TITLE 16.ECONOMIC REGULATION

Part 6. TEXAS MOTOR VEHICLE BOARD

Chapter 103. GENERAL RULES

16 TAC §103.17

The Texas Motor Vehicle Board of the Texas Department of Transportation proposes new §103.17, concerning the definition of motor vehicle under the Texas Occupations Code. This proposed new rule seeks to clarify the definition of motor vehicle to include motorized scooters and other equivalent vehicles.

Proposed new §103.17 clarifies the definition of motor vehicle under Texas Occupations Code §2301.002(23)(A) to include motorized scooters and other like vehicles that meet certain specified criteria. First, to meet the definition of motor vehicle a motorized scooter must be able to commence and continue movement without manual assistance, as stated in proposed subsection §103.17(a)(1). Second, a motorized scooter possessing that capability must also meet one of the additional criteria listed in subsection (a)(2) to be deemed a motor vehicle under the proposed rule. Proposed §103.17(a)(2) requires a motorized scooter to be certified either as a moped by the Texas Department of Public Safety under subsection (a)(2)(A), or capable of being certified as a motor vehicle by the National Highway Traffic Safety Administration under subsection (a)(2)(B). However, if a motorized scooter is not certified under either category, then it may still be deemed a motor vehicle if it meets 3 of 5 alternative criteria listed under proposed subsection (a)(2)(C). The proposed rule further clarifies in subsection (b) that a motorized scooter or equivalent vehicle does not include go-carts or motorized mobility devices.

Brett Bray, Director, Motor Vehicle Board, has determined that for the first five-year period the proposed section is in effect, there will be some indeterminate fiscal implications for state and local government as a result of enforcing and administering the proposed new rule.

Mr. Bray has also determined that for each year of the first five years the proposed new rule is in effect, the anticipated public benefit will be further clarity regarding the definition of motor vehicle, which can reduce questions and administrative costs for both the agency and the motor vehicle industry. In addition, the public will see great benefit from the regulation of motorized scooters, such as the regulation of sales to prevent fraud. Although the Board feels that many small businesses should have been licensed and compliant with the Code for these vehicles all along, it is anticipated that there will be some indeterminate economic cost to small and micro businesses who must come into compliance with the regulatory framework as clarified by the proposed rule. These increased costs arise from the combined effects of a number of factors, including: (1) licensing fees to obtain a franchised or independent motor vehicle dealer's license ($175 or more); (2) amendment fees to add lines for any current franchised dealers ($25); (3) costs to upgrade sales and service facilities, where necessary; and (4) administrative costs required to comply with the statute. Mr. Bray also certifies that there will be no impact on local economies or overall employment, as a whole, resulting from the enforcement or administration of the proposed new rule.

The Board requests comments from any interested person. Comments (15 copies) may be submitted to Brett Bray, Director, Motor Vehicle Division, Texas Department of Transportation, P.O. Box 2293, Austin, Texas 78768, (512) 416-4910. The Motor Vehicle Board will consider adoption of the proposal at its meeting on December 9, 2004. The deadline for receipt of comments on the proposed new rule is 5:00 p.m. on November 19, 2004.

The new rule is proposed under Texas Occupations Code §2301.153 and §2301.155, and Texas Transportation Code §503.002, which provide the Board with authority to adopt rules as necessary and convenient to effectuate the provisions of the statutes and to govern practice and procedure before the agency.

Texas Occupations Code §2301.002 is affected by the proposed new rule.

§103.17.Motorized Scooters.

(a) A motorized scooter or equivalent vehicle is included within the definition of motor vehicle under Texas Occupations Code §2301.002(23)(A) if the vehicle:

(1) can commence and continue movement without pedaling or pushing off; and

(2) has as its primary purpose the transport of a person or persons, or property, on public streets, roads, or highways, by either:

(A) being certified as a moped by the Texas Department of Public Safety;

(B) meeting the certification criteria of the National Highway Traffic Safety Administration for a motor vehicle; or

(C) meeting three or more of the following criteria:

(i) has an internal combustion engine with a piston displacement of at least 30 cc or an electrical power system with at least 2 brake horsepower or 250 watt power;

(ii) has not more than three wheels at least 12" in diameter;

(iii) can attain speeds of 20 mph or more;

(iv) has a gross weight of 40 lbs. or more;

(v) can travel a minimum distance of 30 miles or for a minimum period of 2 hours.

(b) For the purposes of this section, a motorized scooter or equivalent vehicle does not include go-carts or similar products, or motorized mobility devices.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 30, 2004.

TRD-200405944

Brett Bray

Director

Texas Motor Vehicle Board

Proposed date of adoption: December 9, 2004

For further information, please call: (512) 416-4899


Chapter 111. GENERAL DISTINGUISHING NUMBERS

16 TAC §111.20

The Texas Motor Vehicle Board proposes a new rule, §111.20, Dealer Agents, which would require Texas licensed dealers to furnish written authority for any person acting on behalf of the dealer when buying or selling motor vehicles. The proposed rule also would require those entities dealing with an agent of a licensed dealer to verify that the agent has authority of the licensed dealer to act on the dealer's behalf. Titles bought by employees or agents of a dealer would be required to be delivered only to the dealer or his financial institution and only checks or drafts drawn on the purchasing dealer's account would be accepted.

