Justification for Adoption of Administrative Rules

JUSTIFICATION FOR ADOPTION OF ADMINISTRATIVE RULES
VEHICLE STORAGE FACILITIES
16 TAC, Chapter 85, amendments §85.722

The Texas Commission of Licensing and Regulation (Commission) adopts amendments to an existing rule at 16 Texas Administrative Code (TAC), Chapter 85, §85.722, regarding the Vehicle Storage Facilities Program, without changes to the proposed text as published in the August 16, 2019, issue of the Texas Register (44 TexReg 4281). The adopted changes are referred to herein as “adopted rules.”

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

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

The adopted rules implement House Bill (HB) 1140 of the 86th Legislature (2019 Regular Session), which amends Occupations Code, Chapter 2303, by: (1) allowing the Commission to biennially adjust daily storage fees and impoundment fees at vehicle storage facilities (VSF) based on changes in the Consumer Price Index for All Urban Consumers (CPI-U); and (2) removing the authority of the Commission to set fees that VSF operators may charge for environmental hazards. The adopted rules are necessary to create consistency with the amended statutory language and to implement the biennial adjustment of fees for 2019.

SECTION-BY-SECTION SUMMARY

The adopted rules amend §85.722(d) by: (1) reflecting the amended statutory language setting the daily storage fee amount that VSF operators may charge; (2) adding new Subpart (d)(1) to include the daily storage fee amounts resulting from the 2019 biennial adjustment; and (3) renumbering the remaining subparts accordingly.

The adopted rules amend §85.722(e) by: (1) reflecting the amended statutory language setting the impoundment fee amount that VSF operators may charge; and (2) including the impoundment fee amount resulting from the 2019 biennial adjustment.

The adopted rules repeal §85.722(g) to remove the environmental hazard fee and renumber the remaining subsection accordingly.

PUBLIC COMMENTS

The Texas Department of Licensing and Regulation (Department) drafted and distributed the proposed rules to persons internal and external to the agency. The proposed rules were published in the August 16, 2019, issue of the Texas Register (44 TexReg 4281). The deadline for public comments was September 16, 2019. The Department received comments from one interested party on the proposed rules during the 30-day public comment period. The public comment is summarized below.

Comment: TDLR received one comment during the public comment period. The comment was authored by an insurance company which expressed its support of the proposed amendments. The comment further expressed concern that the insurance company often receives what it considers to be “inflated charges” relating to gate fees, admin fees, and tow bills.

Department Response: The Department thanks the commenter for submitting its support of the proposed amendments. It also notes that the commenter did not submit any suggested edits or propose any alternative language.

The Department also thanks the commenter for expressing its concerns about what it perceives to be “inflated charges” relating to various aspects of towing and storage fees. However, HB 1140 does not address towing fees and limits itself to storage fees relating to impound and daily storage rates at Vehicle Storage Facilities and to the elimination of an Environmental Fee. The Department, therefore, cannot provide a response to any portion of the comment that does not relate directly to HB 1140 or the fees which are subject to the proposed amendments.

The Department did not make any changes to the proposed rules in response to this comment.

ADVISORY BOARD RECOMMENDATIONS AND COMMISSION ACTION

The Towing and Storage Advisory Board (Advisory Board) met on September 23, 2019, to discuss the proposed rule and the comment received. The Advisory Board recommended adopting the proposed rule without changes. At its meeting on October 1, 2019, the Commission adopted the proposed rules without changes as recommended by the Advisory Board.

STATUTORY AUTHORITY

The amendments are adopted under Texas Occupations Code, Chapters 51 and Chapter 2303, 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 adopted rules are those set forth in Texas Occupations Code, Chapters 51 and Chapter 2303. No other statutes, articles, or codes are affected by the proposed rules.

ยง 85.722. Responsibilities of Licensee--Storage Fees and Other Charges.

(a) For the purposes of this section, "VSF" includes a garage, parking lot, or other facility that is:

(1) owned by a governmental entity; and

(2) used to store or park at least 10 vehicles each year.

(b) The fees outlined in this section have precedence over any conflicting municipal ordinance or charter provision.

(c) Notification fee.

(1) A VSF may not charge a vehicle owner or authorized representative more than $50 for notification under these rules. If a notification must be published, and the actual cost of publication exceeds 50% of the notification fee, the VSF may recover the additional amount of the cost of publication. The publication fee is in addition to the notification fee.

(2) If a vehicle is removed by the vehicle owner or authorized representative within 24 hours after the date the VSF receives the vehicle, notification is not required by these rules.

(3) If a vehicle is removed by the vehicle owner or authorized representative before notification is sent or within 24 hours from the time VSF receives the vehicle, the VSF may not charge a notification fee to the vehicle owner.

(d) Daily storage fee. A VSF may charge $20 for each day or part of a day for storage of a vehicle that is 25 feet or less in length and may charge $35 for each day or part of a day for storage of a vehicle that exceeds 25 feet in length, subject to a biennial adjustment as set forth in Texas Occupations Code §2303.1552(b)(1).

(1) Per the 2019 biennial adjustment, the maximum amount that a VSF may charge for a daily storage fee is as follows:

(A) Vehicle that is 25 feet or less in length: $20.64.

(B) Vehicle that exceeds 25 feet in length: $36.11.

(2) A daily storage fee may be charged for any part of the day, except that a daily storage fee may not be charged for more than one day if the vehicle remains at the VSF less than 12 hours. In this paragraph a day is considered to begin and end at midnight.

(3) A VSF that has accepted into storage a vehicle registered in this state shall not charge for more than five days of storage fees until a notice, as prescribed in §85.703 of these rules, is mailed or published.

(4) A VSF that has accepted into storage a vehicle not registered in Texas shall not charge for more than five days of storage before the date the request for owner information is sent to the appropriate governmental entity or to the private entity authorized by that governmental entity to obtain title, registration, and lienholder information using a single vehicle identification inquiry.

(5) A VSF shall charge a daily storage fee after notice, as prescribed in §85.703, is mailed or published for each day or portion of a day the vehicle is in storage until the vehicle is removed and all accrued charges are paid.

(e) Impoundment fee. A VSF may charge a vehicle owner or authorized representative an impoundment fee of $20, subject to a biennial adjustment as set forth in Texas Occupations Code §2303.1552(b)(1). Per the 2019 biennial adjustment, the maximum amount that a VSF may charge for an impoundment fee is $20.64. If the VSF charges a fee for impoundment, the written bill for services must specify the exact services performed for that fee and the dates those services were performed.

(f) Governmental or law enforcement fees. A VSF may collect from a vehicle owner or authorized representative any fee that must be paid to a law enforcement agency, the agency's authorized agent, or a governmental entity.

(g) Additional fees. A VSF may not charge additional fees related to the storage of a vehicle other than fees authorized by these rules or a nonconsent-towing fee authorized by Texas Occupations Code, §2308.2065.

REVIEW BY AGENCY COUNSEL

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 October 8, 2019.


Brad Bowman
General Counsel
Texas Department of Licensing and Regulation