Proposed Administrative Rules

Chapter 95. Transportation Network Companies Program
Proposal Filed: September 1, 2017 – Published in the Texas Register:  September 15, 2017
Deadline for Public Comment: October 16, 2017

Underlined text is new language.

The Texas Department of Licensing and Regulation (Department) proposes new rules at 16 Texas Administrative Code (TAC), Chapter 95, §§95.1, 95.2, 95.10, 95.20 - 95.23, 95.30, 95.31, 95.40, 95.50, 95.51, 95.70 - 95.72, 95.80, 95.90, 95.91 and 95.100, regarding the Transportation Network Companies program.

The Texas Legislature enacted House Bill 100 (H.B. 100), 85th Legislature, Regular Session (2017), which established Chapter 2402 of the Texas Occupations Code that requires statewide regulation of Transportation Network Companies by the Texas Commission of Licensing and Regulation (Commission) and the Department. The proposed new rules are necessary to implement H.B. 100.

The Department held stakeholder meetings on July 6, 2017, with the Texas Travel Industry Association and Texas Commercial Airports Association; July 13, 2017, with Coalition of Texas with Disabilities, ADAPT, Governor’s Committee on Disability, and Disability Rights Texas; July 14, 2017, with Coalition of Texas with Disabilities, ADAPT, Governor’s Committee on Disability, and Disability Rights Texas; and July 31, 2017, with Fasten, Uber, Lyft, Ride Austin, Get Me, Pronto Rides and GLT, in Austin, Texas to get initial input about the industry and their concerns.

The proposed new §95.1 provides the statutory authority for the Commission and the Department.

The proposed new §95.2 identifies the definitions to be used under this chapter.

The proposed new §95.10 clarifies the scope and construction of this chapter.

The proposed new §95.20 requires a transportation network company to obtain a permit to operate in this state.

The proposed new §95.21 explains the terms of the permit.

The proposed new §95.22 establishes the initial permit application for transportation network companies.

The proposed new §95.23 provides for the permit renewal notice and application for transportation network companies.

The proposed new §95.30 allows for the issuance of a permit when requirements are met.

The proposed new §95.31 allows for the department to deny a permit.

The proposed new §95.40 establishes the responsibilities of the Department.

The proposed new §95.50 establishes reporting requirements for transportation network companies.

The proposed new §95.51 requires transportation network companies to provide notification of operations at airports and cruise ship terminals.

The proposed new §95.70 requires a permit holder to maintain a current and valid email address.

The proposed new §95.71 establishes requirements for data integrity, name changes, address changes and address additions.

The proposed new §95.72 prohibits deceptive practices.

The proposed new §95.80 establishes the fees for the transportation network company program.

The proposed new §95.80 allows the Department authority to investigate.

The proposed new §95.91 provides for administrative sanctions when necessary.

The proposed new §95.100 requires transportation network company permit holders to comply with the program statute, Texas Occupations Code, Chapter 2402.

Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed new rules are in effect, there will be no cost to local government as a result of enforcing or administering the proposed rules. However, the state will incur additional costs to regulate and administer this program. The agency will require 1.0 additional full-time-equivalent (FTE) employee to administer the new permitting and regulatory responsibilities of the program, computer equipment and website configuration costs for data submission to begin operations, and other operating expenses totaling $104,458 the first year. For the subsequent four years of the first five year period the Department estimates a costs of $74,171 per year. 

The proposed rules will have no direct adverse impact on the costs or revenue of local governments or on rural communities.

Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, the public will benefit by having statewide standards that will reduce confusion amongst local entities and establish consistency in regulation across the state, the industry and the public.

Texas Government Code §2001.0045 requires state agencies to determine if a proposed rule has a fiscal impact that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Because the proposed rules are necessary to implement legislation, Section 2001.0045 does not apply to the proposed rules.  

