessary to create similar processes for contested cases decided by a final order authority as already exist for cases decided by the board.

Subchapter F. Board Procedures in Contested Cases

A proposed amendment to §224.190 would clarify that Subchapter F does not apply to a contested case in which a SOAH administrative law judge has submitted a final proposal for decision for consideration by the department in a case in which the department's Motor Carrier Division Director is the final order authority as provided in proposed new §224.310. Although the department's Motor Carrier Division Director is a board delegate under Chapter 224 for certain contested cases, Subchapter I of this title (relating to Motor Carrier Division Director Procedures in Contested Cases) governs the procedures for certain contested cases in which the department's Motor Carrier Division Director is the final order authority.

A proposed amendment to §224.194 would remove subsection (b) because the executive director, rather than the board, delegated final order authority to the department's Motor Carrier Division Director for contested cases under Transportation Code, Chapter 643. Also, proposed new Subchapter I would include language regarding a special public meeting during which the department's Motor Carrier Division Director may review a contested case for which that director is the final order authority. A proposed amendment to §224.194 would also remove the subsection letter for current subsection (a) due to the proposed deletion of subsection (b).

Proposed amendments to §§224.198, 224.200, and 224.204 would implement SB 2807 by adding a reference to the scope of the board's authority to act under Transportation Code, §545.459(k). Proposed amendments to §§224.198, 224.200, and 224.204 would also modify language and punctuation due to the proposed reference to Transportation Code, §545.459(k). In addition, a proposed amendment to §224.200(a) would correct a grammatical error by changing the word "Chapter" to "Chapters."

Subchapter H. Automated Motor Vehicle Authorizations

Proposed amendments would implement SB 2807 by adding new Subchapter H regarding automated motor vehicle authorization under Transportation Code, §545.456 and §545.459. Proposed new §224.290 would provide the purpose and scope of proposed new Subchapter H for clarity.

Proposed new §224.292 would provide the procedures, authority, and requirements regarding the suspension, revocation, or cancellation of an authorization under Transportation Code, §545.456(f), as well as the rescission of a suspension, revocation, or cancellation under Transportation Code, §545.456(g). A determination under Transportation Code, §545.456(f) is not a contested case under Government Code, Chapter 2001, according to Transportation Code, §545.456(h), so proposed new §224.292(a) would state that no other section in Chapter 224 applies to this section, other than §224.290 regarding the purpose and scope of Subchapter H. Proposed new §224.292(b) and (c) would require the department to notify the authorization holder of certain actions by email because the word "immediately" in Transportation Code, §545.456(f) and the word "promptly" in Transportation Code, §545.456(g) require these processes to be done quickly. Proposed new §224.292(b) and (c) would also state that the action or the recission, respectively, is effective when the notice is emailed by the department to avoid any delay to the process that mail might cause. Proposed new §224.292(d) would require the department to also mail the notification to the authorization holder by first-class mail to ensure that the authorization holder received notice. Proposed new §224.292(e) grants the department's Motor Carrier Division Director the authority to decide suspensions, revocations and cancellations under Transportation Code, §545.456(f) and the recissions of those same decisions under Transportation Code, §545.456(g). Proposed new §224.292(f) and (g) clarify requirements for computation of time, aligning them with the requirements of Government Code, §311.014 and defining the unit of measurement as calendar days rather than business days.

Proposed new §224.292(h) and §224.294(l) would clarify that a reference in rule or in a department communication to an "authorization holder" whose authorization is currently suspended, revoked, or cancelled does not rescind or invalidate the suspension, revocation, or cancellation of the authorization. Transportation Code, §545.456(d) states that an authorization does not expire, and it remains active unless suspended, revoked, or canceled by the department. Also, Transportation Code, §545.459(k) refers to an "authorization holder," even though the authorization has been suspended, revoked, or cancelled under subsection (h). In addition, the suspension, revocation, or cancellation of an authorization may be rescinded under Transportation Code, §545.456(g) and §545.459(j).

Proposed new §224.294 would implement SB 2807 by providing the procedures, authority, and requirements regarding the suspension, revocation, or cancellation of an authorization under Transportation Code, §545.459, as well as the imposition of one or more restrictions on the operation of the automated motor vehicle under Transportation Code, §545.459. Proposed new §224.294(a) would state which subchapters in Chapter 224 apply to contested cases before SOAH and the board or the department's Motor Carrier Division Director brought under Transportation Code, §545.459.

Proposed new §224.294(b) would specify that the notice of intent to sanction, required by Transportation Code, §545.459(a) and (c) shall be sent by certified mail, return receipt requested so that it can also serve as the notice to a licensee of an intended suspension, revocation, or cancellation required by Government Code, §2001.054. Proposed new §224.294(b) would also require the department to send the notice of intent by email to the authorization holder's email address on file in the department's designated system, so the authorization holder receives notice as quickly as possible due to public safety concerns as described in Transportation Code, §545.459(a) and (b).

Proposed new §224.294(c) would require the authorization holder to submit any request for an extension on the department's deadline for corrective action and certification under Transportation Code, §545.459(c)(2) and (e) to be submitted prior to the department's deadline listed in the department's notice of intent. Proposed new §224.294(c) would also require the authorization holder's request for an extension to include an explanation regarding why the department's deadline is not reasonable, why the authorization holder needs more time (including the specific deadline the authorization holder is requesting), and whether the authorization holder's requested deadline is likely to result in harm to the public health, safety, or welfare. Automated motor vehicles are a new and evolving technology. The authorization holder is in the best position to know about the automated motor vehicles that it operates and the automated motor vehicle industry in general. The authorization holder is in the best position to articulate its reasons for an extension on the department's deadline. A request for an extension after the deadline has passed is not a reasonable request under Transportation Code, §545.459(e). The department will only send a notice of intent if the department determines that an authorization holder's automated motor vehicle is not in safe operational condition and the operation of the vehicle on a highway or street in Texas endangers the public. When determining whether an authorization holder's request for an extension is reasonable, the department must consider the public health, safety, and welfare. Although the department will consider the nature of the issues the authorization holder must correct, it is incumbent on the authorization holder to timely request an extension.

Proposed new §224.294(d) would require the department to send notice to the authorization holder of a decision that suspended, revoked, or cancelled the authorization or imposed a restriction on the operation of the automated motor vehicle by both email and first-class mail, to ensure that the authorization holder is as likely as possible to actually receive the notice. The date of the decision issuance would be the date the department sends the email, to avoid any delay or uncertainty that might arise from waiting for the arrival of the regular mail. Proposed new §224.294(e) would specify that the department will designate the address for the authorization holder to submit requests under Transportation Code, §545.459 to extend the compliance period, for review of the decision, for removal or recission of a sanction, or for a hearing. This will allow the department flexibility in determining how best to staff and monitor communications with authorization holders.

Proposed new §224.294(f) would allow the department to request proof that a representative has authority to represent the authorization holder, to prevent confusion, miscommunication, or fraud. Proposed new §224.294(g) would require authorization holders to electronically file certifications under Transportation Code, §545.459(d) by following the requirements of §224.11, relating to Filing and Service of Documents, to ensure uniform evidence of when and what was filed, as well as service to all parties involved.

Proposed new §224.294(h) would make the department's Motor Carrier Division Director the decision authority for determinations under Transportation Code, §545.459(g). Proposed new §224.294(i) would also make the Motor Carrier Division Director the decision authority for final determinations under Transportation Code, §545.459(h) following a timely request to review the decision, similar to the exceptions process under Government Code, §2001.062 and SOAH rules. Proposed new §224.294(j) would make the department's board the final order authority for contested cases under Transportation Code, §545.459(k) when the SOAH administrative law judge issued a proposal for decision, but would empower the Motor Carrier Division Director to make decisions regarding the recission of a sanction or the removal of a restriction under Transportation Code, §545.459(j) to allow for faster decision-making in those situations without the need to call a public meeting of the board.

