TDLR Proposes Administrative Rules - Vehicle Storage Facilities

Chapter 85. Vehicle Storage Facilities Program
Proposal Filed: October 2, 2017 - Published in the Texas Register: October 13, 2017
Deadline for Public Comment: November 13, 2017

Underlined text is new language.
[Strike-thru text] is deleted language.

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 85, §§85.201, 85.204, 85.206, 85.450, 85.451, 85.650, 85.703, 85.704, 85.722, 85.800 and 85.1003; and proposes the repeal of §85.205 and §85.452, regarding the Vehicle Storage Facilities program.

The Texas Legislature enacted Senate Bill 1501, Senate Bill 2065, House Bill 1247 and House Bill 2615, 85th Legislature, Regular Session (2017).  Collectively these bills remove fencing requirements; eliminate dual licensure and associated fees; eliminate periodic and risk-based inspections and associated fees; relax certain signage requirements; as well as clarify required notices and databases; and update the advisory board composition. The proposed amendments and repeals are necessary to implement the legislative changes.

The Towing and Storage Advisory Board met on September 22, 2017, to review a draft of these proposed rules and recommended publishing in the Texas Register

The proposed amendments to §85.201 removes fencing requirements in the licensure process.

The proposed amendments to §85.204 eliminate dual licensure and allows a person to work at a VSF if they have meet one of 4 criteria.

The proposed repeal of §85.205 eliminates dual licensure requirements.

The proposed amendments to §85.206 eliminates dual licensure.

The proposed amendments to §85.450 removes risk based inspections from general inspection rules.

The proposed amendments to §85.451 removes periodic inspections.

The proposed repeal of §85.452 removes language relating to risk based inspections.

The proposed amendments to §85.650 changes the composition of the advisory board.

The proposed amendments to §85.703 relates to notice requirements and databases that must be used to find vehicle owners, lien holders, etc.

The proposed amendments to §85.704 relates to the second notice requirement.

The proposed amendments to §85.722 cleans up the language to bring it in line with other rules.

The proposed amendments to §85.800 eliminates fees related to dual licensure and risk-based inspections.

The proposed amendments to §85.1003 relaxes some of the signage requirements.

Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed new rules are in effect, the effect on state costs and revenue is as follows:

The elimination of providing fence height in § 85.201 will not affect state costs and revenue. A Vehicle Storage Facility (VSF) is still required to have a fence, but the applicant does not need to include the dimensions of the fence as part of the application process.

There is no effect on local government costs and revenue.

The elimination of dual licensure in § 85.204, § 85.205, and § 85.206 will not affect state costs and revenue. An anticipated decrease in revenue will occur in the TOW Program while the VSF Program remains unaffected.

There is no effect on local government costs and revenue.

The elimination of risk-based and periodic inspections in § 85.450, § 85.451, and § 85.452 will not affect state costs and revenue. No risk-based inspections have ever been performed, or charged for, in the VSF Program.

There is no effect on local government costs and revenue.

The composition of the Advisory Board in § 85.650; the relaxing of signage requirements in § 85.1003; and the elimination of fees related to dual licensure and risk-based inspections in § 85.800 will not affect state costs and revenue.

There is also no effect on local government costs and revenue.

Notice requirements and mandated use of particular databases to find vehicle owners and lien holders in § 85.703 and § 85.704, as well as the clean-up of rules relating to storage fees and other charges in § 85.722 will not likely affect state or local costs and revenue.

There may be less revenue for local or state governmental entities if a VSF uses an authorized private entity to obtain information related to a vehicle owner or operator and if the private entity charges less than the governmental entity would have for the same service. However, there may not be any actual loss if the authorized private entity charges an amount equal to or above the government entity. In that instance, there is no financial incentive to use a private entity.

Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, there is no direct benefit to the public. The proposed rules relate to the internal operation of licensed VSFs and the Advisory Board only. These rules do not present a direct benefit or loss to the public.

Mr. Francis has determined that for each year of the first five-year period the proposed new rules are in effect, there is no impact on small and micro-business or rural communities.

