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TxDMV Board Passes Rules Related to Limiting Dealers Access to Temporary Tags

The long process involved in implementing HB 3927 is almost over, as the TxDMV passed rules on January 27th that will be effective once published. HB 3927 was signed into law on June 1, 2021, to deal with fraudulent temporary tags by allowing TxDMV to “establish the maximum number of temporary tags that a dealer or converter may obtain in a calendar year.”

TIADA ensured dealers' voices were heard throughout the process. After HB 3927 was introduced, TIADA reached out to legislators to express our concerns about possible negative impacts on dealers and express our support for eliminating temporary tag abuse. After it passed, TIADA continued to work on HB 3927, starting with numerous members participating in hearings before rules were issued. Most recently, TIADA commented on proposed rules issued by TxDMV and testified before the TxDMV Board.

TIADA Secures Substantial Changes to the Proposed Rules on Temporary Tags

Several of those written comments led to substantial changes to the proposed rules. Below are a couple of changes that occurred based on TIADA's efforts:

1. The allocation of temporary tags for new independent dealers was set at a firm 300. TIADA expressed concern that the language failed to allow for a request for additional tags. In response to our comment and others, TxDMV clarified that a new dealer who requires more tags can request them and is not limited to the 300.

2. TIADA was concerned that changes in ownerships or locations could hurt dealers' allotments. TxDMV, in response to our comment and others, changed the reasons a new dealer can request additional tags to include:

“(1) franchise dealer manufacturer or distributor sales expectations;
(2) a buy-sell change 1 of ownership agreement;
(3) a change in license required by death or retirement;
(4) prior year's sales by a dealership moving into the state; or
(5) other similar change of location or ownership that indicates some continuity in existing operations that will result in increased sales.”
 
TxDMV did not accept every change we requested. For example, TIADA suggested the following:

Provisions should be made to handle changes in business practices. Most dealers use agent specific tags, but during the COVID pandemic some dealers switched to vehicle specific tags so they could send customers on test drives without a salesperson. Also, many dealers facing staff shortages are considering not having their salespeople go on tests drives and may switch to vehicle specific tags. The number of tags issued per year is greatly increased when a dealer uses vehicle specific tags, and this limit would hinder the ability for dealers currently using agent specific tags to switch to vehicle specific tags. Therefore, TIADA recommends a process to increase the allotment of temporary tags when a dealer switches from agent specific tags to vehicle specific tags.”

TxDMV acknowledged TIADA's comment and responded as follows: “The department recognizes the concern, but has made no change in the text. Allocation of dealer tags should adjust in future years based on historical use; however, current year allocations can also be considered in requests for additional tags, or at time of licensing.”

Although TIADA did not get everything it wanted, TIADA got what you needed. TIADA cannot say what the outcome would have been without our involvement, but you should know your voice was heard, and that is especially important considering what other commenters recommend to TxDMV.  Those requests included “five commenters [who] recommended that the department cease issuing paper tags” and an “individual commenter recommended that the department require buyers of vehicles go in person to their TxDMV Regional Service Center to receive a temporary tag.”

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