By Gutierrez H.B. No. 2793 76R8833 WP-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to motor vehicle insurance verification and creating the 1-3 motor vehicle insurance verification program; providing 1-4 administrative and criminal penalties. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 601, Transportation Code, is amended by 1-7 adding Subchapter N to read as follows: 1-8 SUBCHAPTER N. MOTOR VEHICLE INSURANCE VERIFICATION PROGRAM; 1-9 INSURER REPORTING 1-10 Sec. 601.440. DEFINITIONS. In this subchapter: 1-11 (1) "Database" means the motor vehicle insurance 1-12 verification database established under this subchapter. 1-13 (2) "Designated agent" means a third party 1-14 administering the program under contract with the department. 1-15 (3) "Program" means the Motor Vehicle Insurance 1-16 Verification Program established under this subchapter. 1-17 Sec. 601.441. ESTABLISHMENT OF PROGRAM. (a) The department 1-18 shall establish the Motor Vehicle Insurance Verification Program to 1-19 verify compliance with this chapter. 1-20 (b) The department by rule shall administer the program with 1-21 the assistance of a designated agent. 1-22 (c) The program must comply with the Driver's Privacy 1-23 Protection Act of 1994 (18 U.S.C. Section 2721 et seq.). 1-24 Sec. 601.442. DESIGNATED AGENT; MAINTENANCE OF DATABASE. 2-1 (a) The department shall contract with a third party to act as the 2-2 department's designated agent under this subchapter. The contract 2-3 may be awarded under a competitive bid procedure as provided by 2-4 department rule. The contract may not obligate the department to 2-5 pay more money than is determined by the public safety director 2-6 from fees collected under Section 502.1715. 2-7 (b) The designated agent shall develop and maintain a 2-8 computer database to manage and provide access to information 2-9 provided under Sections 601.444, 601.445, and 601.446. 2-10 (c) The database shall be developed, maintained, and 2-11 administered in accordance with guidelines established by the 2-12 department to permit efficient access by courts and state and local 2-13 law enforcement agencies. 2-14 Sec. 601.443. VERIFICATION; NOTICE FOR NONCOMPLIANCE. 2-15 (a) With information provided by the department and the Texas 2-16 Department of Transportation, the designated agent shall, at least 2-17 monthly: 2-18 (1) update the database with the motor vehicle 2-19 insurance information provided by insurers under Section 601.444; 2-20 and 2-21 (2) compare all current motor vehicle registrations 2-22 provided by the Texas Department of Transportation against the 2-23 database. 2-24 (b) If a comparison under this section shows that a motor 2-25 vehicle is not insured, the department may direct that the 2-26 designated agent mail a notice to the owner of the motor vehicle 2-27 stating that the owner has 45 days to provide: 3-1 (1) proof of the owner's financial responsibility in a 3-2 form described by Section 601.053; 3-3 (2) a letter from an insurance agent or company 3-4 verifying that the person had the required motor vehicle insurance 3-5 coverage on the date of action specified by the database query; 3-6 (3) proof of an exemption from the owner's financial 3-7 responsibility under Section 601.052; or 3-8 (4) proof that the owner of the motor vehicle is 3-9 insured by an insurance company located in another state because 3-10 the owner is a member of the United States armed forces, a student 3-11 attending an educational institution in this state and residing in 3-12 this state, or a faculty member of an educational institution in 3-13 this state who is residing in this state. 3-14 (c) If an owner of a motor vehicle has not provided proof of 3-15 financial responsibility to the designated agent by the 45th day 3-16 after the date the notice is sent, the department may direct the 3-17 designated agent to provide an additional notice. 3-18 Sec. 601.444. INFORMATION PROVIDED BY INSURANCE COMPANY. 3-19 (a) Each insurance company providing motor vehicle liability 3-20 policies in this state shall provide the designated agent a record 3-21 of each motor vehicle insurance policy, including: 3-22 (1) the insurance policy number, effective date, and 3-23 expiration date of the policy; 3-24 (2) the name, address, date of birth, and driver's 3-25 license number of each driver insured by the policy; and 3-26 (3) the make, model, year, and vehicle identification 3-27 number of each vehicle covered by the policy. 4-1 (b) Each insurance company shall provide information 4-2 required by Subsection (a) to the designated agent in an electronic 4-3 submission monthly or more frequently as prescribed by the public 4-4 safety director. 4-5 (c) If information provided by an insurance company to the 4-6 designated agent is incorrect, the insurance company shall provide 4-7 corrected information to the designated agent in a timely manner as 4-8 prescribed by the public safety director after the date the 4-9 insurance company receives notice of the error from the designated 4-10 agent. 