TITLE 24. TRANSPORTATION AND MOTOR VEHICLES

DEPARTMENT OF MOTOR VEHICLES

Fast-Track Regulation

Title of Regulation: 24VAC20-121. Virginia Driver Training Schools Regulations (amending 24VAC20-121-60).

Statutory Authority: §§ 46.2-203 and 46.2-1703 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: December 18, 2024.

Effective Date: January 2, 2025.

Agency Contact: Nicholas Megibow, Senior Policy Analyst, Department of Motor Vehicles, 2300 West Broad Street, Richmond, VA 23220, telephone (804) 367-6701, FAX (804) 367-4336, or email nicholas.megibow@dmv.virginia.gov.

Basis: Department of Motor Vehicles (DMV) regulations are promulgated under the general authority of § 46.2-203 of the Code of Virginia, which grants DMV statutory authority to promulgate regulations necessary to carry out the laws administered by DMV. Section 46.2-1703 of the Code of Virginia authorizes DMV to promulgate regulations that include curriculum requirements, contractual arrangements with students, obligations to students, facilities and equipment, qualifications and other requirements for instructors, school ownership requirements, surety bond requirements, and financial stability of schools.

Purpose: This action will reduce the regulatory burden on driver training school businesses without detrimentally affecting the health, safety, or welfare of citizens of the Commonwealth.

Rationale for Using Fast-Track Rulemaking Process: Because this action would reduce the regulatory burden on driver training school businesses without detrimentally affecting citizens of the Commonwealth, DMV anticipates that the action will be noncontroversial and therefore appropriate for the fast-track rulemaking process.

Substance: This action removes the "collect" requirement from subsection A, amends subsection G to eliminate duplicative language, and eliminates subsection H in 24VAC20-121-60.

Issues: The advantage to the public and the Commonwealth is that this action removes unnecessary regulatory requirements from the regulation and lessen the regulatory burden on driver training school businesses. This action does not present any disadvantages to the public or the Commonwealth.

Department of Planning and Budget Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. The Department of Motor Vehicles (DMV) proposes to eliminate superfluous language and a provision in the regulation that conflicts with the Code of Virginia.

Background. The current and proposed regulations both indicate that DMV may refuse to approve any application, including originals or renewals, in which the owner or any principal of the owner, or any of the school's employees or instructors has been convicted of any felony. The current regulation includes several examples of felonies. The agency proposes to remove the examples. The current regulation states that "To avoid any conflict of interest, the department will not approve any Class A school license for any applicant that is certified by DMV as a Third Party Tester for the commercial driver's license (CDL) skills testing." DMV proposes to eliminate this language since it conflicts with amendments made to § 46.2-326.1 of the Code of Virginia in 2019 that allows some Class A driver training schools to be third-party testers.²

Estimated Benefits and Costs. The proposed removal of language that gives examples of felonies would not have a substantive impact. DMV has not enforced the prohibition against Class A (commercial motor vehicle) school licensure for those who are certified by DMV as a third-party tester for CDL skills testing since the legislation creating the conflict went into effect on October 1, 2019 of the Code of Virginia.³ Thus, the proposed elimination of the text would not affect the law in effect and what is enforced in practice. To the extent that there are some third-party testers who have been interested in obtaining Class A school licensure, but thought they could not due to the existing language, the proposed elimination of the text may have some positive impact in better informing of available opportunities, possibly leading to the addition of a few more commercial motor vehicle driving schools. Similarly, if there are possessors of Class A school licensure who have had interest in also becoming third-party testers but thought they could not due to the existing language, the proposed amendment may lead to a few additional third-party testers.

Businesses and Other Entities Affected. The proposal potentially affects the 30 Class A licensed driver training schools and third-party testers for CDL skills testing.⁴ The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁵ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁶ The proposed amendments neither increase costs nor reduce benefits. Thus, no adverse impact is indicated.

Small Businesses⁷ Affected.⁸ The proposed amendments do not appear to adversely affect small businesses.

Localities⁹ Affected.¹⁰ The proposed amendments neither disproportionally affect particular localities nor introduce costs for local governments.

Projected Impact on Employment. There may be a moderate increase in employment at Class A driving schools.

Effects on the Use and Value of Private Property. The proposal may lead to the formation of a small number of additional commercial motor vehicle driving schools. The proposed amendments do not affect real estate development costs.

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¹ Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² Chapters 78 and 155 of the 2019 Acts of Assembly amended § 46.2-326.1 of the Code of Virginia so that certain Class A driver training schools could be certified as third-party testers. See https://lis.virginia.gov/cgi-bin/legp604.exe?191+ful+CHAP0078+hil.

³ Ibid.

⁴ Data source: DMV.

⁵ Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁶ Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁷ Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁸ If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁹ "Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹⁰ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency Response to Economic Impact Analysis: The Department of Motor Vehicles has reviewed the economic impact analysis prepared by the Department of Planning and Budget and has no comment.

