INTRODUCTION. The Texas Department of Motor Vehicles (department) adopts amendments to 43 TAC §§217.22, 217.27, 217.32, 217.38, 217.41, 217.55 and new 43 TAC §§217.58 - 217.64. The department adopts §§217.22, 217.27, 217.32, 217.38, 217.41, 217.55, 217.60, 217.61, 217.63, and 217.64 without changes to the proposed text as published in the April 17, 2020, issue of the Texas Register (45 TexReg 2521). The department adopts §§217.58, 217.59 and 217.62 with changes to the proposed text as published in the April 17, 2020 issue of the Texas Register (45 TexReg 2521).

REASONED JUSTIFICATION. These new and amended sections are necessary to implement Senate Bill 604, 86th Legislature, Regular Session (2019), which amended Transportation Code Chapter 504 by adding Subchapter B-1 to allow certain vehicles to be equipped with digital license plates.

The adopted amendments to §217.22 are necessary to add definitions that relate to digital license plates.

Amended §217.22(11) defines "digital license plate" to create a conforming reference to Transportation Code §504.151.

Amended §217.22(12) defines "digital license plate owner" to create a conforming reference to Transportation Code §504.151.

Amended §217.22(21) defines "GPS" as a global positioning system (GPS) tracking device to address the collection of information by a receiver in a digital license plate that can determine the location of the digital license plate. GPS features are not expressly addressed in Transportation Code Chapter 504 Subchapter B-1.

Amended §217.22(25) defines "legend" to clarify the meaning of the term as it is used in the definition of the phrase "required digital license plate information" in these adopted rules. The term "legend" is defined as a name, motto, slogan, or registration expiration notification appearing on and centered horizontally at the bottom of the license plate. The definition is also necessary to clarify that a digital license plate must display a registration expiration notification.

Amended §217.22(27) defines "metal license plate" to differentiate between a metal license plate and a digital license plate.

Amended §217.22(30) defines "optional digital license plate information" as any information authorized to be displayed on a digital license plate in addition to required digital license plate information. Amended §217.22(30)(A) - (D) list examples of optional digital license plate information.

Amended §217.22(31) defines "park" to conform with the statutory meaning in Transportation Code §541.401.

Amended §217.22(33) defines "primary region of interest" to describe the size requirements of the alphanumeric characters representing the plate number.

Amended §217.22(35) defines "required digital license plate information" to clarify the minimum information that must be displayed on a digital license plate. This definition is necessary to clarify that the same information required to be displayed on a metal license plate must also be displayed on a digital license plate: alphanumeric characters representing the plate number, the word "Texas," the legend, and the registration expiration month and year, if applicable. The definition also clarifies that digital license plates must also display the registration expiration notification if the vehicle's registration is expired. The department has sole control over the design, typeface, color, and alphanumeric pattern for all license plates under Transportation Code §504.005.

Amended §217.22(36) defines "secondary region of interest" to describe the size requirements for the field with the word "Texas" centered on the top of the plate.

The amendments to §217.27 are necessary to clarify the exclusions for digital license plates from the existing paragraph, and clarify existing requirements for metal license plates. Amended §217.27(a)(2) exempts digital license plates from existing requirements for displaying vehicle registration insignia for certain vehicles without a windshield. Amended §217.27(a)(3) clarifies that if a vehicle has a digital license plate, then the expiration month and year will appear digitally on the electronic visual display, and any registration insignia issued by the department must be retained in the vehicle. Vehicles with a digital license plate will be issued a voided registration sticker that will not to be affixed to the windshield. Vehicles with metal license plates that do not have a windshield are issued registration stickers that must be adhered to the rear metal license plate. This amendment provides consistency for law enforcement for metal license plates and digital license plates. The amendment also helps the digital license plate owner because they will have the metal license plate in their vehicle and their registration receipt in the event their digital license plate becomes inoperable or unreadable.

Amendments to §217.27(b)(1) add language clarifying that license plates must be clearly visible, readable, and legible and that the rear license plate must be in an upright horizontal position. These amendments are necessary to assist law enforcement by facilitating a quicker replacement of license plates that have become unreadable or illegible due to age or wear and to facilitate enforcement when a license plate is not placed on the vehicle in an upright position. These amendments also help ensure that license plates are readable and legible as required by §217.32, as well as Transportation Code §§502.475, 504.155(b)(2), and 504.945.

The amendments to §217.32 are necessary to differentiate between metal license plates and digital license plates. Amended §217.32(a) - (b) add "metal" and "metal license plate" to differentiate between metal license plates and digital license plates. A replacement digital license plate will be obtained from a digital license plate provider, rather than from a county tax assessor-collector

The amendment to §217.38 is necessary to differentiate between metal license plates and digital license plates. Amended §217.38(1) adds "metal" to differentiate between metal license plates and digital license plates. The customer is not required to return the digital license plate to the county tax assessor-collector when applying for a registration fee credit.