Mr. Francis has determined that for each year of the first five-year period the proposed new rules are in effect, approximately 10 businesses, roughly 6 of them being small businesses or micro-businesses will operate in the state. The small or micro-businesses will pay an initial application fee of $10,500 and a renewal application fee of $7,500. The Department has also included standard program fees of $25 for a duplicate permit, $25 for a permit amendment, $25 for an address change, $25 for a name change, and late renewal fees twice the amount of the renewal.

Pursuant to Texas Government Code §2006.002, the agency has determined that the proposed new rules may have an adverse economic effect on small or micro-businesses and has prepared an Economic Impact Statement and a Regulatory Flexibility Analysis.

Although the permit fee may have an adverse economic effect on small and micro-businesses applying for or renewing a permit, the permit fees are set in the minimum amount which is reasonable and necessary for the Department to cover its costs of administering the program, as required by Section 51.202, Occupation Code. An estimated six small or micro-businesses might have an adverse economic impact from the proposed fees, with the projected economic impact being the amount of the fees, but no alternative regulatory methods can be employed to achieve the purpose of the fees. To achieve the health, safety and welfare of H.B. 100, the Department is required to assess these fees. Over the first five year period the fees cover the costs of regulating the program, and the costs for the program have been set at the minimum amount necessary to administer the program.

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

The new rules are proposed under Texas Occupations Code, Chapters 51 and 2402, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51 and 2402.  No other statutes, articles, or codes are affected by the proposal.

§95.1. Authority.

This chapter is promulgated under Texas Occupations Code, Chapters 51 and 2402.

§95.2. Definitions.

Unless otherwise defined in this chapter, each term used in this chapter has the meaning assigned by Texas Occupations Code, Chapter 2402 and Texas Government Code, Chapter 2001.

  • (1) Airport– means an airport owner or operator.
  • (2) Cruise Ship Terminal – means a governing body of a governmental entity with jurisdiction over a cruise ship terminal.

§95.10. Rule Construction.

  • (a) Nothing in these rules shall be construed to:
    • (1) prohibit an airport or cruise ship terminal from imposing regulations including a reasonable fee or enforcing those regulations in a manner consistent with any compliance, assurances, and obligations under federal law, rules, regulations, and policies; or
    • (2) authorize an airport or cruise ship terminal to compel data sharing or to impose additional requirements on a personal vehicle or driver; including, tracking of the vehicle or driver when logged into the digital network.
  • (b) For purposes of this section, a reasonable fee means a fee:
    • (1) imposed on May 29, 2017 by an airport or cruise ship terminal;
    • (2) determined by conducting a full cost-of-service fee study by an airport or cruise ship terminal. The rates resulting from the cost-of-service fee study must be based on costs incurred by and allocated to Transportation Network Companies; or
    • (3) of an airport or cruise ship terminal that did not have fees imposed on the date referenced in (b)(1), and that adopts the fees imposed on the date in (b)(1) by an airport or cruise ship terminal with a similar number of passengers boarding annually, or performs a cost-of-service study under (b)(2).
  • (c) A reasonable fee established under this section includes an adjustment escalator option based on an index published by the United States Department of Transportation.

§95.20. Permit Required.

A person may not operate a transportation network company in this state without first obtaining and maintaining a transportation network company permit.

§95.21. Permit Terms.

A transportation network company permit issued under this chapter is:

  • (1) valid for one year from the date of issuance;
  • (2) valid throughout the state; and
  • (3) nontransferable.

§95.22. Transportation Network Company Permit Initial Application.

To be eligible for a transportation network company permit, an applicant must:

  • (1) submit a completed application on a form and in the manner prescribed by the department;
  • (2) provide electronic proof of insurance with the policy coverage required by Texas Occupations Code, Chapter 2402;
  • (3) certify that the applicant meets the requirements of Texas Occupations Code, Chapter 2402; and
  • (4) pay the fee set out under §95.80.

§95.23. Transportation Network Company Permit Renewal Notice and Application.

