Subchapter A. General Provisions

The Texas Department of Transportation adopts an amendment to §18.31, the repeal of §18.32, and new §18.32, concerning motor carrier records and inspections. Section 18.31 and new §18.32 are adopted with changes to the proposed text as published in the November 13, 1998, issue of the Texas Register (23 TexReg 11612). The repeal of §18.32 is adopted without changes and will not be republished.

EXPLANATION OF ADOPTED REPEAL, AMENDMENTS AND NEW SECTION

House Bill 1418, 75th Legislature, 1997, established the Household Goods Carrier Advisory Committee to advise the department on modernizing and streamlining the consumer protection provisions of the household goods carrier rules. The committee had representation from the regulated community, the general public, and the department to help ensure effective communication among interested parties and provide valuable input into the amendments to the policy and procedures that affect household goods carriers and shippers. The repeal and amendments are being contemporaneously adopted in conjunction with amendments to §18.2, §18.13, and §18.16. Existing §§18.50-18.61 are also repealed and are being replaced with new §§18.50-18.65.

The amendments to §18.31, concerning Investigations and Inspections of Motor Carrier Records, are adopted to require the amount of information in a claim record maintained by a household goods carrier to be reduced to only easily-retrieved information and require that the records be retained for two years. This change should simplify the process for carriers to gather information for the claims record.

The repeal of §18.32 is a result of considering the committee's recommendations along with other necessary changes developed by department staff. New §18.32, concerning Records, is adopted to clarify and reorganize the wording of the existing section concerning the records to be maintained by motor carriers. The repeal and new section are necessary to modernize and streamline the rules, and protect customers of household goods movers from deceptive or unfair practices and unreasonably hazardous activities on the part of the movers.

RESPONSE TO COMMENTS

On November 24, 1998 a public hearing was held to receive comments on the proposed repeals, amendments, and new sections. Comments were received from Texas Independent Movers Association (TIMA) and from Southwest Movers Association (SMA). TIMA commended the efforts of the Household Goods Carrier Advisory Committee and the department for their diligence, but did provide recommended changes to the final rules. SMA was in favor of the rules but also provided comments for further changes to various sections. These comments follow below.

§18.31. Investigations and Inspections of Motor Carrier Records.

Comment: TIMA and SMA made comments about providing access to the motor carrier's records and documents at a location specified by the department as required by §18.31(c). TIMA prefers access be provided at the motor carrier's headquarters or other place of business within Texas as specified by the department. SMA prefers access be provided at a location agreed upon by the household goods carrier and the department.

Response: The department concurs in part with the comments. It is not the department's intention to burden household goods carriers by requiring them to produce records at locations other than their principal places of business. However, the department wishes to retain the flexibility of inspecting a carrier's records at a location other than the carrier's principal place of business when such location is agreeable to the carrier. This flexibility is especially important for inspecting records of household goods carriers whose principal place of business is outside of Texas. The rule is amended to allow access to the records and documents at the motor carrier's principal place of business or at a location agreed to by the department and motor carrier.

§18.32. Motor Carrier Records.

Comment: TIMA made comments asking the department to delete §18.32(c)(1), which requires Type B household goods carriers to maintain a copy of their certificate of registration in the cab of each power unit operated on behalf of the carrier. TIMA stated that the requirements in §18.52(e) should be sufficient to allow law enforcement officers to determine the identity of a Type B household goods carrier and ascertain whether the household goods carrier is registered with the department. Section 18.52(e) establishes requirements for identification markings on household goods carriers' vehicles. TIMA also stated that §18.32(c)(1) could lead to confusion. TIMA believes owner-operators who are hired by more than one household goods carrier may fail to carry the certificate of registration for their employer or may provide a law enforcement officer with the incorrect certificate of registration. TIMA stated that the rule should be amended to allow for alternative proof of registration if the department determines Type B household goods carriers must carry the certificate of registration. TIMA also recommends Type B carriers be allowed to carry their certificates of registration in either each power unit or trailer operated on their behalf. TIMA stated that this amendment should allow Type B household goods carriers to ensure compliance rather than relying on their owner-operators.

Response: The department concurs in part, and the rule is amended. The requirements of §18.32(c)(1) are based on the recommendations of the Household Goods Carrier Advisory Committee, and the department supports the committee's recommendations for several reasons. First, the vehicle identification markings required by §18.52(e) are not sufficient to replace the requirements of §18.32(c)(1) because §18.52(e) does not apply to all vehicles operated by Type B household goods carriers. As such, enforcement of registration requirements based solely on the identification markings of vehicles could be difficult. Second, deleting §18.32(c)(1) might make it difficult for consumers who wish to verify whether or not the carrier they contracted with to move their goods is actually the carrier transporting their household goods. Finally, the concern that an owner-operator may fail to carry the certificate of registration for its employer or may provide a law enforcement officer with the incorrect certificate of registration is a training issue or an internal business concern. However, the department agrees with TIMA's suggestion regarding maintaining a copy of the Type B household goods carrier's certificate of registration in either the power unit or trailer operated on the carrier's behalf. This amendment of §18.32(c)(1) should alleviate some of TIMA's concern about compliance by allowing the household goods carriers to ensure compliance rather than relying on their owner-operators. Additionally, §18.13(f)(6), concerning Type B household goods carriers, is amended to accommodate the amendment to §18.32(c)(1).

The new section is adopted under Transportation Code, §201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapter 643, which authorizes the department to carry out the provisions of those laws governing the issuance of motor carrier registration.

§18.32.Motor Carrier Records.

(a)

General records to be maintained. Every motor carrier shall prepare and maintain at its principal place of business in Texas:

(1)

operational logs, insurance certificates, and documents to verify the carrier's operations;

(2)

complete and accurate records of services performed;

(3)

all certificate of title documents, weight tickets, permits for oversize or overweight vehicles and loads, dispatch records, tow tickets, or any other document that would verify the operations of the vehicle to determine the actual weight, insurance coverage, size, and/or capacity of the vehicle;

(4)

documents supporting fee payments and the original registration receipts issued by the department for an interstate carrier registered under §18.17 of this title (relating to Single State Registration System), for a period of at least three years; and

(5)

the original certificate of registration and registration listing, if applicable.

(b)

Additional records for household goods carriers. In order to verify compliance with Subchapters B and E of this chapter, every household goods carrier shall retain complete and accurate records maintained in accordance with reasonable accounting procedures of all services performed in intrastate commerce. Household goods carriers shall retain all of the following information and documents:

(1)

moving services contracts, such as, bills of lading or receipts;

(2)

proposals for moving services;

(3)

inventories, if applicable;

(4)

freight bills;

(5)

time cards, trip sheets, or driver's logs;

(6)

claim records;

(7)

ledgers and journals;

(8)

canceled checks;

(9)

bank statements and deposit slips;

(10)

invoices, vouchers or statements supporting disbursements; and

(11)

dispatch records.

(c)

Proof of motor carrier registration. Except as provided in paragraphs (1) and (2) of this subsection, every motor carrier shall maintain a copy of its current registration listing in the cab of each registered vehicle at all times. A motor carrier shall make available to a certified inspector or any law enforcement officer a copy of the current registration listing upon request.

(1)

A Type B household goods carrier shall maintain a copy of its certificate of registration in either the cab of each power unit or each trailer operated on its behalf at all times. A Type B household goods carrier shall make available and accessible to a certified inspector or any law enforcement officer a copy of the current certificate of registration.

(2)

A registered motor carrier is not required to carry proof of registration in a vehicle leased from a leasing business that is registered under §18.19 of this title (relating to Short-term Lease and Substitute Vehicles), when leased as a temporary replacement due to maintenance, repair, or other unavailability of the originally leased vehicle. A copy of the lease agreement, or the lease for the originally leased vehicle, in the case of a substitute vehicle, must be carried in the cab of the vehicle.

(d)

Location of files. Except as provided in paragraphs (1) and (2) of this subsection, every motor carrier shall maintain at a principal office in Texas all records and information required by the department.

(1)

Texas firms. If a motor carrier wishes to maintain records at a location other than its principal office in Texas, the motor carrier shall make a written request to the manager. A motor carrier may not begin maintaining records at an alternate location until the request is approved by the manager.

(2)

Out-of-state firms. A motor carrier whose principal business address is located outside the state of Texas shall maintain records required under this section at its principal office in Texas. Alternatively, a motor carrier may maintain such records at an out-of-state facility if the carrier reimburses the department for necessary travel expenses and per diem for any inspections or investigations conducted in accordance with §18.31 of this title (relating to Investigations and Inspections of Motor Carrier Records).

(e)

Preservation and destruction of records. All books and records generated by a motor carrier, except driver's time cards and logs, must be maintained for not less than two years at the motor carrier's principal business address. A motor carrier must maintain driver's time cards and logs for not less than six months at the carrier's principal business address.

