(a) Registration. A short-term lease vehicle registered under this section is exempt from the registration requirements described in §218.13 of this title (relating to Application for Motor Carrier Registration) while leased to a registered motor carrier.
  (1) Application. A leasing business registering vehicles under this section shall file an application on a form prescribed by the director.
  (2) Annual report. The operation of a short-term lease vehicle shall be reported to the department on a form prescribed by the director not later than April 1 of each calendar year for the previous calendar year's operations. The report must identify the number of short-term lease vehicles that would otherwise be subject to the registration requirements of this subchapter.
  (3) Fees. An annual registration fee of $10 per vehicle operated must be paid at the time the report is filed under paragraph (2) of this subsection.
  (4) Cancellation, expiration, and revocation.
    (A) A leasing business must make a written request for cancellation of registration.
    (B) A leasing business registration expires on April 30 of each year unless the leasing business reports by April 1 the actual number of vehicles requiring registration operated in the previous calendar year.
    (C) The department may suspend or revoke a leasing business registration under §218.72 of this title (relating to Administrative Sanctions).
(b) Proof of contingency liability insurance. A leasing business registering a vehicle under this section must file and maintain proof of liability insurance on a form prescribed by the director as required by §218.16 of this title (relating to Insurance Requirements).
  (1) Filings. A leasing business shall file proof of insurance at the time of its initial registration and whenever it changes insurance carriers in accordance with §218.16.
  (2) Filing fee. Each proof of insurance filing under this section shall be accompanied by a nonrefundable $100 filing fee.
  (3) Cancellation of insurance coverage. Any cancellation of insurance filed under this section must comply with the requirements set out in §218.16.
(c) Substitute vehicles. A registered motor carrier is not required to comply with the provisions of §218.13(d) for a vehicle that is leased from a leasing business and that is used as a temporary replacement for a vehicle that has been taken out of service for maintenance, repair, or any other reason causing the temporary unavailability of the permanent vehicle.
(d) Identification. A registered motor carrier is not required to carry proof of registration, as required by §218.13(c)(2), in a vehicle leased from a registered leasing business. A copy of the lease agreement or of the lease for the originally leased vehicle, in the case of a temporary replacement vehicle, must be carried in the cab of the vehicle.

Source Note: The provisions of this §218.18 adopted to be effective February 4, 2010, 35 TexReg 663; amended to be effective March 12, 2015, 40 TexReg 1104