HBA-RBT H.B. 267 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 267 By: Wolens Insurance 2/10/1999 Introduced BACKGROUND AND PURPOSE A significant number of people are not in compliance with the Texas Motor Vehicle Safety Responsibility Act which requires each person who registers or maintains a motor vehicle to establish financial responsibility through liability insurance or other approved methods. H.B. 267 requires the Texas Department of Public Safety to establish a system of random checks to verify whether individuals are in compliance with the financial responsibility requirements of the Texas Motor Vehicle Safety Responsibility Act. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Department of Public Safety in SECTION 1 (Section 601.501, Transportation Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 601, Transportation Code, by adding Subchapter N, as follows: SUBCHAPTER N. VERIFICATION AND ENFORCEMENT OF ESTABLISHMENT OF FINANCIAL RESPONSIBILITY. Sec. 601.501. VERIFICATION OF ESTABLISHMENT OF FINANCIAL RESPONSIBILITY. (a) Requires the Department of Public Safety (department) to select random samples of motor vehicle registrations or owners of motor vehicles subject to this chapter, for the purpose of verifying whether or not the owners of motor vehicles have established financial responsibility in accordance with Section 601.051, Transportation Code (Requirement of Financial Responsibility). Authorizes the department to select additional random samples of registrations of motor vehicles from selected groups for verification. Provides that the groups may include, but are not limited to, registrations of motor vehicles owned by persons whose motor vehicle registrations have been suspended during the preceding four years under Sections 601.191 (Operation of Motor Vehicle in Violation of Motor Vehicle Liability Insurance Requirement; Offense), 601.195 (Operation of Motor Vehicle in Violation of Requirement to Establish Financial Responsibility; Offense), 601.196 (Evidence Forged or Signed Without Authority; Offense), 601.505 (Operation of a Motor Vehicle When Registration Suspended for Failure to Establish Financial Responsibility), or 601.507 (Display of False Proof of Financial Responsibility), Transportation Code (the specified sections), who have been convicted during the preceding four years of violating specified sections, who have been convicted during the preceding four years of violating specified sections while operating vehicles owned by other persons, whose driver's license or vehicle registration has been suspended during the preceding four years, or who received deferred adjudication during the preceding four years, under Article 45.54, Texas Code of Criminal Procedure (Suspension of Sentence and Deferral of Final Disposition) for violating specified sections. (b) Requires the department, in order to prepare for the selection of random samples and the department's verification of financial responsibility, to send requests for information to randomly selected owners regarding their motor vehicles and their method of establishing financial responsibility. Requires the request to require the owner to state whether the owner had established financial responsibility in accordance with the requirements of Section 601.051, Transportation Code, on the verification date stated in the department's request. Requires the department to prescribe by rule the methods employed for the selection of random samples, the frequency of random samples to be selected, the form that the department shall use for verification of financial responsibility, and the information that is to be requested. Authorizes the request to require a statement by the owner that the owner had established financial responsibility in compliance with the specified sections through liability insurance, by filing a surety bond, by depositing $55,000 in cash or securities with the appropriate entity, or through self-insurance. (c) Requires a motor vehicle owner who receives a request to furnish within 30 days the information on the form prescribed by the department, which must include a signed affirmation that the information is true and correct. Provides that an owner who fails to respond to an information request, or whose response indicates that the owner had not established financial responsibility in accordance with Section 601.051, Transportation Code, is considered to have registered or maintained a motor vehicle in violation of that section. (d) Authorizes the department to verify an owner's statement that the owner has established financial responsibility in accordance with Section 601.051, Transportation Code, by furnishing the necessary information to the insurer, the company issuing the surety bond, the entity with whom the owner deposited the required funds or securities, or by searching the department's records to verify that a certificate of self-insurance has been issued. Requires the recipient of the department's information to inform the department within 30 days whether or not the owner had established financial responsibility in accordance with this chapter on the verification date. (e) Requires the department to prescribe by rule the procedures necessary for the implementation of the verification process. (f) Prohibits selecting a random sample group based on race, religion, sex, national origin, age, marital status, physical or mental disability, economic status, or geography. Sec. 601.502. FAILURE TO ESTABLISH FINANCIAL RESPONSIBILITY-NOTICE. Requires that, if the department determines that an owner has registered or maintained the registration of a motor vehicle without establishing financial responsibility, the department mail a notice to the owner informing the owner that the owner's vehicle registration will be suspended in 45 days unless the owner furnishes proof within 30 days that the owner had established financial responsibility. Sec. 601.503. FAILURE TO ESTABLISH FINANCIAL RESPONSIBILITYSUSPENSION AND REINSTATEMENT. (a) Requires the department to suspend the vehicle registration of any motor vehicle determined to be in violation of Section 601.051, Transportation Code, or any motor vehicle operated in violation of other specified sections, by an operator other than the owner of the vehicle. Requires the department to disregard whether the