This agency hereby certifies that the adoption 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 February 2, 1999.

TRD-9900697

Richard D. Monroe

General Counsel

Texas Department of Transportation

Effective date: February 22, 1999

Proposal publication date: November 13, 1998

For further information, please call: (512) 463-8630

The Texas Department of Transportation adopts the repeal of §§18.50-18.61 and new §§18.50-18.65, concerning consumer protection relating to household goods carriers. New §§18.54, 18.55, 18.57 and 18.58 are adopted with changes to the proposed text as published in the November 13, 1998, issue of the Texas Register (23 TexReg 11614). The repeal of §§18.50-18.61 and new §§18.50-18.53, 18.56, and 18.59-18.65 are adopted without changes and will not be republished.

EXPLANATION OF ADOPTED REPEALS AND NEW SECTIONS

House Bill 1418, 75th Legislature, 1997, established the Household Goods Carrier Advisory Committee to advise the department on modernizing and streamlining the household goods rules. The committee had representation from the regulated community, the general public, and the department to help ensure effective communication among interested parties and provide valuable input into policy and procedures that affect household goods carriers and shippers. The new sections are a result of considering the committee's recommendations along with other necessary changes recommended by department staff. The new sections modernize and streamline the existing rules, and protect customers of household goods carriers from deceptive or unfair practices and unreasonably hazardous activities on the part of the carriers. Additionally, in order to implement the committee's recommendations it is necessary to adopt the repeal of §§18.50-18.61 and simultaneously adopt new §§18.50-18.65 in a revised form.

New §18.50, concerning Purpose, is adopted to clarify the department's intent to protect shippers of household goods from deceptive or unfair practices and unreasonably hazardous activities on the part of household goods carriers.

New §18.51, concerning Household Goods Agents, is adopted to clarify the existing policies regarding the relationships and responsibilities of household goods carriers and their household goods agents.

New §18.52, concerning Advertising, is adopted to require a carrier to include its department registration number on specified types of advertisements, including print advertisements addressing local markets (excluding promotional items, business cards, internet websites, listings not paid for by carriers or their agents, nationally-placed billboards, and single-line listings of the carrier's name), and specifies registration number requirements for marking equipment. Potential shippers should benefit from the additional information included in these advertisements.

New §18.53, concerning Household Goods Carrier Cargo Liability, establishes carrier liability at $.60 per pound per article for Types A and B household goods carriers. The new section requires a $.60 per pound per article liability requirement for Types A and B household goods carriers to be consistent with current industry practice. Sixty cents per pound per article is the maximum level of liability limitation the department may require under Transportation Code, Chapter 643, Subchapter D.

New §18.54, concerning Selling Insurance to Shippers, is adopted to clarify that insurance policies must clearly indicate the name of the insurance company, policy number, insurance company's address and telephone number, and whether claims are to be filed with the insurance company or the household goods carrier. This change requires carriers that sell additional cargo insurance to their customers to issue the insurance policy to the shipper prior to loading. The policies shall be written in a clear and concise manner to specify the nature and extent of coverage so that shippers understand what type of coverage they are buying.

New §18.55, concerning Information for Shippers, is adopted to require household goods carriers to provide shippers with a Texas Department of Transportation information sheet entitled, Your Rights and Responsibilities When You Move in Texas, rather than carriers creating their own documents providing similar information. The public will benefit from receiving the same consistent and clear information from all carriers operating in Texas.

New §18.56, concerning Proposals and Estimates for Moving Services, is adopted to require household goods carriers to provide the shipper with a written proposal such as a bid or quote prior to loading the shipper's goods, including the street address of the carrier or its agent. This will clarify the agreement between the shipper and the carrier so that shippers will clearly understand and can verify the amount they will be expected to pay the carrier for transportation of their household goods before any charges are incurred. This change should further protect the shipper and the carrier in clarifying the proposal.

New §18.57, concerning Moving Services Contract, changes the information required on the moving services contract (bill of lading) and requires household goods carriers to provide the shipper with a copy of the moving services contract both at the beginning and at the end of the move. The revised information will provide clearer information to shippers. The forms should also be simpler, so that it is easier for the carrier to produce and takes less time for the shipper to read.

New §18.58, concerning Moving Services Contract - Options for Carrier Limitations of Liability, establishes standard terms and conditions under which household goods carriers may limit their liability under certain circumstances to make the liability easier for the shipper to understand.

New §18.59, concerning Inventories, is adopted to reorganize and clarify how inventories are to be prepared.

New §18.60, concerning Determination of Weights, reorganizes and simplifies the wording concerning the weighing of household goods shipments.

New §18.61, concerning Claims, reduces the length of time from nine months to 90 days in which shippers may file claims against household goods carriers. Household goods carriers must now acknowledge claims within 20 working days instead of 30 days, excluding Sundays and nationally recognized holidays. The section requires: the carrier to complete an inspection of damaged goods as soon as possible, but not later than 30 calendar days after receipt of the claim; the household goods carrier to offer settlement, pay, or deny the claim within 90 days; and a household goods carrier to retain certain information in a claim record for two years. This section should expedite the entire claims process and benefit all parties due to the streamlined, more efficient process.

New §18.62, concerning Mediation by the Department, removes the requirement for carrier-sponsored mediation as it applied to Types A and B carriers and allows the parties to resolve their differences through department-sponsored mediation. This change should allow the shipper and carrier to settle their differences through department-sponsored mediation when the normal claim resolution process leaves the claim unresolved. If the claim is under $500, the claim will be mediated in writing or by telephone. If the claim is $500 or over, the claim may be mediated in person in Austin, by telephone conference, or in writing if agreed to by both parties. This mediation process will provide a neutral venue since neither party is paying for the mediation.

New §18.63, concerning Annual Reports, reduces the information included in the annual operating report to the department to only easily retrieved information. This change should have a positive impact on carriers. It will also provide shippers with clearer information regarding the carrier's claims history, and help them to decide whether or not to use certain carriers to transport their goods.

New §18.64, concerning Rates, changes the definition of multiple users from 10 to 50 users so that when collective rate-making associations notify shippers who are multiple use shippers of rate-change meetings, fewer shippers would need to be notified of rate-making meetings. Texas statutes concerning household goods tariffs require collective rate-making associations to hold open rate-making meetings and invite shippers who are multiple users. This change will have a positive impact on collective rate-making associations because the associations may be required to maintain a smaller database of multiple use shippers and to send fewer notices to shippers announcing a meeting regarding rate changes. This requires associations to print fewer notices and spend less money on printing and mailing costs. This revision may have a negative impact on shippers who are multiple users as fewer shippers would qualify as multiple users and fewer shippers may be invited to the rate-making meetings.

New §18.65, concerning Tariff Registration, clarifies that if conflicts arise between tariffs and department rules, tariffs cannot supersede department rules. This revision should reduce any confusion on the applicability of tariffs.

The amended and new sections shall apply to all intrastate shipments of household goods where a moving services contract is signed by both the household goods carrier and shipper on or after the effective date of the adoptions. The existing and repealed sections shall govern all intrastate shipments of household goods where a moving services contract is signed by both the household goods carrier and shipper before the effective date of the adoption of the amended and new sections. For example, a claim resulting from the transportation of household goods under a moving services contract signed on January 1, 1999 will be filed and handled under the rules in effect on January 1, 1999. Therefore, the claimant will follow the claims procedure in the current version of §18.59 and the complaint resolution process in the current version of §18.60 in effect on January 1, 1999, which allows the claimant to request household goods carrier-sponsored mediation and possibly department-sponsored non-binding arbitration. A claim resulting from the transportation of household goods under a moving services contract signed on or after the effective date of the newly adopted rules will be filed and handled under the rules in effect at that time. Therefore, the claimant will follow the claims procedure in proposed §18.60 and may use the mediation process described in proposed §18.62.

RESPONSE TO COMMENTS

On November 24, 1998 a public hearing was held to receive comments on the proposed repeals, amendments, and new sections. Comments were received from Texas Independent Movers Association (TIMA); Southwest Movers Association (SMA); the Better Business Bureaus of Texas (Texas BBB); Consumers Union; Ark Moving Company, Inc. (Ark); A-1 Freeman Relocation, Inc. (Freeman); Atlama Moving & Storage (Atlama); Willis Permian Movers (Willis); Craddock Moving and Storage (Craddock); and Scobey Moving Services Company (Scobey). TIMA commended the efforts of the Household Goods Carrier Advisory Committee and the department for their diligence, but did provide recommended changes to the final rules. SMA was in favor of the rules but also provided comments for further changes to various sections. These comments follow below.

Concerning §18.52. Advertising.

