By:  Harris, C.                                       S.B. No. 1391
       73R9063 T
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the operation of driver training schools.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 3(7), Texas Driver and Traffic Safety
    1-5  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
    1-6  is amended to read as follows:
    1-7              (7)  "Extension" means an entity that geographically
    1-8  extends the educational resources of a driver training school by
    1-9  offering a driving safety course in a location other than the main
   1-10  business location of the school.  An extension may use multiple
   1-11  locations to teach a driving safety course if each location is
   1-12  approved by the parent school and the agency.  A driver education
   1-13  course may not be conducted at an extension.  An extension of an
   1-14  extension is not permitted.
   1-15        SECTION 2.  Section 8, Texas Driver and Traffic Safety
   1-16  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
   1-17  is amended to read as follows:
   1-18        Sec. 8.  COMPETITIVE BIDDING; ADVERTISING.  (a)  The board
   1-19  may not adopt rules to restrict competitive bidding or advertising
   1-20  by a driver training school except to prohibit false, misleading,
   1-21  or deceptive competitive bidding or advertising practices.
   1-22  Specifically, no rule may restrict:
   1-23              (1)  the use of an advertising medium;
   1-24              (2)  the outside dimensions of a printed advertisement
    2-1  or outdoor display;
    2-2              (3)  the duration of an advertisement; or
    2-3              (4)  advertisement under a trade name.
    2-4        (b)  The board may adopt rules to restrict advertising by a
    2-5  branch location of a school so that the branch location adequately
    2-6  identifies its primary driver training school in any solicitation.
    2-7        SECTION 3.  Section 9, Texas Driver and Traffic Safety
    2-8  Education Act (Article 4413(29c), Vernon's Texas Civil Statutes),
    2-9  is amended to read as follows:
   2-10        Sec. 9.  Prohibitions.  A person may not:
   2-11              (1)  operate a school without a driver training school
   2-12  license issued by the commissioner;
   2-13              (2)  utilize advertising designed to mislead or deceive
   2-14  a prospective student;
   2-15              (3)  fail to notify the commissioner of the
   2-16  discontinuance of the operation of any school within three working
   2-17  days after cessation of classes and make available accurate records
   2-18  as required by this Act;
   2-19              (4)  sell, trade, or transfer a uniform certificate of
   2-20  completion to any person, school, or extension not authorized to
   2-21  possess it;
   2-22              (5)  sell, trade, or transfer a uniform certificate of
   2-23  completion to a student who has not successfully completed an
   2-24  agency-approved, six-hour <eight-hour> driving safety course;
   2-25              (6)  negotiate any promissory instrument received as
   2-26  payment of tuition or other charge before completion of 75 percent
   2-27  of the course, except that before that time, the instrument may be
    3-1  assigned to a purchaser who will be subject to all the defenses
    3-2  available against the school named as payee;
    3-3              (7)  conduct any part of an agency-approved driver
    3-4  education or driving safety course without an instructor who is
    3-5  physically present in appropriate proximity to the student for the
    3-6  type of instruction being given; or
    3-7              (8)  violate any provision of this Act.
    3-8        SECTION 4.  The Texas Driver and Traffic Safety Education Act
    3-9  (Article 4413(29c), Vernon's Texas Civil Statutes) is amended by
   3-10  adding Section 10A to read as follows:
   3-11        Sec. 10A.  BRANCH LOCATIONS.  A driver training school that
   3-12  teaches a driver education course at one or more branch locations
   3-13  other than the main business location of the school must obtain a
   3-14  driver training school license for the main business location of
   3-15  the school and a driver training school license for each branch
   3-16  location.  An extension or a branch location of a branch location
   3-17  is not permitted.