owner has subsequently established financial responsibility or no longer owns the vehicle if making a decision to suspend. (b) Authorizes the department to suspend the registration of any motor vehicle registered in this state if the department receives notice that the operator of the motor vehicle was convicted in another state of an offense which would be a violation under Section 601.051, if committed in this state. (c) Requires the suspension, until it is terminated, to remain in force after the registration is renewed or a new registration is acquired for the motor vehicle. Requires the suspension to apply to any vehicle to which the owner transfers the registration. (d) Requires the department, for a first violation, to terminate the suspension upon payment of a reinstatement fee of $100 and submission of proof of financial responsibility. (e) Requires the department, if an owner has two or more violations of Section 601.505 within four years, to terminate the suspension four months after its effective date upon payment of a reinstatement fee of $100 and submission of proof of financial responsibility. (f) Requires all fees to be deposited in the General Revenue Fund. Sec. 601.504. SUBMISSION OF FALSE PROOF-PENALTY. (a) Requires the department to suspend an owner's vehicle registration if the department determines that the proof of financial responsibility submitted is false. Requires the department to terminate the suspension six months after its effective date upon payment of a reinstatement fee of $200 and submission of proof of financial responsibility. Requires all fees collected to be deposited in the General Revenue Fund. Sec. 601.505. OPERATION OF A MOTOR VEHICLE WHEN REGISTRATION SUSPENDED FOR FAILURE TO ESTABLISH FINANCIAL RESPONSIBILITY. Prohibits any person from operating a vehicle if the vehicle's registration is suspended under Sections 601.503 or 601.504. Establishes that a violation of this section is a business offense and that the punishment will be a fine of between $1,000 and $2,000. Sec. 601.506. EVIDENCE OF FINANCIAL RESPONSIBILITY. (a) Requires the operator of a motor vehicle to carry within the vehicle proof of financial responsibility. Lists the types of documents which will satisfy this requirement. (b) Requires any person to display the evidence of financial responsibility to a peace officer upon request. Provides that any person who does not comply with the peace officer's request is in violation of Section 601.051, Transportation Code. Provides that any person who provides evidence of financial responsibility and knows that financial responsibility has not been established under Section 601.051, Transportation Code, or knows that the evidence of financial responsibility is illegally altered, counterfeit, or otherwise invalid, is in violation of Sections 601.196 or 601.507, Transportation Code. (c) Defines "display." Sec. 601.507. DISPLAY OF FALSE PROOF OF FINANCIAL RESPONSIBILITY. Provides that a person commits a misdemeanor if the person displays evidence of financial responsibility to a peace officer, court, or officer of the court, and knows that financial responsibility has not been established as required under Section 601.051, Transportation Code, or knows that the evidence is illegally altered, counterfeit, or otherwise invalid. Requires a peace officer to confiscate the evidence of financial responsibility for presentation in court if the officer issues a citation for displaying invalid evidence of financial responsibility. Provides that the punishment for violating this section is a fine of up to $1,000, confinement in the county jail for up to a year, or a combination of a fine and confinement. SECTION 2. Amends Section 601.051, Transportation Code, to prohibit a person from registering, maintaining, or operating a motor vehicle unless financial responsibility is established. Prohibits the owner of a motor vehicle from allowing another person to operate, register or maintain registration of a motor vehicle unless financial responsibility is established. Requires a person who fails to comply with a request display evidence of financial responsibility, as required under Section 601.506, to be deemed to be operating a motor vehicle in violation of this section. SECTION 3. Amends Section 601.191, Transportation Code, as follows: Sec. 601.191. New title: OPERATION OF MOTOR VEHICLE IN VIOLATION OF FINANCIAL RESPONSIBILITY REQUIREMENTS RATHER THAN OPERATION OF MOTOR VEHICLE IN VIOLATION OF MOTOR VEHICLE LIABILITY INSURANCE REQUIREMENT. Deletes "MOTOR VEHICLE LIABILITY INSURANCE REQUIREMENT" from existing title. Provides that an offense under this section is a business offense, rather than a misdemeanor. Amends the range of punishment to a fine between $500 and $1,000, rather than between $175 and $350 for first offenders, or between $350 and $1,000 for subsequent offenders. Deletes a provision allowing a fine of less than $175 for first-time offenders who are unable to pay the fine. Requires an acquittal of a person charged under this section if the person can produce satisfactory evidence that at the time of arrest, the owner or operator had established financial responsibility. Makes a conforming change. SECTION 4. Repealer: Subchapter H, Chapter 601, Transportation Code (Failure to Maintain Evidence of Financial Responsibility; Suspension of Driver's License and Motor Vehicle Registration), and Subchapter I, Chapter 601, Transportation Code (Failure to Maintain Evidence of Financial Responsibility; Impoundment of Motor Vehicle). SECTION 5. Amends Section 12.02, Subchapter A, Chapter 12, Penal Code, to include business offenses in the classification of offenses. Makes nonsubstantive changes. SECTION 6. Amends Subchapter A, Chapter 12, Penal Code, to add Section 12.05, as follows: Sec. 12.05. CLASSIFICATION OF BUSINESS OFFENSE. Provides that the fine for a business offense is at least $500. Provides that a conviction of a business offense does not impose any legal disability or disadvantage. SECTION 7. Amends Subchapter B, Chapter 12, Penal Code, as follows: New title: SUBCHAPTER B. ORDINARY MISDEMEANOR AND BUSINESS OFFENSE PUNISHMENTS. Sec. 12.24. BUSINESS OFFENSE. Requires the punishment for a business offense to be a fine of at least $500. SECTION 8. Effective date: September 1, 1999. SECTION 9. Emergency clause.