By: Gutierrez, Davis of Harris, Thompson, H.B. No. 814
Taylor, Keffer of Dallas, et al.
A BILL TO BE ENTITLED
relating to motor vehicle financial responsibility; providing
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 601, Transportation Code, is amended by
adding Subchapter N to read as follows:
SUBCHAPTER N. MOTOR VEHICLE FINANCIAL RESPONSIBILITY VERIFICATION
Sec. 601.441. DEFINITIONS. In this subchapter:
(1) "Database" means the motor vehicle financial
responsibility verification database established under this
(2) "Designated agent" means a person administering
the program under contract with the department.
(3) "Program" means the motor vehicle financial
responsibility verification program established under this
Sec. 601.442. ESTABLISHMENT OF PROGRAM. (a) The
department shall establish a motor vehicle financial
responsibility verification program to verify compliance with this
(b) The department by rule shall administer the program with
the assistance of a designated agent.
(c) The program must comply with the Driver's Privacy
Protection Act of 1994 (18 U.S.C. Section 2721 et seq.), as amended.
Sec. 601.443. DESIGNATED AGENT: MAINTENANCE OF DATABASE.
(a) The department shall contract with a person selected by the
State Council on Competitive Government under a competitive bidding
procedure to act as the department's designated agent under this
subchapter. The contract shall be funded from money appropriated
for this purpose from the state highway fund.
(b) The designated agent shall develop and maintain a
computer database to manage and provide access to information
provided under Sections 601.445, 601.446, and 601.447.
(c) The database shall be developed, maintained, and
administered in accordance with guidelines established by the
department to permit efficient access by courts and state and local
law enforcement agencies.
Sec. 601.444. VERIFICATION: NOTICE FOR NONCOMPLIANCE. (a)
With information provided by the department and the Texas
Department of Transportation, the designated agent shall, at least
(1) update the database with the motor vehicle
insurance information provided by insurers under Section 601.445;
(2) compare all current motor vehicle registrations
provided by the Texas Department of Transportation against the
(b) The designated agent shall mail a notice to owners of
vehicles for which a comparison under this section shows that
financial responsibility has not been established. The designated
agent is not required to send a notice to all of those owners, but
shall determine the owners to which the notice is sent in the manner
provided by department rule. The manner of selection may not be
based directly or indirectly on the owner's race, religion, sex,
national origin, age, marital status, physical or mental
disability, economic status, or geographic location. The notice
must state that before the 31st day after the date of the notice,
the owner must provide:
(1) proof of the owner's financial responsibility in a
form described by Section 601.053;
(2) a letter from an insurance agent or company
verifying that the person had the required motor vehicle insurance
coverage on the date of comparison under Subsection (a)(2);
(3) proof of an exemption from the owner's financial
responsibility under Section 601.052; or
(4) proof that the owner of the motor vehicle is
insured by an insurance company located in another state because
the owner is a member of the United States armed forces, a student
attending an educational institution in this state and residing in
this state, or a faculty member of an educational institution in
this state who is residing in this state.
(c) Each notice sent under this section must include, in
English and Spanish, a clear and reasonably complete statement of
an owner's rights and responsibilities under this chapter.
Sec. 601.445. INFORMATION PROVIDED BY INSURANCE COMPANY.
(a) Each insurance company providing motor vehicle liability
policies in this state shall provide the designated agent a record
of each motor vehicle insurance policy, including:
(1) the insurance policy number, effective date, and
expiration date of the policy;
(2) the name, address, and driver's license number of
each driver insured by the policy; and
(3) the make, model, year, and vehicle identification
number of each vehicle covered by the policy.
(b) Each insurance company shall provide information
required by Subsection (a) to the designated agent in an electronic
submission monthly or more frequently as prescribed by the public
safety director. The designated agent and public safety director
shall consult with representatives of the insurance industry in
determining appropriate formats and procedures for submission of
(c) If information provided by an insurance company to the
designated agent is incorrect, the insurance company shall provide
corrected information to the designated agent in a timely manner as
prescribed by the public safety director after the date the
insurance company receives notice of the error from the designated
(d) An insurance company that does not provide information
as required by this section is liable to the state for a civil
penalty of $250 for each day the violation continues.