4-11 (d) Information provided by an insurance company under this 4-12 section remains the property of the insurance company and may not 4-13 be sold or made available except to enforce a state law. 4-14 Sec. 601.445. INFORMATION PROVIDED BY DEPARTMENT. (a) The 4-15 department shall provide the designated agent the following 4-16 information on each Texas driver's license holder: 4-17 (1) the holder's name, address, and date of birth; and 4-18 (2) the driver's license number and expiration date. 4-19 (b) For each motor vehicle covered by a bond filed under 4-20 Section 601.121, a deposit made under Section 601.123, or a 4-21 certificate of self-insurance issued under Section 601.124, the 4-22 department shall provide to the designated agent: 4-23 (1) the owner's name, address, and date of birth; and 4-24 (2) the owner's driver's license number and expiration 4-25 date. 4-26 (c) The department shall notify the designated agent of: 4-27 (1) the cancellation of a bond filed under Section 5-1 601.121; 5-2 (2) the cancellation of a deposit filed under Section 5-3 601.123; or 5-4 (3) the termination of a certificate of self-insurance 5-5 issued under Section 601.124. 5-6 (d) This section does not require the department to provide 5-7 to the designated agent information that is not in the possession 5-8 of the department. 5-9 (e) The department shall provide the information under this 5-10 section in an electronic submission to the designated agent in a 5-11 timely manner as prescribed by the public safety director. 5-12 (f) The department is not liable to any person for damages 5-13 arising as a result of providing information as required by this 5-14 section. 5-15 Sec. 601.446. INFORMATION PROVIDED BY TEXAS DEPARTMENT OF 5-16 TRANSPORTATION. (a) The Texas Department of Transportation shall 5-17 provide the department or its designated agent the following 5-18 information for each vehicle to which this chapter applies, to the 5-19 extent the information is in the Texas Department of 5-20 Transportation's records: 5-21 (1) the owner's name and address; 5-22 (2) the make, model, and year of the vehicle; 5-23 (3) the vehicle identification number and vehicle 5-24 license plate number; and 5-25 (4) the date the certificate of title was issued for 5-26 the vehicle. 5-27 (b) The Texas Department of Transportation is not required 6-1 to provide information under this section about a vehicle 6-2 registered under Subchapter G, Chapter 502. 6-3 (c) The Texas Department of Transportation shall provide the 6-4 information under this section and each change to information 6-5 previously provided under this section in a report that includes 6-6 the information for registrations and changes occurring during the 6-7 week preceding the date of the report. 6-8 (d) The Texas Department of Transportation shall provide by 6-9 electronic submission to the department or its designated agent any 6-10 information required under this section in a timely manner as 6-11 prescribed by the public safety director. 6-12 Sec. 601.447. RULES. (a) The department may adopt rules as 6-13 necessary to implement this subchapter. 6-14 (b) The department shall consult with the Texas Department 6-15 of Transportation about rules that affect the reporting of 6-16 information relating to vehicle registrations. 6-17 (c) The department by rule may waive a requirement that 6-18 particular information be provided to the designated agent if the 6-19 department finds that the information is not useful for enforcing 6-20 this chapter or that the burden of collecting or reporting the 6-21 information is not justified by its value in enforcing this 6-22 chapter. 6-23 Sec. 601.448. INFORMATION REMAINS PROPERTY OF AGENCIES. 6-24 (a) Information provided by the department under Section 601.445 6-25 and information provided by the the Texas Department of 6-26 Transportation under Section 601.446 remains the property of each 6-27 agency and may not be sold or made available except to enforce a 7-1 state law. 7-2 (b) Information provided by the department under Section 7-3 601.445 and information provided by the Texas Department of 7-4 Transportation under Section 601.446 is confidential and not 7-5 subject to disclosure under Chapter 552, Government Code. 7-6 Sec. 601.449. LIABILITY OF CERTAIN OFFICERS, EMPLOYEES, AND 7-7 AGENTS. An officer or employee of an insurance company, an 7-8 officer, employee, or agent of the department, or an officer, 7-9 employee, agent, or statutory agent of the Texas Department of 7-10 Transportation is not liable in a civil action for an act 7-11 performed in good faith in providing information in compliance with 7-12 this subchapter. 7-13 Sec. 601.450. VIOLATION; ADMINISTRATIVE SANCTIONS. 7-14 (a) Violation by an insurance company of this subchapter is a 7-15 ground for an administrative sanction by the commissioner of 7-16 insurance under Articles 1.10 and 1.10E, Insurance Code, including 7-17 the revocation of the company's certificate of authority to engage 7-18 in the business of insurance in this state. The commissioner of 7-19 insurance may assess an administrative penalty against that 7-20 insurance company in an amount not to exceed $250 for each policy 7-21 involved for each day of noncompliance. 7-22 (b) Not later than the 10th day after the date the 7-23 commissioner determines a violation has occurred, the commissioner 7-24 shall send by certified mail a notice of the determination to the 7-25 insurance company involved with a statement of the right of the 7-26 insurance company to a hearing relating to the alleged violation 7-27 and the amount of the penalty. 