Comment: TIMA made verbal and written comments expressing an interest in deleting a portion of §18.52(d), relating to the requirement for placing the department's toll-free telephone number on household goods carriers' websites. TIMA stated that this requirement will create an unnecessary cost to household goods carriers and is not needed since the department's toll-free telephone number will be shown on the information sheet given to shippers as required by §18.55. Consumers Union supported requiring household goods carriers to display the department's toll-free telephone number on their websites. Consumers Union stated that the time and cost of including the department's toll-free number on websites is virtually zero. Additionally, Consumers Union stated that inclusion of the department's toll-free number on websites is justified because it permits consumers to contact the department to determine if the household goods carrier is properly registered and to check the carrier's history of complaints on file with the department. Finally, inclusion of the toll-free telephone number on websites and on the information sheet is not duplicative since the consumer may need to contact the department well before getting a written proposal and information sheet from the household goods carrier.

Response: The department concurs with Consumers Union's comment that including the department's toll-free telephone number on household goods carriers' websites involves minimal cost or time commitment, is helpful to the consumer, and is not duplicative of the information sheet required by §18.55. Further, the department does not believe that this requirement is unnecessary or duplicative since a household goods carrier's website might be the first opportunity for a consumer to learn of the department's toll-free telephone number and the consumer protection rules. The rule is not amended.

Comment: TIMA states the department has not complied with the Administrative Procedures Act by studying the costs involved in adding the department's toll-free telephone number to household goods carriers' websites.

Response: The department has complied with the Administrative Procedures Act as it relates to this subject. The cost for adding one line of text to pre-existing websites is negligible. The cost of adding this toll-free telephone number to household goods carriers' websites only effects those carriers with currently established websites and those carriers that are currently developing websites. This rule does not require carriers to develop websites. Carriers that have pre-existing or are developing websites should have negligible costs to add this telephone number.

§18.53. Household Goods Carrier Cargo Liability.

Comment: TIMA made comments requesting an amendment to allow household goods carriers and consumers to contract for carrier liability of less than $.60 per pound per article. TIMA stated §18.53 is not reasonable because it limits the freedom of parties to contract for lower cost moves with lower household goods carrier cargo liability. Consumers Union stated that carriers should not be allowed to contract for a limit of household goods carrier cargo liability less than $.60 per pound per article for two reasons. First, Consumers Union noted the Household Goods Carrier Advisory Committee studied the issue of household goods carrier cargo liability and unanimously voted to recommend the proposed rule. Second, Consumers Union stated consumers, who are not experienced in the terms of transportation contracts, could agree to less protection against cargo loss or damage without understanding the consequences. Response: The department concurs with Consumers Union's comment, and the rule is not amended. The department recognizes §18.53 limits the ability of household goods carriers and consumers to contract for a lower standard of household goods carrier cargo liability. However, the department supports the committee's recommendation to set the household goods carrier cargo liability at $.60 per pound per article for the following reasons. First, recommending a standard for household goods carrier cargo liability was one of the three statutory objectives of the Household Goods Carrier Advisory Committee. The committee, consisting of representatives of the household goods carrier industry, the public, and the department, discussed and unanimously voted to recommend the level of carrier liability at $.60 per pound per article. Although the committee agreed to allow for household goods carriers and shippers to contract for a higher level of carrier liability, the committee did not recommend allowing a carrier to lower its liability to less than $.60 per pound per article. Second, Type A household goods carriers have historically operated under an industry standard of $.60 per pound per article. The department believes the industry standard is not excessively high. For instance, a consumer may value his television at $300. However, the $.60 per pound per article limitation of household goods carrier cargo liability would value the consumer's 40 pound television at $24.

§18.54. Selling Insurance to Shippers.

Comment: SMA suggested amending §18.54(d) to clarify that the penalty established under this subsection only applies when the shipper actually purchases insurance from the household goods carrier.

Response: The department concurs and the rule is amended to clarify the penalty.

§18.55. Information to Shippers.

Comment: TIMA made comments requesting an amendment to §18.55(a), regarding the information sheet entitled Your Rights and Responsibilities When You Move in Texas. Ark made a written comment regarding this subsection. TIMA and Ark suggested allowing household goods carriers to provide the shipper with a copy of the information sheet at any time prior to loading the shipment rather than at the time the proposal is given to the shipper. TIMA and Ark are also concerned that the proposed rule requires household goods carriers to send a copy of the information sheet with every amendment to the proposal. Consumers Union supports requiring household goods carriers to give the information sheet to consumers with the written proposal rather than just prior to loading. Consumers Union stated that the cost of providing the information sheet is minimal, and the consumer will benefit from having the information sheet prior to purchasing the household goods carrier's services.

Response: The department concurs in part with TIMA's, Ark's, and Consumers Union's comments. The Household Goods Carrier Advisory Committee discussed the information sheet at length and recommended the information sheet be provided to the shipper with the written proposal, and the department supports this viewpoint. The information sheet could provide important information to shippers before their household goods are loaded onto the carrier's vehicle. For example, the information sheet will explain the difference between a binding and not-to-exceed proposal. In order for a shipper to make an informed decision about the various choices in the services provided by a household goods carrier, a shipper must be provided the information sheet prior to the loading of the goods upon the carrier's vehicle. However, the department does not believe it was the intention of the Household Goods Carrier Advisory Committee to recommend that the information sheet be provided with each amendment to the proposal. The rule is amended to clarify that the information sheet must be provided by the household goods carrier to the shipper with the original proposal.

Comment: Consumers Union wants the information sheet required by §18.55(a) to be uniform, widely available, and available on the department's website. Consumers Union wants the rule to prohibit household goods carriers from adding advertisement to the information sheet, and wishes to work with the department on the exact language of the information sheet. Consumers Union prefers that the rule state that the information sheet must be written in plain language and include the department's toll-free telephone number.

Response: The department agrees in part with Consumers Union's comments. The proposed rule largely reflects the recommendations of the Household Goods Carrier Advisory Committee. The department agrees that the information sheet required by §18.55(a) should be widely available. The proposed rule requires household goods carriers to provide a copy to each shipper. The department intends to include the information sheet on the department's website and provide the information sheet to consumers who contact the department. Because the department will create the information sheet, the requirement that the information sheet be written in plain language and include the toll-free telephone number is not necessary in the rule. The issue of advertisement on the information sheet was debated by the Household Goods Carrier Advisory Committee, and the general consensus was to allow advertisements unless they interfere with or alter the text of the information sheet. The department supports the committee's recommendation, and the rule is not amended.

§18.56. Proposals and Estimates for Moving Services.

Comment: Freeman, Willis, and Atlama recommend amending §18.56, regarding proposals for moving services. Freeman, Willis, and Atlama suggested household goods carriers not be required to guarantee their prices. Freeman, Willis, and Atlama are concerned that the proposed rule will not allow household goods carriers to increase the price of a move when additional items are moved or additional services are provided. Freeman, Willis, and Atlama want the rule amended to allow household goods carriers to continue using both binding and non-binding estimates. Response: The department does not concur with the comments, and the rule is not amended. Transportation Code, Chapter 643 requires household goods carriers to disclose the maximum price a customer could be required to pay. The proposed rule reflects this requirement, but does not prohibit the household goods carrier from assessing additional charges for additional services and items not included on the proposal. The rule provides for these additional services and items through the amendment of the proposal. Additionally, binding proposals are not the only type of proposal a household goods carrier may provide the shipper. The household goods carrier may provide a not-to-exceed proposal that allows the household goods carrier and the shipper the flexibility to create a range for the transportation charges. The proposed rule was discussed at length and recommended by the Household Goods Carrier Advisory Committee. The proposed rule meets the statutory requirement of disclosing the maximum price to the consumer while providing household goods carriers a method of updating the disclosure as the consumer's needs change.

Comment: Consumers Union is concerned that §18.56(a) does not require household goods carriers to provide the shipper with the written proposal until just before the household goods are loaded. Consumers Union stated that the consumer cannot truly rely on verbal estimates. Consumers Union recommended household goods carriers be required to give the written proposal to the shipper in advance for all moves other than low cost moves and moves scheduled at the last minute.

Response: The department does not concur with Consumers Union's comment, and the rule is not amended. The Household Goods Carrier Advisory Committee discussed in detail the timing of providing the written estimate to the shipper. The committee recognized the consumer's prerogative to not hire a household goods carrier who will not provide a written estimate prior to the day of the move. Additionally, requiring a written proposal for all household goods shipments is a procedural change for the industry. The committee's recommendations reflected a decision to allow, but not require, the written proposal to be given far in advance of moving day. The department agrees with the analysis of the committee.

§18.57. Moving Services Contract.