  • (a) The department will send written notice to permit holders at least thirty (30) days before the permit expires. The notice will be emailed to the permit holder's last known email address in the department’s licensing records.
  • (b) To be eligible to renew a permit, a permit holder must:
    • (1) submit a completed application on a form and in the manner prescribed by the department;
    • (2) provide electronic proof of insurance with the coverage required by Texas Occupations Code, Chapter 2402;
    • (3) certify that the applicant continues to meet the requirements of Texas Occupations Code, Chapter 2402; and
    • (4) pay the fee set out under §95.80.
  • (c) Late Renewal.
    • (1) To maintain continuous licensure, the renewal requirements under this section must be completed prior to the expiration of the permit.
    • (2) A late renewal means the permit holder will have an unlicensed period from the expiration date of the expired permit to the issuance date of the renewed permit.  During the unlicensed period, a transportation network company must block drivers access to the digital network.
    • (3) Non-receipt of a permit renewal notice from the department does not exempt a permit holder from the requirements of this chapter.

§95.30. Permit Issuance.

The department will issue a permit under this chapter to an applicant who meets the eligibility requirements for a permit.

§95.31. Permit Denial.

The department may deny an application or revoke a permit if the applicant, a partner, principal, officer, or general manager of the applicant has:

  • (1)  violated an order of the commission or executive director, including an order for sanctions or administrative penalties; or
  • (2)  submitted false or incomplete information on the application.

§95.40. Responsibilities of the Department.

  • (a) Unless otherwise provided by statute or this chapter, the department may send notice of department proposed actions and decisions through email sent to the last email address designated by the permit holder in the department’s licensing records.
  • (b)  At licensure, the department will provide the permit holder with the requirements for the accessibility pilot program report required by Texas Occupation Code, Chapter 2402.

§95.50 Reporting Requirements.

  • (a) For purposes of this paragraph “Market” means the legal boundaries of a municipality as defined in Section 1.005 of the Local Government Code or the metropolitan statistical area as defined by the Office of Management and Budget.
  • (b) A permit holder must electronically file the following reports with the department:
    • (1) Disability Compliance Report. A report under this paragraph must include: 
      • (A) Criteria for determining the four largest markets that the transportation company operates in this state;
        • (i) Identify the market(s) the transportation network company implemented the Accessibility Pilot Program; and
        • (ii) Explain the reason(s) for selecting the market(s) that the transportation network company used to implement the Accessibility Pilot Program.
      • (B) The services offered to disabled persons, including disabled persons using a fixed-frame wheelchair.
      • (C) A step-by-step explanation demonstrating the process for an individual to join and utilize the accessibility functions of their transportation network service Accessibility Pilot Program.
      • (D) A detailed plan that ensures referrals to alternate providers of fixed-frame wheelchair-accessible service are made in a manner that does not unreasonably delay the provision of service.  The detailed plan must at a minimum:
        • (i)  explain why the alternate provider of fixed-frame wheelchair-accessible service will not cause unreasonable delay in service;
        • (ii)  include the initial number of alternate providers;
        • (iii)  provide the average number of vehicles equipped to provide fixed-frame wheelchair-accessible service and available to each alternate provider;
        • (iv)  state the hours each alternate provider of fixed frame wheelchair-accessible service is available for service; and
        • (v)  describe the procedures to monitor and ensure alternate providers meet and maintain service levels that do not unreasonably delay fixed-frame wheelchair-accessible service.
      • (E) A report submitted under this subsection that fails to demonstrate compliance will be considered incomplete and subject to correction and resubmission.
      • (F)  The report must contain a table of contents with each section of the report marked to identify the content cross referenced to each paragraph and subparagraph of this section.
    • (2) Accessibility Pilot Program Report. 
      • (A) The report required by this paragraph must be aggregated in ninety (90) day increments. The report must include final values for the entire period of the Accessibility Pilot Program and at a minimum include:
        • (i) The number of vehicles equipped to accommodate a passenger with a fixed-frame wheelchair that were available through the company’s digital network in the pilot program market.
        • (ii) The number of fixed-frame wheelchair requests.
        • (iii) The number of rides provided to fixed-frame wheelchair-bound passengers.
        • (iv) The number of rides not provided to fixed-frame wheelchair-bound passengers by the permit holder or its alternate provider.
        • (v) Percentage of total fixed-frame wheelchair requests provided by the zip code for the passengers requested pick-up location.
        • (vi) Percentage of total fixed-frame wheelchair requests provided by the zip code for the passengers requested drop-off location.
        • (vii) Percentage of fixed-frame wheelchair requests provided by the time of day, delineated by hour.
      • (B) The number of instances in which the company referred a fixed-frame wheelchair-bound passenger to an alternate provider because the passenger could not be accommodated by the company.
      • (C) Average wait times for Accessibility Pilot Program market area. The permit holder must track and report by zip code the average time elapsed between the time a passenger initially requested a ride and the time the ride began for each:
        • (i) fixed-frame wheelchair-bound passenger serviced by the permit holder;
        • (ii) fixed-frame wheelchair-bound passenger referred to an alternate provider; and
        • (iii) non-wheelchair accessible requested ride.

