Texas Department of Motor Vehicles Statement
March 1, 2022
The Texas Department of Motor Vehicles (TxDMV) recognizes the harmful effects of the fraudulent use of temporary tags, not only in Texas but across the nation. Addressing this issue involves multiple parties actively working together: TxDMV, law enforcement, the motor vehicle industry, and state and local leadership.
As a state agency, TxDMV is responsible for implementing and following laws passed by the legislature. House Bill 3927, passed during the 87th Legislative Session (2021), gave TxDMV authority to deny an auto dealer access to the temporary tag database if there is evidence of fraudulent activity and to establish a limit to the number of temporary tags a dealer may obtain in a calendar year. Prior to this legislation, TxDMV was specifically prohibited by statute from denying a licensed dealer access to the database. The department’s only recourse to stop dealers who were fraudulently obtaining temporary tags was license revocation, an administrative process that can take months or years to complete. The new rules and authority are now in place and TxDMV staff has already begun using the tools to prevent the production and use of fraudulent temporary tags.
While denial of access is a powerful tool to stop the systemic misuse of fraudulent temporary tags, this solution is reactive and only addresses the problem after tags are already on Texas roadways. The agency is working with stakeholders to identify and implement additional processes to stop bad actors from obtaining dealer licenses to gain access to the temporary tag system for criminal activities. Options under consideration include fingerprinting dealer applicants, inspecting dealership locations prior to issuing a license, and enhancing background reviews, including criminal histories, of dealer applicants.
Valuable input and expertise from law enforcement, the motor vehicle industry, and other stakeholders continue to help shape the processes and ideas under consideration by TxDMV. Our goal is to ensure the highest level of support for public safety while maintaining the flow of motor vehicle commerce throughout the state. Our partnerships with federal, state, and local law enforcement organizations across the state are crucial to solving this problem and ending the use of fraudulent temporary tags in illegal activities. The Texas Department of Motor Vehicles is committed to working to improve the information available to law enforcement agencies.
While TxDMV has taken steps to stop the fraudulent use of Texas temporary vehicle tags, more can be done, and we will continue to prioritize efforts to improve temporary tag regulation.
Temporary Tags Frequently Asked Questions:
What are temporary tags? Are all paper license plates the same?
Temporary tags, which may also be called temp tags, paper tags, or paper license plates, are issued to vehicle buyers as temporary registration until the dealer completes the title and registration process. Temp tags are also issued to dealers for use during demonstrations, vehicle transfers, or for loaner cars. The temporary tags most often seen on Texas roadways are those issued to vehicle buyers. Learn more about the different types of tags issued by dealers and their uses on the TxDMV website: www.TxDMV.gov/dealers/webdealer/webdealer-101.
The Texas Department of Motor Vehicles also issues 30-day permits for the temporary movement of a vehicle subject to Texas registration law. These permits are not temporary tags and may only be obtained in person at the office of a local tax assessor-collector or at a TxDMV Regional Service Center. Learn more about the types of temporary permits available in Texas on the TxDMV website: www.TxDMV.gov/motorists/register-your-vehicle/temporary-permits.
What is TxDMV doing to address the misuse of temporary tags?
Prior to the 87th Texas Legislative Session in January 2021, the Texas Department of Motor Vehicles Board requested the legislature provide the department with greater authority to combat misuse and fraud in the issuance of temporary tags by motor vehicle dealers and converters. The Texas Legislature supported this request with the passage of House Bill 3927. The authority provided in House Bill 3927 includes authorizing TxDMV to deny an auto dealer access to the temporary tag database if fraud is identified and to establish a maximum limit on the total temporary tags a dealer may obtain in a calendar year, which eliminates the ability to issue unlimited numbers of temporary tags and provides a hard stop when a dealer is engaging in fraudulent activity.
House Bill 3927 became effective September 1, 2021. The agency drafted rules necessary to implement the bill and sought input form various stakeholder communities, the Motor Vehicle Regulatory Advisory Committee, and members of the public. After considering public input and refining the draft rules, the TxDMV board adopted the rules during a specially called meeting on January 27, 2022. The rules allowing the department to revoke dealer access to temporary tag systems based on identification of fraudulent activity was effective immediately. Within the first 10 days, six dealers engaging in suspect activities were prevented from accessing the system. The rules related to annual dealer tag limits became effective February 14, 2022. Agency staff completed initial computer system updates to implement this process before the end of February.
While these are strong steps to prevent future system abuse, there is more TxDMV can do to improve enforcement and ensure the proper use of Texas temporary tags. This includes consideration of fingerprinting license applicants, conducting up front inspections of dealer locations, and enhancing other pre-licensing processes to ensure more accurate identification and background reviews, including criminal histories, of dealer applicants. The department may have the legal authority to implement some changes over the coming months. Other changes will require the development and adoption of administrative rules, or the passage of additional legislation.
Could this issue have been addressed more quickly?
Prior to House Bill 3927, state statute prohibited TxDMV from denying a licensed auto dealer access to the database used to produce and distribute temporary tags. During this time, the department’s only recourse to stop dealers that were fraudulently obtaining temporary tags was license revocation, a formal administrative process that can take months or years to complete, leaving the dealer with access to the temporary tag database to continue fraudulent activity.