Persons are buying vehicles at wholesale auctions and other places under the authority of a licensed dealer, and then selling the vehicles on the Internet or the side of the road in the name of an unlicensed entity. The dealers who allow their licenses to be used in this manner for a fee, disclaim all responsibility for the actions of these independent contractors. These unlicensed entities compete unfairly with licensed and regulated dealers, who are required to make a significant investment in facilities and inventory. Additionally, consumers have no recourse against such dealers, who do not meet license requirements such as maintaining a security bond or a permanent place of business. Often a consumer cannot even find the seller, as that person is selling under a fictitious name, that is not listed and is not licensed. The rule is designed to require dealers to accept responsibility for those persons to whom they give permission to buy or sell on their behalf and to give written notice to anyone dealing with those individuals of the revocation of any such authority.

Additionally, the rule will eliminate cash payments for vehicles sold to such individuals and provide a paper trail for enforcement efforts. Titles to vehicles sold to dealer agents shall not be delivered to the agent but must be delivered to the licensed dealer or his financial institution so a licensed dealer will have knowledge of his agent's dealings.

Brett Bray, Director, Motor Vehicle Board, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the new rule.

Mr. Bray has also determined that for each of the first five years the new rule is in effect, the public benefit anticipated from enforcement of the new rule will be a reduction of the number of vehicles sold by unlicensed dealers in Texas, more accountability of sales by dealers and an easier manner to trace the holder of a vehicle's title. The cost to small and micro businesses associated with complying with the rule is anticipated to be minimal, including only the cost of preparing a letter of authorization for those persons affected and in maintaining the records of authorizations issued. Mr. Bray has also certified that there will be no impact on local economies or overall employment as a result of enforcing or administering the section.

Comments on the new rule may be submitted to Brett Bray, Director, Motor Vehicle Division, P.O. Box 2293, Austin, Texas 78768. The deadline for comments is November 19, 2004. Please submit fifteen copies. The Texas Motor Vehicle Board will consider the adoption of the new rule at its meeting on December 9, 2004.

The new rule is proposed under the Texas Occupations Code, §2301.153 and §2301.155, and Texas Transportation Code, §503.002 and §503.009 which provide the Board with authority to amend and adopt rules as necessary and convenient to effectuate the provisions of Chapter 2301 of the Texas Occupations Code and Chapter 503 of the Texas Transportation Code.

Texas Transportation Code §503.021 and §503.038 are affected by the new rule.

§111.20.Dealer Agents.

(a) Notwithstanding any other laws, in regard to the duties and obligations of a dealer, a dealer is responsible for the acts and omissions of any agent, representative, or employee if that dealer has given authority to any person for that agent, representative, or employee to act on the behalf of the dealer.

(b) A dealer must provide written authorization to any person with whom the dealer's agent or representative will be conducting business or acting on the dealer's behalf.

(1) Once a dealer has given authorization for an agent, representative, or employee to buy and sell motor vehicles for that dealer, the dealer shall be liable for any acts or omissions regarding duties and obligations of dealers caused by that agent, representative, or employee unless and until either the earlier of written notification of revocation of the agent's authority or the expiration of the dealer's license.

(2) Written authorization shall be a letter on the dealership letterhead of the buying dealer, or on a form approved by the director or his designee, and stating that the dealer is liable for any acts or omissions regarding duties and obligations of dealers, caused by that agent, representative, or employee including any financial considerations to be paid for the vehicle unless and until that person is notified in writing of the revocation of the authority. The letter or form shall be signed by the dealer principal or person in charge of daily activities of the dealership. The person receiving said written authorization is responsible for verifying that the dealer did in fact issue said authorization.

(3) The written authorization shall include the employee, agent or representative's name; current mailing address; phone number; the business name, address, and license number of the dealer with whom the employee or agent is associated. The written authorization is a record that must be kept as all other records set out in 111.15 and shall be made available to the board or the board's representative upon request.

(4) The authorization of the agent, representative or employee to act on the dealer's behalf and the dealer's responsibility for any acts or omissions regarding the duties and obligations of the dealer will remain in effect until the dealer provides to the holder of the written authorization a written revocation of the agent, representative or employee's authority, or until the dealer's license expires, whichever event occurs first.

(c) Any licensee, including wholesale auctions who act on behalf of others, who buys and sells vehicles on a wholesale basis, including by sealed bid, is required to verify the authority of any person claiming to be either an employee, agent or representative who represents they are buying or selling motor vehicles on behalf of a licensed dealer.

(d) Titles to vehicles bought by an employee, agent or representative of a dealer shall be reassigned to the dealer by the seller or auction and delivered only to the dealer or the dealer's financial institution.

(e) Only checks or drafts drawn on the purchasing dealer shall be accepted for motor vehicles purchased in a wholesale transaction.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 30, 2004.

TRD-200405945

Brett Bray

Director

Texas Motor Vehicle Board

Proposed date of adoption: December 9, 2004

For further information, please call: (512) 416-4899