(a) Application. An application for licensure as a driver education provider must be made on forms prescribed by the department, and be accompanied by the appropriate fees. An application for a branch driver education provider license must not have the same physical address as the primary provider. A license application is valid for one year from the date it is filed with the department.
(b) Bond requirements. In the case of an original or a change of owner application, an original bond must be provided. In the case of a renewal application, an original bond or a continuation agreement for the approved bond currently on file must be submitted. The bond or the continuation agreement must be executed on the form provided by the department.
(c) Verification of driver education provider ownership. In the case of an original or change of owner application for a driver education provider, the owner must provide verification of ownership to the department.
(d) Change of ownership of a driver education provider. A change of ownership occurs when there is a change in the control of the provider. The control of a provider is considered to have changed:
  (1) in the case of ownership by an individual, when more than 50 percent of the provider has been sold or transferred;
  (2) in the case of ownership by a partnership or a corporation, when more than 50 percent of the provider, or of the owning partnership or corporation has been sold or transferred; or
  (3) when the board of directors, officers, shareholders, or similar governing body has been changed to such an extent as to significantly alter the management and control of the provider.
(e) Purchase of a driver education provider.
  (1) A person who purchases a licensed driver education provider must obtain an original license or branch location license as applicable.
  (2) The purchaser must assume all refund liabilities incurred by any former owner as well as the liabilities, duties, and obligations under the enrollment contracts between the students and any former owner before the transfer of ownership.
(f) New location or change of address.
  (1) The department must be notified in writing of any change of address at least fifteen (15) working days before the move.
  (2) The driver education provider must submit the appropriate change of address fee prior to the actual move.
  (3) If a student is not willing or able to change locations, a pro-rata refund (without deducting any administrative expense) must be made to the student.
(g) Renewal of driver education provider license. An application for the renewal of a license for a driver education provider must be submitted before the expiration of the license and include the following:
  (1) the renewal fee;
  (2) a current list of instructors at the school, if applicable;
  (3) an executed bond or executed continuation agreement for the bond, currently approved by and on file with the department; and
  (4) if applicable, a current list of all motor vehicles used for instruction.
(h) Denial, revocation, or conditional license. The authority to operate a branch location ceases if a primary driver education provider license is denied or revoked. The operation of a branch location license may be subject to any conditions placed on the continued operation of the primary driver education provider. A driver education provider license for a branch location may be denied, revoked, or conditioned separately from the license for the primary location.
(i) Driver education provider closure.
  (1) The driver education provider owner must notify the department at least fifteen (15) business days before the anticipated provider closure. In addition, the driver education provider owner must provide written notice of the actual discontinuance of the operation on the day of cessation of classes. A driver education provider must make all records available for review to the department upon department request.
  (2) The department may declare a driver education provider to be closed:
    (A) when the provider no longer has the facilities, vehicles, instructors, or equipment to provide training pursuant to this chapter;
    (B) when the provider has stopped delivering instruction and training in driver education and has failed to fulfill contractual obligations to its students;
    (C) when the provider informs the department in writing of its intention to no longer deliver instruction or training in driver education and returns all unissued driver education certificates or certificate numbers; or
    (D) when the provider owner allows the license to expire.
  (3) If a branch location closes and a student is not willing or able to complete the training at the primary location, a pro-rata refund (without deducting any administrative expense) must be made to the student.
(j) A driver education provider must not state or imply that a driver's license, permit, or DE-964 is guaranteed or assured to any student or individual who will take or complete any instruction, or enroll, or otherwise receive instruction from any driver education provider.
(k) Contract site. An in-person driver education provider may conduct a course at a contract site, upon execution of a legal written agreement between the licensed driver education provider and an authorized representative for the contract site to provide driver education instruction. The course is subject to the same rules that apply to the licensed driver education provider, including inspections by department representatives. An on-site inspection is not required prior to use of the site. The written agreement is subject to the recordkeeping requirements under §84.81.

Source Note: The provisions of this §84.40 adopted to be effective June 1, 2023, 48 TexReg 2702