§95.51 Notification of Operations at Airports and Cruise Ship Terminals

A permit holder must provide the controlling authority of each airport or cruise ship terminal written notice of its operations or its intent to operate within their jurisdiction. Notification must be provided within thirty (30) days after receipt of a permit issued under this chapter.

§95.70. Maintain Current Email Address

A permit holder must provide to the department a valid email address and must keep the email address current during the term of the permit.

§95.71. Data Integrity, Name Changes, Address Changes, and Address Additions

  • (a) A permit holder is obligated to ensure and maintain the accuracy of all information it provides to the department pursuant to this chapter.
  • (b) A permit holder must notify the department in writing of any change to trade name, mailing address, physical address, email address, or telephone number on file with the department within fifteen (15) days of making such change.
    • (1) The notification shall identify the person making the change and the affected permit number.
    • (2) A notice of name change including trade name changes and trade name additions shall include supporting documentation from the Texas Secretary of State.
  • (c) In the event of a trade name change or an address change, the permit holder shall submit on forms approved by the department, a request for this change and pay, if any, the fee required by §95.80.
  • (d) A change requested under this section shall not be effective until approved by the department.

§95.72. Deceptive Practices Prohibited

A permit holder may not conduct business or advertise under a name that is deceptively similar to a name used by any other licensed transportation network company licensed under this chapter unless specifically approved in writing by the executive director.

§95.80. Fees

  • (a) All fees are nonrefundable except as provided for by commission rules or statute.
  • (b) Transportation Network Company Permit Fees:
    • (1)  Original Application--$10,500
    • (2)  Renewal--$7,500
    • (3)  Permit Amendment--$25
    • (4) Address change--$25
    • (5) Name change--$25
  • (c)  Late renewal fees for licenses and permits issued under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees).

§95.90. Authority to Investigate

For purposes of investigating compliance with, or a violation of, these rules or applicable law, a permit holder must make records, drivers and vehicles logged into the transportation network service available to the department within ten (10) days of the request or within the time agreed to by the department.

§95.91. Administrative Sanctions

The department may suspend or revoke a permit issued to a transportation network company that violates a provision of Occupations Code, Chapter 2402, or impose administrative penalties, sanctions and civil remedies authorized by Occupations Code, Chapter 51 for violating a rule under this chapter or regulation adopted by an airport or cruise ship terminal.

§95.100. Statutory Compliance

A permit holder must implement and follow all technical and operational requirements in Texas Occupations Code, Chapter 2402 including the timely filing of reports.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on September 1, 2017.


Brian E. Francis
Executive Director
Texas Department of Licensing and Regulation

NOTE: Section 95.50 was incorrectly numbered by the Texas Register. A Correction of Error has been submitted and is expected to publish in the September 29, 2017 issue.