Proposed new §224.294(k) would set the process the department will follow to dismiss the case and notify the authorization holder if the SOAH hearing is not held within 60 days of the Motor Carrier Division Director's final determination under Transportation Code, §545.459(h). Notice would be sent by email for expediency in that situation. Proposed new §224.294(m) would exempt certifications or communications regarding a recission or removal of a sanction under Transportation Code, §545.459(j) from the filing requirements of §224.11(a) through (g), relating to Filing and Service of Documents, so that the authorization holder could simply send the documents and request to the designated email address, as prescribed by proposed new §224.294(e), to make the process as efficient and expedited as possible.

Subchapter I. Motor Carrier Division Director Procedures in Contested Cases

Proposed amendments would add new Subchapter I regarding contested cases for which the department's director of the Motor Carrier Division is the final order authority, rather than the board. Proposed new Subchapter I would include modified language from current Subchapter F, which addresses board procedures in contested cases. Proposed new §224.310 would provide the purpose and scope of proposed new Subchapter I.

Proposed new §224.312 would provide an overview of the process for the contested case review by the department's final order authority, including the final order authority's discretion to schedule a special public meeting to review the contested case. Public meetings may be appropriate in matters of great public interest that do not require expedited decisions, but they will be inappropriate when a decision is routine or must be made quickly to protect public health or safety.

Proposed sections throughout proposed new Subchapter I regarding a special public meeting would only apply if the department's final order authority schedules a special public meeting. Proposed new §224.314 would provide the procedure and deadlines regarding a request for oral presentation, if there is a special public meeting. Proposed new §224.314(a) would require the department to provide notice by email to the parties 20 days before a special public meeting, to allow the parties time to prepare any oral presentations and written materials for the special public meeting. Proposed new §224.314(b) would require a party to notify the department and all other parties of its intent to make an oral presentation at least seven days in advance of the meeting, to allow both the parties and the department time to prepare accordingly. Proposed new §224.314(c) would allow parties that are not affected by the proposal for decision to have flexibility to agree to the order of their presentations, but would set the order of presentations in proposed new §224.320, relating to Order of Oral Presentations to the Final Order Authority, as the default order if the parties do not file their agreed order of presentations at the same time they file their intent to make oral presentation under proposed new §224.314(b). Proposed new §224.314(d) would clarify that a party that fails to make a timely written request for oral presentation under proposed new §224.314(b) will not be allowed to present at the special public meeting, to ensure predictability in procedure during the meeting and an opportunity for all parties to prepare in advance of the meeting. Proposed new §224.314(e) would specify that there would be no public comment at special public meetings and that non-parties would not be allowed to give oral presentations. This would prevent extraneous information that is not in the SOAH record from influencing the final order authority in violation of Government Code, Chapter 2001, and would allow for more efficient meetings.

Proposed new §224.316 would provide the procedure and deadline for the provision of written materials for a special public meeting. Proposed new §224.316(a) would require a party that wants to provide written materials to the final order authority at a special public meeting to file them with the department at least 14 days prior to the meeting and provide copies to the other parties. This would allow both the parties and the department adequate time to prepare in advance of the special meeting. Proposed new §224.316(b) would specify that written materials can only contain information from the SOAH record, so as to avoid exposing the final order authority to information that is not in the SOAH record from influencing the final order authority in violation of Government Code, Chapter 2001. Similarly, proposed new §224.316(e) would specify that non-parties are not authorized to provide written materials, to prevent extraneous information that is outside the SOAH record from influencing the final order authority. Proposed new §224.316(c) would require the parties to provide citations to the SOAH record for all written materials, so that the parties and the department can verify that the written materials are all within the SOAH record. Proposed new §224.316(d) would set size, font, and page count limitations for the written materials, to require parties to streamline their documentary presentations so that the presentations during the special public meeting are both efficient and effective.

Proposed new §224.318 would provide the requirements for an oral presentation at a special public meeting. Proposed new §224.318(a) would limit oral presentations to information within the SOAH record and to the scope of the final order authority's powers under Government Code, §2001.058(e), so as to prevent the final order authority from violating Government Code, Chapter 2001 by relying on evidence that is not in the record or taking action that is not within the department's jurisdiction. Proposed new §224.318(b) would allow a party during oral presentation to recommend that the final order authority remand the case to SOAH, to the extent allowed under the SOAH rules in 1 TAC Chapter 155 and Government Code, Chapter 2001. Remand to SOAH can be necessary when the administrative law judge failed to make findings regarding specific allegations. Proposed new §224.318(c) would require the parties to object when another party goes outside the SOAH record, so that the final order authority will be able to identify and disregard information that is outside the record. Proposed new §224.318(d) would set a 15-minute time limit for each party's oral presentation, clarify that additional rebuttal statements or a closing statement are not allowed, and clarify that time spent responding to questions or making objections does not count against the 15 minutes. These guidelines would ensure that oral presentations in special public meetings proceed efficiently but fairly.

Proposed new §224.320 would provide the order of presentation for an oral presentation at a special public meeting. Proposed new §224.320(a) would require the department to provide a presentation of the procedural history and summary of the contested case. Proposed new §224.320(b) would require that the adversely affected party present first, but allows the final order authority to determine the order of presentations if it is not clear which party is adversely affected or if it appears that there is more than one adversely affected party. This would parallel the current order of presentation for parties making an oral presentation at board meetings under §224.202, regarding Order of Oral Presentations to the Board. Proposed new §224.320(c) would require the parties that are not adversely affected to present in alphabetical order, assuming they had not previously agreed to an order under proposed new §224.314.

Proposed new §224.322 would describe the final order authority's conduct and the limits on any discussions when reviewing a contested case. Proposed new §224.322(a) would specify the legal limitations of the final order authority's review. Proposed new §224.322(b) would allow the final order authority to ask the parties questions, but only within the relevant legal limitations. Proposed new §224.322(c) would allow the final order authority to use personal expertise in the industry in deciding a contested case, but only within the relevant legal limitations. Proposed new §224.322 would provide clarity and ease of reference for parties and the final order authority alike regarding the laws that apply to and limit the final order authority's review of the proposal for decision.

Proposed new §224.324 would provide the requirements regarding a final order issued by the department's director of the Motor Carrier Division under proposed new Subchapter I. Proposed new §224.324(a) would require that the final decision from the final order authority be in writing and signed, in keeping with the requirements of Government Code, §2001.141(a). Proposed new §224.324(b) would require the department to email and send by certified mail the final order to the parties in the contested case, to maximize the opportunities for the parties to receive notice of the decision and allow the department to ascertain whether and on what date an impacted party received the decision for purposes of Government Code, §2001.142(c). Proposed new §224.324(c) and (d) would clarify that the Government Code governs the issuance of a final order by the final order authority, the parties' motions for rehearing, and when the decision becomes final.