The amendments to §217.41 are necessary to differentiate between metal plates and digital license plates. A replacement digital license plate will be obtained from a digital license plate provider, rather than from a county tax assessor-collector.

The amendments to §217.55 are necessary to differentiate between metal license plates and digital license plates. Amended §217.55(c)(1) and (2) add "metal license" to differentiate between metal license plates and digital license plates. A replacement digital license plate will be obtained from a digital license plate provider, rather than from a county tax assessor-collector.

New §217.58 lists the types of vehicles that are eligible and ineligible for a digital license plate and the requirements for eligibility verification and issuance of digital plates. New §217.58(a) lists the statutorily-eligible vehicles as any vehicle owned or operated by a governmental entity, any commercial fleet vehicle, or a truck, motorcycle, moped, trailer, semitrailer, or sport utility vehicle or other vehicle that is required to be registered under Transportation Code Chapter 502. Changes were made to the proposed language in amended §217.58 to clarify the reference to fleet vehicle and to ensure that the previously listed vehicles included all possible eligible vehicles under Transportation Code Chapter 502. These amendments to the rule text do not alter the eligibility requirements for a digital license plate outlined in statute, do not put additional stakeholders on notice, and add no additional costs.

New §217.58(b) lists which vehicles are ineligible for a digital license plate. The proposed language in §217.58(b) was amended for clarity. Section §217.58(b) was amended after proposal to clarify that any vehicle registered as a passenger vehicle, that is not part of a commercial fleet or owned or operated by a governmental entity, is ineligible for a digital license plate. These amendments to the rule text do not alter the eligibility requirements for a digital license plate outlined in statute, do not put additional stakeholders on notice, and add no additional costs.

New §217.58(c) is necessary to ensure that digital license plate providers and applicants are aware that registration is completed separately from digital license plate issuance and that all digital license plate owners are issued their metal license plates to attach to the vehicle in case of digital license plate removal or malfunction. The proposed rule text in Section 217. 58(c)(5) has been deleted because it was unnecessary and may cause confusion as to whether a digital license plate could be replaced if it was lost or malfunctioned. The original purpose of the requirement, to prevent one vehicle from being linked to two or more different digital license plates, will be achieved through department programming controls.

New §217.59 outlines the requirements for digital license plate testing. New §217.59 requires a digital plate provider to provide the department with documentation demonstrating that testing was completed on a digital license plate model before the approval and initial deployment of that digital license plate model, and for each subsequent hardware upgrade. A hardware upgrade is any upgrade to any physical aspects of the digital license plate except for the mounting bracket. The documentation demonstrating that testing was completed must be sufficient for the department to be assured that the digital license plate approved for use was tested in a manner set forth by the department. The documentation must include a description of the testing protocols and methods and must be conducted by governmental entities, universities, or independent nonprofit research and development organizations. New §217.59 is necessary to ensure that digital license plates meet the statutory requirements for license plates and that the testing is conducted by the types of organizations with which the department has established relationships. The department works with these types of entities on a regular basis for different projects and requiring these types of entities to perform testing will ensure consistency and independence in testing. The testing must be conducted for four separate issues: reflectivity, legibility, readability, and network and data security. As discussed in the response to comments, the proposed rule text has been changed to require reflectivity testing with results demonstrating that the digital license plates are manufactured utilizing reflectorized material as required by Transportation Code §504.005, and are reflective in daytime, as defined in Transportation Code §541.401 and nighttime, as defined in Transportation Code §541.401 with the use of low beam headlights, at a distance of no less than 75 feet. Reflectivity testing with results demonstrating that the digital license plates perform consistently with the International Organization for Standardization ISO 7591, clauses 6 and 7 is preferred. This change is necessary to provide an incentive for digital license plate providers to achieve retroreflectivity as the technology develops, while not creating a barrier to enter the market if the standard is not currently possible. The digital license plate provider must comply with the requirement in Transportation Code §504.005(d), which promotes highway safety by requiring that each license plate is made with a reflectorized material that provides effective and dependable brightness for the period for which the plate is issued. New §217.59(2) requires legibility testing with results demonstrating that digital license plates are legible during daytime and also during nighttime using low beam headlights, under optimal conditions, at a distance of no less than 75 feet. New §217.59(2) also requires readability testing with results demonstrating that digital license plates are readable with commercially-available automated license plate readers, and in a variety of weather conditions. This is necessary to comply with the industry standard and to comply with the requirement that the digital license plate display be legible under Transportation Code §504.155(b)(2); to ensure that law enforcement can read the digital license plate to determine compliance with Transportation Code §504.945; and to ensure that law enforcement and toll entities can read the digital license plates with commercially-available automated license plate readers. New §217.59(3) requires commercially-available penetration testing for protection of the digital license plate, the electronic display information, and the digital license plate provider's systems. The penetration testing will be decided by the department and the provider in the contracting process. New §217.59(3) is necessary to ensure the safety and security of the digital license plates for the benefit of the digital license plate owner, law enforcement, and the public. If the digital license plate or the provider's system are vulnerable to penetration, this could enable fraud and jeopardize public safety. In addition to testing before initial approval and each subsequent hardware upgrade, penetration testing must be completed for each software or firmware upgrade. This requirement is necessary to ensure that new vulnerabilities are not instituted in subsequent updates.

