                           Q3fficeof tly Plttornep General
                                   &ate of Qkxae
DAN MORALES
 AT-rORSEY
       GENERAL                           October 14,1993


     Mr. James R. Wdson                          Opiion No. DM-261
     DiECtO~
     Texas Department of Public Safety           Re: constitutionanty of pr&isions of
     5805 North Lamar Boulevard                  section 4A, V.T.C.S. article 6701h, pertain-
     Box 4087                                    ing to impoundment of Out-of-state vehicles
     Austin, Texas 78773-OOOl                    involved in accidents where proof of
                                                 fhmcial responsibiity is not shown, and
                                                 related questions (FQ-419)

     Dear Mr. Wdson:

              You ask about the safety Responsibiity Law. article 67Olh, V.T.C.S.. which
     generally requires that operators of motor vehicles in Texas be able to Finnishproof of
     “financialresponsibility,”that is, liability insurance or other proof as provided for in the
     Ict, of the opemtoh abiity to respond in damages for liabiity arising from ownership,
     maintenance,or use of the motor vehicle. Scr V.T.C.S. art. 67011505 1 (detinition& 1A .
     (necessii of liability insurance, with exceptions). 1B (fbmisbing evidence of fmancial
     responsibility). Your questions relate to the provisions of section 4A of the act, which
     pertain to persons who own or operate motor vehicles which are involved in accidents in
     this state but which are not registered in this state.

            Section 4A provides that when such an accident results in injury or death, or in
    property damage to any person to “an apparent extent of SSOOor more,” the owner or
    operator, upon his failure to tkmish evidence of “fiwrcial responsiiity” to an
    investigating law enforcement 05cer. shall be taken before a magistrate. Id. 5 4A(a), (b).
    The latter, upon finding in a hearing a reasonable possiiity of a judgment being rendered
    against the person for damages arising from the accident, must order the vehicle
    impounded by the sheriff or chief of police unless the person shows evidence of %nancial
    responsiiity” for such damages or evidence that he is exempt from the “tinancial
    resp~nsiiity~ requirements of the act. Id. 8 4A(a)(t) - (e). (Section IA(b) includes
    exemptions for certain public vehicles, vehicles for which bonds or cash deposits have
    been filed, aelf-insured vehicles, certain olda collectors’ vehicles, implements of
    husbandry, golf carts. etc.) The owner or operator may secure release of a vehicle thus
    impounded Only upon obtaining a kerti6cate of release”fkom the Department of Public
    Safety (the “department”)and paying the “cost of impoundment.”Id. 8 4A(f). Subsection
    (8) of section 4A provides that the department shall issue such c&&ate of release on
    submission to it of 1) evidence of financial responsibiity or exemption from the
    requiren~ent;2) a release from each person who was damaged in the accident other than




                                            p. 1362
Mr. James R. Wilson - Page 2             (DM-261)




 the one seeking the certiticate of release; or 3) “security in a form and amount determined
 by the Department to secure the payment of any damages for which the operator may be
 liable.” The department is to determine “the form, content and procedures for the issuance
.Ofa certificate of &am.” Id. 8 4A(i).

        Your specific questions am:
           1. Does Section 44 Article 67Olh, V.T.C.S.. violate the
              constitutional provisions relating to equal protection or the
              ccmlmerw clause.
           2.   Does the duty of the Department of Public Safety under Section
                4A. .bticle 67Olh, to issue a certificate of release and to
                determine the amount of security to be posted by a vehicle
                owner or operator require ,a prior hearing under Article
                6252-13a. V.T.C.S. (Administrative Procedure and Texas
                Register Act)?
           3. What is the minimumamount of security which the Department
              may require in order to issue a certificate of release under
              Section 4A. Article 67Olh?
          4. What standards should the Department apply in determining the
             amount of security that is required by the Department?
        You suggest that the impoundment of vehicles involved in accidents in but not
registered in Texas, and for which no proof of tlnancial responsiiility is shown, is a
potentially harsh remedy:
          It is clear that the procedures set forth in Section 4A could present a
          lengthy delay and possibly great expense on the owner or operator of
          the vehicle which is not registered in Texas. . . . The vacationing
          family could be without use of its vehicle for an extended period of
          time. Jf a commercisl motor vehicle was carrying a load of
          perishable goods, a potentially even greater financialburden might be
          imposed . . . . None of these provisions would apply to a vehicle
          registered in Texas.
        The constitutional issues you raise in your tkst question involve whether the
differing treatment atforded with respect to vehicles not registered in Texas when involved
in accidents for which proof of Snancial responsibiity is not shown-k, impoundment
under the procedures set out in section 4A-is warranted. Indeed. section 4A’s provisions
are diiected only against owners or operators of vehicles not registered in Texas. The
parts of article 6701h which contain counterpart security provisions applicable to Texas
registered vehicles are in sections 5 through 7A. Section 5. applicable to ali vehicles
invol~d   in accidents here resulting in S1000 or more in damages, provides for suspension