Summary:

The amendments remove the "collect" requirement, eliminate duplicative language, and reduce the regulatory burden on driver training school businesses.

24VAC20-121-60. School licensing requirements.

A. Schools seeking a license shall file with the department, as required by these regulations this chapter, a completed application for a driver training school license along with any associated fees and other documentation required by the department. In addition, each school shall collect and submit to the department, as required by these regulations this chapter, the instructor applications for those instructors that they employ along with any associated fees and other documentation required by the department.

B. The following shall accompany the school licensing application and shall be in addition to any other application requirements of the department:

1. An application fee;

2. A certificate of insurance;

3. A surety bond;

4. Instructor applications;

5. A local business license or zoning document, or a letter from local authorities indicating none is required; and

6. A national criminal records check completed within 60 days of the application deadline for each individual providing instruction or otherwise employed by or managing the school.

In addition., each owner or principal of the owner of a driver training school shall submit a national criminal records check with the school license application package.

C. The application package shall be submitted to the department in a format prescribed by the department. All proper applications will be either approved or denied within 30 business days of receipt by the department.

D. School licenses shall be valid for a period of 12 months and shall display the validity period on the face of the license. The school license shall expire on the last day of the last valid month of the license period.

E. Schools seeking a license shall file with the department evidence of insurance, with a company authorized to do business in the Commonwealth of Virginia, on all vehicles used by schools to provide instruction, at least in the minimum amounts as required by § 46.2-472 of the Code of Virginia.

The school shall provide and maintain evidence of insurance coverage on a certificate of insurance in a format prescribed by the department. The certificate shall be filed upon application and at other times of the licensure period as requested by the department. The certificate shall stipulate the make, model, year, vehicle identification number, vehicle color, and license plate number for all vehicles and shall also stipulate that the department will be notified by the insurance carrier (i) 10 calendar days before the school's insurance policy expires or (ii) on the same day that the policy is canceled or not maintained in full force.

Schools A school shall provide to the department verification from their the school's insurance company in a format prescribed by the department that the insurance company is aware the vehicles are used for driver training instruction and are operated by student drivers. Schools shall notify the department of any change in liability insurance coverage not later than the effective date of the change.

Each school shall provide notice to the department's driver training school section in a format prescribed by the department in the event that any motor vehicle is added to or deleted from the insurance policy during the coverage period. The notice shall include the make, model, year, vehicle identification number, vehicle color, and the license plate number. The notice shall be received by the department prior to using any added motor vehicle for driver education instruction. Failure to maintain required liability insurance for school vehicles or failure to comply with insurance certification requirements shall result in the suspension or revocation of the school's license or the imposition of other sanctions, or both, as set forth in these regulations this chapter.

F. All licensed schools shall file with the department a surety bond in the sum set by statute for Class A and Class B schools, payable to the Commonwealth of Virginia, issued by a corporation licensed to transact surety business in the Commonwealth. The surety bond shall be filed with each application and must provide coverage for the entire licensure period.

G. The department may refuse to approve any application, including originals or renewals, in which the owner or any principal of the owner, or any of the school's employees or instructors (i) have previously been or would be subject to any sanctions prescribed by these regulations this chapter or (ii) has been convicted of a any felony, including but not limited to bribery, forgery, fraud or embezzlement under the laws of the Commonwealth or any other jurisdiction, or a conviction of any offense included in Article 7 (§ 18.2-61 et seq.) of Chapter 4 of Title 18.2 of the Code of Virginia (Criminal Sexual Assault) or of any similar laws of any other jurisdiction, or any misdemeanor or felony involving:

1. Sexual assault as established in Article 7 (§ 18.2-61 et seq.) of Chapter 4 of Title 18.2 of the Code of Virginia;

2. Obscenity and related offenses as established in Article 5 (§ 18.2-372 et seq.) of Chapter 8 of Title 18.2 of the Code of Virginia;

3. Drugs as established in Article 1 (§ 18.2-247 et seq.) of Chapter 7 of Title 18.2 of the Code of Virginia;

4. Crimes of moral turpitude;

5. Contributing to the delinquency of a minor;

6. Taking indecent liberties with a minor;

7. The physical or sexual abuse or neglect of a child;

8. Similar offenses in other jurisdictions; or

9. Other offenses, as determined by the department, which would impact ownership, operation, or instruction by a school.

Any school license issued may be suspended or revoked if such a conviction occurs during any licensure period.

H. To avoid any conflict of interest, the department will not approve any Class A school license for any applicant that is certified by DMV as a Third Party Tester for the commercial driver's license (CDL) skills testing.

I. H. Requests to change (i) the name or address of a school or (ii) a school license to add to or eliminate a licensed location, or any other business offices, classrooms, or other instructional facilities during the licensure period shall be made to the department at least 30 days prior to such change. Such changes shall be subject to a processing fee, as set forth in these regulations this chapter, and the issuance of a modified license, as requested. The expiration on any modified license issued shall be the same as the current license.