DAN MORALES

AT-rORSEY GENERAL 

## Q3ffice

of tly Plttornep &ate of Qkxae
October 14,1993 

## General

Mr. James R. Wdson DiECtO~ Texas Department ofPublic Safety 5805North Lamar Boulevard Box 4087 Austin,Texas 78773-OOOl Opiion No. DM-261
Re: constitutionanty of pr&isions of section 4A, V.T.C.S. article 6701h, pertaining to impoundmentof Out-of-statevehicles 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

“financial responsibility,”that is, liabilityinsurance 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. 670115 05 1 (detinition& 1A (necessii of liability responsibility). insurance, with exceptions). 1B (fbmisbing evidence of fmancial .

Your questions relate to the provisions of section 4A of the act, which pertain to persons who own or operate motor vehicleswhich 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 SSOO or more,” the owner or operator, upon his failure to tkmish evidence of “fiwrcial responsiiity” to an investigatinglaw enforcement05cer. shallbe taken before a magistrate. Id. 5 4A(a), (b). The latter, upon findingin a hearing a reasonablepossiiity of ajudgment being rendered against the person for damages arising from the accident, must order the vehicle impoundedby the sheriffor chiefof police unlessthe 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 Onlyupon obtaining a kerti6cate of release”fkomthe Department of Public Safety (the “department”)and payingthe “costof 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

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the one seekingthe certiticate of release;or 3) “securityin a form and amount determined by the Department to secure the payment of any damagesfor whichthe operator may be liable.” The departmentis to determine“theform, content and procedures for the issuance .Of a certificate of &am.” Id. 8 4A(i).
Your specificquestions am: 1. Does Section 44 Article 67Olh, V.T.C.S.. violate the constitutional provisions relating to equal protection or the ccmlmerwclause. 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 determiningthe amount of securitythat is requiredby 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 possiblygreat expenseon 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 perishablegoods, a potentiallyeven greater financial burden mightbe 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 differingtreatment atforded with respect to vehiclesnot 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’ sprovisions are diiected only against owners or operators of vehicles not registered in Texas. The parts of article 6701h which contain counterpart security provisions applicableto Texas registered vehicles are in sections 5 through 7A. Section 5. applicable to ali vehicles
invol~d in accidents here resulting in S1000or more in damages,provides for suspension

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of the operator’ s license and vehicle registration, “and if such operator or owner is a nonresidentthe privilegeof operating a motor vehicle within this State, and the privilege ofthe use withinthis State of any vehicleownedby him,”unless or until “securitythat 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 privilegesupon posting of security or presentation of evidence of release fiorn liabiity, adjudication of non-liability, or an agreementfor installment payments 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 notificationof state of non-residentwhose Texas operating privilegesare suspendedif such state provides for suspension of such person’ slicense and registration upon such notification,as Texas does with respectto its residentsunder section 8(c).’ Attorney General OpinionJ?vf-826 (1987). in concluding,that the requirementof article 6701h that out-of-state motorists be able to tbrnish proofof tinancialresponsibiity in the same measure as residents does not violate the commerceclause, article 1, section 8, clause 3 of the federal wnstitution,s noted that state legislationperminingto highways and trafhc carries a strong presumptionofvalidity. The opinionand the cases it relied on, however, stressed the significanceof such legislation’ s treating intrastate and interstate traffic alike in opiningas 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 circumstanceswhere it is likely there will be liabilityis a more e&ctive incentiveto 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

*ThemM, in sution 1F. @ provisionsfor tbc bpodmau of vehicles upon multiple convictionsfor fsilurc 105unish proofof financialrmponsiiilii, 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 ICI show proofof financial msponsiiility). Section 1Fs provisionsarc lpplicablcm~vehiclawhahcrTasr~a~kdthydearly~~inCbcirpvporcfrom tboseincection4A,bcingdrpenalm~tbantenvitynature. Theoffense addmsd in section 1F is the fsilurc to show pmofof5nancid mspors%ilily after a prior convictionor convictions for mme. The ca&mhnitsthcpcridofinqdment t0 lEOdQ%unlarthCdliVUltdIUUOShlClOShOWpdOf financidrqonsiiilityforthefulure. Postiqofamonamyamouuiswtameansofobhirgthc rclcasc of a vehicle tmpodcd u&r sccttonIF.

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section 4A in. 1991 characterize the problem of the state’ snot being able under the then current Jawto impose “any enforceableresponsibiity” 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 generalmatter under such cir~ this imbalance. is a reamable means of addressing

That said, we concede the treatment .&fordedunder section 4A to vehicles not registered in Texas may be especiallytroubling in particular applications. For examplethe matter to which your second question relates-while the provisionsof section 5 of the act for the suspension of a Texas owner/operator’ sJicense and registration only apply where there hss been SJOOO or more in damage Tom an accident, the impoundment procedures under section 4A are triggered when there has been damage “to an apparent extent of SSOO

or 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 SlOOO when the apparent damages involved were only SSOO

was 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 whichthe release of the impoundedvehiclemay 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 remainimpoundedinde6nitely. Compare section 7. which provides for reinstatementof a Texas license and registration suspendedunder section 5 two years after the accidentif no action for damageshas 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 applicationsof section 4A would run afoul of wnstitutional safeguardscan only, we think be determined on a cases by case basis. again with a fidl taking of evidence and findingof filetsrelevant to the particulsr case. We have stated before that ~mtitutional questions which imvhw a weighing of opposinginterests may not be amenable to resolutionin the opinionprocess, 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 opinionprocess). Accordingly,it is our opinionhere that only

