HBA-MPM C.S.S.B. 1329 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1329 By: Bivins Insurance 5/8/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Approximately 17 to 26 percent of Texas drivers are currently uninsured. C.S.S.B. 1329 requires the Texas Department of Transportation to randomly select samples of motor vehicle registrations or samples of owners of motor vehicles to verify whether the owner has established financial responsibility and provides for a standard appearance and form for proof of insurance cards. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Transportation in SECTION 1.02 and to the commissioner of insurance in SECTION 2.01 (Article 5.06-7, Insurance Code) of this bill. ANALYSIS C.S.S.B. 1329 amends law to require the Texas Department of Transportation (TxDOT) or an agent of TxDOT between September 1, 2001 and January 1, 2003 to randomly select samples of motor vehicle registrations or samples of owners of motor vehicles subject to the Texas Motor Vehicle Safety Responsibility Act to verify whether the owner has established financial responsibility. The Department of Public Safety (DPS) is required to provide TxDOT access to any information that will allow TxDOT to comply with this provision. TxDOT is also authorized to randomly select other persons who own a registered vehicle to verify the person's financial responsibility. The bill requires TxDOT to send to the owner of a randomly selected vehicle or a randomly selected vehicle owner a request for information about the vehicle and the owner's method of establishing financial responsibility. TxDOT is required to adopt rules as necessary to implement the provisions of this bill and to establish by rule the frequency of the sample selection and prescribe methods and procedures necessary for the verification process. The bill authorizes TxDOT to request the information provided by the owner to include a statement that the owner had as of the verification date established financial responsibility. The owner to whom the notice is sent is required no later than the 30th day after the verification date to furnish the requested information accompanied by the owner's signed affirmation to TxDOT. If the owner asserts that financial responsibility had been established as of the verification date, TxDOT may conduct a verification investigation. The bill sets forth the method by which TxDOT conducts a verification investigation C.S.S.B. 1329 requires TxDOT to submit a report to the lieutenant governor and the speaker of the house of representatives on or before January 30, 2003 detailing the results of the sampling. The random sampling of motor vehicle registrations and owners of motor vehicles ends September 1, 2003. C.S.S.B. 1329 amends the Insurance Code to require the commissioner of insurance by rule to prescribe no later than December 1, 2001 a standard appearance and form for a motor vehicle liability insurance card (card). The commissioner shall also require an appearance of the card that is difficult to alter, duplicate, or counterfeit, and that is not cost-prohibitive for consumers. The bill specifies that a card issued on or after January 1, 2002 as proof of motor vehicle liability insurance issued in this state must conform to the form and appearance prescribed by these provisions. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 1329 differs from the original bill by amending law rather than specifically amending the Transportation Code. The substitute requires the Texas Department of Transportation (TxDOT) to request rather than require proof of financial responsibility from the owner when randomly selecting samples of motor vehicle registrations or samples of owners of motor vehicles to verify whether the owner has established financial responsibility. The substitute removes the provision that an owner who fails to respond or indicates that the owner has not established financial responsibility is subject to suspension of the owner's motor vehicle registration. The substitute also removes provisions authorizing TxDOT to mail a warning to the owner informing the owner that noncompliance with the request for proof of financial responsibility will result in the suspension of the owner's motor vehicle registration. The substitute removes provisions regarding suspension, hearing, and the reinstatement fees of an owner's registration and exemptions to such provisions. The substitute removes provisions that establish fines for the operation of a motor vehicle while the registration is suspended. The bill removes provisions regarding the submission of false proof of financial responsibility and providing for criminal penalties of for such an offense. The substitute removes provisions authorizing TxDOT to submit requests for proposals for contracts with private vendors to perform the random sampling and the verification investigations required by this bill as an agent of TxDOT and to enter into contracts as necessary. The substitute removes the requirement that at least 500,000 samples be included in the sample selection before September 1, 2003. The substitute removes the requirement that the Texas Department of Insurance cooperate with TxDOT to conduct an evaluation of the verification program and the effectiveness of the program. The substitute removes provisions prohibiting the owner of a motor vehicle from permitting another person to operate the vehicle in this state unless financial responsibility is established for the vehicle and removes provisions establishing penalties for such an offense. The substitute removes provisions that amended the Insurance Code to authorize the commissioner of insurance (commissioner) by rule to establish a program to provide for the sale of short-term liability insurance policies to non-Texas resident motorists visiting this state. The substitute removes provisions transferring duties governing uninsured or underinsured motorist coverage from the board of insurance to the commissioner and authorizing the named insured to elect to waive coverage for recovery of noneconomic and exemplary damages resulting from bodily injury, sickness, or disease, including death. The substitute removes provisions authorizing the commissioner by rule to adopt minimum limits of liability applicable to those damages. The substitute no longer repeals provisions regarding the defense for financial responsibility in effect t the time of an alleged offense.