BILL ANALYSIS

S.B. 2425

By: Nichols

Delivery of Government Efficiency

Committee Report (Unamended)

BACKGROUND AND PURPOSE

In 2017, the Texas Legislature passed S.B. 2205, which established a legal framework for the operation of automated motor vehicles (AVs) in Texas. The bill sponsor has informed the committee that this legislation allowed AVs to operate on public roads provided the vehicles comply with certain federal laws, are registered and titled in Texas, and have data recording systems. However, the bill sponsor has also informed the committee that issues in the governance of AVs still persist. S.B. 2425 seeks to address these issues by further revising and establishing provisions relating to the regulation of AVs, including the use of AVs in furtherance of a commercial enterprise, enforcement authority of the Texas Department of Motor Vehicles to suspend or revoke operations in certain circumstances, and the applicability of laws relating to motor carriers and transportation network companies to AVs.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill expressly does one or more of the following: creates a criminal offense, increases the punishment for an existing criminal offense or category of offenses, or changes the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Public Safety Commission and the board of the Texas Department of Motor Vehicles in SECTION 1 of this bill.

ANALYSIS

S.B. 2425 amends the Transportation Code, Insurance Code, and Occupations Code to revise and establish provisions relating to the regulation of automated motor vehicles.

Operation of Automated Motor Vehicles

Definitions

S.B. 2425 amends the Transportation Code to do the following with respect to the definitions applicable to statutory provisions governing the operation of automated motor vehicles, as revised by the bill:

· while current law defines "automated driving system" as hardware and software that, when installed on a motor vehicle and engaged, are collectively capable of performing, without any intervention or supervision by a human operator, all aspects of the entire dynamic driving task for the vehicle on a sustained basis and any fallback maneuvers necessary to respond to a failure of the system, the bill redefines the term as hardware and software that, when installed on a motor vehicle and engaged, are collectively capable of operating the vehicle with Level 3 automation, Level 4 automation, or Level 5 automation by performing the entire dynamic driving task for the vehicle on a sustained basis, regardless of whether the system is limited to a specific operational design domain;

· with respect to the definition of "automated motor vehicle" as a motor vehicle on which an automated driving system is installed, specifies that the system is capable of being operated with Level 4 automation or Level 5 automation;

· revises the definition of the term "entire dynamic driving task" as the operational and tactical aspects of operating a vehicle, including certain operational and tactical aspects, by doing the following:

o replacing the term with "dynamic driving task" and redefining the term as the real-time operational and tactical functions required to operate a vehicle, including certain operational and tactical functions; and

o removing the specification that the specified tactical functions include other related actions;

· with respect to the definition of the term "human operator" as a natural person in an automated motor vehicle who controls the entire dynamic driving task, replaces that term with "human driver" and redefines the term to include a person who controls all or part of the dynamic driving task;

· defines the following terms:

o "authorization holder" as a person granted an authorization by the Texas Department of Motor Vehicles (TxDMV) under the bill's provisions to operate one or more automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in Texas without a human driver;

o "Level 3 automation," "Level 4 automation," and "Level 5 automation" as a standard of automation meeting the criteria for Level 3, Level 4, and Level 5, respectively, specified in the SAE International Standard J3016 (April 2021);

o "minimal risk condition" as a stable and stopped condition to which a person or an automated driving system may bring an automated motor vehicle to reduce the risk of a collision when a given trip cannot or should not be continued; and

o "operational design domain" as operating conditions under which an automated driving system or feature of the system is specifically designed to function, including environmental, geographical, and time-of-day restrictions and the requisite presence or absence of certain traffic or roadway characteristics; and

· removes the definition of "owner" as defined by reference to statutory provisions governing vehicle registration.