Comment: TIMA made verbal and written comments recommending an amendment to §18.57(b), regarding delivery signatures on the moving services contracts. TIMA is concerned that this subsection will prohibit household goods carriers from delivering shipments to locations where the shipper is not present such as storage units or uninhabited dwellings. TIMA suggested the rule be amended to allow the contract to be mailed to the shipper if the shipper is unable to be present at the destination. Consumers Union stated that the rule should not be amended to allow household goods carriers to mail the contract to the consumer for the consumer's signature after delivery. While Consumers Union recognizes the need to accomplish delivery without the shipper's presence, it believes allowing the household goods carrier to simply mail the moving services contract after delivery does not adequately protect the consumer. Consumers Union is concerned that unscrupulous household goods carrier may deliver the household goods at a time other than the agreed time listed on the moving services contract. An unscrupulous household goods carrier could simply claim the shipper was not at the destination at the agreed time. Consumers Union suggested the rule be amended to allow shippers and household goods carriers to agree conspicuously and in writing to the delivery of the shipment when the shipper is not present.

Response: The department concurs with Consumers Union's comment. While the proposed rule allows the household goods carriers to obtain the shipper's signature by facsimile or other electronic means, it does not relieve the concern for shippers and household goods carriers who do not have immediate access to facsimile machines. Therefore, the rule is amended to allow a household goods carrier and a shipper to agree on the moving services contract at origin that the shipment may be delivered without the shipper's signature.

Comment: SMA made a comment about §18.57(b), regarding the final charges stated on moving services contracts. SMA suggested that the rule be amended to exempt household goods carriers from stating the final charges on the moving services contract at destination when the shipment is transported pursuant to a pre-existing third-party transportation contract.

Response: The department concurs in part with SMA's comment. The department recognizes the differing nature of household goods shipments that are subject to pre-existing third-party transportation contracts. However, the department also recognizes that not all charges applied to these household goods shipment are paid for by the third-party. For example, a third-party, such as an employer, may negotiate a transportation contract with a household goods carrier on behalf of the employer's employees. While the third-party contract specifies what the employer will pay, it does not take into account additional services that the employee might request such as additional valuation or transit insurance. In this example, the employee is responsible for the costs that are not covered by the pre-existing third-party transportation contract. The department agrees to amend §18.57(b) to exempt household goods carriers from the provisions of §18.57(b)(1) and (2) when all costs associated with a household goods shipment are applied through a pre-existing third-party transportation contract.

§18.58. Moving Services Contract - Options for Carrier Limitation of Liability.

Comment: TIMA made comments requesting §18.58 be deleted. Ark made a written comment requesting §18.58 be deleted. TIMA and Ark state the rule is unnecessary and intrusive, is not required by statute, is not modernized and streamlined as required by statute, will create an enormous burden on the industry, and may raise legal issues that are not acceptable to the industry. Consumers Union supports the rule as proposed and states it was a collaboration and compromise between various groups represented on the Household Goods Carrier Advisory Committee. Consumers Union acknowledges that §18.58(c) is difficult to understand, but points out that §18.58(b) was developed to address this issue. Consumers Union further stated the standardized language in §18.58 will aid consumers in comparing household goods carriers. Additionally, the standardized language will protect the typical household goods shipper who is not experienced in negotiating transportation contracts.

Response: The department concurs with Consumers Union's comment, and the rule is not amended. The department disagrees with TIMA's and Ark's statements regarding this proposed rule being unnecessary and not required by statute. Transportation Code, Chapter 643 requires TxDOT to establish rules to protect consumers from deceptive and unfair practices. Additionally, the statute directed the Household Goods Carrier Advisory Committee to recommend a maximum limitation for liability for loss or damage to cargo for household goods carriers. To accomplish these goals, the department has embraced the committee's recommendations regarding the maximum liability for loss or damage to cargo and the circumstances under which a household goods carrier should not be held accountable for this liability. The Household Goods Carrier Advisory Committee unanimously voted to set the standard for the maximum liability for loss or damage to cargo at sixty cents per pound per article. Further, the committee reviewed a variety of moving services contracts (bills of lading) from both large and small household goods carriers to examine the circumstances under which a carrier should not be held accountable for liability for loss or damage. The committee unanimously voted on a compromise set of standardized liability limitations for loss or damage to cargo. The committee deemed this compromise as necessary to protect consumers from deceptive and unfair practices while still providing a fair and reasonable standard for household goods carriers. The department also disagrees with TIMA's and Ark's assertions that the proposed §18.58 is not a modernized and streamlined rule. This proposed rule allows a household goods carrier to choose to use either of two sets of standardized liability limitation options or choose to be liable at common law for loss or damage to cargo. The current rule allows only for the standardized liability limitations found in Option 2 of the proposed rule. The department recognizes the standardized liability limitations found in Option 2 of the proposed rule may be difficult for the some consumers to understand. In an effort to alleviate this concern, the standardized liability limitations found in Option 1 of this proposed rule were created. However, the department does not believe eliminating or streamlining Option 2 standardized liability limitations is appropriate since many professional shippers, such as corporations, use Option 2 as the basis for their third-party contracts with household goods carriers. Additionally, the Option 2 standardized liability limitations are used on a nationwide basis. Since the Option 2 standardized liability limitations are used on a nationwide basis, the elimination of Option 2 could have an ill effect on household goods carriers who contract with out-of-state shippers. Finally, the department believes the benefits of this proposed rule may exceed any costs there may be to household goods carriers. For example, the standardization of the liability limitations for loss or damage to cargo may decrease the cost of litigation since precedent will develop eliminating the number of arguable legal issues. Consumers may also benefit from the standardization of the liability limitations. The standardization should allow the consumer to more easily compare the rates and services offered by competing household goods carriers.

Comment: TIMA recommended that the department distribute sample moving services contracts that can be used by "small movers."

Response: The department concurs with TIMA's comment and will prepare several sample moving services contracts that will comply with the provisions of Chapter 18 of Title 43 of the Texas Administrative Code.

§18.58. Moving Services Contract.

Comment: TIMA asks for clarification of §18.58(c)(2)(C). Specifically, TIMA asked whether the department intended to use the term "deductible paid" rather than "premium paid."

Response: The department intended to use the term "premium paid."

§18.61. Claims.

Comment: SMA suggested that §18.61(d) be amended to allow claims records to be maintained either by the household goods carrier or its agent who settles the claim. SMA stated that a household goods carrier's agent is often responsible for settling claims and maintaining claims records on behalf of the household goods carrier. SMA stated that §18.61(d) should be modified to make it clear that claims records may be maintained by the household goods carrier or its agent who settles the claim.

Response: The department does not concur with SMA's comment, and the rule is not amended. While the department does agree that a household goods carrier should be allowed to store claims records at its household goods agent's office, the department does not agree that the responsibility for the maintenance of such records should be shifted from a household goods carrier to its household goods agent. SMA's concern about where claims files must be stored is addressed in §18.32(d)(1). If a household goods carrier wishes to store its claims records at its household goods agent's office, it need only issue a request for approval from the department. The department believes SMA's suggestion could lead to confusion as to the household goods carrier's recordkeeping responsibilities. Section 18.61(d) makes clear that the maintenance of the household goods carrier's claims records is the responsibility of the household goods carrier and not its household goods agent.

§18.62. Mediation by the Department.

Comment: Texas BBBs is concerned that §18.62 may prohibit household goods carriers and consumers from voluntarily participating in a dispute resolution program sponsored by a party other than the department.

Response: The department does not concur with Texas BBBs' comment, and the rule is not amended. As suggested by the title of the §18.62, the proposed section addresses procedures and timelines for mediation arranged by the department. Section 18.62 does not prohibit parties to the dispute from seeking mediation or other alternative dispute resolution from sources other than the department.

Comment: Texas BBBs is concerned that the department may not be able to accomplish the mediation process in §18.62 because of questions over the department's neutrality in the mediation. Texas BBBs stated that while the department may attempt to assist consumers and household goods carriers in the resolution of disputes concerning household goods shipments, the department's role as a regulator of household goods carriers prevents the department from acting as a neutral party to a dispute between the carrier and consumer.

Response: The department does not concur with Texas BBBs' comment, and the rule is not amended. Since 1995, the department has administered a dispute resolution program by hiring independent contractors who organize and conduct the dispute resolution session. A recent survey of participants revealed the vast majority supported the department's dispute resolution program. None of the participants have disputed the department's neutrality.

Comment: Texas BBBs stated that the proposed §18.62 does not contain all the elements necessary to administer a dispute resolution program. Texas BBBs stated that a proper dispute resolution program should consist of both mediation and binding arbitration and allow telephone, mail-in, and in-person verbal presentations of the dispute. Texas BBBs stated that arbitration decisions must be rendered within 60 days of conclusion of the arbitration hearing. Texas BBBs stated that binding arbitration decisions should be enforced through the department and the court system.

