RS C.S.H.B. 18 75(R)    BILL ANALYSIS


INSURANCE
C.S.H.B. 18
By: Corte
5-6-97
Committee Report (Substituted)



BACKGROUND 

 Texas law requires that all drivers have proof of financial
responsibility (liability). This proof must be provided in order to renew
a driver's license, have a car inspected or register a car. However, many
drivers are circumventing the law by purchasing liability insurance in
order to accomplish the above and then canceling the policy thereby
driving uninsured. The penalties for uninsured drivers are relatively
minor and have done little to ensure compliance with state law. Further,
Texas law states that driving while intoxicated is a crime, and one or the
leading causes for all fatal traffic accidents. 

PURPOSE
 To limit the amount of recovery a driver could receive for automobile
injuries if he was not able to show proof of financial responsibility at
the time of the accident, or was driving while intoxicated at the time of
the accident and received a conviction.  If an uninsured driver or an
intoxicated driver is involved in an accident which is not his fault, he
would only be able to recover economic damages (that is property damages,
medical expenses and lost wages). Noneconomic damages would not be
recoverable. In the instance that an uninsured driver is hit by an
intoxicated driver, that person would still retain the right to sue under
this legislation.  The intent of this legislation is to prevent a person
who is violating state law from recovering large damage awards. 

RULEMAKING AUTHORITY

It is the opinion of the committee that this bill does grant additional
rulemaking authority to the Commissioner of Insurance in SECTION 1 of the
bill (Sec. 92.001(e), Title 4, Civil Practice and Remedies Code).
Additional rulemaking authority is granted to the Texas Education Agency
in SECTION 1 of the bill (Sec. 92.001(g), Title 4, Civil Practices and
Remedies Code).   
  
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 4, Civil Practices and Remedies Code by adding
Chapter 92 as follows: 

CHAPTER 92. LIABILITY FOR CERTAIN MOTOR VEHICLE ACCIDENTS

Sec. 92.001. LIABILITY FOR INJURY TO CERTAIN OPERATORS. (a) A person may
not obtain non-economic or exemplary damages in a civil action for injury,
death, or damage or destruction of property arising from an auto accident
if: the person was operating the vehicle while intoxicated in violation of
Sec. 49.04, Penal Code, or similar law of another state, and convicted of
an offense described in paragraph (A); or if the person knowingly operated
the vehicle in violation of Sec. 601.051, Transportation Code. 

(b) Subsection (a) does not apply to a person described by Subsection
(a)(2) if the person was injured by another person who was operating a
vehicle while intoxicated and convicted of this offense. 

(c) Except as provided by Subsection (d), Subsection (a) applies to a
claim for damages made by a person whose right to recovery derives from an
injury to another person whose right to recovery of noneconomic and
exemplary damages would be barred by subsection  (a).  Including wrongful
death or loss of consortium or companionship. 

(d) This section does not prohibit recovery of damages for a wilful act,
omission, or gross neglect in a wrongful death action brought on behalf of
a surviving spouse or heirs of the decedent.  A claim for exemplary
damages in this subsection is governed by Chapter 41. 

(e) Requires each insurer that issues a policy of motor vehicle insurance
in this state to comply with the requirements of Chapter 601,
Transportation Code, including a Lloyd's plan insurer, county mutual,
reciprocal, or interinsurance exchange insurer to notify the insured of
sections (a) - (d).  Notice shall be made at the time of issuance and
termination of the policy.  The commissioner by rule shall adopt the form
and content of notice.   

(f) The Department of Public Safety shall post notice of Subsections (a) -
(d) at each facility where a license may be issued or renewed. 

(g) A person who offers a driving safety course approved by the Texas
Education Agency (TEA) under the Texas Driver and Traffic Safety Education
Act shall notify each student of Subsections (a) - (d).  The TEA shall
adopt the form and content of the notice required under this subsection.
The notice may be included in the approved course materials or may be
separate. 

(h) This section does not prohibit the person described by subsection (a)
from acting in a representative capacity to bring suit  on behalf of
another person injured in the accident.  

(i) Defines "Exemplary damages," and "Noneconomic damages."

SECTION 2. This act applies only to a cause of action that accrues on or
after the effective date.  

SECTION 3.  Emergency Clause; Effective date upon passage.

COMPARISON OF ORIGINAL TO SUBSTITUTE

CSHB 18 amends the caption by removing "a driver who fails to maintain
financial responsibility." 

CSHB 18 amends the original language in SECTION 1 of HB 18, by changing
from the Transportation Code to the Civil Practices and Remedies Code. 

SECTION 1. New SECTION 1 adds Chapter 92 to Title 4, Civil Practices and
Remedies Code, and makes the following changes in the new language: 

(a) Language stays the same in subsection (a), changes bill to amend Civil
Practices and Remedies Code.  Adds language to subdivision (A) about
operating vehicle while intoxicated in violation of Section 49.04, Penal
Code, or similar law of another state.  Adds subdivision (B) requiring
conviction of an offense from paragraph (A).  Adds "at the time of the
accident" to subsection (2). 

(b) Adds new subsection (b) to do the following: Subsection (a) does not
apply if the person was injured by another person who was operating a
vehicle while intoxicated and convicted of this. 

(c) Changed from subsection (b) in HB 18.  Adds exception as provided by
subsection (d). 

(d) Adds new subsection (d) to say the following:  This act does not
prohibit the recovery of damages for gross negligence or a wilful act of
omission in a wrongful death action brought by or on behalf of a surviving
spouse or heirs of decedent.  A claim for damages described under this
subsection is governed by Chapter 41. 

Adds new subsections (e), (f), and (g) to lay out how the insurance
companies should inform  their clients of this legislation.  The DPS must
post notice of these provisions where license renewals are made.  Requires
persons who offer certified driving safety courses to provide to students
written information of this law. 

(h) Adds new subsection (h) to say the following: Specifies that the
person that is described in Subsection (a) is not prohibited from acting
in a representative capacity to bring suit on behalf of another person
injured in the accident, as next friend or otherwise. 

(i)(1) remains the same.

(i)(2) Rewords the first part of the definition.  Adds sentence to the
end, saying definition does not include exemplary damages. 

SECTION 2. Changes bill from effective date of September 1, 1997, to a new
section applying this act to a cause of action that arises on or after the
effective date of this act. 

SECTION 3. Changes the Emergency Clause.  Makes effective date upon
passage.