8-1 (c) Not later than the 20th day after the date the report is 8-2 sent, the insurance company may make a written request for a 8-3 hearing or may remit the amount of the administrative penalty to 8-4 the Texas Department of Insurance. Failure to request a hearing or 8-5 to remit the amount of the administrative penalty within the time 8-6 provided by this subsection waives the right to a hearing under 8-7 this subsection. Not later than the 30th day after the date the 8-8 notice is received, the insurance company charged shall pay the 8-9 administrative penalty in full or, if the insurance company wishes 8-10 to contest the amount of the penalty or the violation, forward the 8-11 amount of the penalty assessed to the Texas Department of Insurance 8-12 for deposit in an escrow account. 8-13 (d) If after the hearing or judicial review it is determined 8-14 that a violation did not occur or that the amount of the penalty 8-15 should be reduced, the Texas Department of Insurance shall return 8-16 the appropriate amount to the insurance company charged with the 8-17 violation not later than the 30th day after the date the 8-18 determination becomes final. 8-19 Sec. 601.451. VIOLATION; CRIMINAL PENALTY. (a) A person 8-20 commits an offense if the person knowingly releases information 8-21 maintained by the department or its designated agent under this 8-22 subchapter except to enforce a state law. 8-23 (b) An offense under this section is a Class A misdemeanor. 8-24 SECTION 2. Section 502.104, Transportation Code, is amended 8-25 to read as follows: 8-26 Sec. 502.104. DISPOSITION OF CERTAIN SPECIAL FEES. Each 8-27 Monday a county assessor-collector shall send to the department an 9-1 amount equal to collections for the preceding week for: 9-2 (1) each transfer fee collected under Section 502.175; 9-3 and 9-4 (2) each fee collected under Section 502.169(b), 9-5 502.1715, or 502.279. 9-6 SECTION 3. Subchapter D, Chapter 502, Transportation Code, 9-7 is amended by adding Section 502.1715 to read as follows: 9-8 Sec. 502.1715. ADDITIONAL FEE FOR EVIDENCE OF FINANCIAL 9-9 RESPONSIBILITY SYSTEM. (a) In addition to other fees imposed for 9-10 registration of a motor vehicle at the time of application for 9-11 registration or renewal of registration of a motor vehicle for 9-12 which the owner is required to submit evidence of financial 9-13 responsibility under Section 502.153, the applicant shall pay a fee 9-14 of $3. 9-15 (b) Fees collected under this section shall be deposited to 9-16 the credit of the state highway fund. The department shall use 9-17 money appropriated from the state highway fund that represents 9-18 those fees to administer Subchapter N, Chapter 601, and to 9-19 reimburse the Department of Public Safety for expenses in 9-20 administering that subchapter. 9-21 (c) The department and the Department of Public Safety shall 9-22 adopt rules and develop forms necessary to administer this section. 9-23 SECTION 4. This Act takes effect September 1, 1999. 9-24 SECTION 5. (a) As soon as practicable after the effective 9-25 date of this Act, the Department of Public Safety shall appoint a 9-26 technical advisory committee to assist the department in developing 9-27 the initial rules required for implementation of Subchapter N, 10-1 Chapter 601, Transportation Code, as added by this Act. The 10-2 technical advisory committee must include representatives of the 10-3 affected insurance companies and representatives of the Texas 10-4 Department of Transportation. 10-5 (b) The technical advisory committee shall prepare 10-6 recommended rules for consideration by the Department of Public 10-7 Safety not later than April 1, 2000. 10-8 (c) This section expires and the technical advisory 10-9 committee is abolished September 1, 2000. 10-10 SECTION 6. (a) Not later than September 1, 2000: 10-11 (1) the Department of Public Safety shall contract 10-12 with an entity to serve as designated agent under Subchapter N, 10-13 Chapter 601, Transportation Code, as added by this Act; and 10-14 (2) the Department of Public Safety shall adopt any 10-15 rules necessary to implement Subchapter N, Chapter 601, 10-16 Transportation Code, as added by this Act. 10-17 (b) Except as provided by Subsection (c) of this section, a 10-18 motor vehicle insurance company is not required to report under 10-19 Section 601.444, Transportation Code, as added by this Act, before 10-20 September 1, 2000. 10-21 (c) The Department of Public Safety by rule may designate, 10-22 by market share, premium volume, or another similar characteristic, 10-23 smaller motor vehicle insurance companies that are not required to 10-24 report under Section 601.444, Transportation Code, as added by this 10-25 Act, before September 1, 2001. 10-26 (d) The Department of Public Safety is not required to 10-27 report under Sections 601.445(b) and (c), Transportation Code, as 11-1 added by this Act, before September 1, 2000. 11-2 SECTION 7. The importance of this legislation and the 11-3 crowded condition of the calendars in both houses create an 11-4 emergency and an imperative public necessity that the 11-5 constitutional rule requiring bills to be read on three several 11-6 days in each house be suspended, and this rule is hereby suspended.