Response: The department concurs in part with Texas BBBs' comments, and notes that telephone, mail-in and in-person presentations of disputes are allowed under the proposed rules. However, statutory limitations prevent the department from requiring binding arbitration of disputes for claims involving intrastate shipments of household goods. Additionally, the department is not authorized by statute to enforce dispute resolution agreements. Instead, the enforcement of these agreements is accomplished through an appropriate court of law. The rule is not amended.

Comment: Texas BBBs requested Texas BBBs' dispute resolution program be incorporated into §18.62. Texas BBBs requested that the department designate it as the department's provider of dispute resolution services for conflicts between household goods carriers and their customers. Texas BBBs stated that if it is designated as the dispute resolution provider for the household goods industry, it would make the program available to household goods carriers that are Texas BBB members and non-members. Additionally, Texas BBBs stated that the department would have the authority to monitor the program and request necessary data and statistics.

Response: The department concurs in part with Texas BBBs' comment. While the department recognizes the value of the Texas BBBs dispute resolution program, the department-sponsored alternative dispute resolution program has historically been awarded to several independent contractors based on an open bidding process. Amending §18.62 to incorporate and designate the Texas BBBs program as the department's sole provider of mediation services would not allow other qualified mediators to bid for the department's contract and is therefore inappropriate. Additionally, designating an independent contractor as a provider of services is traditionally achieved through awarding a contract rather than by designating the independent contractor as the provider of services by rule. However, the department does want to work with the Texas BBBs to inform and assist our mutual customers. The rule is not amended.

§18.62. Mediation by the Department.

Comment: TIMA made both written and verbal comments requesting that §18.62(d) be amended to give the household goods carrier the sole right to decide whether the mediation should be conducted by telephone or written submissions rather than an in-person meeting in Austin, Texas. Consumers Union supports §18.62(d) as proposed and notes that mediation sessions held in Austin are equally burdensome on both shippers and carriers. Consumers Union also observes that the rule provides for alternatives to in-person mediation in Austin, Texas when all parties agree to the alternative method.

Response: The department concurs with Consumers Union's comment, and the rule is not amended. The mediation process established by the proposed §18.62 was debated and recommended by the Household Goods Carrier Advisory Committee and is supported by the department. Additionally, giving the household goods carrier the sole power to decide whether the mediation will be held in Austin, Texas rather than by telephone conference or written submissions is not equitable to all parties involved in the dispute.

Comment: Texas BBBs stated that the proposed §18.62(d) will subject household goods carriers and consumers to the financial burden of traveling to Austin, Texas to have their disputes mediated and the mediation program should be offered on a state-wide basis.

Response: The department does not concur with the Texas BBBs' comment, and the rule is not amended. The mediation process established by the proposed §18.62 was debated and recommended by the Household Goods Carrier Advisory Committee and is supported by the department for the following reasons. First, household goods carriers and shippers may avoid traveling expenses by participating in local alternative dispute resolution programs, such as the Texas BBBs' program. The proposed rule does not require shippers and household goods carriers to use the department-sponsored mediation program if they agree to use another alternative dispute resolution program. In fact, some household goods carriers already maintain alternative dispute resolution that they offer to their shippers. Second, the proposed §18.62 is not designed to accommodate all disputes between household goods carriers and their shippers. Rather, the rule is designed to provide an independent forum in which shippers, who believe their grievances against a household goods carrier have not been addressed, may find some reconciliation with the carrier. For example, the rule will help shippers who file a claim with a household goods carrier, and the carrier simply ignores the claim. Again, this rule was not designed to encompass situations where the participants have mutually agreed to use some other form of alternative dispute resolution. Third, the traveling expenses to the shippers and household goods carriers can be avoided even if the parties choose to use the department-sponsored mediation program. An in-person mediation session in Austin is only one of the mediation formats described in §18.62. The parties to a dispute may agree to use either the telephone conference or written submissions format in order to minimize the expense to both parties.

§18.62. Mediation by the Department.

Comment: TIMA made verbal and written comments recommending that §18.62(e) be amended to allow a household goods carrier the opportunity to opt out of the entire mediation process if the carrier pays the claim up to the carrier's limit of liability.

Response: The department does not concur with TIMA's comment, and the rule is not amended. Shippers may file claims for cargo loss or damage that involve more carrier liability than the standard $.60 per pound per article. Mediation of the claim could help both the shipper and the household goods carrier gain a deeper understanding of the issues involved in the claim and may help the shipper and carrier avoid litigation. Allowing the household goods carrier to opt out of the mediation process if the "claim is paid to the full extent of the limit of liability" would require the department to determine the household goods carrier's legal liability. While the department can help resolve claims, it cannot determine the household goods carrier's legal liability. This is a function best left to a court of law.

§18.63. Annual Report.

Comment: TIMA made verbal and written comments requesting clarification of §18.63(b), regarding annual reports. TIMA has requested clarification on the data included in the phrase, "(3) the total number of claims resolved after a lawsuit was filed." TIMA asked if this data includes the number of lawsuits that result in dismissals or judgments for the household goods carrier. Ark recommends the annual report include the number of claims that resulted in a judgment for the shipper rather than the number of claims resolved after a lawsuit was filed.

Response: In response to TIMA's question, the annual performance report includes the total number of claims resolved after a lawsuit was filed regardless of the outcome of the lawsuit. The department does not concur with Ark's comment, and the rule is not amended. The proposed §18.63 was discussed and recommended by the Household Goods Carrier Advisory Committee. No compelling reasons to disagree with the committee's recommendation were presented, and the department supports the committee's recommendation for the following reasons. First, the purpose of the annual performance report is to provide information about a household goods carrier's overall performance with regards to mediated claims and lawsuits, in relation to the total number of intrastate shipments. The total number of lawsuits filed against a household goods carrier as a result of the transportation of household goods is important because it could indicate the total number of consumers who felt it necessary to attempt to resolve their disputes through the court system.

Second, the total number of lawsuits filed against a household goods carrier as a result of the transportation of household goods may also show a carrier's overall attitude towards the resolution of disputes. Third, reporting only the number of lawsuits that resulted in a judgment for the shipper may not provide helpful information on the annual performance report. For example, a household goods carrier may win a lawsuit on procedural aspects of the case regardless of the merits of the shipper's claim. Requiring household goods carriers to state the total number of claims resolved after a lawsuit was filed is not intended to indicate the number of legally valid claims or the number of claims that resulted in a judgment against a household goods carrier. Rather, it is intended to provide a standardized method of comparing household goods carriers' customer claim service.

Comment: Consumers Union commented on §18.63 and preferred that the annual performance report filed by household goods carriers include the total number of claims filed with the carrier. Consumers Union notes that the annual performance report currently filed by household goods carriers includes the total number of claims filed with the carrier, and states that this statistic is helpful to consumers when comparing household goods carriers. Consumers Union also wants the rule to require household goods carriers to provide the annual performance report to consumers at the time the household goods carriers provide the information sheet to the consumer.

Response: The department does not concur with Consumers Union's comment, and the rule is not amended. The proposed §18.63 was discussed and recommended by the Household Goods Carrier Advisory Committee and is supported by the department for the following reasons. First, the committee discussed the statistics to be reported by household goods carriers, and the total number of claims filed with the carrier was not one of the three statistics included in the committee's recommendations to the department. The number of claims which require mediation could be considered a more meaningful statistic than the total number of claims. Second, the committee discussed the method of providing the annual report to consumers and recommended all household goods carriers file the annual report with the department. In the event where a household goods carrier refuses to provide a copy of its annual performance report, a consumer may obtain a copy of the report from the department.

Comment: TIMA requested clarification of the term "claim" as used within §18.63(b).

Response: The term "claim" in this rule refers to a written claim filed with a household goods carrier for an intrastate household goods shipment.

General Comments

Comment: TIMA is concerned that the department has not complied with the Administrative Procedures Act in determining the adverse economic effects of the consumer protection rules on small businesses and their customers. TIMA explains that the consumer protection rules, especially §§18.57 and 18.58, will have a tremendous effect on small businesses throughout the state. For instance, TIMA stated the proposed rules will result in possible substantial expenses for small businesses as they review their existing contractual documents to determine compliance and incur legal expenses to update them. TIMA also noted that carriers will be required to revise, print, and distribute their new forms and train their employees to use the adjusted business procedures. TIMA stated that the department only reported these costs as "minimal" and disregarded Administrative Procedures Act requirements to prepare a statement documenting the effect these rules will have on small businesses.

