The Texas Department of Motor Vehicles (department) adopts amendments to Chapter 217, Subchapter A, §217.2, Definitions; §217.3, Motor Vehicle Titles; §217.4, Initial Application for Title; §217.5, Evidence of Motor Vehicle Ownership; §217.7, Replacement of Title; Subchapter B, §217.26, Identification Required; §217.33, Commercial Farm Motor Vehicles, Farm Trailers, and Farm Semitrailers; §217.40, Special Registration Permits; §217.43, Military Specialty License Plates; §217.45, Specialty License Plates, Symbols, Tabs, and Other Devices; §217.46, Commercial Vehicle Registration; §217.54, Registration of Fleet Vehicles; §217.55, Exempt and Alias Vehicle Registration; Subchapter D, §217.88, Sale, Transfer, or Release of Ownership of a Non-repairable or Salvage Motor Vehicle; and Subchapter F, §217.123, Access to Motor Vehicle Records. The amendments to §§217.3, 217.33, 217.40, 217.43, 217.45, 217.46, and 217.54 are adopted without changes to the proposed text as published in the April 22, 2016, issue of the Texas Register (41 TexReg 2895) and will not be republished. The amendments to §§217.2, 217.4, 217.5, 217.7, 217.26, 217.55, 217.88, and 217.123 are adopted with changes to the proposed text and will be republished. Changes in the adopted amendments respond to public comments or otherwise reflect nonsubstantive variations from the proposed amendments.

Several bills from the 84th Legislature, Regular Session, 2015, amended sections of the Transportation Code. Because of these statutory changes, several rules required amendment to maintain consistency with the amended statutes. Amendments throughout Chapter 217, Subchapters A, B, D, and F reflect the statutory changes and correct statutory citations; delete unnecessary language, including language that repeats statute; and update and clarify various requirements and procedures.

COMMENT

The following individuals or entities furnished written comments opposed to the proposed amendment to §217.4 prescribing requirements applicable to "even trade" title transactions: Linda Bridge, Bee County Tax Assessor-Collector (TAC); Sharon Long, Bell County TAC; Ro'Vin Garrett, Brazoria County TAC; Jackie Moore, Carson County TAC; Becky Watson Fant, Cass County TAC; Cathy C. Talcott, Comal County TAC; Michelle French, Denton County TAC; Gaye Whitehead, Gray County TAC; Bruce Stidham, Grayson County TAC; Linda Cummings, Hansford County TAC; Debra L. Ford, Hemphill County TAC; Mary Ann Lovelady, Jones County TAC; Deborah A. Sevcik, Lavaca County TAC; Ronnie Keister, Lubbock County TAC; Karen M. Lane, Madison County TAC; Randy Riggs, McLennan County TAC; Karen Hood, Midland County TAC; Tammy McRae, Montgomery County TAC; Nikki McDonald, Moore County TAC; Gail Smith, Navarro County TAC; Linda Brown, Oldham County TAC; Sherri Aylor, Potter County TAC; Tonya Martin, Red River County TAC; Ida M. Turner, Refugio County TAC; Dalia Sanchez, San Patricio County TAC; Patrick L. Kubala, Wharton County TAC; Deborah M. Hunt, Williamson County TAC; Monte S. Shaw, Wise County TAC; and Thelma "Midget" Sherman, President, Tax Assessor-Collectors Association of Texas (TACA).

The TACs for Bee, Brazoria, Grayson, Hemphill, Hansford, Madison, Red River, San Patricio, Wharton, and Williamson Counties, and TACA commented that the amendment was too onerous, too burdensome a process for the public, and would create a hardship for individuals wishing to conduct an "even trade."

RESPONSE

While the proposed amendment related to even trade transactions may create a more onerous or burdensome process for the public, the department does not agree that this is a compelling reason not to adopt the amendment. Even trade transactions are more susceptible to fraud since no sales taxes are paid. The proposed rules had the potential to more effectively deter fraudulent actors from committing a crime.

COMMENT

The TACs for Bee, Bell, Brazoria, Denton, Potter, San Patricio, Wharton, and Wise Counties and TACA commented that the amendment did not provide any guidance for motor vehicle dealers.

RESPONSE

The department disagrees that guidance is necessary for motor vehicle dealers. Dealers are expressly authorized to deduct the trade-in value of a vehicle from the purchase price for the purposes of calculating sales tax owed. If a dealer accepts a vehicle as a trade-in for a new or used motor vehicle, a sale has still occurred, and consideration has passed from the buyer to the dealer for that vehicle. An "even trade," as defined by proposed amended §217.2, is a "transaction involving the even exchange of two automobiles with comparable standard presumptive value."