Proposed new §224.326 would address public access to a special public meeting. Proposed new §224.326 would contain modified versions of portions of 43 TAC §206.22, regarding Public Access to Board Meetings, which only applies to board meetings. Proposed new §224.326(a) would require persons in need of special accommodations who plan to attend the special public meeting to send a request to the department two days in advance, to allow the department time to arrange the accommodation. Proposed new §224.326(b) would specify that members of the public may not question parties or the final order authority in a contested case, to maintain decorum in the meeting and to avoid exposing the final order authority to information that is outside the SOAH record. Proposed new §224.326(c) would require a person who disrupts a special public meeting to leave the premises, to maintain decorum and safety in the meeting.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments and 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. Corrie Thompson, Director of the Enforcement Division (ENF), has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Ms. Thompson has also determined that, for each year of the first five years that the amended and new sections are in effect, there is an anticipated public benefit because the proposal provides clarity for the regulated industries that are governed by these provisions, and negligible associated costs to comply.

Anticipated Public Benefits. The public benefit anticipated as a result of the proposal includes clarity for the regulated industries regarding the procedures, requirements, and restrictions regarding the matters governed by this proposal.

Anticipated Costs to Comply with the Proposal. Ms. Thompson anticipates that there will be no significant costs to comply with this proposal. The department has drafted the rules so as to eliminate cost by allowing authorization holders to use online document filing and email as service for requests rather than mail.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed new sections and amendments will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the requirements are minimal. 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, a government program would be created to implement Senate Bill 2807. Implementation of the proposed amendments and new sections would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed amendments and new sections create new regulations to implement Senate Bill 2807, and expand an existing regulation to provide the procedures in certain contested cases for which the director of the department's Motor Carrier Division is the final order authority, rather than the board. The proposed rules would not limit or repeal regulations. Lastly, the proposed amendments and new sections do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

SUBCHAPTER A. GENERAL PROVISIONS

STATUTORY AUTHORITY. The department proposes amendments under Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to certain department staff; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed amendments would implement Transportation Code, Chapter 545, Subchapter J; §1002.001, and §1003.005; and Government Code, Chapter 2001.

§224.1. Purpose and Scope.

This subchapter describes the procedures by which the department will adjudicate a contested case arising under Occupations Code, Chapters 2301 or 2302; [, or] Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005; or Transportation Code, §545.459(k), consistent with the requirements of Government Code, Chapter 2001. Unless expressly excluded or limited, this subchapter applies to every contested case in which the department has jurisdiction.

§224.5. Prohibited Communication.

(a) No person, party, attorney of record, or authorized representative in any contested case shall violate Government Code, §2001.061 by directly or indirectly engaging in ex parte communication concerning a contested case with an ALJ, board member, board delegate, final order authority, or a hearings examiner assigned to render a decision or make findings of fact and conclusions of law in a contested case.

(b) Unless prohibited by Government Code, §2001.061, department staff who did not participate in the hearing may advise a board member, a board delegate, a final order authority, or a hearings examiner, regarding a contested case and any procedural matters.

(c) Department staff shall not recommend a final decision to the board unless the department is a party to the contested case.

(d) A violation of this section shall be promptly reported to the board chair or chief hearings examiner, as applicable, and the general counsel of the department.

(e) The general counsel shall ensure that a copy or summary of the ex parte communication is included with the record of the contested case and that a copy is forwarded to all parties or their authorized representatives.

(f) The general counsel may take any other appropriate action otherwise provided by law.

§224.27. Final Order; Motion for Rehearing.

(a) The provisions of Government Code, Chapter 2001, Subchapter F, govern the issuance of a final order issued under this subchapter and a motion for rehearing filed in response to a final order.

(b) Except as provided by subsection (c) of this section and §224.29 of this title (relating to Delegation of Final Order Authority), the board has final order authority in a contested case filed under Occupations Code, Chapters 2301 or 2302; [, or under] Transportation Code, Chapters 502, 503, 621-623, 643, 645, and 1001-1005; or Transportation Code, §545.459(k).

(c) The hearings examiner has final order authority in a contested case filed under Occupations Code, §2301.204 or Occupations Code Chapter 2301, Subchapter M.

(d) A department determination and action denying access to the license plate system becomes final within 26 days of the date of the notice denying access to a database, unless the dealer:

(1) requests a hearing regarding the denial of access, or

(2) enters into a settlement agreement with the department.

(e) Unless a timely motion for rehearing is filed with the appropriate final order authority as provided by law, an order shall be deemed final and binding on all parties. All administrative remedies are deemed to be exhausted as of the effective date of the final order.

(f) If a timely motion for rehearing is not filed, the final order shall be deemed final and binding in accordance with the provisions of Government Code, §2001.144.

(g) If a final and binding order includes an action on a license, the department may act on the license on the date the final order is deemed final and binding, unless the action is stayed by a court order.

§224.29. Delegation of Final Order Authority.

(a) In accordance with Occupations Code, §2301.154(c) and Transportation Code, §1003.005(b), except as provided by subsection (b) of this section, the director of the division that regulates the distribution and sale of motor vehicles is authorized to issue, where there has not been a decision on the merits, a final order in a contested case under Subchapters B and C, including, but not limited to a contested case resolved:

(1) by settlement;

(2) by agreed order;

(3) by withdrawal of the complaint;

(4) by withdrawal of a protest;

(5) by dismissal for want of prosecution including:

(A) failure of a complaining or protesting party to participate in scheduling mediation or to appear at mediation as required under Subchapter C of this chapter (relating to Contested Cases Between Motor Vehicle Industry License Holders or Applicants);

(B) failure of a complaining or protesting party to respond to department requests for information or scheduling matters;

(C) failure of a complaining or protesting party to dismiss a contested case that has been resolved by the parties;

(6) by dismissal for want of jurisdiction;

(7) by summary judgment or summary disposition;

(8) by default judgment; or

(9) when a party waives opportunity for a contested case hearing.

(b) In accordance with Occupations Code, §2301.704 and §2301.711, a hearings examiner is authorized to issue a final order in a contested case brought under Occupations Code, §2301.204 or §§2301.601-2301.613.

(c) In accordance with Transportation Code, §1003.005, the director of the department's Motor Carrier Division is delegated [any power relating to a contested case, including] the authority to issue a final order[,] in contested cases under Subchapter D of this chapter to the extent that delegation of such authority is not already provided under Transportation Code, §643.001(2). [by statute.]

(e) [(d)] In a contested case in which the board has delegated final order authority under subsection (a), (c) or (d) [or (c)] of this section, a motion for rehearing shall be filed with and decided by the final order authority delegate.

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 July 14, 2025.

TRD-202502466

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER D. MOTOR CARRIER AND OVERSIZE OR OVERWEIGHT VEHICLE OR LOAD ENFORCEMENT

STATUTORY AUTHORITY. The department proposes amendments under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643, and which authorizes a motor carrier to appeal the revocation or suspension of a registration or placement on probation of the motor carrier as requested by the Texas Department of Public Safety under Transportation Code, §643.252(b); Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.001, which states that the department is subject to Government Code, Chapter 2001, except as specifically provided by law; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to certain department staff; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, Chapter 2001; and Transportation Code, Chapters 502, 621, 622, 623, 643, and 645; Transportation Code, §§1002.001, 1003.001, and 1003.005.

§224.110. Purpose and Scope.

This subchapter and Subchapters A, E, and I [F] of this chapter describe the procedures by which the department will adjudicate alleged violations and claims under Transportation Code, Chapters 502, 621-623, 643, and 645. These contested cases involve registrants under the International Registration Plan, motor carriers, motor carrier leasing businesses, motor transportation brokers, and household goods carriers. Contested cases involving persons operating oversize or overweight vehicles or moving oversize or overweight loads are also included.

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 July 14, 2025.

