Vehicle Towing and Booting - Justification for Administration Rule Adoption

JUSTIFICATION FOR ADMINISTRATIVE RULE ADOPTION
General Provisions for Vehicle Towing and Booting Program
16 TAC Chapter 86, repeal of §§86.212, 86.213, and §86.452; and amendments to §§86.10, 86.450, 86.451, 86.650, 86.705 and 86.800

The Texas Commission of Licensing and Regulation (Commission) adopted the repeal of current rules at rules at 16 Texas Administrative Code (TAC), Chapter 86, §86.212 and §86.452, regarding the Vehicle Towing and Booting program without changes to proposed text as published in the October 13, 2017, issue of the Texas Register (42 TexReg 5622). The rules will not be republished.

The Commission also adopted amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 86, §§86.10, 86.450, 86.451, 86.650, and 86.800, with changes to the proposed text as published October 13, 2017, issue of the Texas Register (42 TexReg 5622). The rules will be republished.

The repeal of existing rules is necessary to implement Senate Bill 1501, Senate Bill 2065, and House Bill 2615 during the 85th Legislature, Regular Session (2017). These bills eliminated dual licensure, the towing operator training licenses as well as the associated fees, and risk-based inspections. The repeals are necessary to implement the legislative changes mandated by these statutes.

The amendments to existing rules are necessary is necessary to implement Senate Bill 1501, Senate Bill 2065, and House Bill 2615 during the 85th Legislature, Regular Session (2017). These bills establish guidelines for nonconsent tows in an apartment complex and to update the advisory board composition. The amendments are necessary to implement the legislative changes mandated by these statutes.

The adopted amendments to §86.10 updates the name of the advisory board, removes the definition of Property Owner's Association and renumbers the section accordingly.

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

The adopted amendments to §86.450 removes references to the risk-based inspection schedule.

The adopted amendments to §86.451 removes reference to risk-based inspections.

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

The adopted amendments to §86.650 updates the composition of the advisory board.

The adopted amendments to §86.800 removes dual licensure.

The Department also withdraws §86.213 and §86.705.

The Department drafted and distributed the proposed rules to persons internal and external to the agency. The proposed rules were published in the October 13, 2017, issue of the Texas Register (42 TexReg 5622). The Department received a total of 16 comments from the public regarding this program and the proposed amendments. All comments are summarized below.

Comment--The Department received two comments from the same individual inquiring about his license.

Department Response--These comments do not pertain to the proposed rules. General Counsel staff forwarded the inquiries to Licensing for handling.

The Department did not make any changes to the proposed rules based on these public comments.

Comment--The Department received one comment from a consumer complaining about an alleged wrongful tow.

Department Response--The comment does not pertain to the proposed rules. General Counsel staff forwarded the complaint to Enforcement for handling.

The Department did not make any changes to the proposed rules based on this public comment.

Comment--The Department received one comment expressing agreement with all proposed changes.

Department Response--The Department did not make any changes to the proposed rules based on this public comment.

Comment--The Department received one comment related to §86.450(a). The commenter suggested adding language to the first sentence of the rule so that it reads: "A towing company shall be inspected periodically to warn a towing company of a violation if found or as a result of a complaint. (italicized words represent the suggested addition).

Department Response--The rule at §86.450(a) relates to inspections. TDLR conducts inspections at towing companies to provide notification of any violations. Accordingly, the Department determined that the suggested language is redundant and does not substantively add to, or clarify, any portion of the rule.

The Department did not make any changes to the proposed rules based on this public comment.

Comment--The Department received one comment related to §86.650(a) with three parts.

Two parts of the comment concern §86.650(a)(1)-(4) and (9) with regards to the change in reference to certain board members as a "representative" instead of an "owner". The commenter suggested that the board members referenced in (a)(1)-(4) and (9) be referred to as "representative or owner".

The third part of the comment asks why the Department added a member of the insurance industry to the Advisory Board.

Department Response--The Department's proposed amendment updates the rule to mirror language used in the statutory change to Tex. Occ. Code §2308.051(a). The updated language in rule is not discretionary and must replicate the language in statute. In statute, certain board members are now referred to as "representative" in lieu of "owner".

The addition of an insurance industry professional to the Advisory Board was made by the State Legislature in SB 1501 and not by the Department. This addition is also not discretionary.

The Department did not make any changes to the proposed rules based on this public comment.

Comment--The Department received nine comments related to §86.705. Section 86.705 responds to a statutory change to add Tex. Occ. Code §2308.205(a)(1) - (2)(A) - (B) and (a-1)(1) - (3) that mandates the Commission to adopt rules authorizing a tow company that makes a nonconsent tow from a parking facility to tow the vehicle to another location on the same parking facility under the direction of a parking facility owner, authorized agent, or peace officer. The Texas Apartment Association commented specifically on §86.705(o).

