(a) The board by rule shall allow a vehicle described by Subsection (b) to be equipped with a digital license plate that is placed on the rear of the vehicle in lieu of a physical license plate issued under this chapter. The rule must require the owner of a vehicle issued a digital license plate to obtain a physical license plate to be placed on the front of the vehicle unless the vehicle is of a class of vehicles that is not required to display two license plates, as provided by other law.
(b) A vehicle registered under Chapter 502 may be equipped with a digital license plate only if the vehicle:
(1) is part of a commercial fleet, as defined by § 502.001;
(2) is owned or operated by a governmental entity; or
(3) is not a passenger vehicle.

(c) The department may contract with digital license plate providers for the issuance of digital license plates, including any services related to the issuance of digital license plates.
(d) Notwithstanding any other law, a rule adopted under this subchapter may:
(1) authorize the display of the vehicle’s registration insignia on a digital license plate issued for the vehicle in lieu of attaching the registration insignia to the inside of the vehicle’s windshield as required by § 502.059;
(2) establish a fee in an amount necessary to cover any administrative costs incurred that relate to the issuance of a digital license plate and exceed the administrative costs incurred for the issuance of a physical license plate; or
(3) prohibit a digital license plate provider from contracting with the department under Subchapter J.