                                        p.   1363
Mr. Jamts R. Wrlson - Page 3                 (D~-26i)




of the operator’s license and vehicle registration, “and if such operator or owner is a
nonresident the privilege of operating a motor vehicle within this State, and the privilege
ofthe use within this State of any vehicle owned by him,”unless or until “security that will
be suffxient to satis@ any judgment or judgements,” is deposited. Section 5 makes
detailed provision for notice, hearing, and the issues to be detemrined relative to the
suspensions of licenses, registrations and privileges thereunder. Section 7 provides for
reinstatement of such licenses, registrations, and privileges upon posting of security or
presentation of evidence of release fiorn liabiity, adjudication of non-liability, or an
agreement for installmentpayments of damages-but in no event later thsn two years after
the accident if no action for damages has been instituted. See also id. 5 8(b), providiig
for notification of state of non-resident whose Texas operating privilegesare suspendedif
such state provides for suspension of such person’s license and registration upon such
notification, as Texas does with respect to its residents under section 8(c).’

         Attorney General Opinion J?vf-826(1987). in concluding, that the requirement of
article 6701h that out-of-state motorists be able to tbrnish proof of tinancial responsibiity
in the same measure as residents does not violate the commerce clause, article 1, section
8, clause 3 of the federal wnstitution,s noted that state legislation perminingto highways
and trafhc carries a strong presumption of validity. The opinion and the cases it relied on,
however, stressed the significance of such legislation’streating intrastate and interstate
traffic alike in opining as to its validity. See, e.g., Bibb v. Namjo Freight Lines, Inc., 359
U.S. 520 (1959).

       Clearly, the suspension of the license and registration of a Texas resident in
circumstances where it is likely there will be liability is a more e&ctive incentive to the
Texas resident to provide security therefor than the suspension of the non-resident’s
“operating privilege.” Notably, the bii analysis to the bii adopting the provisions of

         *Them M, in sution 1F. @          provisions for tbc bpodmau         of vehicles upon multiple
convictionsfor fsilurc 10 5unish proof of financial rmponsiiilii, as well as for license and @stration
stwpasion. Src oh       id. # 1C (rcaing out hmic penal prdsions for 5ncs and costs for 5rsl and
sobsqocti offenses of tik      ICIshow proof of financial msponsiiility). Section 1Fs provisions arc
lpplicablcm~vehiclawhahcrTasr~a~kdthydearly~~inCbcirpvporcfrom
tboseincection4A,bcingdrpenalm~tbantenvitynature.                 Theoffense addmsd in section 1F is
the fsilurc to show pmof of5nancid mspors%ililyaftera priorconvictionor convictionsfor mme. The
ca&mhnitsthcpcridofinqdment               t0 lEOdQ%unlarthCdliVU ltdIUUOShlClOShOWpdOf
financidrqonsiiilityforthefulure.      Postiqofamonamyamouuiswtameansofobhirgthc
rclcascof a vehicle tmpodcd u&r sccttonIF.




                                              p.   1364
Mr. James R. Wilson - Page 4             (DM-261)




 section 4A in. 1991 characterize the problem of the state’s not being able under the then
 current Jaw to impose “any enforceable responsibiity” on uninsured out-of-state drivers
causing damages in accidents as a “serious” one. See House Insurance Comm., Bill
.Analysis, H.B. 595, 72d Leg. (1991). Arguably, the impoundment of out-of-state
vehicles. as a general matter under such cir~          is a reamable means of addressing
this imbalance.