Response: The department concurs in part with the comment. The department contends that the proposed rules themselves are not the contributing factor to any potential adverse economic effect on small businesses as applied under Government Code, Chapter 2006. Any effect is actually a result of House Bill 1418, 75th Legislature, which was effective September 1, 1997, and required household goods carriers of all employee and revenue sizes to comply with existing department rules, which are more stringent than the new and revised sections being adopted. The new and revised sections are less stringent than the existing rules. By proposing the new and revised rules, the department has actually decreased the burden on small businesses and to continue enforcing the existing rules would have been more burdensome. Thus the department believes it has complied with the Administrative Procedures Act in this area. TIMA assumes that the majority of small businesses would incur legal expenses to update forms. Carriers are not required by the department to procure legal services to ensure that their forms comply with department rules. Additionally, TIMA stated that carriers will be required to revise, print, and distribute their new forms. The department agrees that there will be some costs involved in revising and printing forms. However, the term "distribute" may be overstated, as the department only requires carriers to provide forms to their immediate customers, not to conduct a mass distribution. Finally, TIMA assumes that small businesses will need to adjust their business procedures and train their employees in these new procedures at considerable costs. Carriers may need to change their business procedures and train employees with regard to providing consumers with the correct information at the appropriate time. However, this would only apply to a very limited number of the carrier's employees who interact directly with the customer. Further, employees familiar with existing rules should not be unduly burdened with operational changes affecting day-to-day duties.

Comment: Craddock, Scobey, Ark, SMA, and Consumers Union are in general support of the proposed rules. Consumers Union further stated that the proposed consumer protection rules are urgently needed and could put Texas at the forefront of states combating fraud and lowering the barrier to information concerning household goods carriers. Scobey believes the proposed rules will protect the consumers and are necessary, despite any operating changes and paperwork changes required of household goods carriers.

Response: The department concurs with the comments.

Comment: Craddock requested the Texas Transportation Commission accept the work of the Household Goods Carrier Advisory Committee.

Response: The department concurs in part with the comment. While the department supports the vast majority of the Committee's recommendations, the proposed rules reflect minor modifications necessary to implement the recommendations.

Comment: Craddock requested the rules be reviewed in two to four years to determine if they are working in the best interest of all parties.

Response: The department considers the rules to be under constant review.

Comment: Consumers Union requests the department review for future rulemaking the issue of overbooking of shipments by household goods carriers.

Response: The shipper may use the household goods carrier's claims process established in §18.61 if the shipper believes the carrier has not complied with a signed contract between the shipper and the household goods carrier. The shipper may also pursue a dispute over the household goods carrier's failure to comply with their agreement in a court of law. Additionally, should data become available to the department indicating overbooking is a significant consumer protection problem, the department may further review the issue.

Comment: Consumers Union is concerned with the lack of standardized language in insurance policies sold by household goods carriers to shippers. Consumers Union is concerned that the lack of standardized language in these insurance policies may result in consumers purchasing policies without the coverage they expected. Consumers Union requested the department review for future rulemaking the possibility of entering into a memorandum of understanding with the Texas Department of Insurance to develop standard policy language.

Response: The Household Goods Carrier Advisory Committee did not recommend the department enter into a memorandum of understanding with the Texas Department of Insurance to develop standard policy language. No compelling reason to enter into a memorandum of understanding was presented to the department. However, the consumer protection rules are constantly under review, and should a compelling reason be presented in the future appropriate action may be taken to remedy the situation. The department does not concur with the comment, and the rule is not amended.

In addition to changes adopted in response to public comments, the department adopts the following changes to the amendments and new sections.

Concerning §18.58, Moving Services Contract, the department revises §18.58(c)(4)(A) to clarify where notice must be sent to advise shippers when their shipment is placed in storage. Due to a typographical error, some of the language in this subparagraph was inadvertently omitted. The amendment is identical to the language contained in the previous rule governing the contract terms and conditions for household goods carriers.

Concerning §18.62, Mediation by the Department, the department has modified subsection(d) to allow greater flexibility in the form of mediation. The adopted rules provided that, regardless of the amount of the claim, mediation may be conducted by written submissions, telephone conferences, or mediation sessions held at the department facilities in Austin. The department will establish the time, date, and form of the mediation session.

Subchapter C. Utility Accommodation

The Texas Department of Transportation adopts amendments to §28.2, §28.10, §§28.14-28.15, §28.30, §28.80, and §28.82, and new §28.3, §§28.11-28.13, §§28.40-28.45, and §§28.60-28.64, concerning oversize and overweight vehicles and loads. Sections 28.2, 28.10-28.14, 28.30, 28.41, 28.43, 28.61 and 28.63 are adopted with changes to the proposed text as published in the October 9, 1998 issue of the Texas Register (23 TexReg 10362). Sections 28.3, 28.15, 28.40, 28.42, 28.44-28.45, 28.60, 28.62, 28.64, 28.80, and 28.82 are adopted without changes and will not be republished.

EXPLANATION OF ADOPTED AMENDMENTS AND NEW SECTIONS

The existing rules in Chapter 28, concerning Oversize and Overweight Vehicles and Loads are, at times, cumbersome or difficult to understand. The amended and new sections are part of the department's overall strategy to modernize and streamline existing rules, while clarifying new and existing policies and procedures. The amended and new sections in part replace existing sections that have been contemporaneously repealed. The amended and new sections are necessary in order to reorganize, streamline, and consolidate requirements imposed on operators of oversize and overweight vehicles and loads. The amended and new sections are also necessary to allow the department to more effectively and efficiently administer Transportation Code, Chapters 621, 622, and 623, allow the department to charge fees for services actually performed, increase the efficiency of the permit issuance process, clarify new and existing policies and procedures, reduce unnecessary burdens imposed on the motor carrier industry, and facilitate compliance with department rules by the motor carrier industry, which in turn will increase the safety of the traveling public.

Section 28.2, concerning Definitions, is amended to remove unnecessary and redundant definitions, add definitions for additional terms used in this chapter, and include additional information necessary to clarify the remaining definitions.

Section 28.10, concerning Purpose and Scope, is amended, in order to protect the state's investment in its transportation system, to clarify and prescribe permittee responsibilities for the safe movement of permitted vehicles and loads, and is also amended to remove references to surety bonds, which were moved to new §28.3.

Section 28.14, concerning Manufactured Housing, and Industrialized Housing and Building Permits, is amended to move some provisions to new §28.11 for consolidation and organizational purposes, to specify, in order to reduce the amount of amendment requests received by the Motor Carrier Division, that permit amendments will only be made to change intermediate points between the origination and destination points listed on the permit, to specify when a permit is void, and to require that a permitted vehicle be routed over the most "practical" route rather than the most "direct" route, which will allow the department to consider all factors when routing a permitted load.

Section 28.15, concerning Portable Building Unit Permits, is amended to consolidate and reorganize information for purposes of clarity.

Section 28.30, concerning Permits for Over Axle and Over Gross Weight Tolerances, is amended to specify the circumstances under which a permit will be voided. Section 28.30 is also amended to reflect the recodification of the Transportation Code.

Section 28.80, concerning Purpose, and Section 28.82, concerning Preparation of Contract, are amended to reflect the recodification of the Transportation Code.

New §28.3, concerning Surety Bonds for Ready-mix Concrete Trucks, Concrete Pump Trucks, Vehicles Transporting Recyclable Materials, and Solid Waste Vehicles, is proposed to replace §28.11, which was reorganized and moved for purposes of clarity.

New §28.11, concerning General Oversize/Overweight Permit Requirements and Procedures, is proposed to prescribe requirements relating to prerequisites to obtaining an oversize/overweight permit, permit applications, maximum permit weight limits, permit issuance, payment of permit fees and refunds, amendments to permits, requirements for overwidth loads, requirements for overlength loads, requirements for overheight loads, escort vehicle requirements for permitted vehicles and loads, restrictions on movement of permitted vehicles, general provisions, and surety bonds. Changes between the new §28.11 and existing §28.11 include: (1) reorganizing and consolidating all general permit information under this section, and eliminating any duplications throughout Chapter 28; (2) including additional information necessary to clarify current policies and procedures; (3) requiring that a permitted vehicle be routed over the most "practical" route rather than the most "direct" route, which will allow the department to consider all factors when routing a permitted load; (4) allowing a permitted vehicle return movement to the permitted vehicle's point of origin or the permittee's place of business, along with the transport of a non-divisible load of legal dimensions in the return trip, which will allow motor carriers to utilize their equipment more efficiently; (5) clarifying and specifying existing policy regarding when a permit will be voided; (6) specifying that personal and business checks will be accepted for payment of permit fees; (7) placing the responsibility for monitoring escrow account balances on the permittee; (8) specifying escort vehicle requirements and the department's authority to require escort vehicles; (9) prescribing permittee responsibilities regarding obstructions along the specified route; (10) placing the responsibility for determining whether or not conditions are hazardous on the permittee and law enforcement, with law enforcement making the final determination; (11) adding wind to the list of potential hazardous weather conditions; and (12) specifying that permitted vehicles may be operated in maintenance/construction areas as long as the permitted vehicle's dimensions do not exceed posted restrictions.