Sec. 601.446. INFORMATION PROVIDED BY DEPARTMENT. (a) The
department shall provide the designated agent the following
information on each Texas driver's license holder:
(1) the holder's name and address; and
(2) the driver's license number and expiration date.
(b) For each motor vehicle covered by a bond filed under
Section 601.121, a deposit made under Section 601.123, or a
certificate of self-insurance issued under Section 601.124, the
department shall provide to the designated agent:
(1) the owner's name and address; and
(2) the owner's driver's license number and expiration
(c) The department shall notify the designated agent of:
(1) the cancellation of a bond filed under Section
(2) the cancellation of a deposit made under Section
(3) the termination of a certificate of self-insurance
issued under Section 601.124.
(d) This section does not require the department to provide
to the designated agent information that is not in the possession of
(e) The department shall provide the information under this
section in an electronic submission to the designated agent in a
timely manner as prescribed by the public safety director.
Sec. 601.447. INFORMATION PROVIDED BY TEXAS DEPARTMENT OF
TRANSPORTATION. (a) The Texas Department of Transportation shall
provide the department or its designated agent the following
information for each vehicle to which this chapter applies, to the
extent the information is in the Texas Department of
(1) the owner's name and address;
(2) the make, model, and year of the vehicle;
(3) the vehicle identification number and vehicle
license plate number; and
(4) the date the certificate of title was issued for
(b) The Texas Department of Transportation is not required
to provide information under this section about a vehicle
registered under Subchapter G, Chapter 502.
(c) The Texas Department of Transportation shall provide
the information under this section and each change to information
previously provided under this section in a weekly report that
includes the information for registrations and changes occurring
during the week preceding the date of the report.
(d) The Texas Department of Transportation shall provide by
electronic submission to the department or its designated agent any
information required under this section in a timely manner as
prescribed by the public safety director.
Sec. 601.448. RULES. (a) The department may adopt rules as
necessary to implement this subchapter.
(b) The department shall consult with the Texas Department
of Transportation about rules that affect the reporting of
information relating to vehicle registrations.
(c) The department by rule may waive a requirement that
particular information be provided to the designated agent if the
department finds that the information is not useful for enforcing
this chapter or that the burden of collecting or reporting the
information is not justified by its value in enforcing this
Sec. 601.449. USE OF INFORMATION PROVIDED TO DESIGNATED
AGENT. (a) Information provided by an insurance company under
Section 601.445, the department under Section 601.446, or the Texas
Department of Transportation under Section 601.447 remains the
property of the insurance company or agency, as applicable. The
information is confidential and may not be disclosed except as
provided by this section.
(b) The designated agent may disclose whether financial
responsibility has been established for a motor vehicle only to a
state or local governmental entity enforcing this chapter.
(c) A person commits an offense if the person knowingly
discloses information in violation of this subchapter. An offense
under this subsection is a Class A misdemeanor.
(d) The state, an employee or officer of the state, an
insurance company, or the designated agent is not liable for an act
performed in good faith in carrying out this subchapter, except
that the designated agent is liable to an insurance company damaged
by the designated agent's negligent failure to protect the
confidential and proprietary nature of the information disclosed to
the designated agent by the insurance company.
Sec. 601.450. REVIEW OF PROGRAM. (a) After January 1,
2009, and before January 1, 2010, the department shall review the
effectiveness of the program and determine the amount by which
compliance with this chapter has increased between September 1,
2003, and the date of the review. The department shall review all
aspects of the program, including effectiveness and efficiency, and
the error rate in matching proof of financial responsibility with
motor vehicle registrations. The department may coordinate with
the Texas Department of Insurance to conduct the review.