TRD-202502467

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER E. CONTESTED CASES REFERRED TO SOAH

STATUTORY AUTHORITY. The department proposes amendments under Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §623.271, which states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty or the revocation of a permit under §623.271; Transportation Code, §623.272, which states that the notice and hearing requirements under Transportation Code, §643.2525 apply to the imposition of an administrative penalty under §623.272; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.2525, which provides the process for an administrative hearing under Transportation Code, Chapter 643; Transportation Code, §643.2526, which authorizes an applicant to appeal the denial of an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643, and which authorizes a motor carrier to appeal the revocation or suspension of a registration or placement on probation of the motor carrier as requested by the Texas Department of Public Safety under Transportation Code, §643.252(b); Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.001, which states that the department is subject to Government Code, Chapter 2001, except as specifically provided by law; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to certain department staff; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed amendments would implement Transportation Code, Chapter 545, Subchapter J; Transportation Code, Chapters 621, 622, 623, 643, and 645; Transportation Code, §§502.091(b), 1002.001, 1003.001, and 1003.005; and Government Code, Chapter 2001.

§224.150. Purpose and Scope.

(a) This subchapter describes department practice and procedures for referring a contested case to SOAH for a hearing, including a contested case under Subchapter B (relating to Motor Vehicle, Salvage Vehicle, and Trailer Industry Enforcement), Subchapter C (relating to Contested Cases Between Motor Vehicle Industry License Holders or Applicants), and Subchapter D (Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement) of this chapter, as well as §224.294 of this title (relating to Suspension, Revocation, or Cancellation of Automated Motor Vehicle Authorization under Transportation Code, §545.459) .

(b) When SOAH accepts a referral from the department, jurisdiction of the contested case transfers to SOAH, and practice and procedure in contested cases heard by SOAH are addressed in:

(1) 1 TAC Chapter 155, and

(2) subchapter A and this subchapter, where not in conflict with SOAH rules.

(c) When SOAH disposes of a contested case, jurisdiction transfers from SOAH back to the department. The department will issue a final order under §224.29 of this title (relating to Delegation of Final Order Authority), [or] under Subchapter F of this chapter (relating to Board Procedures in Contested Cases), or under Subchapter I of this chapter (relating to Motor Carrier Division Director Procedures in Contested Cases).

§224.152. Referral to SOAH.

(a) The department shall refer contested cases to SOAH upon determination that a hearing is appropriate under Occupations Code, Chapter 2301 or 2302; [, or] Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005; or Transportation Code, §545.459(k), including contested cases relating to:

(1) an enforcement complaint on the department's own initiative;

(2) a notice of protest that has been timely filed in accordance with §215.106 of this title (relating to Time for Filing Protest);

(3) a protest filed under Occupations Code, §2301.360 or a protest or complaint filed under Occupations Code, Chapter 2301, Subchapters I or J;

(4) a department-issued cease and desist order; or

(5) any other contested matter that meets the requirements for a hearing at SOAH.

(b) The department will follow SOAH procedures to file a Request to Docket Case and related documents and request a setting of a hearing.

(c) SOAH will provide the department with the date, time, and place of the initial hearing.

§224.164. Issuance of a Proposal for Decision.

(a) After a hearing on the merits, the ALJ shall submit a proposal for decision in a contested case to the department and all parties.

(b) The parties may submit to the ALJ exceptions to the proposal for decision and replies to exceptions to the proposal for decision in accordance with the SOAH rules.

(c) The ALJ will review all exceptions and replies and notify the department and parties whether the ALJ recommends any changes to the proposal for decision.

(d) The parties are not entitled to file exceptions or briefs in response to a final [an amended] proposal for decision but may raise an issue regarding the final proposal for decision before the following:

(1) the board as allowed at the time of oral presentation under Subchapter F of this chapter; or

(2) the final order authority as allowed at the time of an oral presentation at a special public meeting, if any, under Subchapter I of this chapter (relating to Motor Carrier Division Director Procedures in Contested Cases).

§224.166. Transfer of Jurisdiction for Final Decision.

(a) A party may appeal an interlocutory order issued under Occupations Code, Chapter 2301 to the board under §224.192 of this title (relating to Appeal of an Interlocutory Order). SOAH retains jurisdiction on all other pending matters in the contested case, except as provided otherwise in this chapter.

(b) If a contested case includes a hearing on the merits, SOAH's jurisdiction transfers to the board or other final order authority when the ALJ confirms that the proposal for decision is final.

(c) Once jurisdiction transfers, no new testimony, witnesses, or information may be considered by the board or board delegate with final order authority.

(d) After SOAH transfers the SOAH administrative record to the department, the board or the department's director of the Motor Carrier Division [or board delegate with final order authority] will consider the contested case under the provisions of Subchapter F of this chapter (relating to Board Procedures in Contested Cases) or Subchapter I of this chapter (relating to Motor Carrier Division Director Procedures in Contested Cases).

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

Filed with the Office of the Secretary of State on July 14, 2025.

TRD-202502468

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER F. BOARD PROCEDURES IN CONTESTED CASES

STATUTORY AUTHORITY. The department proposes amendments under Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.001, which states that the department is subject to Government Code, Chapter 2001, except as specifically provided by law; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to certain department staff; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed amendments would implement Transportation Code, Chapter 545, Subchapter J; Transportation Code, §§1002.001, 1003.001, and 1003.005; and Government Code, Chapter 2001.

§224.190. Purpose and Scope.

This subchapter describes procedures for the board to review and issue a final order in a contested case in which:

(1) a SOAH ALJ has submitted a final proposal for decision for consideration by the board or board delegate with final order authority, except as stated otherwise in §224.310 of this title (relating to Purpose and Scope),

(2) a party has appealed an interlocutory cease-and-desist order issued by an ALJ, or

(3) a party affected by a statutory stay order issued by an ALJ requested a hearing to modify, vacate, or clarify the extent and application of the statutory stay order.

§224.194. Contested Case Review.

[(a)] After SOAH submits a final proposal for decision and transfers SOAH's administrative record to the department, the board has jurisdiction and the record required to issue a final order and will review the contested case during the public session of a board meeting, in accordance with the APA.

§224.198. Written Materials and Evidence.

(a) If a party wants to provide written materials at the board meeting, the party must provide the written materials to the department and all other parties in accordance with §224.11 of this title (relating to Filing and Service of Documents) at least 21 days prior to the date of the board meeting. If a party fails to timely provide written materials to the department or any other party, the department shall not provide the written materials to the board and the party shall not provide the written materials to the board at the board meeting. Non-parties are not authorized to provide written materials to the board.

(b) For the purposes of this section, written materials are defined as language or images including photographs or diagrams, that are contained in the SOAH administrative record and recorded in paper form except as stated otherwise in this subsection. The language or images in the written materials must be taken without changes from the SOAH administrative record; however, proposed final orders and draft motions for possible board action are allowed to be included in a party's written materials even if they contain arguments or requests that are not contained in the SOAH administrative record. Written materials shall be limited to evidence contained in the SOAH administrative record and consistent with the scope of the board's authority to act under Government Code, §2001.058(e); [and] Occupations Code, Chapters 2301 and 2302; [, and] Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005 ; and Transportation Code, §545.459(k), as applicable.

(c) All information in the written materials shall include a citation to the SOAH administrative record on all points to specifically identify where the information is located. The citations may be provided in an addendum to the written materials that is not counted against the 15-page limit under subsection (d) of this section; however, the addendum must not include any information other than a heading that lists the name of the party, the caption for the contested case, and text that lists the citations and page numbers.

(d) Written materials shall be 8.5 inches by 11 inches and single-sided. Written materials must be double-spaced and at least 12-point type if in text form. Written materials are limited to 15 pages per party. If a party provides the department with written materials that contain more pages than the maximum allowed, the department shall not provide the written materials to the board and a party shall not provide the written materials to the board at the board meeting.

