TxDMV: 'Without a doubt' paper-metal tag law debate coming to Capitol

AUSTIN (KXAN) -- The chair of the Texas Department of Motor Vehicles Board said Thursday that conversations, and industry concerns, over a new law eliminating paper license plates will "without a doubt" continue next year.

"I recognize that this conversation will be continued in the next session of the legislature, without a doubt," said TxDMV Board Chair Charles Bacarisse. "But, today, we are making rules."

On Thursday, the TxDMV acknowledged industry concerns with House Bill 718, foreshadowing a potential fight at the Capitol over law that passed last year replacing temporary tags with metal ones amid widespread fraud that spilled outside of Texas into every state, according to law enforcement, and a years-long KXAN investigation.

'It's the law'

Two weeks ago, the Texas Automobile Dealers Association (TADA) -- which represents over 1,400 franchised automobile dealerships in the state -- asked the Texas House Transportation Committee to take another look at the law, expressing concern, among other things, that metal tag fraud will become "ubiquitous."

TADA did not respond when asked if it plans to try to repeal House Bill 718 during the upcoming legislative session but suggested it will stay involved in on-going discussions, noting it did so in 2021 and 2023.

"And we should note that the Legislature pushed the effective date of HB 718 back until July 1, 2025, giving interested parties another session to redress any remaining concerns," said TADA spokesperson Jennifer Stevens.

TADA and the Texas Independent Automobile Dealers Association (TIADA) told the board on Thursday that they have concerns with aspects of the new law.

"I know some of us wanted it, some of us didn't, but we're here," said TIADA director of compliance and business development Earl Cooke. "I think we've done the best that we can."

KXAN asked Bacarisse about TADA's comment to lawmakers that crime will switch to metal tag fraud when the new law goes into effect.

"I think the legislature is always willing to take input from citizens and interest groups, and interested parties, as are we," said Bacarisse. "But, at this point, our focus is completely on making rules that put that law into effect."

"Should there be any doubt whether HB 718 takes effect on July 1 of next year?," asked KXAN investigative reporter Matt Grant.

"No, it's the law," Bacarisse said. "We will have that law ready to be implemented. It will be implemented on July 1, absolutely."

Rules pass as deadline looms

At its Thursday meeting, the board unanimously passed a set of rules that will act as a roadmap to put the law in motion. Bacarisse warned some members of the board opposed to parts of the law that the TxDMV would be "out of compliance" with a December deadline looming if it wasn't passed now.

Among the board members with concerns: Stacey Gillman, a Houston car dealer for more than 20 years, and Darren Schlosser, with Houston Police.

"I think it's easier for a crook to generate a temp tag to put on the back of a car, which would be spotted by [law enforcement] more easily than a hard plate," said TxDMV Board Member Darren Schlosser, concerned metal plates will blend in.

"My personal opinion," he said, "is temp tags on a vehicle prior to full registration, all avenues of finance, registration, the dealership process should be completed before a hard plate is issued to a vehicle."

After some back-and-forth, a rules package was unanimously adopted with some language tweaks. The rules ensure dealerships have enough metal license plates to operate efficiently, that a license plate database can help the TxDMV and law enforcement keep tabs, and that theft and fraud are deterred, general counsel Laura Moriaty said.

One thing that was taken out: Encouraging car dealers to immediately notify law enforcement when license plates are lost or stolen. Cooke, at one point, asked the board: "There seems to be even confusion in this room: Is it mandatory or not?"

"I do agree as a dealer it's in our best interest to report those plates are missing," said TxDMV Board Member Mark Jones. "Since it's not enforceable, I don't feel it should be in there at all."

A rule "encouraging" action is not enforceable by compliance staff, TxDMV spokesman Adam Shaivitz clarified, saying that is more of a "best practice."

Bacarisse said this is all part of "the sausage being made."

'Where were you?'

Despite industry concerns, law enforcement said the change can't come soon enough, as criminals continue using paper tags to hide in plain sight. Lt. John Gonzalez with the Harris County Sheriff's Office reminded the board that bogus temp tags are often used by criminals "to mask or disguise their vehicle before, during or after the commission of a crime."

The problem has only been "marginally" reduced, he said.

At the Texas House Transportation Committee hearing two weeks ago, Sgt. Jose Escribano with the Travis County Constable's Office Pct. 3 said TADA's concerns over metal tag fraud seemed to come out of nowhere months before HB 718 is set to take effect.

“Well, where were you a year-and-a-half ago?” Escribano asked. “You have a bill that just passed, and now, you’re going to go up and propose that we keep paper tags because of something that you just discovered? This is not recent. We could have had this conversation a long time ago.”

At that House hearing, Rep. Terry Canales, D-Edinburg, the committee chair, gave Escribano and TADA a "homework" assignment to meet, discuss concerns and bring back solutions. Escribano wrote Karen Phillips, the association's general counsel and executive vice president, on Oct. 11, according to an email shared with KXAN.

"As per Chairman Terry Canales['] suggestion at yesterday's transportation committee hearing, I would like to see if you would be available to meet to discuss your concerns with HB 718," Escribano wrote, copying Canales on the email.

Thirteen days later, he said he still has not received a reply.

On Wednesday, KXAN asked a TADA spokesperson for a timeframe on when that meeting will occur. We did not hear back.