The comments are as follows:

i) One comment relating to §86.705(n) with three subparts asking:

a) whether a tow truck driver is obligated to comply with a consumer request to move a vehicle to a location different than the one to which a driver might otherwise be required to take it to;

b) how charges for towing a vehicle upon customer request to a location different than the one to which the driver might otherwise be required to take it to would be assessed; and

c) how tow tickets would need to be written.

ii) Two comments related to §86.705 (o)(1) - (2) and its proposed rule restriction on non-consent tows contemplated by the statute to apartment complexes that are moving vehicles from one location on their parking facility to another in furtherance of repairs or renovation. The comments collectively expressed that the statute does not contain such restrictions and should not be limited to solely those circumstances.

iii) Two comments related to §86.705 (o)(3) and its proposed obligation on an apartment complex to provide 10 days notice of its intent to move vehicles in its parking facility. The commenters stated that a 10-day notice is too long and unreasonable.

iv) One comment related to §86.705(o)(3) stating that there should be a clarification that initial notice is sufficient even if the event that necessitated the notification is delayed.

v) one comment related to §86.705(o)(2) expressing that a clarification should be added to state that "written notice" includes electronic notice if such a notice provision is present in a lease.

vi) one comment that §86.705 should allow parking facilities to post signs like those allowed for the relocation of vehicles at universities.

vii) One comment related to §86.705(o)(3)(E) to allow a parking facility that does not know the exact location to which vehicles will be moved to tell residents how they will be informed of the exact location at a later date.

Department Response--The Department reviewed the new statutory provision of §2308(a)(1)-(2) and (a-1)(1) - (3) and determined that there is merit to the comments relating to the restrictive nature of the proposed rules. The Department acknowledges that the applicable statute is broad in nature and does not limit its application to apartment complexes moving cars from one location on its parking facility to another in furtherance of repairs or renovations.

The Department also finds merit to the comments relating to notice and believes that further discussion regarding the timing of notice, the form of notice, the ability to use freestanding signs to provide notice, and the need for flexibility regarding notification of specific re-locations is warranted.

Accordingly, the Department recommended to the Advisory Board during its November 16, 2017, meeting that it withdraw the entire proposed rule additions of §86.705(o)(1) - (8) and form a workgroup in order to facilitate a re-drafting of the rule and its subparts. The Department believes that withdrawal is warranted and required in order to draft rule provisions that more closely reflect the broad nature of the statutory change and to accommodate industry input.

Comment--The Department received one comment related to §86.800(4) asking how to get a refund on dual-license fees.

Department Response--This question does not pertain to the proposed rule.

The Department did not make any changes to the proposed rule based on this public comment.

The Towing and Storage Advisory Board (Board) met on November 16, 2017, to discuss proposed amendments and the public comments received. The board recommended adopting the proposed repeal and amendments with changes. At its meeting on December 15, 2017, the Commission adopted the proposed repeal without changes and adopted the proposed amendments with changes as recommended by the Board.

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

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

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

§86.10. Definitions.

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

(1) Advisory board--The Towing and Storage Advisory Board.

(2) Applicant--The person or entity submitting an application for a permit or license issued by the department.

(3) Certificate of insurance--A certificate prescribed by and filed with the department in which an insurance carrier or surety company, approved in this state, warrants that a towing company for whom the certificate is filed has the minimum coverage as required by §86.400.

(4) Commission--The Texas Commission of Licensing and Regulation.

(5) Consent tow--Any tow of a motor vehicle in which the tow truck is summoned by the owner or operator of the vehicle or by a person who has possession, custody, or control of the vehicle. The term does not include an incident management tow or a private property tow.

(6) Conspicuous--Written in a size, color, and contrast so as to be readily noticed and understood.

(7) Contested case--A proceeding, including a licensing proceeding, in which the legal rights, duties, or privileges of a party are to be determined by a state agency after an opportunity for adjudicative hearing.

(8) Department--The Texas Department of Licensing and Regulation.

(9) Driver's License--Has the meaning assigned by 521.001, Transportation Code.

(10) Incident--an unplanned randomly occurring traffic event that adversely affects normal traffic operations.

(11) Incident management tow--Any tow of a vehicle in which the tow truck is summoned to the scene of a traffic accident or to an incident, including the removal of a vehicle, commercial cargo, and commercial debris from an accident or incident scene.

(12) License holder or Licensee--The person to which the department issued a license.

(13) Nonconsent tow--Any tow of a motor vehicle that is not a consent tow, including:

(A) an incident management tow; and

(B) a private property tow.

