(1) The Department of Transportation shall have the authority to investigate and verify information provided in conjunction with application for proportional registration of a tow vehicle under ORS 822.217. The department may cancel an identification device for a proportionally registered tow vehicle if the department determines that the owner or lessee of the vehicle, or an employee of either, has:
(a) Operated the vehicle in violation of tow vehicle registration limits;
(b) Falsely certified an application required by ORS 822.217 for registration or renewal of registration of a proportionally registered tow vehicle; or
(c) Falsely completed an application under ORS 822.205 for a towing business certificate.
(2) If a tow vehicle proportional registration identification device is canceled under this section, the vehicle is not eligible for registration under ORS 822.205 for a period of one year after the cancellation.