[AlphaSigOU]

A license plate frame that does not obscure any of the license plate numbers is still OK. It is intended to prohibit neon license plate frames or any covering designed to alter the color or reflectivity of the license plate.

Here's the text of the bill (SB 439):

S.B. No. 439




AN ACT

relating to an offense involving a motor vehicle with an altered or
obscured license plate.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 502.409, Transportation
Code, is amended to read as follows:
Sec. 502.409. WRONG, FICTITIOUS, ALTERED, OR OBSCURED
[UNCLEAN] LICENSE PLATE.
SECTION 2. Subsection (a), Section 502.409, Transportation
Code, is amended to read as follows:
(a) A person commits an offense if the person attaches to or
displays on a motor vehicle a number plate or registration insignia
that:
(1) is assigned to a different motor vehicle;
(2) is assigned to the vehicle under any other motor
vehicle law other than by the department;
(3) is assigned for a registration period other than
the registration period in effect;
(4) is fictitious;
(5) has letters, numbers, or other identification
marks that because of blurring or reflective matter are not plainly
visible at all times during daylight;
(6) has an attached illuminated device or [is a]
sticker, decal, emblem, or other insignia that is not authorized by
law and that interferes with the readability of the letters or
numbers on the plate or the name of the state in which the vehicle is
registered; or
(7) has a coating, covering, or protective material
that:
(A) distorts angular visibility or
detectability; or
(B) alters or obscures the letters or numbers on
the plate, the color of the plate, or another original design
feature of the plate.
SECTION 3. (a) The change in law made by this Act applies
only to an offense committed on or after the effective date of this
Act. For the purposes of this section, an offense is committed
before the effective date of this Act if any element of the offense
occurs before that date.
(b) An offense committed before the effective date of this
Act is governed by the law in effect when the offense was committed,
and the former law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2003.