New §28.12, concerning Single-Trip Permits Issued Under Transportation Code, Chapter 523, Subchapter D, prescribes requirements relating to overweight loads, permits for vehicles hauling drill pipe and drill collars in a pipe box, and permits for moving houses and storage tanks. Changes between the new §28.12 and existing §28.12 include: (1) moving generic permit information to new §28.11 for organizational purposes; (2) expanding department policy to authorize the reduction of vehicle supervision fees for a permittee who moves identical loads over the same route within 30 days, rather than the previously allowed 5 days, in order to more accurately reflect industry practice and the amount of time MCD staff spends routing loads in these situations; (3) requiring an applicant for a superheavy permit to pay the vehicle supervision fee upon permit application, which will allow the department to collect fees for work actually performed (specifically bridge/pavement analysis) in those cases where a permit is applied for and then canceled after analysis has begun; and (4) providing for a refund of a vehicle supervision fee which has been paid in advance, when a refund request is received in writing prior to the department initiating bridge/pavement analysis.

New §28.13, concerning Time Permits, prescribes requirements relating to general requirements, overwidth loads, overlength loads, and annual permits. Changes between new §28.13 and existing §28.13 include: (1) consolidating and reorganizing information for purposes of clarity; (2) removing the restriction stating that travel under a 30, 60, or 90 day permit is limited to 8 districts and allowing travel on a statewide basis for those permits; (3) specifying that permitted vehicles may be operated in maintenance/construction areas as long as the permitted vehicle's dimensions do not exceed posted restrictions; (4) specifying when a permit will be voided; (5) specifying that time permits will only be amended in the case of permit officer error, with the exception of annual envelope vehicle permits; (6) allowing an overwidth time permit to be used in conjunction with an overlength time permit; and (7) allowing for the payment of permit fees by personal or business check.

New §28.40, concerning Purpose and Scope, replaces the existing §28.40 and includes provisions reflecting the recodification of the Transportation Code.

New §28.41, concerning General Requirements for Permits Issued Under Transportation Code, Chapter 623, Subchapter G, prescribes requirements relating to prerequisites to obtaining an oversize/overweight permit, payment of permit fees, restrictions on permitted vehicles, void permits, transferability of permits, records retention by motor carriers, and escort requirements for permitted vehicles. Changes from existing rules concerning these requirements include: (1) reorganizing provisions for clarity and moving duplicate information to new §28.11; (2) placing responsibility for obtaining restrictions on the permittee; (3) specifying when a permit is void; (4) specifying permit amendment procedures; and (5) allowing permit fees to be paid by personal or business check.

New §28.42, concerning Single-Trip Mileage Permits, prescribes requirements relating to maximum permit weight limits, permit application and issuance, permit fees and refunds, and amendments to permits. Changes from existing rules concerning these requirements consist of consolidating provisions relating to single-trip mileage permits, which are currently disseminated throughout Subchapter D, under one section.

New §28.43, concerning Quarterly Hubometer Permits, outlines requirements relating to maximum permit weight limits, initial permit application and issuance, permit renewals and closeouts, permit fees and refunds, and amendments to permits. Changes from existing rules concerning the issuance of quarterly hubometer permits include: (1) consolidating provisions relating to quarterly hubometer permits, which is currently disseminated throughout Subchapter D, under one section; (2) specifying amendment procedures; and (3) allowing a vehicle permitted with a quarterly hubometer permit to travel on a statewide basis, rather than limiting permittee travel to 12 districts.

New §28.44, concerning Annual Permits, outlines requirements relating to permit application and issuance. Changes from existing rules concerning the issuance of annual permits under Subchapter D include: (1) consolidating provisions relating to annual permits, which is currently disseminated throughout Subchapter D, under one section; (2) specifying that a permit issued under this section may not be amended; and (3) allowing a vehicle permitted with an annual permit to travel on a statewide basis, rather than limiting permittee travel to 12 districts.

New §28.45, concerning Permits for Vehicles Transporting Liquid Products Related to Oil Well Production, prescribes requirements relating to applications for permit, permit qualifications and requirements, amount of fees, and permit movement conditions. New §28.45 differs from the repealed §28.45 by allowing for payment of permit fees by personal or business check and by reflecting the recodification of the Transportation Code.

New §28.60, concerning Purpose and Scope, describes and specifies the department's authority to issue permits for oversize and overweight unladen lift equipment motor vehicles, and prescribes the requirements and procedures applicable to those permits.

New §28.61, concerning General Requirements for Permits for Oversize and Overweight Unladen Lift Equipment Vehicles, prescribes requirements relating to the payment of permit fees, restrictions on permitted vehicles, void permits, transferability of permits, records retention requirements for certain permitted vehicles, and escort requirements for permitted vehicles. Changes from existing rules under Subchapter E include: (1) reorganizing information for purposes of clarity, and moving duplicate information to new §28.11; (2) placing responsibility for obtaining restrictions on the permittee; (3) specifying when a permit is void; and (4) allowing permit fees to be paid by personal or business check.

New §28.62, concerning Single-Trip Mileage Permits, prescribes requirements relating to maximum permit weight limits, permit application and issuance, permit fees and refunds, and amendments to permits. Changes from existing rules for the issuance of single-trip mileage permits under Subchapter E consist of consolidating provisions relating to single-trip mileage permits, which are currently disseminated throughout Subchapter E, under one section.

New §28.63, concerning Quarterly Hubometer Permits, outlines requirements relating to maximum permit weight limits, initial permit application and issuance, permit renewals and closeouts, and permit fees and refunds. Changes from existing rules concerning the issuance of quarterly hubometer permits under Subchapter E include: (1) consolidating all provisions relating to quarterly hubometer permits, which were previously disseminated throughout Subchapter E; (2) specifying when a permit may be amended; and (3) allowing a vehicle permitted with a quarterly hubometer permit to travel on a statewide basis, rather than limiting permittee travel to 12 districts.

New §28.64, concerning Annual Permits, prescribes requirements relating to permit application and issuance. Changes from existing rules concerning the issuance of annual permits under Subchapter E include: (1) consolidating provisions relating to annual permits, which are currently disseminated throughout Subchapter E, under one section; and (2) specifying that a permit issued under this section may not be amended.

RESPONSE TO COMMENTS

The department received comments from the Texas Motor Transportation Association (TMTA) in favor of the proposed sections and from Hulcher Services, Inc. who did not indicate whether it was in favor or against the proposed sections. The following addresses the comments received.

Section 28.11. General Oversize/Overweight Permit Requirements and Procedures.

Comment: The Texas Motor Transportation Association (TMTA) suggested that the provision allowing the movement of overdimensional loads at night be adopted on a trial basis due to concerns for the safety of the traveling public.

Response: Current rules allow night movement on interstate highways for permitted vehicles that are of legal dimensions and are overweight. The proposed new policy would allow the movement of overdimension vehicles (up to 10 feet wide and 100 feet long) at night on interstate highways, which is consistent with policies in many other U.S. states. Lane widths on interstate highways are designed to be 12 feet in width, or 2 feet wider than any overdimensional load which would be traveling at night. As such, the department does not anticipate that the new policy will create additional safety hazards for the traveling public. The department will continually evaluate this policy after it goes into effect to determine its effectiveness.

Comment: The TMTA and one other commenter suggested that vehicles transporting loads which are overweight only should be allowed to travel on the interstate system at night.

Response: It is current department policy to allow the movement of overweight only loads at night on the interstate system. In response to this comment, the department revises new §28.11, subsection(l)(2) to clarify this policy.

Comment: The TMTA suggested allowing the operator of a permitted vehicle to transport a legal load when returning "in the same direction" as the point of origin or place of business.

Response: Existing rules do not allow an oversized vehicle to transport a legal load. The proposed rules would allow a permitted vehicle to transport a legal load when returning to the original destination point after transporting a permitted load. As the TMTA's suggestion has the potential to affect numerous groups and individuals who have not had the opportunity to comment on a change of this type, the commenter's suggestion can not be accomplished at this time. The department will consider this issue for future rulemaking.

Comment: The TMTA commented that department rules should be amended to allow a "portion" of a permit to be voided when a dimension or axle weight exceeds the permit provisions, so that the permittee will not have to pay an expensive overweight fine even if that portion of the permit has not been violated.

Response: The department believes that voiding the entire permit is consistent with the statute. Therefore, the rules will not be revised.

Comment: One commenter requested that oversize only loads be allowed to move at night with one escort rather than two escorts.

Response: As the request has the potential to affect numerous groups and individuals who have not had the opportunity to comment on a change in the department's escort requirements, the commenter's request cannot be accomplished at this time. The department will consider this issue for future rulemaking.

In addition to changes adopted in response to public comments, the department adopts the following changes to the proposed amendments and new sections.