        That said, we concede the treatment .&forded under section 4A to vehicles not
registered in Texas may be especially troubling in particular applications. For example-
the matter to which your second question relates-while the provisions of section 5 of the
act for the suspension of a Texas owner/operator’s Jicense and registration only apply
where there hss been SJOOOor more in damage Tom an accident, the impoundment
procedures under section 4A are triggered when there has been damage “to an apparent
extent of SSOOor more.” It would appear, however, that the minimum security which
must be posted, pursuant to section 9, for the reinstatement of registration and license
under section 5 or the release of an impounded vehicle under section 4A is the same:
SlOOO. Whether this provision for the posting of SlOOOwhen the apparent damages
involved were only SSOOwas an oversight on the patI of the legislature or was motivated
by legitimate wncems, we have been unable to detemrine. Also, the limited ways by
which the release of the impoundedvehicle may be obtained-presenting proof of financial
responsibility effective at the time of the accident, payment of sea&y, or securing a
release from the persons damaged-may in particular cases mean that the vehicle will
remain impounded inde6nitely. Compare section 7. which provides for reinstatement of a
Texas license and registration suspended under section 5 two years after the accident if no
action for damages has been instituted.

          However, we do not 6nd cases or authorities which we believe enable us to
resolve your question as to the wnstitutionahty of the article 6701h provisions at issue
here as a matter of law. We think it clear that were a court to entertain this question, it
would take evidence to determine the weight to be accorded the various interests
involved. That would be the case. we think, even if a “strict scrutiny” level of anrdysis
were applied, on an equal protection theory that section 4A burdened a timdamentalright,
the “right to travel,* or a “suspect w    non-residents. See, e.g., Shqiro v. lbompson,
394 U.S. 618 (1968); PryIrr v. Doe, 457 U.S. 202 (1982). Moreover, whether particular
applications of section 4A would run afoul of wnstitutional safeguards can only, we think
be determined on a cases by case basis. again with a fidl taking of evidence and finding of
filets relevant to the particulsr case.

       We have stated before that ~mtitutional questions which imvhw a weighing of
opposing interests may not be amenableto resolution in the opinion process, when we are
unable to take evidence or find facts. See generuliy Attorney General Opinion DM-42
(1991) (questions as to wnstitutionahty of geographical classifications as basis for
exemption from continuing education requirement for real estate brokers can not be
resolved in attorney general opinion process). Accordingly,it is our opinion here that only


                                        p.   1365
Mr. James R. Wilson - Page 5              @M&261)




the full development in a judicial adversarial proceeding of the evidence supporting the
wncems of the state and affected parties would provide a basis for meaningftdresolution
of your questions. We thus decline to attempt to resolve your wnstitutionsl question
here.

        Your second, third, and fourth questions ash about particular procedures the
department should follow in administering section 4A Ckarly, wnstitutional wnwrns
such as those presented generally in your first question, also underlie these patticular
procedural issues you rake. It might be that in a given case, a court would read in, read
out, or otherwise refashion particular provisions of section 4A in order to render its
application there wnstitutional. For the reasons given above however. we do not feel we
are able in the opinion process either to determine the wnstitutionslity generally of section
4A or to refashion particular provisions so that they may be wnstitutionally applied in all
specific situations.

        Your second question, again, asks whether the department is required to provide
opportunity for a hearing prior to determining whether to issue a “certificate of release”
under section 4A(g), or more particularly, prior to determiningthe amount of secutity the
owner or operator must submit in order to obtain said cutiticate, under section 4A(g)(3).
If so, you ask, would such hearing be held under the procedures set out in title 10,
chapter 2001 of the Government Code, the AdmGatmtive Procedure Act (“APA”)?)
Section 4A does not specigcally provide for hearings at these junctures but instead
generally directs the department to adopt “the fotm, content, and procedures for issuance
ofacertificateofrelease.” V.T.C.S. art. 67014 #4A(i).