Proposed rules § 85.703 and § 85.704 may have an unknown fiscal impact on VSFs who do not timely send notices to vehicle owners and operators. VSFs in violation of the notice requirements will lose daily storage fee revenues until such time as a late notice is sent. However, loss of daily storage fee revenues can be minimized or entirely avoided by a VSFs timely compliance with notice requirements.

Additionally, the elimination of notice provided by VSFs to law enforcement in instances of abandoned vehicles may save VSFs a $10 notification fee per vehicle. However, it is noted that law enforcement agencies do not accept or actively enforce the payment of the fee. Therefore, an accurate assessment of how much money VSFs may save, if any, is unknown.

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

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.

Mr. Francis has determined that none of the proposed rules will impose costs on regulated persons, including another state agency, a special district, or a local government.

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 amendments are proposed under Texas Occupations Code, Chapters 51 and 2303, 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 2303. No other statutes, articles, or codes are affected by the proposal.

§85.201. License Requirements--Vehicle Storage Facility License.

To be eligible for a VSF license, an applicant must:

(1) - (9) (No change.)

(10) state the VSF's storage capacity; and

[(11) state the height of any fence enclosing the VSF and the date it was installed;]

(11) include a statement indicating whether the facility has an all weather surface, signs posted in the proper locations, and lighting, as required by these rules; and

(12) [(13)] adopt the model drug testing policy provided in these rules or file an alternate drug testing policy for approval under these rules.

§85.204 License Requirements--Vehicle Storage Facility Employee License.

(a) To be eligible for a VSF employee license, an applicant must:

(1) submit a completed application on a department-approved form;

(2) pay the fee required under §85.800;

(3) successfully pass a criminal background check; and

(4) if the applicant for renewal has within the preceding 12-month period tested positive for drugs under §85.725, the applicant must submit a negative drug test to the department.

(b) A person may not work at a VSF unless the individual holds: [a license issued under this chapter. A VSF may not employ a person unless the person holds a license issued by the department.]

(1) a license issued under this chapter;

(2) an incident management towing operator's license under Section 2308.153;

(3)  a private property towing operator's license under Section 2308.154; or

(4)  a consent towing operator's license under Section 2308.155.

(c) A VSF may not employ a person to work at the VSF unless the person holds a license issued under this chapter or under Chapter 86.

(d) [(c)] For purposes of this chapter, persons operating or managing a VSF as a sole proprietor or other unincorporated business organization are employees of the VSF and required to obtain a VSF employee license or otherwise be licensed under this chapter or under Chapter 86.

§85.206. License Requirements--Vehicle Storage Facility Employee License Renewal [; Dual Vehicle Storage Facility Employee and Towing Operator License].

(a) To renew a VSF employee license [or dual VSF employee and towing operator license,] an applicant must:

(1) submit a completed application on a department-approved form;

(2) pay the applicable fee required under §85.800;

(3) successfully pass a criminal background check; and

(4) if the applicant for renewal has within the preceding 12-month period tested positive for drugs under §85.725, the applicant must submit a negative drug test to the department.

(b) - (c) (No change.)

§85.450. Inspections--General.

(a) All VSFs shall be inspected periodically [, according to a risk-based schedule,] or as a result of a complaint. These inspections will be performed to determine compliance with the requirements of the Act and these rules. In addition, the department may make information available to VSF owners and managers on best practices for risk-reduction techniques.

(b) - (d) (No change.)

§85.451. Periodic Inspections.

(a) - (d) (No change.)

[(e) Based on the results of the periodic inspection, a VSF may be moved to a risk-based schedule of inspections. The department will notify the owner of the VSF, in writing, if the facility becomes subject to the risk-based inspection schedule and the scheduled frequency of inspection.]

§85.650. Towing [,] and Storage [, and Booting] Advisory Board.

