Proposed Rules Title 43

TITLE 43. TRANSPORTATION

PART 3. MOTOR VEHICLE CRIME PREVENTION AUTHORITY

CHAPTER 57. MOTOR VEHICLE CRIME PREVENTION AUTHORITY

INTRODUCTION. The Motor Vehicle Crime Prevention Authority (MVCPA) proposes amendments to 43 Texas Administrative Code (TAC) §57.48 concerning motor vehicle years of insurance calculations. These amendments are necessary to implement Senate Bill (SB) 224 enacted during the 88th Legislature, Regular Session (2023). SB 224 provides that the (a)(1) single statutory fee payable on each motor vehicle for which the insurer provides insurance coverage during the calendar year regardless of the number of policy renewals is increased from $4 to $5; and (a)(4) all motor vehicle or automobile insurance policies as defined by Insurance Code §5.01(e), covering a motor vehicle shall be assessed the $5 fee except mechanical breakdown policies, garage liability policies, non-resident policies, and policies providing only non-ownership or hired auto coverages.

EXPLANATION.

Amendments to §57.48(a)(1) and (a)(4) implement SB 224 enacted by the 88th Legislature, 2023. Transportation Code §1006.153, Fee Imposed on Insurers, provides "motor vehicle years of insurance" means the total number of years or portions of years during which a motor vehicle is covered by insurance. Insurers are required to pay to the Authority a fee equal to $5 multiplied by the total number of motor vehicle years of insurance policies delivered, issued for delivery, or renewed by the insurer. Transportation Code §1006.153(b). Insurers are required to pay the fee not later than: (1) March 1 of each year for a policy delivered, issued, or renewed from July 1 to December 31 of the previous calendar year; and (2) August 1 of each year for a policy delivered, issued, or renewed from January 1 through June 30 of that year.

Out of each fee collected under §1006.153(b), $1 shall be deposited to the credit of the general revenue fund to be used only for coordinated regulatory and law enforcement activities intended to detect and prevent catalytic converter theft in this state. The money deposited to the credit of the general revenue fund for coordinated regulatory and law enforcement activities intended to detect and prevent catalytic converter theft in this state as described by Transportation Code §1006.153(e), may be appropriated to the authority for coordinated regulatory and law enforcement activities.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Glenna Bowman, Chief Financial Officer, Texas Department of Motor Vehicles has determined that for each year of the first five years the new section will be in effect, there will be no significant fiscal impact to state or local governments as a result of the enforcement or administration of the proposal. Joe Canady, Director of the Motor Vehicle Crime Prevention Authority (MVCPA) Division, has determined that there will be no measurable effect on local employment or the local economy as a result of the proposal.

PUBLIC BENEFIT AND COST NOTE. Mr. Canady has also determined that, for each year of the first five years new section is in effect, the public benefits anticipated as a result of the proposal include the increased grant funding for MVCPA taskforces to increase their enforcement activities, including the prevention of catalytic converter theft.

Anticipated Costs To Comply With The Proposal. Mr. Canady anticipates that there will be costs to comply with these rules. The cost to persons required to comply with the proposal is the increased fee assessed by insurers on all motor vehicle and automobile insurance policies.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by the Government Code, §2006.002, the department has determined that the proposed amendments will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the new section does not require small businesses, micro-businesses, or rural communities to comply. Therefore, the MVCPA is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

TAKINGS IMPACT ASSESSMENT. The MVCPA has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT STATEMENT. The MVCPA has determined that each year of the first five years the proposed new section is in effect, no government program would be created or eliminated. Implementation of the proposed amendments would require the creation of four new employee positions. Implementation would not require an increase in legislative appropriations to the MVCPA. The proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. Lastly, the proposed new section does not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

If you want to comment on the proposal, submit your written comments by 5:00 p.m. CST on October 8, 2023. A request for a public hearing must be sent separately from your written comments. Send written comments or hearing requests by email to rules@txdmv.gov or by mail to Office of General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731. If a hearing is held, the department will consider written comments and public testimony presented at the hearing.

STATUTORY AUTHORITY. The MVCPA proposes amendment to 43 TAC §57.48 under Transportation Code §1006.101.

Transportation Code §1006.101 authorizes the MVCPA to adopt rules that are necessary appropriate to implement the powers and the duties of the authority.

CROSS REFERENCE TO STATUTE. Art. 4413(37) §6.

§57.48.Motor Vehicle Years of Insurance Calculations.

(a) Each insurer, in calculating the fees established by Transportation Code §1006.153, shall comply with the following guidelines:

(1) The single statutory fee of $5 [$4] is payable on each motor vehicle for which the insurer provides insurance coverage during the calendar year regardless of the number of policy renewals; and

(2) When more than one insurer provides coverage for a motor vehicle during the calendar year, each insurer shall pay the statutory fee for that vehicle.

(3) "Motor vehicle insurance" as referred to in Transportation Code, Chapter 1006, means motor vehicle insurance as defined by the Insurance Code, Article 5.01(e). This definition shall be used when calculating the fees under this section.

(4) All motor vehicle or automobile insurance policies as defined by Insurance Code, Article 5.01(e), covering a motor vehicle shall be assessed the $5 [$4] fee except mechanical breakdown policies, garage liability policies, non-resident policies and policies providing only non-ownership or hired auto coverages.