   3-18        SECTION 5.  Sections 13(b), (d), and (g), Texas Driver and
   3-19  Traffic Safety Education Act (Article 4413(29c), Vernon's Texas
   3-20  Civil Statutes), are amended to read as follows:
   3-21        (b)(1)  License, application, and registration fees shall be
   3-22  collected by the commissioner and deposited with the state
   3-23  treasurer.  Fees shall be sufficient to cover administrative costs
   3-24  and may not be subject to refund.  Each fee shall be set by the
   3-25  commissioner and approved by the board in an amount not to exceed
   3-26  150 percent of the following:
   3-27                    (A)  the initial fee for a driver training school
    4-1  license is $1,700 plus $850 for each branch location;
    4-2                    (B)(i)  annual renewal fees as specified in this
    4-3  subsection may be waived by the agency if revenue generated by the
    4-4  sale of uniform certificates of completion is sufficient to fund
    4-5  the cost of administering this Act and Section 143A, Uniform Act
    4-6  Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
    4-7  Statutes); and
    4-8                          (ii)  the annual renewal fee for a school
    4-9  license shall be determined by the board in an amount sufficient to
   4-10  fund the cost of administering this Act and Section 143A, Uniform
   4-11  Act Regulating Traffic on Highways (Article 6701d, Vernon's Texas
   4-12  Civil Statutes);
   4-13                    (C)  the fee for a change of address of a school
   4-14  is $180;
   4-15                    (D)  the fee for a change of name of a school or
   4-16  owner is $100;
   4-17                    (E)  the application fee for each additional
   4-18  course is $25;
   4-19                    (F)  the application fee for each director is
   4-20  $30, and for each assistant director, or administrative staff
   4-21  member is $15;
   4-22                    (G)  the fee for each extension is $35;
   4-23                    (H)  each application for an original driver
   4-24  training instructor's license shall be accompanied by a processing
   4-25  fee of $50 and an annual license fee of $25; and
   4-26                    (I)  the fee for a duplicate license, which may
   4-27  be issued if the original is lost or destroyed and an affidavit of
    5-1  that fact is filed with the agency, shall be set by the board in an
    5-2  amount sufficient to cover the costs of issuing the duplicate
    5-3  license.
    5-4              (2)  A driver education instructor who teaches driver
    5-5  education courses in a county having a population of 50,000 or
    5-6  less, according to the most recent federal census, and who has no
    5-7  more than 200 students annually, shall be regulated by the agency
    5-8  as a school.  An instructor described by this subdivision shall
    5-9  submit a school application or renewal form plus all required
   5-10  documentation and information to the agency.  The commissioner may
   5-11  waive initial school fees, annual school renewal fees, or
   5-12  director's or administrative staff member's fees.  An instructor
   5-13  described by this subdivision is not exempt from licensing
   5-14  requirements or fees.
   5-15              (3)  The commissioner shall periodically review and
   5-16  recommend adjustments in the level of fees to the board and
   5-17  legislature.
   5-18              (4)  The fee for an investigation at a school to
   5-19  resolve a complaint filed against the school shall be set by the
   5-20  commissioner and approved by the board.  The complaint
   5-21  investigation fee may be charged only if:
   5-22                    (A)  the complaint could not have been resolved
   5-23  solely by telephone or written correspondence;
   5-24                    (B)  a representative of the agency visited the
   5-25  school as a part of the complaint resolution process; and
   5-26                    (C)  the school is found to be at fault.
   5-27              (5)  The agency shall print and supply serially
    6-1  numbered uniform certificates of course completion to owners or
    6-2  primary consignees of courses approved under this Act. The agency
    6-3  may charge a fee of $1 for each certificate.  An owner or consignee
    6-4  may not charge an operator a fee in excess of the fee paid to the
    6-5  agency for a certificate.
    6-6              (6)  The commissioner, with approval of the board, may
    6-7  increase any fee authorized under this subsection at a rate that
    6-8  does not exceed the increase in the Consumer Price Index for All
    6-9  Urban Consumers published by the Department of Labor.  Fees under
   6-10  this subsection do not have to be increased annually.
   6-11              (7)  Fees collected under this subsection shall be
   6-12  deposited in the state treasury in a special account in the General
   6-13  Revenue Fund.  Money in the account may be appropriated only for
   6-14  the administration of this Act and Section 143A, Uniform Act
   6-15  Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
   6-16  Statutes).