(a) The advisory board consists of the nine [ten] members appointed by the chairman of the commission with the approval of the commission. The nine [ten] 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 [owner] of a vehicle storage facility located in a county with a population of less than one-million;

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

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

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

(7) one parking facility representative [owner];

(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 [property and casualty insurers who write] automobile insurance in this state; and

(9) one person who operates both a towing company and a vehicle storage facility. [one member of a booting company; and]

[(10) one public member.]

(b) - (g) (No change.)

§85.703 Responsibilities of Licensee--Notice to Vehicle Owner or Lienholder.

(a) [Applicability.] If a vehicle is removed by the vehicle owner or authorized representative within 24 hours after the VSF receives the vehicle, notification as described in subsections (b) – (j) [(i)] does not apply.

(b) The registered [Notification to owners of registered vehicles. registered] owners and lien holders of a vehicle accepted at a VSF [towed vehicles] shall be notified in the following manner.

(1) If [Vehicles registered in Texas. After accepting for storage] a vehicle is registered in Texas, the VSF shall notify the vehicle's current registered owner and primary lien holder by certified mail, return receipt requested, registered, or electronic certified mail, within five days, but in no event sooner than within 24 hours of receipt of the vehicle.

(2) If [Vehicles not registered in Texas. After accepting for storage] a vehicle is not registered in Texas, the VSF shall notify the vehicle's [current] registered owner and all recorded lien holders within 14 days, but [in] no [event] sooner than within 24 hours of receipt of the vehicle.

(c) The operator of a VSF shall send the notice required by subsections (b)(1) and (b)(2) to an address obtained by mail or electronically from:

(1) The governmental entity responsible for maintaining the motor vehicle title and

registration database for the state in which the vehicle is registered or

(2) A private entity authorized by the governmental entity to obtain title, registration, and lienholder information using a single vehicle identification number search obtained through a secure access portal to the government entity’s motor vehicle records.

[(c) It is a defense to an action initiated by the department for violation of this section that the facility has attempted unsuccessfully and in writing or electronically to obtain information from the governmental entity with which the vehicle is registered by requesting the names and addresses of registered owners and lien holders based on the license plate number and vehicle identification number.]

(d) [Date of notification.] Notification has [will be considered to have] occurred when the United States Postal Service places its postmark on the return receipt and is [to be] timely [filed] if:

(1) the postmark indicates that the notice was mailed within the period described by subsection (b); or

(2) the notice was published as provided by subsection (f) [(e].

(e) If a VSF sends a notice required under this section after the time mandated by Subsections (b)(1) or (b)(2):

(1) The deadline for sending any subsequent notice is based on the date that notice was actually sent to the vehicle owner and any lien holders;

(2) A VSF may not charge the daily storage fee permissible under Tex. Occ. Code Section 2303.155(b)(3) until 24 hours after it has sent the notice required under this section.

(f)[(e)] [Notice by publication.] Notice required under this section [to the registered owner and the primary lienholder of a vehicle towed to a VSF] may be completed [provided] by publication in a newspaper of general circulation in the county in which the vehicle is stored if:

(1) the vehicle is registered in another state;

(2) the VSF [operator of the storage facility] submits to the governmental entity that is responsible for maintaining the motor vehicle title and registration database for the state in which the vehicle is registered, or to a private entity that is authorized by the governmental entity to access title, registration, or lienholder information, [with which the vehicle is registered] a written or electronic request for information relating to the identity of the registered owner and any lienholder of record.

(3) If mailed, such requests shall be correctly addressed, with sufficient postage, and sent by certified mail, or electronic certified mail, return receipt requested, to the governmental entity with which the vehicle is registered requesting information relating to the identity of the last known registered owner and any lienholder of record.

(4) [(3)] the identity of the registered owner cannot be determined;

(5) [(4)] the registration does not contain an address for the registered owner; or

(6) [(5)] the operator of the storage facility cannot reasonably determine the identity and address of each lienholder.

(g) [(f)] Notice by publication is not required if each notice sent in accordance with this section [subsection (b)] is returned because:

(1) the notice was unclaimed or refused; or

(2) the person to whom the notice was sent moved without leaving a forwarding address.