(b) The Insurance Motor Vehicle Crime Prevention Authority Fee Report form and Instructions for the Computation of the Motor Vehicle Crime Prevention Authority Fee of the Comptroller of Public Accounts are adopted by reference. The form and instructions are available from the Comptroller of Public Accounts, Tax Administration, P.O. Box 149356, Austin, Texas 78714-9356. Each insurer shall use this form and follow those instructions when reporting assessment information to the Comptroller.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 25, 2023.

TRD-202303157

David Richards

General Counsel

Motor Vehicle Crime Prevention Authority

Earliest possible date of adoption: October 8, 2023

For further information, please call: (512) 465-1423

43 TAC §57.52

INTRODUCTION. The Motor Vehicle Crime Prevention Authority (MVCPA) proposes new 43 Texas Administrative Code (TAC) §57.52 concerning a penalty for late payment of fee or filing of report; appeal. This new section is necessary to implement House Bill (HB) 3514 enacted during the 87th Legislature, Regular Session (2021). HB 3514 provides that the MVCPA may assess a penalty if an insurer fails to timely pay the fee required under Transportation Code §1006.153 or fails to timely file a report of the fee. An insurer that is assessed a penalty or interest for the late filing of a fee or report may appeal the assessment to the MVCPA board under the new section.

EXPLANATION.

New §57.52 implements HB 3514 enacted by the 87th Legislature, 2021. Transportation Code §1006.153, Fee Imposed on Insurers, provides "motor vehicle years of insurance" means the total number of years or portions of years during which a motor vehicle is covered by insurance. Insurers are required to pay to the Authority a fee equal to $4 multiplied by the total number of motor vehicle years of insurance policies delivered, issued for delivery, or renewed by the insurer. Transportation Code §1006.153(b). Insurers are required to pay the fee not later than: (1) March 1 of each year for a policy delivered, issued, or renewed from July 1 to December 31 of the previous calendar year; and (2) August 1 of each year for a policy delivered, issued, or renewed from January 1 through June 30 of that year.

New §57.52 provides that a penalty shall be imposed on an insurer for the delinquent payment of the required fee or the delinquent filing of the report of a fee that is required by rule. The penalty shall be assessed in the same manner as the assessment of a penalty for a delinquent tax payment or filing or a report under Tax Code §111.061(a). Interest accrues in the manner described in Tax Code §111.060 on any fee paid after the due date required under Transportation Code §1006.153(b). HB 3514 provides the Authority with the ability to audit or contract for the audit of the fees paid under Transportation Code §1006.153(b-2) and requires the Authority to establish procedures by rule that provide a right to an appeal to an insurer assessed a penalty or interest under this section. The final decision regarding an insurer's appeal is decided by a majority vote of the Authority. The appeal of the assessment of a penalty or interest is not a contested case under Government Code, Chapter 2001.

PUBLIC BENEFIT AND COST NOTE. Mr. Canady has also determined that, for each year of the first five years new section is in effect, the public benefits anticipated as a result of the proposal include the timely payment of the MVCPA fee and timely filing of the report of the MVCPA fee by insurers.

Anticipated Costs To Comply With The Proposal. Mr. Canady anticipates that there will be costs to comply with these rules. The cost to persons required to comply with the proposal are the payment of a penalty and any interest accrued on that penalty for the delinquent payment of the fee or delinquent filing of the report of the fee.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by the Government Code, §2006.002, the department has determined that the proposed new section will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the new section does not require small businesses, micro-businesses, or rural communities to comply. Therefore, the MVCPA is not required to prepare a regulatory flexibility analysis under Government Code, §2006.002.

GOVERNMENT GROWTH IMPACT STATEMENT. The MVCPA has determined that each year of the first five years the proposed new section is in effect, no government program would be created or eliminated. Implementation of the proposed new section would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the MVCPA or an increase or decrease of fees paid to the MVCPA. The proposed new section does not create a new regulation, or expand, limit, or repeal an existing regulation. Lastly, the proposed new section does not affect the number of individuals subject to the rule's applicability and will not affect this state's economy.

REQUEST FOR PUBLIC COMMENT.

STATUTORY AUTHORITY. The MVCPA proposes new section 43 TAC §57.52 under Transportation Code §1006.101.

Transportation Code §1006.101 authorizes the MVCPA may adopt rules to administer Chapter 1006.

CROSS REFERENCE TO STATUTE. Art. 4413(37) §6.

§57.52.Assessment of Penalty or Interest for Late Payment of the Fee, Filing of Report; Appeal.

(a) Penalty for Late Payment of Fee or Filing of Report.

(1) A penalty shall be assessed against an insurer for the delinquent payment of the fee required under Transportation Code §1006.153(b-1) or the delinquent filing of any report of the fee required.

(2) The penalty for the delinquent payment of the fee or late filing of the report shall be assessed in accordance with Tax Code §111.061(a).

(3) Interest accrues in the manner described in Tax Code §111.060 on any fee paid after the due date.

(b) Appeal Procedures.

(1) An insurer that is assessed a penalty or interest by the MVCPA under Transportation Code §1006.153 may appeal the assessment by submitting an MVCPA prescribed form to the MVCPA Director within thirty (30) days of the date of the assessment.

(2) An insurer shall provide the MVCPA with any written documentation or evidence demonstrating the reasons for the late payment of the fee or late filing of the report.

(3) The MVCPA shall make a final decision on an insurer's appeal at a regularly scheduled open meeting of the MVCPA board. A final decision on the appeal shall be made by a majority vote of the MVCPA board.

(4) An appeal under this section is not a contested case under Government Code, Chapter 2001.