          We think it is clear that the department must aiTordopportunity for a hearing prior
to a final setting of the security amount the owner or operator must deposit in order to
obtain a certificate of release. See, es., Wright v. Molloy. 373 F. Supp, 1011 (D. Vt.
1974). Wright, in a very similar context, concluded that the setting of the amount of
security needed to be deposited in order to avoid suspension of an operator’s license after
an accident where the operator had been unable to show proof of financial responsibility,
would violate procedural due process requirements if the opportunity for a hearing were
not alTorded. Noting that the examiner in the motor vehicle department there had
exercised some discretion in setting the amount, “based upon damage figures and
descriptions of personal injury contained in police and motorist accident reports as well
as . . . the damage figure claimed by a victim,” and that only “the judgment rendered in
such civil action as may follow an accident 6xes the damages of the injured parties with
exactitude,” 373 F. Supp. at 1022, the Wright court nevertheless considered a hearing on


        ‘We note ths1 V.T.C.S. artkk 6252-131. the MmiabaW F’mc&uc ti Taps Rc@er Act,
was rqcakd by the 13d Lqislalure. AUS 1993. 13d b&. ch. 268. 0 46. Article 6252.134 is mw
codifkd in tk GwunmaU Ccdc al chaptu 2001. Id. 8 1. The codification of the Administrative
ProcdurcAclinthc GotemwotCodcisrrons&mbrcvirion            Id.047.




                                        p.   1366
Mr. James R. Wilson - Page 6             (DM-261)




the setting of security necessary in order to allow the driver to contest abuses of
discretion, the use of improper data, etc. See a&o Bell v. Bumn, 402 U.S. 535 (1971).

        Where the owns or operator seeks a cutitkate of release based on submissionof
a release 6om persons damaged in the accident or of proof of financirdresponsibiity, we
believe the department must also offer opportunity for a hearing prior to a final
detemktation that such submissionsare insufficient,unless the matter at issue has already
been resolved in an adjudicatory proceeding. Although the adequacy or inadequacy of
such submissions may be clearer as a matter of law than the appropriateness of a
departmental detemtination of the amount of securhy which must be deposited in order to
obtain the certificate of release, discussed above. there may be submissions as to the
adequacy of which reasonable minds might differ. See V.T.C.S. art. 67Olh, 88 1B (means
of evidencing financial responsibility), 20 (non-residents proof). Given the substantial
property interests which could be at stahe, we believe opportunity for a hearing should be
afforded in this setting as well. However. if for example,the magistrate before whom the
owner or operator was initially brought under subsections (b) et srq. of section 4A
determined, in a hearing affording due process, that the proof of tTnancialresponsibiity
offered there was inadequate, we see no reason why the department should have to aEord
opportunity for another hearing with respect to the adequacy of the same offered proof

        Also, we conclude that hearings on seauity amounts or the adequacy of releases
or proofs of financialresponsibiity offbred are subject to the provisions of APA relating to
contested cases. See id 8 13; see ulso Goti Code ch. 2003 (wntested cases under APA
to be conducted by State OtTice of Administrative Hearings unless orightatmg agency
employs own ii&time hearings officers) (former 6252-13f. V.T.C.S.). APA governs all
hearings on contested matters before agencies unless specifically provided otherwise.
Again, the legislature has not specifically provided for such hearings in tqtion SA, but
rather directed the department to itself adopt procedures for issuance of certiktes of
release. While the counterpart provisions of section 4S, in section 5, relating to licence
and registration suspensions of Texas owners and operators, specifically provide for
hearings in “police courts” and justice of the peace coutts, we do not believe that the
department under the general authority to adopt procedures in section 4A(i) could require
for the section 4A hearings in question the use of such triiunalq which are operated by
distinct political entities, without specik provision the&or by the legislature.

        We have noted already that your third question-as to the minimum amount of
oecurity which must be posted under section 4A in order to obtain a certificate of r&se
for an impounded vehicle-raises troubling issues, albeit with respect to the limited field of
applications of the statute where the possible damages arising from the accident are found
to be bawem ,SSOOand SlOOO. While, under section 4A(a) through (e). if SSOOin
apparent damages were caused in an accident by an uninsured out-of-state vehicle, the
owner or operator must be brought before a magistrate and the vehicle impounded,
section 9 of the act clearly provides that for “security rquired under this Article. . . the
Department may require. . . no. . . . less than One Thousand (Sl.000) Dollars.” whahcr



                                         p.   1367
I




    Mr. James R. Wilson - Page 7            .(DM-261)




    the words “under this Article”refer to article 6701h as a whole or to article.IIJ of article
    6701h “Security Following Accident,”the security amounts the department is rquired to
    set under section 4A would be embracedtherein.