Prohibitions on the Regulation by State Agencies or Political Subdivisions; Exemptions

S.B. 2425 removes the provision establishing that, unless otherwise provided by provisions governing the operation of automated motor vehicles, the operation of automated motor vehicles, including any commercial use, and automated driving systems are governed exclusively by those provisions and by statutory provisions relating to the equipment required for certain automated motor vehicles. Instead, the bill prohibits a state agency from imposing a regulation that discriminates against a person operating an automated motor vehicle or an automated motor vehicle relative to other types of motor vehicles or with respect to road usage. The bill removes the prohibition against a state agency imposing a franchise or other regulation related to the operation of an automated motor vehicle or automated driving system. The bill authorizes the Public Safety Commission by rule to exempt from the application of a specific state traffic or motor vehicle law automated motor vehicles on determining that the exemption will not cause a risk to public safety.

Rules

S.B. 2425 authorizes the board of TxDMV to adopt rules necessary to administer provisions governing the operation of automated motor vehicles.

Vehicle Operators

S.B. 2425 removes the provision establishing the following when an automated driving system installed on a motor vehicle is engaged:

· the owner of the automated driving system is considered the operator of the automated motor vehicle solely for the purpose of assessing compliance with applicable traffic or motor vehicle laws, regardless of whether the person is physically present in the vehicle while the vehicle is operating; and

· the automated driving system is considered to be licensed to operate the vehicle.

The bill establishes the following instead:

· when an automated driving system installed on a motor vehicle is engaged, the automated driving system is the operator of the vehicle, including for purposes of assessing compliance with applicable traffic or motor vehicle laws; and

· when an automated driving system installed on an automated motor vehicle is engaged, the owner of, or if the vehicle is operating under a commercial authorization issued by TxDMV under the bill's provisions, the authorization holder for, the automated motor vehicle must be issued any citation for a violation of traffic or motor vehicle laws related to the vehicle.

S.B. 2425 replaces the provision establishing that a licensed human operator is not required to operate a motor vehicle if an automated driving system installed on the vehicle is engaged with a provision establishing that neither a licensed human driver nor a license issued under statutory provisions governing driver's licenses and certificates or under the Texas Commercial Driver's License Act is required to operate an automated motor vehicle if the automated driving system installed on the vehicle is engaged.

Automated Motor Vehicle Operation

S.B. 2425 authorizes any motor vehicle equipped with an automated driving system to operate in Texas. The bill revises the provisions establishing the requisite conditions under which an automated motor vehicle may operate on a highway in Texas while the automated driving system is engaged as follows:

· expands the applicability of the provisions to an automated motor vehicle that operates on a street in Texas while the automated driving system is engaged;

· revises the requirement that a vehicle's automated driving system comply with applicable federal law and federal motor vehicle safety standards to specify instead that such federal law includes federal motor vehicle safety standards;

· includes as a new condition that the vehicle be capable of achieving a minimal risk condition if a failure of the automated driving system occurs that renders the system unable to perform the dynamic driving task relevant to its intended operational design domain; and

· for purposes of the existing condition that the vehicle be covered by motor vehicle liability coverage or self-insurance in an amount equal to the amount of coverage that is required under state law, specifies instead that the applicable amount be equal to or greater than the amount of coverage required under state law or federal law, as applicable to the type and use of the vehicle.

S.B. 2425 requires, in addition to satisfying the requisite conditions, as revised by the bill, the following additional conditions to be met before a person may operate an automated motor vehicle to transport property or passengers in furtherance of a commercial enterprise on a highway or street in Texas without a human driver:

· the person receives and maintains authorization from TxDMV under the bill's provisions to operate automated motor vehicles to transport property or passengers in such a manner; and

· the Department of Public Safety (DPS) has been provided, in the form and manner prescribed by rule of the Public Safety Commission, a plan specifying how a person who provides firefighting, law enforcement, ambulance, medical, or other emergency services should interact with the automated motor vehicle during the provision of those services, including the following:

o how to communicate with a fleet support specialist who is available during the period in which the vehicle is in operation;

o how to safely remove the vehicle from the roadway and safely tow the vehicle;

o how to recognize whether the vehicle is being operated with the automated driving system engaged; and

o any additional information the person or the manufacturer of the vehicle or the automated driving system considers necessary regarding hazardous conditions or public safety risks associated with the operation of the vehicle.

