Proposed Administrative Rules

Chapter 86. Vehicle Towing and Booting
Proposal Filed: November 30, 2020 – Published in the Texas Register: December 18, 2020
Deadline for Public Comment: January 18, 2021

Underlined text is new language.
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The Texas Department of Licensing and Regulation (Department) proposes amendments to an existing rule at 16 Texas Administrative Code (TAC), Chapter 86, §86.700, regarding the Vehicle Towing and Booting program . The proposed changes are referred to as the “proposed rule.”

EXPLANATION OF AND JUSTIFICATION FOR THE RULE

The rules under 16 TAC, Chapter 86, implement Texas Occupations Code, Chapter 2308, Vehicle Towing and Booting.

The proposed rule clarifies the limited locations to which a tow truck company or a tow truck operator may take a vehicle involved in an Incident Management (IM) or other Non-Consent tow, by stating the two options in more concise language.

Additionally, the proposed rule explicitly prohibits: 1) a tow truck company or tow operator from recommending or soliciting authorization to tow or move a vehicle involved in an IM or other Non-Consent tow to any location other than a licensed vehicle storage facility (VSF) or 2) from obtaining authorization for any repairs or services other than those that are necessary for the tow.

The proposed rule is necessary because the Department continues to see a rise in vehicle “flipping” – a practice which involves towing vehicles involved in IM or other Non-Consent tows from one location to an unlicensed and unregulated body shop for storage and unauthorized work. The proposed rule will explicitly prohibit this practice and allow the Department to prosecute both tow companies and tow truck operators for using deception and dishonesty to funnel disabled vehicles away from licensed VSFs where storage fees are regulated and capped.

The need for rules addressing the practice of “flipping” has been discussed by the Towing and Storage Advisory Board for approximately one year. During the Board’s September 22, 2020 meeting, it formally requested that the Department engage in the rulemaking process on this issue and present it with a proposed draft. The Sunset Commission has also recommended that the Department consider rules on this issue.

The proposed rules were presented to and discussed by the Towing and Storage Advisory Board at its meeting on November 18, 2020. The Advisory Board made the following change to the proposed rules:

SECTION-BY-SECTION SUMMARY

The proposed rule amends §86.700 by:

1. adding tow truck operators to the persons or entities subject to the rule;

2. explicitly adding Incident Management (IM) tows to the rule language to emphasize applicability to all types of Non-Consent tows;

3. adding a prohibition on tow truck companies and tow truck operators recommending or soliciting authorization to tow vehicles involved in IM and other Non-Consent tows to locations other than those allowed by rule;

4. adding clarifying language to emphasize where a vehicle involved in IM or other Non-Consent tows must be taken, if the vehicle operator selects a location of their own choosing and the tow truck company or tow truck operator declines to tow the vehicle there;

5. adding the word “ticket” to subsection (c); and

6. renumbering all sections.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

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

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

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

LOCAL EMPLOYMENT IMPACT STATEMENT

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

PUBLIC BENEFITS

Mr. Couvillon also has determined that for each year of the first five-year period the proposed rule is in effect, the public benefit will be that it clarifies where a vehicle can be taken when it is towed during an IM or other Non-Consent tow. The proposed rule also provides protection from a tow company or operator who might attempt to solicit a vehicle owner on the side of the road or scene of an accident, to have the vehicle taken to a location without regulated fees. Lastly, the proposed rule protects the public from bearing additional, possibly exorbitant costs, imposed by unregulated entities that can result from an unlawful solicitation by a tow operator at the scene of an accident or incident.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

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

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

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

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

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

GOVERNMENT GROWTH IMPACT STATEMENT

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

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

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

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

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

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

6. The proposed rule does expand, limit, or repeal an existing regulation.

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

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

TAKINGS IMPACT ASSESSMENT

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

PUBLIC COMMENTS

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

STATUTORY AUTHORITY

The proposed rule is proposed under Texas Occupations Code, Chapters 51 and Texas Occupations Code, Chapter 2308, which authorize the Texas Commission of Licensing and Regulation, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

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

§86.700. Responsibilities of Tow Truck Permit Holder and Tow Truck Operator--Storage of Towed Vehicles

(a) A towing company or tow truck operator that performs an incident management or nonconsent tow may only tow the vehicle to one of the following locations:

(1) a vehicle storage facility operated by a person who holds a vehicle storage facility license issued by the department; or

(2) a location other than a vehicle storage facility licensed by the department that is specifically requested and authorized by the vehicle owner or operator and to which a towing company or tow truck operator agrees to take the vehicle.

[ (a) Unless the towing company agrees to take the vehicle to a location designated by the vehicle's owner, a towing company that makes a nonconsent tow shall tow the vehicle to a vehicle storage facility operated by a person who holds a vehicle storage facility license issued by the department. ]

(b) Neither a towing company nor a tow truck operator may recommend or solicit authorization for a vehicle involved in an incident management or nonconsent tow to be towed or moved to any location other than a vehicle storage facility licensed by the department.

(c) [ (b) ] In the event the vehicle is taken to a location other than a licensed vehicle storage facility, the authorization for [ document signed by the vehicle owner or operator to authorize ] the tow ticket must [ may ] not include authorization for repairs or [ of ] any other services other than those necessary to perform the [ nonconsent ] tow.

(d) A towing company or tow truck operator may decline to take a vehicle to a location specifically requested and authorized by the vehicle owner or operator. However, if the towing company or tow operator declines, they may not take the vehicle to any location other than a licensed vehicle storage facility as set forth in subsection (a)(1).

REVIEW BY AGENCY COUNSEL

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 November 30, 2020.


Brad Bowman
General Counsel
Texas Department of Licensing and Regulation