HBA-TBM H.B. 1752 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1752
By: Gutierrez
Insurance
4/23/2001
Committee Report (Amended)



BACKGROUND AND PURPOSE 

The Texas Motor Vehicle Safety Responsibility Act prohibits a person from
operating a motor vehicle in Texas unless financial responsibility is
established for that vehicle.  Even so, many motorists circumvent the law.
Some purchase an insurance policy solely to receive a proof-of-insurance
card and then cancel the insurance policy.  Others purchase fraudulent
proof-of-insurance cards based on nonexistent or deceptive insurance
policies.  These techniques may prevent a proof-of-insurance card from
being an effective method of verifying whether a motorist complies with
current financial responsibility laws.  House Bill 1752 requires the
Department of Public Safety in conjunction with insurance companies, the
Texas Department of Transportation, and a designated agent to establish a
motor vehicle insurance verification program to certify compliance with 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 Texas Department of Public Safety
in SECTION 2 (Section 601.081, Transportation Code), SECTION 3 (Sections
601.442, 601.443, and 601.448, Transportation Code), SECTION 5 (Section
502.1715, Transportation Code), SECTION 7, and SECTION 8 and to the Texas
Department of Transportation in SECTION 5 (Section 502.1715, Transportation
Code) of this bill.   

ANALYSIS

House Bill 1752 amends the Transportation Code to require the Texas
Department of Public Safety (DPS) rather than the Texas Department of
Insurance to provide for production of a standard proof of motor vehicle
liability insurance form (form) for use by insurers.  The bill authorizes
DPS to contract with another person for production of the form and requires
each insurer issuing motor vehicle liability insurance (insurance) to use
the form produced by DPS.  The bill authorizes DPS to adopt rules to
implement the production of the form (Secs. 601.053 and 601.081).   

H.B. 1752 requires DPS to establish a motor vehicle insurance verification
program (program) to verify compliance with the Texas Motor Vehicle Safety
Responsibility Act.  The program must conform to the provisions of the
federal Driver's Privacy Protection Act of 1994 and verifies motorist
compliance with insurance requirements.  The bill requires DPS by rule to
administer the program with the assistance of a designated agent (agent)
and sets forth provisions by which DPS is required to contract with the
agent for the development and maintenance of a computer database that will
manage and provide efficient access to insurance information.  The bill
requires DPS, the Texas Department of Transportation (TxDOT), and each
company providing insurance in this state to electronically submit to the
agent information on each driver's license, evidence of financial
responsibility, vehicle registration, and insurance policy issued in Texas.
The agent is required, at least monthly, to update and compare this
information to determine which, if any, vehicles in Texas are not insured.
The bill sets forth provisions for the notification of a motorist whose
vehicle, according to the insurance verification database (database), is
not insured.  The bill authorizes DPS by rule to waive a requirement that
particular information be provided to the agent if DPS finds that the
information is not useful or that the burden of collecting or reporting the
information is not justified (Secs. 601.442-601.448).  The bill authorizes
DPS to adopt rules as necessary to implement the  establishment of the
database.  DPS is required to consult with TxDOT about rules that affect
the reporting of information relating to vehicle registrations (Sec.
601.448).   

The bill prohibits information provided by an insurer, DPS, or TxDOT from
being sold or made available except to enforce a state law and provides
that the information belongs to the submitting entity, is confidential, and
is not subject to disclosure under public information laws.  An officer,
employee, or agent who acts in good faith in providing this information is
not liable in a civil action.  A person who knowingly releases this
information except to enforce a state law commits a Class A misdemeanor
(Secs. 601.445, 601.446, and 601.449-601.451).   

The bill requires a person registering or renewing the registration of a
motor vehicle to pay a fee of $1which shall be deposited to the credit of
the state highway fund (fund).  TxDOT is required to use money appropriated
from the fund that represents those fees to administer the database and to
reimburse DPS for expenses related to the database.  The bill requires
TxDOT and DPS to adopt rules and develop forms necessary to administer the
financing of the database (Sec. 502.1715).   

As soon as practicable after the effective date of this Act, DPS is
required to appoint a technical advisory committee, which must include
representatives of the affected insurance companies and TxDOT, to assist
DPS in developing the initial rules required for implementing the
establishment of the database.  The technical advisory committee is
abolished September 1, 2002 (SECTION 7).   

Not later than September 1, 2002, DPS is required to contract with an
entity to serve as the agent and to adopt any rules necessary to implement
the establishment of the database.  A motor vehicle insurance company is
not required to report insurance information to the agent before September
1, 2002.  The bill authorizes DPS by rule to designate smaller motor
vehicle insurance companies that are not required to report insurance
information to the agent before September 1, 2003.  DPS is not required to
report financial responsibility information to the agent before September
1, 2002 (SECTION 8).   

EFFECTIVE DATE

September 1, 2001.

EXPLANATION OF AMENDMENTS

Committee Amendment No. 1 requires the Texas Department of Insurance to
adopt rules for enforcing compliance for insurance companies reporting a
record of each motor vehicle policy issued in this state under the Texas
Motor Vehicle Safety Responsibility Act.   

Committee Amendment No. 2 requires the Texas Department of Public Safety
(DPS) after January 1, 2007, and before September 1, 2007 to review the
effectiveness of the motor vehicle insurance verification program (program)
and determine the amount by which compliance with the provisions governing
the program has increased between September 1, 2001 and the date of the
review.  DPS is authorized to coordinate with the Texas Department of
Insurance to conduct the review.  If DPS determines that compliance has not
increased by at least eight percent during that period, the provisions
governing the program expire September 1, 2007.  This provision expires
September 2, 2007.