(14) Parking facility--Public or private property used, wholly or partly, for restricted or paid vehicle parking. The term includes:

(A) a restricted space on a portion of an otherwise unrestricted parking facility; and

(B) a commercial parking lot, a parking garage, and a parking area serving or adjacent to a business, church, school, home, apartment complex, property governed by a property owners' association, or government-owned property leased to a private person, including:

(i) a portion of the right-of-way of a public roadway that is leased by a governmental entity to the parking facility owner; and

(ii) the area between the facility's property line abutting a county or municipal public roadway and the center line of the roadway's drainage way or the curb of the roadway, whichever is farther from the facility's property line.

(15) Parking facility authorized agent--An employee or agent of a parking facility owner with the authority to:

(A) authorize the removal of a vehicle from the parking facility on behalf of the parking facility owner; and

(B) accept service on behalf of the parking facility owner of a notice of hearing requested under this chapter.

(16) Parking facility owner--

(A) an individual, corporation, partnership, limited partnership, limited liability company, association, trust, or other legal entity owning or operating a parking facility;

(B) a property owners' association having control under a dedicatory instrument, as that term is defined in §202.001, Property Code, over assigned or unassigned parking areas; or

(C) a property owner having an exclusive right under a dedicatory instrument, as that term is defined in §202.001, Property Code, to use a parking space.

(17) Permit holder--The person to which the department issued a permit.

(18) Private property tow--Any tow of a vehicle authorized by a parking facility owner without the consent of the owner or operator of the vehicle.

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

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

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

(B) a motor vehicle towing:

(i) a race car;

(ii) a motor vehicle for exhibition; or

(iii) an antique motor vehicle;

(C) a recreational vehicle towing another vehicle;

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

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

(F) a motor vehicle that:

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

(ii) only tows vehicles rented by the entity.

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

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

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

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

(25) Vehicle owner--A person:

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

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

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

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

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

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

§86.450.Inspections--General.

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

(b) The towing company owner, manager, or their representative must, upon request, make available to the inspector all records, notices and other documents required by these rules.

(c) Upon completion of the inspection, the owner manager, or representative shall be advised in writing of the results of the inspection. The inspection report will indicate whether the inspection was approved or not approved, and will describe any violations identified during the inspection.

(d) For inspections that are not approved, the inspection report will identify violations that must be corrected by the owner. The report will also indicate the corrective actions required to address the violations, in accordance with §86.453. Additionally, the department may assess administrative penalties and/or administrative sanctions for violations.

§86.451.Periodic Inspections.

(a) Each towing company shall be inspected at least once every two years.

(b) The towing company owner, manager, or their representative must, upon request, make available to the inspector all records, notices and other documents required by these rules.

(c) Upon completion of the inspection, the owner manager, or representative shall be advised in writing of the results of the inspection. The inspection report will indicate whether the inspection was approved or not approved, and will describe any violations identified during the inspection.

(d) For inspections that are not approved, the inspection report will identify violations that must be corrected by the owner. The report will also indicate the corrective actions required to address the violations, in accordance with §86.453. Additionally, the department may assess administrative penalties and/or administrative sanctions for violations.

§86.650. Towing and Storage Advisory Board.

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

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

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

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

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

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

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

(7) one parking facility representative;

(8) one representative of a member insurer, as defined by Section 462.004, Insurance Code, of the Texas Property and Casualty Insurance Guaranty Association who writes automobile insurance in this state; and

(9) one person who operates both a towing company and a vehicle storage facility.

(b) The advisory board shall include representation for each classification of towing.

(c) Advisory board members serve terms of six years, with the terms of two or three members, expiring on February 1 of each odd-numbered year.

(1) A member may not serve more than two full consecutive terms.

(2) If a vacancy occurs during a term, the chairman of the commission will appoint a replacement who meets the qualifications of the open position to serve for the balance of the term.

(d) The chairman of the commission appoints one of the advisory board members to serve as the presiding officer of the advisory board for one year. The presiding officer of the advisory board may vote on any matter before the advisory board.

(e) Advisory board members do not receive compensation. They are, subject to the General Appropriations Act, reimbursed for actual and necessary expenses incurred in performing the duties of the advisory board.

(f) The advisory board meets twice yearly and may meet at other times at the call of the chairman of the commission or the executive director.

(g) The advisory board provides advice and recommendations to the department on technical matters relevant to the administration and enforcement of this chapter, including examination content, licensing standards, continuing education requirements, and maximum amounts that may be charged for fees related to private property tows.

§86.800.Fees.

(a) Application Fees

(1) Permit Tow Truck

(A) Original Application--$75

(B) Renewal--$75

(C) Duplicate Permit--No charge

(D) Permit Amendment--$25

(2) Tow Company License

(A) Original Application--$350

(B) Renewal--$350

(C) Duplicate License--$25

(D) Permit Amendment--$25

(3) Operator License

(A) Original Application--$100

(B) Renewal--$100

(C) Duplicate License--$25

(D) Operator License Amendment--$25

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 21, 2017.


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