§224.200. Oral Presentation Limitations and Responsibilities.

(a) A party to a contested case under review by the board shall limit oral presentation and discussion to evidence in the SOAH administrative record. Also, oral presentation and discussion shall be consistent with the scope of the board's authority to act under Government Code, §2001.058(e); Occupations Code, Chapters 2301 and 2302; [and] Transportation Code Chapters [ Chapter] 502, 503, 621-623, 643, 645, or 1001-1005; and Transportation Code, §545.459(k), as applicable.

(b) A party may argue that the board should remand the contested case to SOAH.

(c) Each party is responsible for objecting when another party attempts to make arguments or engage in discussion regarding evidence that is not contained in the SOAH administrative record.

(d) A party's presentation to the board is subject to the following limitations and conditions:

(1) Each party shall be allowed a maximum of 15 minutes for their oral presentation. The board chair may increase this time.

(2) No party is allowed to provide a rebuttal or a closing statement.

(3) An intervenor of record from the SOAH proceeding supporting another party shall share that party's time.

(4) Time spent by a party responding to a board question is not counted against their presentation time.

(5) During an oral presentation, a party to the contested case before the board may object that a party presented material or argument that is not in the SOAH administrative record. Time spent discussing such objections is not counted against the objecting party's time.

§224.204. Board Conduct and Discussion When Reviewing a Contested Case or Interlocutory Order.

(a) The board shall conduct its contested case review in compliance with Government Code, Chapter 2001; Occupations Code, Chapters 2301 and 2302; [and] Transportation Code Chapters 502, 503, 621, 623, 643, 645, or 1001-1005; and Transportation Code, §545.459(k), as applicable, including the limitations on changing a finding of fact or conclusion of law made by a SOAH ALJ, and the prohibition on considering evidence outside of the SOAH administrative record.

(b) A board member may question a party or the department on any matter that is relevant to the proposal for decision; however, a question shall be consistent with the scope of the board's authority to take action under Government Code, §2001.058(e); Occupations Code, Chapters 2301 and 2302; [and] Transportation Code, Chapters 502, 503, 621-623, 643, 645, or 1001-1005; and Transportation Code, §545.459(k), as applicable; a question must be limited to evidence contained in the SOAH administrative record; and the communication must comply with §224.5 of this title (relating to Prohibited Communication). In considering a contested case, a board member is authorized to ask a question regarding a request to remand the case to SOAH, including a remand to SOAH for further consideration of the evidence.

(c) A board member may use personal expertise in the industry to understand a contested case and make effective decisions, consistent with the scope of the board's authority to act under Government Code, §2001.058(e); Occupations Code, Chapters 2301 and 2302; [and] Transportation Code Chapters 502, 503, 621-623, 643, 645, or 1001-1005; and Transportation Code, §545.459(k), as applicable. However, a board member is not an advocate for a particular industry. A board member is an impartial public servant who takes an oath to preserve, protect, and defend the Constitution and laws of the United States and Texas.

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 July 14, 2025.

TRD-202502469

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER H. AUTOMATED MOTOR VEHICLE AUTHORIZATIONS

STATUTORY AUTHORITY. The department proposes new sections under Transportation Code, §545.453, which authorizes the board to adopt rules that are necessary to administer Subchapter J of Chapter 545 of the Transportation Code; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Government Code, §2001.054, which specifies the requirements regarding the grant, denial, renewal, revocation, suspension, annulment, or withdrawal of a license; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.001, which states that the department is subject to Government Code, Chapter 2001, except as specifically provided by law; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to certain department staff; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new sections would implement Transportation Code, Chapter 545, Subchapter J; Transportation Code, §§1002.001, 1003.001, and 1003.005; and Government Code, Chapter 2001.

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

Filed with the Office of the Secretary of State on July 14, 2025.

TRD-202502470

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER I. MOTOR CARRIER DIVISION DIRECTOR PROCEDURES IN CONTESTED CASES

STATUTORY AUTHORITY. The department proposes new sections under Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §502.0021, which authorizes the department to adopt rules to administer Transportation Code, Chapter 502; Transportation Code, §502.091(b), which authorizes the department to adopt and enforce rules to carry out IRP; Transportation Code, §621.008, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 621; Transportation Code, §622.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 622; Transportation Code, §623.002, which authorizes the board to adopt rules that are necessary to implement and enforce Transportation Code, Chapter 623; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.2525, which addresses the final order issued by the department for a contested case under Transportation Code, Chapter 643; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; Transportation Code, §1003.001, which states that the department is subject to Government Code, Chapter 2001, except as specifically provided by law; Transportation Code, §1003.005, which authorizes the board by rule to delegate any power relating to a contested case, including the power to issue a final order, to certain department staff; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed new sections would implement Transportation Code, Chapters 621, 622, 623, 643, and 645; Transportation Code, §§502.091(b), 1002.001, 1003.001, and 1003.005; and Government Code, Chapter 2001.

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

Filed with the Office of the Secretary of State on July 14, 2025.

TRD-202502471

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER B. MOTOR VEHICLE, SALVAGE VEHICLE, AND TRAILER INDUSTRY ENFORCEMENT

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes to amend 43 Texas Administrative Code (TAC) Subchapter B, Motor Vehicle, Salvage Vehicle, and Trailer Industry Enforcement, §224.58, concerning denial of access to the license plate system. These amendments are necessary to implement Senate Bill (SB) 1902, 89th Legislature, Regular Session (2025), which became effective July 1, 2025. In SB 1902, Section 3, the legislature directed the department to adopt implementing rules by October 1, 2025. Transportation Code, §503.0633(f), as amended by SB 1902, allows the department to deny access to the license plate database if a dealer has been denied access to the temporary tag database under former Transportation Code, §503.0632(f).

EXPLANATION.

As the department transitioned from paper temporary tags to metal license plates on July 1, 2025, in accordance with House Bill 718, 88th Legislature, Regular Session, the temporary tag database has been replaced with the license plate database. Under Transportation Code 503.0633(f), as amended by SB 1902, the department may deny a dealer access to the license plate system if the department determines that the dealer has acted fraudulently. A proposed amendment to §224.58(b) would add denial of access to the temporary tag system as a basis for the department to deny a dealer access to the license plate system. These amendments implement SB 1902, which added this basis as one the department could consider in denying access to the license plate database under Transportation Code, §503.0633(f). The proposed amendment would allow the department to deny access to the license plate system if the dealer had been denied access to temporary tag database prior to July 1, 2025, after providing the dealer with notice.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendment 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. Corrie Thompson, Director of the Enforcement 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. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendment 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. Corrie Thompson, Director of the Enforcement Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Ms. Thompson has also determined that, for each year of the first five years the amendment is in effect, public benefits include limiting the criminal activity of a small subset of dealers who fraudulently obtain and sell license plates to persons seeking to engage in violent criminal activity, including armed robbery, human trafficking, and assaults on law enforcement, or to persons seeking to criminally operate uninsured and uninspected vehicles as a hazard to Texas motorists and the environment.

