(a) Application. An application for a school license
for a primary or branch driver education school shall be made on forms
supplied by the Texas Education Agency (TEA).
(b) Bond requirements. In the case of an original or
a change of owner application, an original bond or approved alternate
form of security shall be provided. In the case of a renewal application,
an original bond or approved alternate form of security or a continuation
agreement for the approved bond currently on file or continuation
of an approved alternate form of security shall be submitted. The
bond or the continuation agreement shall be executed on the form provided
by TEA. Approved alternate forms of security shall adhere to the following
(1) An irrevocable letter of credit. The letter shall
be in the name of the owner of the school. The letter shall specify
the amount of credit extended, which shall be equivalent to the coverage
required for a corporate surety bond, and the purpose of the credit.
The letter shall contain the signature of an appropriate bank representative.
The bank and the letter shall be approved by TEA.
(2) A cash deposit. An irrevocable account shall be
established by the school owner in the name of TEA to be drawn upon
as needed to pay student refunds as needed if the school closes owing
refunds. The account shall be equivalent to the coverage required
for a corporate surety bond. The bank and the terms of the account
shall be approved by TEA. The TEA shall keep records of deposits
and/or withdrawals on the account.
(c) Verification of ownership.
(1) In the case of an original or change of owner application
for a primary school, the owner of the school shall provide verification
of ownership that includes, but is not limited to, copies of stock
certificates, partnership agreements, and assumed name registrations.
The division may require additional evidence to verify ownership.
(2) In the case of an original or change of owner application
for a branch school, the owner shall submit an application on forms
supplied by TEA.
(3) With the renewal application, the owner of the
school shall provide verification that no change in ownership has
occurred. The division may require additional evidence to verify
that no change of ownership has occurred.
(d) Effective date of the driver education school license.
The effective date of the school license for a primary driver education
school shall be the date designated on the license. For a branch school,
the expiration date of the driver education school license shall be
concurrent with the driver education school license for the primary
(e) Purchase of a driver education school.
(1) A person, partnership, or corporation, purchasing
a licensed driver education school shall obtain an original license.
(2) A driver education school license for a branch
school is transferable only to an applicant who owns a currently
licensed primary driver education school. A purchaser of a branch
school who does not own a currently licensed primary driver education
school shall obtain an original driver education school license for
a primary school.
(3) Copies of the executed sales contracts, bills of
sale, deeds, and all other instruments necessary to transfer ownership
of the school shall be submitted to TEA. The contract or any instrument
transferring the ownership of the school shall include the following
(A) The purchaser shall assume all refund liabilities
incurred by the seller or any former owner before the transfer of
(B) The sale of the school shall be subject to approval
(C) The purchaser shall assume the liabilities, duties,
and obligations under the enrollment contracts between the students
and the seller, or any former owner.
(4) A change of ownership of a driver education school
is considered substantially similar if:
(A) in the case of ownership by an individual, when
the individual transfers ownership to a corporation in which the individual
owns 100% of the stock of the corporation;
(B) in the case of ownership by a corporation, when
the ownership is transferred to a partnership in which the stockholders
possess equal interest in the owning partnership; or
(C) in the case of ownership by a partnership or a
corporation that transfers ownership to a corporation in which the
partners hold interest that equals the interest of the owning partnership,
or the owning corporation transfers ownership to a different corporation
in which the stockholders for both corporations possess equal shares.
(f) New location.
(1) The division shall be notified in writing of any
change of address at least five working days before the move.
(2) The school must submit the appropriate change of
address fee prior to the actual move.
(3) If a student is not willing to change locations
or is prevented from completing the training at the new location,
a pro-rata refund (without deducting any administrative expense) must
be made to the student.
(4) The school must maintain a current mailing address,
telephone number, and e-mail address (if applicable) at the division.
(g) Renewal of driver education school license. A complete
application for the renewal of a license for a primary or branch driver
education school shall be submitted before the expiration of the license
and shall include the following:
(1) completed application for renewal;
(2) annual renewal fee;
(3) a current list of instructors employed at the school;
(4) executed bond or executed continuation agreement
for the bond currently approved by, and on file with, TEA or approved
alternate form of security;
(5) a current list of all motor vehicles used for
(6) evidence that all vehicles used for instruction
are properly insured; and
(7) any other revision or evidence of which the school
has been notified in writing that is necessary to bring the school's
application for a renewal license to a current and accurate status.
(h) Denial, revocation, or conditional license. The
authority to operate a branch school ceases if a primary driver education
school license is denied or revoked. The operation of a branch school
license may be subject to any conditions placed on the continued operation
of the primary driver education school. A driver education school
license for a branch school may be denied, revoked, or conditioned
separately from the license for the primary school.
(i) Notification of legal action. A school shall notify
the division in writing of any legal action that may affect the operation
of, or is filed against, the school, its officers, any owner, or any
school instructor within five working days after the school, its officers,
any owner, or any school instructor has commenced the legal action
or has been served with legal process. Included with the written notification,
the school shall submit a file-marked copy of the petition or complaint
that has been filed with the court.
(j) School closure.
(1) The school owner shall notify TEA at least five
business days before the anticipated school closure. In addition,
the school owner shall provide written notice of the actual discontinuance
of the operation the day of cessation of classes. A school shall make
all records available for review to TEA upon request.
(2) The division may declare a school to be closed:
(A) when the school does not have the facilities, vehicles,
instructors, or equipment to provide training pursuant to this subchapter;
(B) when the school has stopped conducting classes
and has failed to fulfill contractual obligations to its students;
(C) when the school owner allows the school license
(3) If a branch school closes and a student is prevented
from completing the training at the primary location, a pro-rata
refund (without deducting any administrative expense) must be made
to the student.
(k) Contract site. A school shall receive approval
from TEA prior to conducting a class at a contract site, and approval
may be granted by TEA upon review of the agreement made between the
licensed driver education school and the contract site. The course
shall be subject to the same rules that apply at the licensed driver
education school, including periodic inspections by TEA representatives.
An on-site inspection is not required prior to approval of the site.
Source Note: The provisions of this §84.102 adopted to be effective December 26, 1999, 24 TexReg 11335; amended to be effective April 21, 2005, 30 TexReg 2215; amended to be effective December 29, 2010, 35 TexReg 11636; transferred effective September 1, 2015, as published in the Texas Register August 28, 2015, 40 TexReg 5471