The bill creates a Class B misdemeanor offense for a person who operates an automated motor vehicle in violation of these additional conditions. The bill requires a corporation, an association, a limited liability company, or another business entity that is convicted of the offense to be punished in accordance with Penal Code provisions relating to authorized punishments for corporations, associations, limited liability companies, and other business entities. For purposes of the offense, each day the person operates an automated motor vehicle in violation of these provisions constitutes a separate offense.

Authorization to Operate Automated Motor Vehicles for Commercial Use

S.B. 2425 requires the board of TxDMV by rule to prescribe the form and manner by which a person may apply to TxDMV for authorization to operate automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in Texas without a human driver. The rules adopted under these provisions must require a person to provide the following to TxDMV:

· a written statement by the person that includes the person's contact information and vehicle descriptive information as prescribed by TxDMV;

· a written statement by the person or the manufacturer of the vehicle or the automated driving system acknowledging that each automated motor vehicle is:

o capable of operating in compliance with applicable state traffic and motor vehicle laws, subject to provisions governing the operation of automated motor vehicles;

o equipped with a recording device, as defined by statutory provisions relating to vehicle equipment, installed by the manufacturer of the automated motor vehicle or automated driving system;

o equipped with an automated driving system in compliance with applicable federal law, including federal motor vehicle safety standards;

o capable of achieving a minimal risk condition if a failure of the automated driving system occurs that renders the system unable to perform the dynamic driving task relevant to its intended operational design domain;

o registered and titled in accordance with state law; and

o covered by motor vehicle liability coverage or self-insurance in an amount equal to or greater than the amount of coverage that is required under state or federal law, as applicable to the type and use of the vehicle; and

· a certification acknowledging that DPS has been provided the plan required under the bill's provisions specifying how a person who provides emergency services should interact with an automated motor vehicle during the provision of those services.

The bill requires TxDMV, on receipt of an application under these provisions and verifying that the application complies with the rules adopted by the board of TxDMV, including satisfying these requirements, to approve the application and issue a unique operating number to the applicant authorizing the operation of automated motor vehicles on highways and streets in Texas without a human driver. The bill provides for the following with respect to such an authorization:

· an authorization issued by TxDMV under these provisions does not expire and remains active unless suspended, revoked, or canceled by TxDMV;

· the person issued an authorization must provide to TxDMV in the form and manner prescribed by TxDMV an update to the applicable written statement or certification not later than the 30th day after the date material information in the applicable document changes;

· TxDMV may immediately suspend, revoke, or cancel the authorization if the authorization holder fails to comply with:

o the requirement to provide such an update to the applicable written statement or certification; or

o TxDMV requests for an updated or current written statement or certification;

· TxDMV must promptly rescind such a suspension, revocation, or cancellation upon receiving the updated or current written statement or certification as requested by TxDMV; and

· a determination under these provisions regarding suspension, revocation, or cancellation is not a contested case under the Administrative Procedure Act.

Duties Following a Collision Involving an Automated Motor Vehicle

S.B. 2425 revises the requirement for an automated motor vehicle or any human operator of the automated motor vehicle to comply with statutory provisions relating to collisions and collision reports in the event of a collision involving the automated motor vehicle by including in the provision's applicability a person on behalf of the automated motor vehicle.

Applicability of Commercial Motor Vehicle Laws to Automated Motor Vehicles

S.B. 2425 requires an automated motor vehicle that is a commercial motor vehicle, defined by reference to statutory provisions governing commercial motor vehicle safety standards, to operate in accordance with statutory provisions governing commercial motor vehicles and any other applicable laws or regulations of the state or a political subdivision of the state governing the operation of a commercial motor vehicle, except that any provision of a commercial motor vehicle law that by its nature reasonably applies only to a human driver does not apply to an automated motor vehicle operating with the automated driving system engaged.