Anticipated Costs to Comply with the Proposal. Ms. Thompson anticipates that there will be no costs to comply with this proposed rule as the proposed rule only applies when a dealer's actions indicate fraud.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the rule does not change the underlying statutory policy-that the department may deny a dealer the ability to issue vehicle registration credentials if the dealer has committed fraud. This fraud prevention tool first applied to temporary tags and will now apply to license plates obtained or issued by a dealer. The amendment will also not have an adverse impact on rural communities because rural communities are not required to hold a general distinguishing number. The proposed amendment does not require small businesses or micro-businesses to pay a fee or incur any new costs to comply with this amendment, as any costs will be the same as those under the existing rule regarding temporary tags. Therefore, the department is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

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

GOVERNMENT GROWTH IMPACT STATEMENT. The department has determined that each year of the first five years the proposed amendment is in effect, no government program would be created or eliminated. Implementation of the proposed amendment would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. The proposed amendment does not create a new regulation and does not expand, limit, or repeal an existing regulation. Lastly, the proposed amendment does not increase the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT. If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. 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. In addition to the rulemaking authority provided in Section 34 of HB 718, the department proposes amendments to §224.58 under Transportation Code, §§503.002, 503.0631, and 1002.001. Transportation Code, §503.002 authorizes the department to adopt rules to administer Transportation Code Chapter 503. Transportation Code, §503.0631(e) authorizes the department to adopt rules and prescribe procedures as necessary to implement §503.0631. 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.

The department also proposes amendments under Occupations Code, §2301.151, which gives the board authority to regulate the distribution, sale, and lease of motor vehicles and the authority to take any action that is necessary or convenient to exercise that authority; Occupations Code, §2301.152, which authorizes the board to establish the qualifications of license holders, ensure that the distribution, sale, and lease of motor vehicles is conducted as required by statute and board rules, to prevent fraud, unfair practices, discrimination, impositions, and other abuses in connection with the distribution and sale of motor vehicles, and to enforce and administer Occupations Code, Chapter 2301 and Transportation Code, Chapter 503; Occupations Code, §2301.155, which authorizes the board to adopt rules as necessary or convenient to administer Occupations Code, Chapter 2301 and to govern practice and procedure before the board; and Government Code, §2001.004 requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.

CROSS REFERENCE TO STATUTE. These proposed revisions implement Government Code, Chapter 2001; Occupations Code, Chapter 2301; and Transportation Code, Chapters 501-504, and 1002.

§224.58. Denial of Dealer Access to License Plate System.

(a) In this section "fraudulently obtained license plates from the license plate system" means misuse by a dealer account user of the license plate system authorized under Transportation Code, §503.063, §503.0631, or §503.065 to obtain or issue:

(1) an excessive number of license plates relative to dealer sales;

(2) a license plate for a vehicle or vehicles not in the dealer's inventory (a vehicle is presumed not to be in the dealer's inventory if the vehicle is not listed in the relevant monthly Vehicle Inventory Tax Statement);

(3) access to the license plate system for a fictitious user or person using a false identity;

(4) a license plate for a vehicle or a motor vehicle when a dealer is no longer operating at a licensed location;

(5) a license plate for a vehicle or a motor vehicle not located at the dealer's licensed location or storage lot; or

(6) a license plate for a vehicle or motor vehicle that is not titled or permitted by law to be operated on a public highway.

(b) The department shall deny a dealer access to the license plate system effective on the date the department sends notice electronically and by certified mail to the dealer that the department has determined, directly or through an account user, that the dealer has fraudulently obtained or issued a license plate in the license plate system or has been denied access to the temporary tag database . A dealer may seek a negotiated resolution with the department by demonstrating the dealer took corrective action or that the department's determination was incorrect.

(c) Notice shall be sent to the dealer's last known mailing address and last known email address in the department-designated licensing system.

(d) A dealer may request a hearing on the denial of access to the license plate system, as provided by Subchapter O, Chapter 2301, Occupations Code. The request must be in writing and the dealer must request a hearing under this section. The department must receive the written request for a hearing within 26 days of the date of the notice denying access to the license plate system. The request for a hearing does not stay the denial of access under subsection (b) of this section. A dealer may continue to seek a negotiated resolution with the department after a request for hearing has been submitted under this subsection by demonstrating the dealer took corrective action or that the department's determination was incorrect.

(e) The department may also issue a Notice of Department Decision stating administrative violations as provided in §224.56 of this title (relating to Notice of Department Decision) concurrently with the notice of denial of access under this section. A Notice of Department Decision may include notice of any violation, including a violation listed under subsection (a) of this section.

(f) A department determination and action denying access to the license plate system becomes final if the dealer does not request a hearing or enter into a settlement agreement with the department within 26 days of the date of the notice denying access to the license plate system.

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

Filed with the Office of the Secretary of State on July 10, 2025.

TRD-202502356

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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

SUBCHAPTER D. MOTOR CARRIER AND OVERSIZE OR OVERWEIGHT VEHICLE OR LOAD ENFORCEMENT

INTRODUCTION. The Texas Department of Motor Vehicles (department) proposes amendments to 43 Texas Administrative Code (TAC) Chapter 224, Subchapter D, Motor Carrier and Oversize or Overweight Vehicle or Load Enforcement, §224.116 and §224.124, and proposes new §224.121, regarding the requirements and procedures under Transportation Code, §643.2526. The proposed amendments and new section are necessary to implement House Bill (HB) 1672, 89th Legislature, Regular Session (2025), which requires that the department adopt rules to create the requirements and procedures for revocation, suspension, or probation of a motor carrier's registration, and the motor carrier's appeal of the revocation, suspension, or probation. Proposed amendments are also necessary to clean up the rule text.

EXPLANATION.

HB 1672 became effective on May 24, 2025, and requires the department to adopt rules to create the requirements and procedures for the following under Transportation Code, §643.2526: 1) the revocation or suspension of a motor carrier's registration; 2) the placement of a motor carrier on probation whose registration is suspended; and 3) the motor carrier's appeal of the revocation, suspension or probation.

Proposed amendments to §224.116 would implement HB 1672 by modifying the title of the section and adding new subsection (h) to clarify that these administrative procedures do not apply to a proceeding under Transportation Code, §643.2526. Section 224.116 provides the administrative procedures for a proceeding under laws that require the department to provide written notice to the person and an opportunity for the person to request a hearing before the department takes an administrative action against the person. Because Transportation Code, §643.2526 states that a department action under §643.2526 is not required to be preceded by notice and an opportunity for hearing, the department proposes amendments to §224.116 that would clarify that this section does not apply to a proceeding under §643.2526. Proposed amendments to §224.116(a) would also clean up the rule text by adding a hyphen to the term "first class mail" to read "first-class mail."

Proposed new §224.121 and proposed amendments to §224.124 are necessary to implement amendments made by HB 1672 to Transportation Code, §643.2526. These proposed revisions would govern the requirements and procedures under Transportation Code, §643.2526, which authorizes the department to deny an application for registration, renewal of registration, or reregistration under Transportation Code, Chapter 643 (Motor Carrier Registration) prior to providing the person with notice and an opportunity for hearing. Upon request by the Texas Department of Public Safety (DPS) under Transportation Code, §643.252(b) and prior to providing the person with notice and an opportunity for hearing, the department is also authorized under Transportation Code, §643.2526 to revoke or suspend the registration of a motor carrier or to place a motor carrier on probation whose registration is suspended, if the motor carrier has an unsatisfactory safety rating under 49 C.F.R. Part 385 (Safety Fitness Procedures), which is determined by the Federal Motor Carrier Safety Administration (FMCSA); or multiple violations of Transportation Code, Chapter 644 (Commercial Motor Vehicle Safety Standards), a rule adopted under Chapter 644, or Subtitle C (Rules of the Road) of Transportation Code, Title 7 (Vehicles and Traffic), which is determined by DPS. The references to registration under Transportation Code, Chapter 643 are references to operating authority to operate as a motor carrier, rather than vehicle registration under Transportation Code, Chapter 502.