COMMENT

The TACs for Bee, Bell, Brazoria, Carson, Cass, Gray, Jones, Madison, Moore, Oldham, Potter, Red River, Refugio, San Patricio and Wharton Counties, and TACA commented that the proposed amendment could be a violation of the Health Insurance Portability and Accountability Act (HIPAA).

RESPONSE

HIPAA protects individuals' identifiable health information held by covered entities and their business associates (called "protected health information" or "PHI"). Covered entities under HIPAA are health care clearinghouses, health plans, and most health care providers. Business associates generally are persons or entities that perform functions or activities on behalf of, or provide certain services to, a covered entity that involve access to PHI. See generally http://www.hhs.gov/hipaa/for-professionals/privacy/guidance/index.html. As such, the department disagrees that a TAC is a covered entity or a business associate under HIPAA and disagrees that a TAC is covered by the HIPAA privacy rule.

COMMENT

The Jones County TAC also commented that the amendment would be a violation of privacy.

RESPONSE

The department would point out that the proposed amendment does not require detailed medical information, but rather documentation from the applicant's physician attesting that the applicant is unable to be physically present.

COMMENT

The TACs from Bee, Bell, Brazoria, Cass, Comal, Denton, Hansford, Lavaca, Madison, Montgomery, Refugio, San Patricio, Wharton and Williamson County suggested that instead of adopting the amendments for an even trade transaction, the process should be similar to the "gift affidavit" process.

RESPONSE

The department notes that the "gift affidavit" statement is specifically authorized by Tax Code, §152.062(b-2) and is applicable only to the transfer of ownership of a motor vehicle as the result of a gift. As such, the "gift affidavit" may not be used for an even trade.

COMMENT

The TACs from Bee, Bell, Brazoria, Carson, Cass, Denton, Gray, Hansford, Hemphill, Lavaca, Lubbock, McLennan, Midland, Montgomery, Moore, Navarro, Potter, Red River, Wharton, Williamson, and Wise Counties and TACA commented that the proposed amendment is a sales tax issue, and that the Comptroller of the State of Texas should be consulted.

RESPONSE

The department responds that while the issue does relate to the proper payment of sales tax, it involves the transfer of ownership of motor vehicles, and, as such, is within the department's statutory authority to "adopt rules to administer [the Certificate of Title Act, Chapter 501 of the Texas Transportation Code]." See Transp. Code, §501.0041.

Despite the above responses to comments, the department has determined that the proposed definition for "even trade" and the requirements applicable to an even trade transaction will not be added to Chapter 217, Subtitle A, at this time. The department intends to either propose a similar rule in the future, or pursue other avenues for addressing the risks associated with even trade transactions. As such, proposed amendments to §217.2 and §217.4 related to even trade transactions will not be adopted.

COMMENT

Insurance Auto Auctions (IAA) commented on §217.88, Sale, Transfer, or Release of Ownership of a Non-repairable or Salvage Motor Vehicle, recommending that the section be further amended to comply with Transportation Code, §501.095 by eliminating the limitations on sales by insurance companies, including a reference to electronic titling, and including out-of-state documents.

RESPONSE

Having reviewed the comment and Transportation Code, §501.095, the department agrees that the rule and statute are not consistent, and amended the rule to align with the language of the Transportation Code.

Lastly, proposed amendments to §217.5, Evidence of Motor Vehicle Ownership; §217.7, Replacement of Title; §217.26, Identification Required; and §217.123, Access to Motor Vehicle Records, added a concealed handgun license issued by the Texas Department of Public Safety under Government Code, Chapter 411, Subchapter H as an acceptable form of identification to support an application for a title, replacement title, initial registration, or a request for personal information. House Bill 910, 84th Legislature, Regular Session, 2015, amended Government Code, Chapter 411, Subchapter H, to change the term "concealed handgun license" to "license to carry a handgun" in most sections. To maintain consistency with statute, the department is adding "license to carry a handgun" to the proposed rule text, in addition to "concealed handgun license." This change is nonsubstantive and made only to align with the Government Code.

STATUTORY AUTHORITY

The amendments are adopted under Transportation Code, §1002.001, which provides the board of the Texas Department of Motor Vehicles (board) the authority to adopt rules necessary and appropriate to implement the powers and the duties of the department under the Transportation Code; Transportation Code, §501.0041, which provides the department may adopt rules to administer Chapter 501, Certificate of Title Act; Transportation Code, §502.0021, which provides the department may adopt rules to administer Chapter 502, Registration of Vehicles; and Transportation Code, §504.0011, which provides the department may adopt rules to implement and administer Chapter 504, License Plates. More specifically, amendments are also adopted under Transportation Code, §501.0235, which provides the department may require an applicant for a title to provide current personal identification as determined by department rule.

CROSS REFERENCE TO STATUTE

Transportation Code, §§501.022, 501.023, 502.095, 502.453, 502.456, and 504.202.