House Bill 3927, passed during the 87th Legislative Session in 2021, removed the statutory prohibition and authorized TxDMV to deny a dealer’s or converter’s access to the temporary tag database if TxDMV determines that a dealer or converter fraudulently obtained temporary tags. As described above, TxDMV worked during 2021 to implement the new legislation. The implementation process required the department to post the draft administrative rules and obtain comments from the public and agency stakeholders; the rule process concluded with the adoption of new administrative rules on January 27, 2022.
Why is TxDMV unable to enforce laws related to the misuse of temporary tags?
As an administrative agency, TxDMV is not authorized to enforce criminal laws, investigate crimes, or prosecute criminals. When TxDMV encounters criminal activity, we notify law enforcement who are then able to take the appropriate action. Arrest or prosecution decisions for these fraudulent or illegal activities is at the discretion of the investigating law enforcement agency or prosecuting jurisdiction. Law enforcement will also notify TxDMV when evidence of fraudulent temporary tag activity is discovered during criminal investigations.
With respect to the misuse of temporary tags, a dealer producing, reproducing, or selling temporary tags violates Section 503.067 of the Texas Transportation Code. By violating Section 503.067, the dealer could be committing anything from a Class C misdemeanor to a state jail felony. In addition, the dealer would be subject to administrative civil monetary penalties and the revocation of their license. A person who purchases a fraudulent temporary tag and operates a vehicle displaying the tag is committing a Class C misdemeanor or a state jail felony depending on the circumstances.
If the fraudulent or criminal action is perpetrated by a licensee regulated by the agency, TxDMV can initiate an administrative enforcement action against that entity to assess civil monetary penalties or revoke their license. Administrative cases are heard by the State Office of Administrative Hearings and decided by the TxDMV Board.
How is TxDMV working with law enforcement on issues related to temporary tags?
The department’s relationships and collaboration with federal, state, and local law enforcement entities is critical to identifying, stopping, and ultimately ending illegal activity involving temporary tags. Some of this work has been reported in recent TxDMV statements.
When TxDMV receives a complaint about the sale of temporary tags by a licensee, the complaint is assigned to an investigator in the agency’s Enforcement division for review. TxDMV makes every effort to engage law enforcement when criminal activity is suspected. If a law enforcement agency accepts the case, TxDMV sends the law enforcement agency a referral with all the information gathered from the administrative investigation. The department continues to provide support to law enforcement by providing technical assistance in the interpretation of rules and laws, analysis of evidence, and answering questions concerning substantiated violations.
The Texas Department of Motor Vehicles also works with law enforcement to provide training about temporary tags, including the proper use of temporary tags and how to identify counterfeit tags.
How does a motorist obtain a legitimate temporary tag for their vehicle?
Only the dealer from whom you purchased a motor vehicle can lawfully give you a Texas Buyer’s Temporary Tag. In addition, that dealer must hold an active license, also referred to as a general distinguishing number, from TxDMV.
If you see an advertisement on social media, an electronic marketplace, or in your community for temporary tags, the seller is committing a crime. If you purchase one of those tags and operate a motor vehicle with it, you may be committing a crime as well.
If you purchased a vehicle from a dealer and the temporary tag on that vehicle is expiring, but the dealer has not transferred the title to you, you may ask the dealer to purchase a 30-day permit so you can continue to legally operate your vehicle. You may also purchase a 30-day permit from your local tax office or TxDMV Regional Service Center yourself. If you find yourself in this situation, please consider filing a complaint against the dealer that sold you the vehicle at www.TxDMV.gov/complaints. Texas Department of Motor Vehicles staff may be able to assist you in obtaining your title from the dealer or receiving reimbursement from the dealer for the cost of the 30-day permit.
How do I report the suspected misuse of temporary tags?
If you suspect a licensed dealer is misusing temporary tags, you are encouraged to report the dealer via the TxDMV Online Complaint Portal at www.TxDMV.gov/complaints.
As TxDMV is not a law enforcement organization, if you suspect a temporary tag is being used for criminal activity report the activity to your local law enforcement agency. Always be mindful of your own personal safety, and the safety of others around you, especially if you believe you are in proximity to illegal activity.
How are dealers licensed in Texas?
The TxDMV Motor Vehicle Division (MVD) issues licenses to used vehicle dealers, franchised motor vehicle dealers, salvage vehicle dealers, vehicle leasing companies, manufacturers, distributors, converters, and vehicle transit operators. Department licensing staff processes more than 18,500 license applications per year. This includes applications for new licenses, applications to amend existing licenses, and applications to renew licenses.
License applications are submitted via eLICENSING, the department’s online licensing management system, and are assigned to an MVD licensing specialist for processing. The licensing specialist reviews the file in detail and completes a variety of identity, affiliation and location checks to identify possible issues. To enhance the licensing process, TxDMV is researching additional processes to verify applicant identity and assist with background checks, including criminal histories, during the licensing process. This includes the possible requirement to fingerprint license applicants and conduct in-person site visits of the intended dealer location to confirm the legitimacy of the applicant.
Learn more about the dealer licensing process: Dealer Licensing Process Overview.