Proposed new §224.121 would provide the requirements and procedures regarding the department's action under Transportation Code, §643.2526. Proposed new §224.121(a) would state that the department will only revoke a motor carrier's registration under Transportation Code, §643.2526 pursuant to a request from DPS under Transportation Code, §643.252(b). Although Transportation Code, §643.252(b) authorizes DPS to request the department to suspend or revoke a registration issued to a motor carrier under Transportation Code, Chapter 643, or to place on probation a motor carrier whose registration is suspended, the department will only revoke the registration of a motor carrier under Transportation Code, §643.252(b). The department's current system is not programmed to suspend a motor carrier's registration, so revocation is the only option.

Also, the DPS rule regarding DPS's request to the department under Transportation Code, §643.252(b) only refers to a revocation of the motor carrier's registration. See 37 TAC §4.19(a). Transportation Code, §644.051(b) states that a DPS rule adopted under Transportation Code, Chapter 644 must be consistent with federal regulations. Section 4.19(a), which was adopted under the DPS rulemaking authority in Transportation Code, §644.051, is consistent with 49 C.F.R. §385.13(e), which states that if an interstate motor carrier has a final unsatisfactory safety rating, FMCSA will provide notice to the motor carrier and issue an order revoking the motor carrier's interstate registration, which is also known as operating authority to operate as a motor carrier in interstate transportation. Because DPS does not administer Transportation Code, Chapter 643, DPS must request the department to revoke a motor carrier's registration for intrastate transportation.

Proposed new §224.121(a) would also state that the department will not take action under Transportation Code, §643.252(b) until FMCSA or DPS, as applicable, issues an order regarding the laws referenced in §643.252(b). This requirement is necessary to help protect the person's due process rights because Transportation Code, §643.2526 authorizes the department to take action against the person prior to providing notice and an opportunity for a hearing. FMCSA and DPS are required to comply with the due process requirements under the laws that govern their actions when issuing an order under the laws referenced in Transportation Code, §643.252(b). The process set out in proposed new §224.121(a) would ensure that while a motor carrier may not receive notice and an opportunity for a hearing from the department before the department revokes the motor carrier's registration, the motor carrier should have received full due process on the same factual and legal allegations from either FMCSA or DPS.

The FMCSA order under 49 C.F.R. §385.13(d)(1) is called an out-of-service order, which prohibits the motor carrier from engaging in interstate transportation. See 49 U.S.C. §31144(c) and 49 C.F.R. §385.1(a) and §385.13(d)(1). The FMCSA procedures and proceedings regarding an out-of-service order are governed by 49 U.S.C. §31144, 49 C.F.R. Part 385 (Safety Fitness Procedures), and 49 C.F.R. Part 386 (Rules of Practice for FMCSA Proceedings).

The DPS order under Transportation Code, §644.155 and 37 TAC §4.15 is called an order to cease, which prohibits the motor carrier from operating a commercial motor vehicle in intrastate transportation. The DPS proceedings regarding an order to cease are governed by 37 TAC §4.15 and §4.18. The DPS order to cease tells the motor carrier that it must immediately cease all intrastate transportation until such time as DPS determines the motor carrier's safety rating is no longer unsatisfactory.

Proposed new §224.121(b) would state that the department will issue notice of the department's action under Transportation Code, §643.2526 to the person by email and first class mail using the person's last known address in the department's records. The notice requirements under Government Code, §2001.054(c) do not apply to the department's notice regarding the department's action under Transportation Code, §643.2526 because Transportation Code, §643.2526(a) says that the department's action under Transportation Code, §643.252(b) is not required to be preceded by notice and an opportunity for hearing, notwithstanding other law. Also, the motor carrier should have already received due process under the DPS or FMCSA proceeding that resulted in an order to cease or out-of-service order, respectively.

Proposed amendments to §224.124 would implement HB 1672 by modifying the title of the section to refer to an appeal of a department action. Proposed amendments to §224.124 would delete subsection (a), and amend current subsections (b) and (c) to expand the scope of the rule to be consistent with the expanded scope of Transportation Code, §643.2526 as amended by HB 1672. A proposed amendment to current subsection (b) would clarify that Subchapter E of Chapter 224 of this title is not the only subchapter in Chapter 224 that would apply to an appeal to the department under Transportation Code, §643.2526. Proposed amendments to §224.124 would also re-letter existing subsections (b), (c), and (d) due to the proposed deletion of subsection (a).

Proposed new §224.124(d) would state that on appeal under Transportation Code, §643.2526, the department will not rescind a revocation under Transportation Code, §643.252(b), based on the motor carrier taking corrective action that results in an upgrade to its unsatisfactory safety rating after the department has issued notice to the motor carrier that it revoked the motor carrier's registration. DPS wants the department to immediately revoke a motor carrier's registration under Transportation Code, Chapter 643 once DPS requests the department to revoke under Transportation Code, §643.252(b). The department will not wait to see if the motor carrier takes either of the following actions prior to revoking the motor carrier's registration: 1) requests DPS or FMCSA, as applicable, to change the final safety rating or to conduct a review regarding the final safety rating; or 2) appeals their final safety rating to a court under the laws that govern the DPS or FMCSA order, as applicable.

FMCSA's regulation states that a motor carrier that has taken action to correct the deficiencies that resulted in a final rating of "unsatisfactory" may request a rating change at any time. See 49 C.F.R. §385.17(a). Another FMCSA regulation states as follows: 1) that a motor carrier may request FMCSA to conduct an administrative review if it believes that FMCSA committed an error in assigning the final safety rating; 2) that FMCSA's decision under the administrative review constitutes the final agency action; and 3) that a motor carrier may request a rating change under the provisions of 49 C.F.R. §385.17. See 49 C.F.R. §385.15. In addition, federal law authorizes the motor carrier to appeal FMCSA's final order to the applicable United States Court of Appeals under 49 U.S.C. §521(b)(9) and 49 C.F.R. §386.67. Therefore, it is possible that FMCSA could change a motor carrier's safety rating from unsatisfactory to satisfactory or conditional after FMCSA issued the out-of-service order to the motor carrier and after the department revoked the motor carrier's registration pursuant to DPS's request under Transportation Code, §643.252(b).

The DPS administrative rule states that a motor carrier that has taken action to correct the deficiencies that resulted in a final rating of "unsatisfactory" may request a rating change at any time. See 37 TAC §4.15(b)(3)(G). The DPS rule also states that the motor carrier may request DPS to conduct a departmental review if the motor carrier believes that DPS has committed error in assigning the final safety rating, that the final safety rating under the DPS departmental review constitutes a final agency decision, and that any judicial review of the DPS final agency decision is subject to Government Code, Chapter 2001. See 37 TAC §4.15(b)(3)(H) and (I). Therefore, it is possible that DPS could change a motor carrier's safety rating from unsatisfactory to satisfactory or conditional after DPS issued the order to cease to the motor carrier and after the department revoked the motor carrier's registration pursuant to DPS's request under Transportation Code, §643.252(b).

Once the department issues a revocation under Transportation Code, §643.2526, the revocation is effective and cannot be rescinded unless the motor carrier submits a timely appeal under §643.2526. If the motor carrier timely submits an appeal under Transportation Code, §643.2526, if the underlying order from DPS or FMCSA was issued in compliance with the motor carrier's due process rights, and if the requirements under Transportation Code, §643.252(b) were met at the time DPS requested the department to revoke the motor carrier's registration, the department's revocation will not be rescinded on appeal to the department. If the motor carrier resolves its unsatisfactory safety rating and is no longer subject to the order to cease or out-of-service order after the department revokes the motor carrier's registration, the evidence on appeal will not show any error regarding the department's revocation. However, an appeal of a revocation under Transportation Code, §643.2526 may result in a rescission of the revocation if the underlying order from DPS or FMCSA, as applicable, was issued in violation of the motor carrier's due process rights or was issued to the motor carrier in error.