New §217.60 outlines the specifications and requirements for digital license plates. New §217.60(a) requires digital license plate providers to ensure that the digital license plate meets or exceeds the benefits to law enforcement provided by metal license plates. This requirement is necessary to conform to the statutory requirement in Transportation Code §504.155(b)(4). New §217.60(a) paragraphs §217.60(a)(1) - (4) provide further requirements for the digital license plate. Paragraph §217.60(a)(1) outlines the physical requirements for a digital license plate. Paragraph §217.60(a)(2) requires that the digital license plate include one or more security features that verify the plate was issued by an approved digital license plate provider. Paragraph §217.60(a)(2) is necessary to provide benefits to law enforcement by allowing them to visually ensure that a digital license plate is not a counterfeit. Metal license plates have two security features that law enforcement can visually check to see if the metal license plate is counterfeit. Paragraphs §217.60(a)(3) - (4) require a digital license plate to display the same information as a metal license plates while not in park. This includes displaying required digital license plate information and the registration expiration month and year in the same font size and location as the information displayed on the corresponding metal license plate; as well as ensuring that the required information continues to display when the digital license plate is not connected to a wireless network. These requirements are necessary to fulfill the requirement under Transportation Code §504.155 for the board of the Texas Department of Motor Vehicles (board) to set the specifications and requirements for digital license plates. By setting consistent standards and features, the department is aiding law enforcement by preventing fraud and aiding consumers by ensuring their digital license plate displays the information required by law.

New §217.60(b) outlines the requirements for placement of a digital license plate and the vehicle registration insignia for a vehicle displaying a digital license plate. New §217.60(b)(1) requires that the digital license plate must be attached to the exterior rear of the vehicle. This requirement is necessary to comply with the definition of digital license plate defined in Transportation Code §504.151, which states that a digital license plate is designed to be placed on the rear of a vehicle in lieu of a physical, metal license plate. This requirement is also necessary to comply with Transportation Code §504.154(a), which states a digital license plate is placed on the rear of the vehicle in lieu of a physical, metal license plate. New §217.60(b)(2) requires a metal license plate to be attached to the exterior front of the vehicle, unless the vehicle is not required to display a plate on the front of the vehicle under this chapter. This requirement is necessary to comply with the requirements in Transportation Code §504.943 and 43 TAC §§217.27(b), 217.46(b)(3), and 217.56(c)(2)(E). New §217.60(b)(3) requires that the vehicle's registration insignia for validation of registration must be displayed in accordance with 43 TAC §217.27. Owners of vehicles with digital license plates will keep their registration receipt in or on the vehicle, and their registration month and year will be displayed on the electronic visual display of the digital license plate. New §217.60(b)(3) is necessary to provide consistency for law enforcement and limit fraud.

New §217.61 outlines the prohibitions and requirements for digital plate designs and display. New§217.61(a)(1) prohibits digital license plate providers from creating or designing a specialty license plate under Transportation Code Chapter 504 unless they have a contract with the department under Transportation Code §504.851. This is necessary to ensure that the department is aware of and approves all specialty license plates in the state of Texas. If specialty plates were created without the department's knowledge and approval it would be difficult to verify the legitimacy of the license plates. New §217.61(a)(2) requires the digital license plate provider to enter into a licensing agreement, with standard language as approved by the department, for the display of any third party's intellectual property on a digital license plate. New §217.61(a)(2) is necessary to protect third-party intellectual property.

New §217.61(b) outlines the requirements for the display of information on a digital license plate. New §217.61(b)(1) requires that the display of electronic information on a digital license plate be approved by the department. New §217.61(b)(1) provides that the digital license plate may not be personalized under any region of interest except under current rules governing specialty license plates. New §217.61(b)(1) is necessary to maintain consistency between digital license plates and metal license plates which assists law enforcement by ensuring that the digital license plate information is readable and legible. New §217.61(b)(2) - (4) describe the requirements for the display of optional digital license plate information while the vehicle is in park. These requirements are necessary to permit digital license plates to display an emergency alert, public safety alert, manufacturer or safety recalls, advertising or parking permits, while ensuring that the Cont'd...