According to the Legislative Budget Board (LBB), SB 1365 is not expected to have a significant fiscal impact on the state. The Department of Motor Vehicles, which would be primarily responsible for implementing the provisions of the bill, is anticipated to manage any associated costs using existing budgetary resources. Therefore, no additional appropriations or major adjustments to agency operations are projected to be necessary.

Additionally, SB 1365 is not expected to impose significant costs or revenue changes for local governments. The changes in vehicle registration procedures, enforcement powers, and fee structures—such as the standardization of electric vehicle registration fees and updated dealer plate rules—are presumed to have minimal financial impact on cities or counties. Overall, the bill is considered to be fiscally neutral at both state and local levels under its current form.

SB 1365 proposes a range of administrative updates to the Texas vehicle registration and dealer licensing framework, many of which aim to reconcile conflicting legislation passed in previous sessions and to enhance the enforcement capabilities of the Texas Department of Motor Vehicles (TxDMV). These changes include clarifying the registration period for new vehicles, standardizing electric vehicle fees, and allowing TxDMV to deny access to dealer databases in cases of inspection fraud. The bill also updates the fee structure for temporary license plates and strengthens the TxDMV’s authority to cancel or refuse registration for vehicles deemed unsafe.

Despite these practical improvements, the bill raises significant concerns regarding individual liberty and due process. Most notably, SB 1365 adds TxDMV’s registration enforcement actions to the list of exceptions under Government Code §2001.223, which exempts them from contested case procedures. While the bill requires the agency to provide notice and an opportunity to respond before revoking a registration, it explicitly allows such actions to proceed without a hearing. This effectively denies affected individuals and businesses the right to challenge potentially arbitrary or erroneous decisions in a formal, structured setting, undermining basic procedural safeguards and private property protections.

While the fiscal note accompanying the bill states that there are no significant costs to state or local governments, the broader policy concern lies in the unchecked expansion of agency authority without corresponding accountability. Granting TxDMV the power to deny vehicle registrations—a key requirement for legal use of property on public roads—without robust oversight mechanisms sets a concerning precedent.

For this reason, Texas Policy Research recommends that lawmakers vote NO on SB 1365 unless amended to reinstate due process protections, such as access to administrative hearings.

• Individual Liberty: The bill weakens individual liberty by removing formal due process protections for Texans facing vehicle registration denial, suspension, or revocation by TxDMV. By exempting these actions from contested case procedures (as outlined in Government Code §2001.223), it limits a citizen's ability to challenge state actions in a fair hearing. While notice and a chance to respond are provided, the absence of a formal hearing undermines fundamental protections and risks arbitrary administrative decisions.
• Personal Responsibility: The bill reinforces personal responsibility by holding vehicle owners and dealers accountable for operating safe vehicles and complying with registration and inspection requirements. The bill targets fraudulent activity, such as misuse of dealer plates or falsified inspection reports, which upholds a standard of lawful conduct and deters bad actors.
• Free Enterprise: While the bill supports enforcement consistency and clarifies rules for commercial fleet registration, it also introduces a risk to legitimate businesses—particularly licensed vehicle dealers—by granting TxDMV broad discretion to deny database access or take punitive action without robust oversight. This may create uncertainty or a chilling effect on business operations, especially if enforcement is uneven or lacks transparency.
• Private Property Rights: The right to use and operate a privately owned vehicle is a core expression of property rights. Allowing TxDMV to revoke or deny vehicle registration without a hearing undermines this principle, as it limits an owner's ability to defend their lawful use of personal property. Such administrative actions can directly impair the value and usability of a private asset without sufficient procedural protections.
• Limited Government: The bill expands agency authority without adding proportional accountability. By bypassing established checks like contested case hearings, it centralizes power in TxDMV and reduces legislative or judicial oversight. This concentration of executive power runs contrary to the principle of limited government, which seeks to restrain bureaucratic overreach.