            As mentioned previously,the SlOOOminimumsecurity requirement UdK section 9
    wmports more obviously with the provisions of section 5, whereunder the department is
    to suspend the license and registrations of an uninsured person who has had M accident
    resulting in damage of SlOOOor more, unless he deposits securhy. (Section,5 itself also
    Statesthat the minimum security under that section is SIOOO.)It may be, however, that
    although we find nothing in the legislative history of the provisions indicating such, the
    1egidatUrehad a reason, w~cct~! with the *serious problem”of uninsured out-of-state
    motorists causing damage in accidents in Texas, for making the minimum security for
    obtaining release of an impounded vehicle under section 4A SlOOOalthough the minimum
    damages which wuld lead to impoundment were only SSOO. As indicated above, with
    respect to the issue of wnstitutionality of section 4A generally, we think the issue of the
    wnstitutionality of the SlOOOminimumsecurity amount must await resolution in a judicial
     setting in which evidence of the respective wmpeting interests may be taken and
    considered.

           Your last question asks what “standards” the department should apply in
    determining the amount of secmity it will requires “For example, is a repair estimate
    MO@ or should actual testimony of some competent witness be requi@d]? Could an
    affidavitbe used to satisfy those standards?”

            Section 4A directs that the security in question should bc set at an amount “to
    secure the payment of any damages for which the operator may be liable.”V.T.C.S. art.
    6701h, 8 4A(g)(3). Obviously, determination of such amounts with any exactitude may
    present diicuhies in partictdsr cases, for example, where serious personal injuries are
    involved. On the other hand, since section 9 of the act limits the amount of security which
    may be required to “the limits speciftedin Section 5 in reference to the acceptable limits of
    a policy,” it is likely that the department will, in many cases of serious injury andor
    extensive damage. simply set the security amount at such maximums. See id. 8 S(c)6
    (requiring coverage of at least S20.000 for personal injuries to one person, S40,OOO     for
    personal injuries to two or more, and S15,OOO  for propesty damage).

            As to the use of “repair estimates”or “affidavits”in lieu of actual testimony, as
    bases for setting the amount of security, we note that APA itself provides with respect to
    hearings under that act that if a hearing will be expedited and the interests of the parties
    will not be prejudiced substantiahy, any part of the evidence may be received in written
    form. Goti Code 8 2001.085 (formerV.T.C.S. art. 6252-134 0 14(a)).’HOWCVM,            where
    as here, the matters to be OffMbd in evidence as to amounts Of damageS OaUd i0
    accidents will generally be open to dispute, we feel that the department should, in order to
    afford due process, offer opportunity for cross examination,and hence be prepared t0 put
    on oral testimony where a hearing is sought. See, e.g., Ri&r&on v. City of PpFndeM,



                                              p.   1368
Mr. James R. Wilson - Page 8             (Dbl-261)




 513 S.W.Zd.l (Tex. 1974) (right to cross examine witnesses applies in administrative
 hearings). As to the procedures generally the department should adopt under section 4A
for setting security amounts, we believe that the department, in wnsdtatiOn with its legal
staff and the attorneys in this office who represent the department, is better situated than
we are in the opinion process to.stmcture appropriate guidelines.

                                   SUMMARY
               Section 4A of article 6701h, V.T.C.S., providing for
          impoundmentof vehicles not registered in Texas where such vehicles
          are involved in accidents and proof of Snancial responsibiity is not
          shown, is not on its face violative of wnstitutional wmmerce and
          equal protection provisions. The Department of Public Safety must
          afford opportunity for hearings under the AdministrativeProcedure
          Act, former V.T.C.S. article 6252-13a now codiied at title JO,
          chapta  2001 of the Government Code, Acts 1993, 73d Leg., ch.
          268, 8 1, in setting security amounts required to be submitted in
          order to obtain the release of impounded vehicles. Article 6701h,
          V.T.C.S., on its face requires security of at least SlOOOin such
          circumstances. Where a hearing on the amount of security to be
          required is sought, the department should be pmpared to offa oral
          testimony in order to lrffordopportunity for cromtion.




                                                     DAN      MORALES
                                                     Attorney O~~eralof Texas

WILL PRYOR
Fii Assistant Attorney General

MARYKELLER
Deputy Attorney General for Litigation

RENEAHJCKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Wdliam M. Walker
Asdant Attorney General



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