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TITLE 16ECONOMIC REGULATION
PART 4TEXAS DEPARTMENT OF LICENSING AND REGULATION
CHAPTER 84DRIVER EDUCATION AND SAFETY
SUBCHAPTER CDRIVER EDUCATION SCHOOLS AND INSTRUCTORS
RULE §84.40Driver Education School Licensure Requirements

(a) Application. An application for a school license for a primary or branch driver education school shall be made on forms prescribed by the department. A license application is valid for one year from the date it is filed with the department.

(b) Bond requirements. In the case of an original or a change of owner application, an original bond or approved alternate form of security shall be provided. In the case of a renewal application, an original bond or approved alternate form of security or a continuation agreement for the approved bond currently on file or continuation of an approved alternate form of security shall be submitted. The bond or the continuation agreement shall be executed on the form provided by the department. Approved alternate forms of security shall adhere to the following guidelines.

  (1) An irrevocable letter of credit. The letter shall be in the name of the owner of the school. The letter shall specify the amount of credit extended, which shall be equivalent to the coverage required for a corporate surety bond, and the purpose of the credit. The letter shall contain the signature of an appropriate bank representative. The bank and the letter shall be approved by the department.

  (2) A cash deposit. An irrevocable account shall be established by the school owner in the name of the department to be drawn upon as needed to pay student refunds as needed if the school closes owing refunds. The account shall be equivalent to the coverage required for a corporate surety bond. The bank and the terms of the account shall be approved by the department. The department shall keep records of deposits and/or withdrawals on the account.

(c) Verification of ownership.

  (1) In the case of an original or change of owner application for a primary school, the owner of the school must provide verification of ownership.

  (2) In the case of an original or change of owner application for a branch school, the owner shall submit an application on forms prescribed by the department.

(d) Purchase of a driver education school.

  (1) A person, partnership, or corporation purchasing a licensed driver education school shall obtain an original license or branch school license as applicable.

  (2) The purchaser shall assume all refund liabilities incurred by the seller or any former owner as well as the liabilities, duties, and obligations under the enrollment contracts between the students and the seller, or any former owner before the transfer of ownership.

(e) New location or change of address.

  (1) The department must be notified in writing of any change of address at least fifteen (15) working days before the move.

  (2) The school must submit the appropriate change of address fee prior to the actual move.

  (3) If a student is not willing to change locations or is prevented from completing the training at the new location, a pro-rata refund (without deducting any administrative expense) must be made to the student.

(f) Renewal of driver education school license. A complete application for the renewal of a license for a primary or branch driver education school shall be submitted before the expiration of the license and shall include the following:

  (1) a completed application for renewal;

  (2) renewal fee;

  (3) a current list of instructors employed at the school;

  (4) an executed bond or executed continuation agreement for the bond currently approved by, and on file with, the department or an approved alternate form of security;

  (5) if applicable, a current list of all motor vehicles used for instruction; and

  (6) if applicable, documentation showing that all vehicles used for instruction are properly insured.

(g) Denial, revocation, or conditional license. The authority to operate a branch school ceases if a primary driver education school license is denied or revoked. The operation of a branch school license may be subject to any conditions placed on the continued operation of the primary driver education school. A driver education school license for a branch school may be denied, revoked, or conditioned separately from the license for the primary school.

(h) School closure.

  (1) The school owner shall notify the department at least fifteen (15) business days before the anticipated school closure. In addition, the school owner shall provide written notice of the actual discontinuance of the operation on the day of cessation of classes. A school shall make all records available for review to the department upon request.

  (2) The department may declare a school to be closed:

    (A) when the school does not have the facilities, vehicles, instructors, or equipment to provide training pursuant to this subchapter;

    (B) when the school has stopped delivering instruction and training in driver education and has failed to fulfill contractual obligations to its students; or

    (C) when the school owner allows the school license to expire.

  (3) If a branch school closes and a student is prevented from completing the training at the primary location, a pro-rata refund (without deducting any administrative expense) must be made to the student.

(i) Branch schools shall adopt, use, and conduct business with the same name as the primary school.

(j) A school shall not, by advertisement or otherwise, state or imply that a driver's license, permit, or DE-964 is guaranteed or assured to any student or individual who will take or complete any instruction or enroll or otherwise receive instruction in any driver education school.

(k) Contract site. A school shall receive approval from the department prior to conducting a class at a contract site, and approval may be granted by the department upon review of the agreement made between the licensed driver education school and the contract site. The course shall be subject to the same rules that apply at the licensed driver education school, including periodic inspections by department representatives. An on-site inspection is not required prior to approval of the site.


Source Note: The provisions of this §84.40 adopted to be effective April 1, 2017, 42 TexReg 1400; amended to be effective September 1, 2020, 45 TexReg 6069

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