Section 28.2, Definitions, is adopted with changes to paragraph (11) in order to expand the definition of the term "credit card." This change will allow the department to accept other types of credit cards in addition to MasterCard and VISA, if such credit cards are approved by the department.

The department adopts changes to §28.2(48), the definition of "Permit Account Card," to clarify that such accounts are to be set up with the Comptroller of Public Accounts rather than the Texas State Treasury.

Section 28.10, Purpose and Scope, is adopted with changes to clarify the wording of subsection (b).

Section 28.11, General Oversize/Overweight Permit Requirements and Procedures, is adopted with changes to subsection (d)(1) to remove subparagraph (D) and Appendix A, to renumber subsequent subparagraphs accordingly, and to add new subparagraph (F). These changes are being made in order to clarify department policy which requires the maximum permit weight limits for a vehicle with two or more consecutive axle groups with an axle spacing of less than 12 feet, to be reduced by 2.5% for each foot less than 12 feet. This is consistent with current department policy for all single-trip and time permits.

Section 28.11(e)(2)(A) is adopted with changes to state that permitted vehicles will not be routed on load restricted roads, in order to clarify current department policy and ensure compliance with existing law.

After analysis of existing statute, the department adopts changes to §28.11(e)(5) to clarify that a permit will only be voided when informed by law enforcement that a citation has been issued for a violation of a permit's terms and conditions.

The department adopts changes to §28.11(k) to replace the term "police" with the term "law enforcement" to ensure consistency throughout Chapter 28. In addition, the department adopts changes to §28.11(k)(7) to require that warning flags be at least 12 inches square in order to comply with the provisions of Transportation Code, §547.502, §622.052, and §622.062. Previously, the department required that warning flags be at least 18 inches square.

The department adopts changes to §28.11(k)(8)(A) to remove the reference to motorized bicycles and quadricycles not being used as escort vehicles on the state highway system. This statement implies that motorized bicycles and quadricycles may escort a permitted vehicle on roads other than the state highway system. As motorized bicycles and quadricycles do not meet equipment requirements for motorcycles used as escort vehicles, they may not be used as escort vehicles for a permitted vehicle on any road.

The department adopts changes to §28.11, subsection (l)(2)(A) to clarify that a permitted vehicle may travel on interstate highways at night if such vehicle is both 10 feet wide or less and 100 feet long or less. Existing proposed language implies that such vehicles may travel on Interstate Highways if they are either 10 feet wide or less, or 100 feet long or less.

The department adopts changes to §28.11(m)(1) to clarify language concerning when two or more commodities may be hauled as one permit load, and to clarify that written certifications shall be obtained from the Texas Department of Economic Development rather than the Texas Department of Commerce.

Section 28.12, Single-Trip Permits Issued Under Transportation Code, Chapter 623, Subchapter D, is adopted with changes to subsection (b)(3) and (6) to further clarify that a Vehicle Supervision Fee will be returned if the request is made by the applicant in writing and if the department has not initiated the collection of structural information in response to the permit request.

Section 28.13, Time Permits, is adopted with changes to subsection (b)(11) to clarify that 30, 60, and 90 day permits for overwidth or overlength loads, or overlength vehicles, will only be voided when requested by law enforcement in conjunction with the issuance of a citation.

The department adopts changes to §28.13(c)(3) to amend the title of that paragraph which will more accurately reflect the contents of paragraph (3).

Section 28.13(e)(1)(G) is revised to clarify that annual permits will be voided only when requested by law enforcement in conjunction with the issuance of a citation.

Section 28.14, Manufactured Housing, and Industrialized Housing and Building Permits, is adopted with changes to subsection (e)(11) to clarify that a permit issued under this section will be voided only when requested by law enforcement in conjunction with the issuance of a citation.

Section 28.30, Permits for Over Axle and Over Gross Weight Tolerances, is adopted with changes to subsection (l) to clarify that a permit issued under this section will be voided only when the department is informed by law enforcement that a citation has been issued for a violation of a permit's terms and conditions.

Section 28.41, General Requirements, is adopted with changes to subsection (e) to clarify that permits issued under Subchapter D, relating to Permits for Oversize and Overweight Oil Well Related Vehicles, will be voided only when the department is informed by law enforcement that a citation has been issued for a violation of a permit's terms and conditions.

Section 28.43, Quarterly Hubometer Permits, is adopted with changes to subsection (d)(1) to remove the requirement that renewal application forms be mailed to the department. This change gives the permit applicant more flexibility when submitting renewal application forms.

Section 28.61, General Requirements for Permits for Oversize and Overweight Unladen Lift Equipment Motor Vehicles, is adopted with changes to subsection (d) to clarify that permits issued under this section will be voided only when the department is informed by law enforcement that a citation has been issued for violation of a permit's terms and conditions.

Section 28.63, Quarterly Hubometer Permits, is adopted with changes to subsection (d)(1)(A) to remove the requirement that applications for the renewal or closeout of a quarterly hubometer permit be mailed to the department. This change gives the permit applicant more flexibility when submitting renewal or closeout application forms.

Subchapter A. General Provisions

The Texas Department of Transportation adopts the repeal of §§28.11-28.13, §§28.40-28.47, and §§28.60-28.66, concerning oversize and overweight vehicles and loads. The repealed sections are adopted without changes to the proposed text as published in the October 9, 1998 issue of the Texas Register (23 TexReg 10362) and will not be republished.

EXPLANATION OF THE ADOPTED REPEALS

The existing rules in Chapter 28, concerning Oversize and Overweight Vehicles and Loads, are cumbersome and, at times, difficult to understand. The repealed sections are part of the department's overall strategy to modernize and streamline existing rules, while clarifying new and existing policies and procedures. The repealed sections have been replaced with new sections contemporaneously with this proposal. The repeals are necessary in order to reorganize, streamline, and consolidate requirements imposed on operators of oversize and overweight vehicles and loads. The repeals are also necessary in order to allow the department to more effectively and efficiently administer Transportation Code, Chapters 621, 622, and 623, reduce unnecessary burdens imposed on the motor carrier industry, and facilitate compliance with department rules by the motor carrier industry, which in turn will increase the safety of the traveling public.

Existing sections in Chapter 28 that have been adopted for repeal are as follows:

Repeal of existing §28.11, concerning Permit Issuance Requirements and Procedures, which is being replaced by new §28.11, concerning General Oversize/Overweight Permit Requirements and Procedures.

Repeal of existing §28.12, concerning Single-Trip Permits Issued under Transportation Code, Chapter 623, Subchapter D, which is being replaced by new §28.12, concerning Single-Trip Permits Issued Under Transportation Code, Chapter 623, Subchapter D.

Repeal of §28.13, concerning Time Permits, which is being replaced by new §28.13, concerning Time Permits.

Repeal of existing §28.40, concerning Purpose, which is being replaced with new §28.40, concerning Purpose and Scope.

Repeal of existing §28.41, concerning Application for Permit, which is being replaced with new §28.41, concerning General Requirements.

Repeal of existing §28.42, concerning Permit Qualifications and Requirements, which is being replaced with new §28.42, concerning Single-Trip Mileage Permits.

Repeal of existing §28.43, concerning Registration Requirements, which is being replaced with new §28.43, concerning Quarterly Hubometer Permits.

Repeal of existing §28.44, concerning Maximum Permit Weight Limits, which is being replaced by new §28.44, concerning Annual Permits.

Repeal of §28.45, concerning Permit Fee Calculations, which is being replaced with new §28.45, concerning Permits for Vehicles Transporting Liquid Products Related to Oil Well Production.

Repeal of §28.46, concerning Permit Movement Conditions. The rules contained in this section have been moved to new §§28.40-28.44.

Repeal of existing §28.47, concerning Permits for Vehicles Transporting Liquid Products Related to Oil Well Production, which is being moved to new §28.45.

Repeal of existing §28.60, concerning Purpose, which is being replaced by new §28.60, concerning Purpose and Scope.

Repeal of existing §28.61, concerning Application for Permit, which is being replaced with new §28.61, concerning General Requirements for Permits for Oversize and Overweight Unladen Lift Equipment Motor Vehicles.

Repeal of existing §28.62, concerning Permit Qualifications and Requirements, which is being replaced with new §28.62, concerning Single-Trip Mileage Permits.

Repeal of existing §28.63, concerning Registration Requirements, which is being replaced with new §28.63, concerning Quarterly Hubometer Permits.

Repeal of existing §28.64, concerning Maximum Permit Weight Limits, which is being replaced with new §28.64, concerning Annual Permits.

Repeal of existing §28.65, concerning Permit Fee Calculations, and repeal of existing §28.66, concerning Permit Movement Conditions. The rules contained in these sections have been moved to new §§28.60-28.64.

COMMENTS

No comments were received on the proposed repeals.

Subchapter B. General Permits