Enforcement

S.B. 2425 requires TxDMV, on determining that an automated motor vehicle operating under an authorization issued by TxDMV under the bill's provisions to operate an automated motor vehicle to transport property or passengers in furtherance of a commercial enterprise on a highway or street in Texas without a human driver is not in safe operational condition and the operation of the vehicle on a highway or street in Texas endangers the public, to provide to the authorization holder for the vehicle a notice of intent to do the following:

· suspend, revoke, or cancel the authorization issued under provisions governing the operation of automated motor vehicles for the vehicle; or

· impose restrictions on the vehicle's operation.

For these purposes, the operation of an automated motor vehicle endangers the public when the operation has resulted in or is likely to result in serious bodily injury as defined by general Penal Code provisions. The bill provides for the following with respect to the notice of intent:

· a notice of intent must do the following:

o include a summary of TxDMV's determination and evidence supporting the determination;

o provide the authorization holder with a reasonable period to correct the issues identified in TxDMV's determination and provide to TxDMV the certification under the bill's provisions acknowledging that the issues identified by TxDMV in the notice have been corrected; and

o specify which enforcement actions TxDMV will take if the authorization holder fails to correct the identified issues or provide the applicable certification within the specified period;

· before the expiration of the period specified in a notice of intent, the authorization holder must do the following:

o ensure the issues identified by TxDMV in the notice are corrected; and

o provide to TxDMV, in the form and manner prescribed by TxDMV, a certification acknowledging that the issues identified by TxDMV in the notice have been corrected;

· TxDMV may extend the period specified in a notice of intent on a written request for an extension that TxDMV determines is reasonable; and

· a certification provided by the authorization holder to TxDMV under these provisions must include an explanation of how the issues identified by TxDMV in the notice of intent have been corrected, such as identifying specific adjustments made to the automated driving system or operational measures implemented.

S.B. 2425 requires TxDMV to do the following if the authorization holder fails to comply with the requirement to either ensure the identified issues are corrected or provide the applicable certification within the period specified by the notice of intent:

· issue a decision, as specified in the notice of intent, that suspends, revokes, or cancels the authorization issued under provisions governing the operation of automated motor vehicles for the vehicle, or imposes restrictions on the vehicle's operation; and

· notify the authorization holder of the decision issued by TxDMV.

The bill provides for the following with respect to such a decision:

· an authorization holder notified of such a decision issued by TxDMV may submit a written request to TxDMV for review of the decision not later than the 10th day after the date TxDMV issued the decision;

· not later than the 10th day after the date TxDMV receives such a request, TxDMV must review the decision and issue a final determination to the authorization holder either upholding or rescinding the decision;

· if the authorization holder does not submit a request for review of a decision issued by TxDMV during the period provided by these provisions, the decision becomes a final determination on the 11th day after the date TxDMV issued the decision; and

· a suspension, revocation, cancellation, or restriction under these provisions takes effect on the date of the final determination of the decision issued by TxDMV.

S.B. 2425 requires TxDMV to promptly rescind a suspension, revocation, or cancellation or remove a restriction under the bill's provisions relating to enforcement at any time if the authorization holder subsequently corrects the identified issues or provides the applicable certification as required by the bill's provisions.

S.B. 2425 does the following:

· authorizes an authorization holder aggrieved by an action of TxDMV regarding the issuance of a final determination under these provisions to submit a written request for a hearing not later than the 10th day after the date of TxDMV's final determination;

· requires TxDMV to file a request with the State Office of Administrative Hearings (SOAH) for an expedited hearing not later than the 10th day after the date the authorization holder requests the hearing;

· requires SOAH to hold a hearing requested under these provisions not later than the 60th day after the date of TxDMV's final determination;

· requires the authorization issued under the bill's provisions, as revised by the bill, if a hearing is not held during the required period, to be automatically reinstated or the restriction imposed automatically removed, as applicable; and

· establishes that the contested case provisions of the Administrative Procedure Act, including the right to judicial review, apply to a proceeding under these provisions.