When determining whether to request the department to revoke the motor carrier's registration under Transportation Code, §643.252(b), it is within DPS's discretion to consider whether the motor carrier's unsatisfactory safety rating might change to a satisfactory or conditional safety rating after the issuance of an order to cease or an out-of-service order. Once the department receives the request from DPS to revoke the motor carrier's registration under Transportation Code, §643.252(b), the department will immediately revoke the registration. If the department revoked a motor carrier's registration pursuant to DPS's request under Transportation Code, §643.252(b), and the motor carrier later improves its safety rating and is no longer subject to an out-of-service order or an order to cease, the department will consider this fact when reviewing the motor carrier's application for reregistration under Transportation Code, §643.0585 or the motor carrier's application for registration under Transportation Code, §643.052.

Proposed new §224.124(e) would require the person who submits an appeal to the department under Transportation Code, §643.2526 to state why the person claims the department's action is erroneous, as well as the legal and factual basis for the claimed error. This information is necessary to enable the department to comply with a requirement to docket the contested case with the State Office of Administrative Hearings under 1 TAC §155.53(a)(1), which requires the Request to Docket Case form to be submitted together with the complaint or other pertinent documents describing the agency action giving rise to the contested case.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, has determined that for each year of the first five years the amendments and new section will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Corrie Thompson, Director of the Enforcement Division (ENF), has determined that there will be no significant impact on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Ms. Thompson has also determined that, for each year of the first five years the amended and new sections are in effect, there is an anticipated public benefit because the proposal provides clarity for the motor carrier industry that is governed by these provisions.

Anticipated Public Benefits. The public benefit anticipated as a result of the proposal includes clarity for the motor carrier industry regarding the procedures, requirements, and restrictions under Transportation Code, §643.2526.

Anticipated Costs to Comply with the Proposal. Ms. Thompson anticipates that there will be no costs to comply with these rules for the reasons stated in this preamble.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by Government Code, §2006.002, the department has determined that the proposed new section and amendments will not have an adverse economic effect on small businesses, micro-businesses, and rural communities for the reasons stated in this preamble. 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 and amendments are in effect, no government program would be created or eliminated. Implementation of the proposed new section and amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease in fees paid to the department. The proposed new section and amendments create a new regulation regarding the revocation of a motor carrier's registration under Transportation Code, §643.2526 pursuant to a request from DPS under Transportation Code, §643.252(b). The proposed new section and amendments expand an existing regulation regarding the department's authority to deny an application for registration, renewal of registration, or reregistration under Transportation Code, §643.2526. The proposed rules would not limit or repeal any regulations. Lastly, the proposed new section and amendments do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CDT on August 25, 2025. 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 under Transportation Code, §643.2526(d), which requires the department to adopt rules as necessary to implement §643.2526, including rules governing the requirements and procedures under §643.2526; Government Code, §2001.004, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; Transportation Code, §643.003, which authorizes the department to adopt rules to administer Transportation Code, Chapter 643; Transportation Code, §643.252, which authorizes the department to suspend, revoke, or deny a registration issued under Transportation Code, Chapter 643 or place on probation a motor carrier whose registration is suspended; Transportation Code, §1002.001, which authorizes the board to adopt rules that are necessary and appropriate to implement the powers and duties of the department; and the statutory authority referenced throughout this preamble and in the rule text, which is incorporated herein by reference.

CROSS REFERENCE TO STATUTE. The proposed amendments would implement Government Code, Chapter 2001; and Transportation Code, §§643.252(b), 643.2526, and 1002.001.

§224.116. Administrative Proceedings, Excluding Proceedings Under Transportation Code, §643.2526.

(a) If the department decides to take an enforcement action under §218.16 of this title (relating to Insurance Requirements) for the revocation of self-insured status, §218.64 of this title (relating to Rates), §218.71 of this title (relating to Administrative Penalties), §219.121 of this title (relating to Administrative Penalties and Sanctions under Transportation Code, §623.271), §218.72 of this title (relating to Administrative Sanctions), or §219.126 of this title (relating to Administrative Penalty for False Information on Certificate by a Shipper), the department shall mail a Notice of Department Decision to the person by first-class [first class] mail to the last known address as shown in department records. If the enforcement action falls under the Memorandum of Agreement with the Federal Motor Carrier Safety Administration (FMCSA) under §218.71, the department shall mail the Notice of Department Decision to the person by first-class [first class] mail to the last known address as shown in FMCSA's records.

(b) The Notice of Department Decision shall include:

(1) a brief summary of the alleged violation or enforcement action being proposed;

(2) a statement describing each sanction, penalty, or enforcement action proposed;

(3) a statement informing the person of the right to request a hearing;

(4) a statement of the procedure a person must use to request a hearing, including the deadline for filing a request with the department and the acceptable methods to request a hearing; and

(5) a statement that a proposed penalty, sanction, or enforcement action will become final and take effect on a specific date if the person fails to request a hearing.

(c) A person must submit to the department a written request for a hearing to the address provided in the Notice of Department Decision not later than the 26th day after the date the notice is mailed by the department; however, this requirement does not apply to a contested case that falls under §218.64 and Transportation Code, §643.154.

(d) If a person submits a timely written request for a hearing or the contested case that falls under §218.64 and Transportation Code, §643.154, the department will contact the person and attempt to informally resolve the contested case. If the person and the department cannot informally resolve the contested case, the department will refer the contested case to SOAH to set a hearing date and will give notice of the time and place of the hearing to the person.

(e) Except as provided by Transportation Code, §643.154, if the person does not make a timely request for a hearing or agree to settle a contested case within 26 days of the date the Notice of Department Decision was mailed, the allegations are deemed admitted on the 27th day and a final order including sanctions and penalties may be issued by the final order authority.

(f) Except as provided by statute and the applicable provisions of this chapter, any SOAH proceeding is governed by Government Code, Chapter 2001 and 1 TAC Chapter 155, including the authority of the department to informally dispose of the contested case by stipulation, agreed settlement, consent order, or default. The department will follow the process set forth in Transportation Code, §643.2525 and the applicable provisions of this chapter when enforcing the federal laws and regulations cited in §218.71 to the extent authorized by applicable federal laws and regulations.

(g) The department and the person may informally resolve the contested case by entering into a settlement agreement or agreeing to stipulations at any time before the director issues a final order. However, the person must pay any penalty in full prior to the execution of a settlement agreement.

§224.124. Appeal of Department Action [ of Denial] Under Transportation Code, §643.2526.

(a) [(b)] An [The] appeal to the department under Transportation Code, §643.2526 will be governed by Chapter 224 [, Subchapter E] of this title (relating to Adjudicative Practice and Procedure) [Contested Cases Referred to SOAH)].

(b) [(c)] An [The applicant's] appeal will be considered untimely if it is not filed with the department by the 26th day after the date of the department's issuance of notice of the department's action. [denial of the application.] The department will not consider an untimely appeal.

(c) [(d)] An application that is withdrawn under Transportation Code, §643.055 is not a denial of an application for the purposes of an appeal under Transportation Code, §643.2526.

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 July 10, 2025.

TRD-202502354

Laura Moriaty

General Counsel

Texas Department of Motor Vehicles

Earliest possible date of adoption: August 24, 2025

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