AUSTIN (KXAN) — The chairman of the Texas Department of Motor Vehicles said Thursday that discussions on a new law eliminating paper license plates will “definitely” continue next year.

“I recognize that this conversation will continue in the next session of the legislature, no doubt,” said TxDMV Board Chairman Charles Bacarisse. “But today we make rules.”

On Thursday, the TxDMV Board acknowledged industry concerns with House Bill 718, foreshadowing a potential fight on Capitol Hill over a law passed last year that replaces temporary tags with metal ones amid widespread fraud that has spread outside of Texas to every state, according to law enforcement. , and a KXAN investigation for years.

“It’s the Law”

Two weeks ago, the Texas Automobile Dealers Association (TADA) — which represents more than 1,400 franchised automobile dealers in the state — asked the Texas House Transportation Committee to take another look at the law, expressing concern, among other things, that metal tag fraud would become “pervasive.”

TADA did not respond when asked if it planned to repeal House Bill 718 during the upcoming legislative session, but suggested it would remain involved in ongoing discussions, noting that it had done so in 2021 and 2023.

“And we should note that the Legislature has pushed the effective date of HB 718 back to July 1, 2025, giving stakeholders another session to address any remaining concerns,” TADA spokeswoman Jennifer Stevens said.

TADA and the Texas Independent Automobile Dealers Association (TIADA) told the board Thursday they have concerns about aspects of the new law.

“I know some of us wanted it, some of us didn’t, but here we are,” said TIADA’s director of compliance and business development, Earl Cooke. “I think I did the best I could.”

KXAN asked Bacarisse about TADA’s comment to lawmakers that the crime would shift to metal tag fraud when the new law goes into effect.

“I think the legislature is always willing to get input from citizens and interest groups and stakeholders, just like us,” Bacarisse said. “But right now, we’re totally focused on crafting rules that put that law into effect.”

“Should there be any doubt that HB 718 will go into effect on July 1 of next year?” asked KXAN investigative reporter Matt Grant.

“No, it’s the law,” Bacarisse said. “We will have that law ready to be implemented. It will be implemented on July 1st, absolutely.”

EXPLORE: KXAN’s ‘Risky Rides’ investigations into paper tag fraud in Texas

The rules are changing as the deadline looms

At Thursday’s meeting, the board unanimously adopted a set of rules that will act as a road map to put the law in motion. Bacarisse warned some board members who oppose parts of the law that the TxDMV would be “out of compliance” with the December deadline if it doesn’t pass now.

Among the board members who expressed concern: Stacey Gillman, a Houston car dealer for more than 20 years, and Darren Schlosser of the Houston Police Department.

“I think it’s easier for a crook to generate a temporary tag to put on the back of a car that would be noticed by us (the police) more easily than a hard plate,” TxDMV board member Darren Schlosser said.

“My personal opinion,” he said, “is temporary tags (should be) on a vehicle before full registration; all avenues of funding, registration, distribution process should be completed before a hard plate is issued to a vehicle.”

After some back and forth, a set of rules it was adopted unanimously with some language changes. The rules ensure that dealers have enough metal license plates to operate efficiently, that a database of license plates can help TxDMV and law enforcement keep track, and that theft and fraud are deterred, General Counsel Laura Moriaty said.

One thing that was removed: encouraging car dealers to immediately notify law enforcement when license plates are lost or stolen. Cooke, at one point, asked the board, “There seems to be quite a bit of confusion in this room: Is it mandatory or not?”

“I agree that as a dealer it is in our best interest to report these plates missing,” TxDMV Board Member Mark Jones said. “Since it’s not enforceable, I don’t think it should be there at all.”

An “encouraging” rule action is not enforceable by compliance staff, TxDMV spokesman Adam Shaivitz clarified, saying it’s more guidance and “best practice.”

Bacarisse said this is all part of the “sausage being made”.

KXAN reached out to Craig Goldman for comment, but did not hear back. Goldman authored House Bill 718 and is now running for Congress.

‘Where have you been?’

Despite industry concerns, law enforcement said the change can’t come soon enough, as criminals continue to use paper tags to hide in plain sight. Lt. John Gonzalez of the Harris County Sheriff’s Office reminded the board that fake temporary tags are often used by criminals “to mask or disguise their vehicle before, during or after committing a crime.”

The problem was only “marginally” reduced, he said.

At the Texas House Transportation Committee hearing two weeks ago, Sgt. Jose Escribano with the Travis County Sheriff’s Office. 3 said TADA concerns about metal tag fraud appeared to arise less than 10 months before HB 718 took effect.

“Well, where were you a year and a half ago?” Escribano asked. “You have a bill that just went through and now you’re going to come up and propose that we keep paper labels because of something you just discovered? This is not recent. We could have had this conversation a long time ago.”

At that House hearing, Rep. Terry Canales, D-Edinburgh, the committee’s chairman, gave Escribano and TADA a “homework” mission to meet, discuss concerns and bring back solutions. Escribano wrote to Karen Phillips, the association’s general counsel and executive vice president, on Oct. 11, according to an email shared with KXAN.

“At the suggestion of Chairman Terry Canales(‘) at yesterday’s transportation committee hearing, I would like to see if you are available to meet to discuss your concerns with HB 718,” Escribano wrote, copying Canales on the email.

Thirteen days later, he said he still hadn’t received a response.

On Wednesday, KXAN asked a TADA spokesperson for a time frame on when that meeting would take place. I didn’t get a reply.

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