(h) [(g)] Only one notice is required to be published for an abandoned nuisance vehicle.

(i) [(h)] [Form of notifications.] All mailed notifications must be correctly addressed; mailed with sufficient postage; and sent by certified mail, return receipt requested, registered, or electronic certified mail.

(1) All mailed notifications shall state:

(A) the full licensed name of the VSF where the motor vehicle is located, its street  address and telephone number, and the hours the vehicle can be released to the vehicle owner;

(B) the daily storage rate, the type and amount of all other charges assessed, and the statement, "Total storage charges cannot be computed until vehicle is claimed. The storage charge will accrue daily until vehicle is released";

(C) the first date for which a storage fee is assessed;

(D) the date the vehicle will be transferred from the VSF and the address to which the    vehicle will be transferred if the operator will be transferring a vehicle to a second lot because the vehicle has not been claimed within a certain time;

(E) the date the vehicle was accepted for storage and from where, when, and by whom the vehicle was towed;

(F) the VSF license number preceded by the words "Texas Department of Licensing and Regulation Vehicle Storage Facility License Number" or "TDLR VSF Lic. No.";

(G) a notice of the towed vehicle owner’s right under the Texas Occupations Code, Chapter 2308, to challenge the legality of the tow involved; and

(H) the name, mailing address, and toll-free telephone number of the department for purposes of directing questions or complaints.

(2) All published notifications shall state:

(A) the full name, street address, telephone number, and VSF license number [of the VSF], and the Department's internet address;

(B) a description of the vehicle; and

(C) the total amount of charges assessed against the vehicle.

(3) Notices published in a newspaper may contain information for more than one towed vehicle.

(j) [(i)] If authorized, a notification fee may not be charged unless actual notice has been given as required under this section. [the notification is actually sent or performed before the vehicle is released.]

§85.704 Responsibilities of licensee--Second Notice; Consent to Sale.

[(a) If a vehicle is not claimed by a person permitted to claim the vehicle or is not taken into custody by a law enforcement agency under Chapter 683, Transportation Code, before the 15th day after the date notice is mailed or published under §85.703, the operator of the VSF shall send a second notice to the registered owner and the primary lienholder of the vehicle.]

(a) [(b)] If a vehicle is not claimed by a person permitted to claim the vehicle before the 10th day after the date notice is mailed or published under §85.703, the operator of the VSF shall consider the vehicle to be abandoned and, if required by the law enforcement agency with jurisdiction where the vehicle is located, must report the [send notice of] abandonment to the [a] law enforcement agency. If the law enforcement agency notifies the VSF that the agency will send notices and dispose of the abandoned vehicle under Subchapter B, Chapter 683, Transportation Code, the VSF shall pay the fee required under Section 683.031, Transportation Code.

(b) If the vehicle is not claimed, the second notice shall be sent no earlier than the 15th day, and no later than the 21st day, after the date the first notice is mailed or published under §85.703. The operator of a VSF shall send a second notice to the registered owner and each recorded lienholder of the vehicle if the facility:

(1)  was not required to make a report under Subsection (a); or

(2)  has made a required report under Subsection (a) and the law enforcement agency:

(A)  has notified the facility that the law enforcement agency will take custody of the vehicle;

(B)  has not taken custody of the vehicle; or

(C)  has not responded to the report.

(c) If the VSF sends a second notice after the 21st day on which the first notice was mailed or published, it may not charge a daily storage fee authorized under Section 85.722(d) until 24 hours after the second notice is mailed or published.

(d) [(c)] Notice under this section must include:

(1) the information listed in § 85.703(h)(1)(A)-(H);

(2) a statement of the right of the facility to dispose of the vehicle under subsections (a) and (b);

(3) a statement that the failure of the owner or lienholder to claim the vehicle and personal property before the 30th day after the date the notice if provided is:

(A) a waiver by that person of all right, title, or interest in the vehicle and personal property; and

(B) a consent to the sale of the vehicle at a public sale.