S.B. 2425 establishes that, except as provided by the bill's provisions relating to the authorization to operate automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in Texas without a human driver, the bill's provisions relating to enforcement provide the exclusive means by which TxDMV may do the following:

· suspend, revoke, or cancel an authorization issued under provisions governing the operation of automated motor vehicles, as revised by the bill, for an automated motor vehicle; or

· otherwise restrict the operation of an automated motor vehicle operating under a authorization issued by TxDMV under the bill's provisions to operate automated motor vehicles to transport property or passengers in furtherance of a commercial enterprise on highways and streets in Texas without a human driver.

Vehicle Classification

S.B. 2425 removes the provision authorizing a vehicle owner to identify the owner's vehicle to TxDMV as an automated motor vehicle or an automated driving system.

Applicability of Certain Insurance Requirements for Transportation Network Company Drivers

S.B. 2425 amends the Insurance Code to establish that an automated motor vehicle is considered a transportation network company driver for purposes of statutory provisions governing insurance requirements for transportation network company drivers and that the coverage requirements of those provisions apply to the automated motor vehicle.

Transportation Network Companies

S.B. 2425 amends the Occupations Code to establish that a corporation, partnership, sole proprietorship, or other entity that, for compensation, enables a passenger to prearrange a ride in an automated motor vehicle through the entity's digital network is a transportation network company and is subject to the requirements of provisions governing such companies, except as otherwise provided by these provisions. The bill authorizes a transportation network company holding an applicable permit issued by the Texas Department of Licensing and Regulation to use automated motor vehicles owned by the company or operated under a contract with the company to provide digitally prearranged rides through the company's digital network. The bill establishes that a reference in statutory provisions governing transportation network companies or a rule adopted under those provisions to a "driver" includes an automated motor vehicle, except that a provision of those statutory provisions or a rule adopted under those statutory provisions that by its nature reasonably applies only to a human driver does not apply to an automated motor vehicle operating with the automated driving system engaged.

S.B. 2425 does the following:

· establishes that an automated motor vehicle that is used to provide digitally prearranged rides is not required to have four doors, as an exception to the requirement for a transportation network company to confirm that each motor vehicle used by a driver to provide digitally prearranged rides through the company's digital network has four doors; and

· makes statutory provisions relating to accessibility pilot programs inapplicable to a transportation network company that uses automated motor vehicles to provide digitally prearranged rides through the company's digital network or the digital network of another entity.

S.B. 2425 establishes that, for purposes of statutory provisions governing transportation network companies, "automated driving system" and "automated motor vehicle" have the meanings assigned by the bill's provisions regarding the operation of automated motor vehicles.

Motor Carrier Registration

S.B. 2425 amends the Transportation Code to make inapplicable with respect to the following authorizations multiple violations of the bill's additional conditions that must be met before a person may operate an automated motor vehicle to transport property or passengers in furtherance of a commercial enterprise on a highway or street in Texas without a human driver:

· the authorization for TxDMV to deny a motor carrier's registration, an application to renew a registration, or an application for reregistration if the applicant or motor carrier, as applicable, is owned, operated, managed, or otherwise controlled by or affiliated with a person, including a family member, corporate officer, entity, or shareholder, that DPS has determined has multiple violations of statutory provisions governing the rules of the road; and

· the authorization for DPS to request that TxDMV suspend or revoke a motor carrier registration or place on probation a motor carrier whose registration is suspended if a motor carrier has multiple violations of statutory provisions governing the rules of the road.

Procedural Provisions

S.B. 2425 requires the board of TxDMV to adopt the rules required by the bill's provisions relating to the operation of automated motor vehicles not later than December 1, 2025. The bill requires the Public Safety Commission, not later than December 1, 2025, to adopt the requisite rule prescribing the form and manner of the provision to DPS of the applicable plan specifying how a person who provides certain emergency services should interact with an automated motor vehicle during the provision of those services. The bill establishes that a person is not required to comply with the bill's provisions relating to the operation of automated motor vehicles until the 90th day after the effective date of rules adopted by the Public Safety Commission and the board of TxDMV under these provisions.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.