   6-17        (d)(1)  The commissioner, on review of an application for a
   6-18  driver training school license that is submitted in accordance with
   6-19  this Act and that meets the requirements of this Act, shall issue a
   6-20  driver training school license to the applicant.  A driver training
   6-21  school license shall be in a form recommended by the commissioner
   6-22  and approved by the board and shall show in a clear and conspicuous
   6-23  manner at least the following:
   6-24                    (A)  the date of issuance, effective date, and
   6-25  term of approval;
   6-26                    (B)  the name and address of the school;
   6-27                    (C)  the authority for approval and conditions of
    7-1  approval;
    7-2                    (D)  the signature of the commissioner; and
    7-3                    (E)  any other fair and reasonable
    7-4  representations that are consistent with this Act and considered
    7-5  necessary by the commissioner.
    7-6              (2)  The term for which a driver training school
    7-7  license is issued may not exceed one year.
    7-8              (3)(A)  A driver training school license issued to an
    7-9  owner of the applicant school is nontransferable and is the
   7-10  property of the state.  In the event of a change in ownership of
   7-11  the school, a new owner shall, at least 30 days before the date of
   7-12  the change in ownership, apply for a new driver training school
   7-13  license.  Instead of the fees required by Subsection (b) of this
   7-14  section, the fee for a new license required under this subdivision
   7-15  is $500, plus $200 for each branch location, if the purchasing
   7-16  entity is substantially similar to the transferring entity and
   7-17  there is no significant change in the management or control of the
   7-18  school.
   7-19                    (B)  The commissioner is not required to
   7-20  reinspect a school or a branch location after a change of its
   7-21  ownership.
   7-22              (4)  At least 30 days before the expiration of a driver
   7-23  training school license, the school shall forward to the
   7-24  commissioner an application for renewal.  The commissioner may
   7-25  reexamine the school premises and shall renew or cancel the
   7-26  school's driver training school license.  If a school fails to file
   7-27  a complete application for renewal at least 30 days before the
    8-1  expiration date of the driver training school license, the school
    8-2  shall pay as a condition of renewal and in addition to any annual
    8-3  renewal fee a late renewal fee in an amount established by board
    8-4  rule of at least $100, subject to Subsection (b) of this section.
    8-5              (5)  The commissioner shall visit a school and
    8-6  reexamine the school for compliance with the criteria adopted under
    8-7  this Act <not later than three months after the date a school
    8-8  begins operation or after a change in ownership of a school>.
    8-9        (g)  Before a driver training school license may be issued
   8-10  under this Act, a bond shall be provided by the school for the
   8-11  period for which the license is to be issued, and the obligation of
   8-12  the bond shall be that neither a provision of this Act nor any rule
   8-13  adopted under this Act shall be violated by the school or any of
   8-14  its officers, agents, or employees.  A driver training school that
   8-15  teaches driver education shall submit a bond in the amount of
   8-16  $10,000 for its primary driver training school and $5,000 for each
   8-17  branch location of the school.  All other schools shall submit a
   8-18  bond in the amount of $5,000.  A bond must be a corporate surety
   8-19  bond issued by a company authorized to do business in the state, be
   8-20  payable to the state, and be used only for payment of a refund due
   8-21  to a student or potential student.  The bond shall be filed with
   8-22  the commissioner and shall be in such form as shall be approved by
   8-23  the commissioner.  Posting of these bond amounts shall satisfy the
   8-24  requirements for financial stability for schools under this Act.
   8-25        SECTION 6.  This Act takes effect September 1, 1993.  The
   8-26  change in law made by this Act applies only to an application for
   8-27  an original or the renewal of a driver training school license that
    9-1  is made on or after that date.  An application for an original or
    9-2  the renewal of a driver training school license made before the
    9-3  effective date of this Act is covered by the law in effect when the
    9-4  application was filed, and the former law is continued in effect
    9-5  for this purpose.
    9-6        SECTION 7.  The importance of this legislation and the
    9-7  crowded condition of the calendars in both houses create an
    9-8  emergency and an imperative public necessity that the
    9-9  constitutional rule requiring bills to be read on three several
   9-10  days in each house be suspended, and this rule is hereby suspended.