(e)[(d)] Notwithstanding subsection (a) [(b)], if publication is required for notice under this section, the notice must include:

(1) the information listed in § 85.703(h)(2); and

(2) a statement that the failure of the owner or lienholder to claim the vehicle before the date of the sale is:

(A) a waiver of all right, title, and interest in the vehicle;

(B) and a consent to the sale of the vehicle at a public sale.

(f) [(e)] The operator shall pay any excess proceeds to the person entitled to those proceeds.

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

(a) For the purposes of this section, “VSF [operator]” 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) (No change.)

(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 [operator] 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 [operator] may not charge a notification fee to the vehicle owner.

(d) Daily storage fee. A VSF [operator] may not charge less than $5.00 or more than $20 for each day or part of a day for storage of a vehicle that is 25 feet or less in length. A VSF [operator] shall charge a fee of $35 for each day or part of a day for storage of a vehicle that exceeds 25 feet in length.

(1) 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.

(2) 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.

(3) A VSF [operator] 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 number inquiry. [If mailed, such requests shall be correctly addressed, with sufficient postage, and sent by certified mail, or electronic certified mail, return receipt requested, to the governmental entity with which the vehicle is registered requesting information relating to the identity of the last known registered owner and any lienholder of record.]

(4) A VSF [operator] 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 [operator] may charge a vehicle owner or authorized representative an impoundment [Impoundment] fee not to exceed $20. [if Impoundment is performed in accordance with these rules. The Impoundment fee may not exceed $20.] If the VSF [operator] charges a fee for impoundment [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 [operator] 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) Environmental hazard fee. A VSF [operator] may collect from a vehicle owner or authorized representative a fee in an amount set by the commission for the remediation, recovery, or capture of an environmental or biological hazard.

(h) Additional fees. A VSF [operator] 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.

§85.800. Fees.

(a) Application fees.

(1) - (2) (No change.)

[(3) Dual Vehicle Storage Facility and Tow Operator License

(A) Original Application--$150

(B) Expedited Dual License--$75

(C) Renewal--$150]

(b) (No change.)

[(c) Risk-based Inspections--$150]

(c) [(d)] Late renewals fees for licenses under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees).

(d) [(e)] All fees are nonrefundable [except as provided for by commission rules or statute].

§85.1003. Technical Requirements--Storage Lot Signs.

(a) Facility information. All VSFs shall have a clearly visible and readable sign located at the [its] main entrance. The [Such] sign shall have letters at least 2 inches in height, with a contrasting background, [shall] be readable [visible] at 10 feet, and [shall] contain the following information:

(1) the registered name of the storage lot, as it appears on the VSF license;

(2) street address;

(3) the telephone number for the owner to contact in order to obtain release of the vehicle;

(4) the facility's hours, within one hour of which vehicles will be released to vehicle owners; and

(5) the storage lot's state license number preceded by the phrase "VSF License Number."

(b) (No change.)

(c) Nonconsent towing fees schedule. All VSFs shall [conspicuously] place a clearly visible and readable sign where payment to the VSF is made [, at the place of payment,] which states [in 1-inch letters that]:

(1) 'Nonconsent tow fees schedules available on request.' The VSF shall provide a copy of a nonconsent towing fees schedule on request; and

(2) The nonconsent towing fees provided for viewing and to the vehicle owner or representative must match the nonconsent towing fees authorized by this chapter or Texas Occupations Code §2308.2065.

(d) - (f) (No change.) 

[(g) A vehicle storage facility accepting a nonconsent towed vehicle shall post a sign in one inch letters stating "Nonconsent tow fee schedules available on request." The vehicle storage facility shall provide a copy of a nonconsent towing fee schedules on request.]

*n

The repeals are proposed under Texas Occupations Code, Chapters 51 and 2303, 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 2303.  No other statutes, articles, or codes are affected by the proposal.

[§85.205. Licensing Requirements--Dual Vehicle Storage Facility Employee and Towing Operator License]

[§85.452. Risk-based Inspections]

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 October 2, 2017.

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