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the full development in a judicial adversarial proceeding of the evidence supporting the wncems of the state and affectedparties 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 administeringsection 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 applicationthere wnstitutional. For the reasons given above however. we do not feel we are able in the opinionprocess eitherto determinethe wnstitutionslity generally of section 4A or to refashionparticular provisions so that they may be wnstitutionally applied in all specificsituations.
Your second question, again, asks whether the department is required to provide opportunity for a hearing prior to determiningwhether to issue a “certificate of release” under section 4A(g), or more particularly,prior to determiningthe amount of secutity the owner or operator must submitin 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 departmentto adopt “the fotm, content, and procedures for issuance ofacertificateofrelease.” V.T.C.S. art. 67014 #4A(i).
We think it is clear that the departmentmust aiTord opportunity for a hearingprior 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 suspensionof an operator’ slicense after an accident where the operator had been unableto show proof of financialresponsibility, would violate procedural due process requirementsif 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 “thejudgment 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 Wrightcourt neverthelessconsidered a hearing on

‘We noteths1V.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 codificationof the Administrative ProcdurcAclinthc GotemwotCodcisrrons&mbrcvirion Id.047.

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the setting of security necessary in order to allow the driver to contest abuses of discretion,the use of improperdata, etc. See a&oBell v. Bumn, 402 U.S. 535 (1971).
Where the owns or operator seeks a cutitkate of releasebased on submissionof a release 6om persons damaged in the accident or of proof of financird responsibiity, we believe the department must also offer opportunity for a hearing prior to a final detemktation that such submissionsare insufficient, unlessthe 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 departmentaldetemtination 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 whichreasonablemindsmightdiffer. 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 shouldbe afforded in this setting as well. However. if for example,the magistratebefore 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 tTnancial responsibiity offered there was inadequate,we see no reason why the department should have to aEord opportunity for another hearingwith respectto the adequacy ofthe same offeredproof Also, we conclude that hearings on seauity amounts or the adequacy of releases or proofs of financialresponsibiity offbredare subjectto the provisionsof APA relatingto contested cases. See id 8 13;see ulso Goti Code ch. 2003 (wntested cases under APA to be conducted by State OtTiceof AdministrativeHearings 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 specificallyprovided 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” andjustice of the peace coutts, we do not believe that the departmentunder 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 politicalentities, without specik provisionthe&or by the legislature.
We have noted already that your third question-as to the minimum amount of oecuritywhich must be posted under section 4A in order to obtain a certificate of r&se for an impoundedvehicle-raises troubling issues, albeitwith respect to the limitedfield of applicationsof the statute where the possible damages arisingfrom the accident are found to be bawem ,SSOO

and SlOOO. While, under section 4A(a) through (e). if SSOO in 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

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the words “underthis Article” refer to article 6701 h as a whole or to article. IIJ of article 6701h “SecurityFollowingAccident,”the security amounts the department is rquired to set under section 4A would be embracedtherein.
As mentionedpreviously,the SlOOO minimum securityrequirementUdK section9 wmports more obviouslywith the provisions of section 5, whereunderthe departmentis to suspend the license and registrations of an uninsuredperson who has had M accident resulting in damage of SlOOO or more, unless he deposits securhy. (Section,5 itself also States that the minimumsecurity under that section is SIOOO.) It may be, however, that although we find nothing in the legislativehistory of the provisions indicating such, the 1egidatUre

had a reason, w~cct~! with the *seriousproblem”of uninsured out-of-state motorists causing damage in accidents in Texas, for making the minimum security for obtainingrelease of an impoundedvehicleunder section 4A SlOOO although the minimum damages which wuld lead to impoundmentwere 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 SlOOO minimumsecurity amountmust await resolution in ajudicial 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 satisfythose 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, determinationof 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 ofthe act limitsthe amount of securitywhich may be required to “the limits speciftedin Section 5 in referenceto the acceptablelimitsof 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 injuriesto 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 itselfprovides with respect to hearings under that act that if a hearingwill 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 accidentswill generallybe 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 ofPpFndeM,

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513 S.W.Zd.l (Tex. 1974) (right to cross examine witnesses applies in administrative hearings). As to the procedures generallythe department should adopt under section 4A for setting security amounts, we believethat the department,in wnsdtatiOn with its legal staff and the attorneys in this officewho represent the department, is better situated than we are in the opinionprocess to.stmcture appropriateguidelines. 

### SUMMARY Section 4A of article 6701h, V.T.C.S., providing for impoundmentof vehiclesnot registered in Texas where such vehicles are involved in accidents and proof of Snancialresponsibiity 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 hearingsunder 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 SlOOO in 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 lrffordopportunityfor cromtion.

DAN MORALES Attorney O~~eral

of Texas
WILL PRYOR Fii Assistant Attorney General
MARYKELLER Deputy Attorney Generalfor Litigation
RENEAHJCKS State Solicitor
MADELEINEB. JOHNSON Chair, OpinionCommittee Prepared by WdliamM. Walker Asdant Attorney General

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