(b) Before September 1, 2010, the department shall report
its findings and recommendations to the lieutenant governor and the
speaker of the house of representatives.
(c) This section expires September 2, 2010.
SECTION 2. Subchapter C, Chapter 601, Transportation Code,
is amended by adding Section 601.0521 to read as follows:
Sec. 601.0521. SEASONAL EXCEPTION FOR CERTAIN FARM
VEHICLES. (a) In this section, "road tractor," "truck-tractor,"
"farm tractor," "farm trailer," and "farm semitrailer" have the
meanings assigned by Section 502.001.
(b) During a season when the vehicle is not in use, Section
601.051 does not apply to a road tractor, truck-tractor, farm
tractor, farm trailer, or farm semitrailer used exclusively to
transport seasonally harvested agricultural products or livestock
from the place of production to the place of processing, market, or
(c) The designated agent may send a notice under Section
601.444 to the owner of a vehicle to which this section applies only
during a season when the vehicle is in use.
(d) The department by rule shall provide a method of
determining the season when a vehicle to which this section applies
is in use.
SECTION 3. Section 601.053(a), Transportation Code, is
amended to read as follows:
(a) As a condition of operating in this state a motor
vehicle to which Section 601.051 applies, the operator of the
vehicle on request shall provide to a peace officer, as defined by
Article 2.12, Code of Criminal Procedure, or a person involved in an
accident with the operator evidence of financial responsibility by
(1) a motor vehicle liability insurance policy
covering the vehicle that satisfies Subchapter D or a photocopy of
(2) a standard proof of motor vehicle liability
insurance form prescribed by the department [
Texas Department of
Insurance] under Section 601.081 and issued by a liability insurer
for the motor vehicle;
(3) an insurance binder that confirms the operator is
in compliance with this chapter;
(4) a surety bond certificate issued under Section
(5) a certificate of a deposit with the comptroller
covering the vehicle issued under Section 601.122;
(6) a copy of a certificate of a deposit with the
appropriate county judge covering the vehicle issued under Section
(7) a certificate of self-insurance covering the
vehicle issued under Section 601.124 or a photocopy of the
SECTION 4. Section 601.081, Transportation Code, is amended
to read as follows:
Sec. 601.081. STANDARD PROOF OF MOTOR VEHICLE LIABILITY
INSURANCE FORM. (a) The department shall provide for the
production of a standard proof of motor vehicle liability insurance
form for use by insurers. The department may contract with another
person for production of the form.
(b) Each insurer issuing a standard proof of motor vehicle
liability insurance form shall use a form produced by the
(c) The department may adopt rules to implement this
section, including rules relating to the use of security features
for the form.
(d) The [ A] standard proof of motor vehicle liability
insurance form prescribed by the department [ Texas Department of
Insurance] must include:
(1) the name of the insurer;
(2) the insurance policy number;
(3) the policy period;
(4) the name and address of each insured;
(5) the policy limits or a statement that the coverage
of the policy complies with the minimum amounts of motor vehicle
liability insurance required by this chapter; and
(6) the make and model of each covered vehicle.
SECTION 5. Section 502.104, Transportation Code, is amended
to read as follows:
Sec. 502.104. DISPOSITION OF CERTAIN SPECIAL FEES. Each
Monday a county assessor-collector shall send to the department an
amount equal to collections for the preceding week for:
(1) each transfer fee collected under Section 502.175;
(2) each fee collected under Section 502.169(b),
502.1715, or 502.279.
SECTION 6. Subchapter D, Chapter 502, Transportation Code,
is amended by adding Section 502.1715 to read as follows:
Sec. 502.1715. ADDITIONAL FEE FOR MOTOR VEHICLE INSURANCE
VERIFICATION PROGRAM. (a) In addition to other fees imposed for
registration of a motor vehicle, at the time of application for
registration or renewal of registration of a motor vehicle for
which the owner is required to submit evidence of financial
responsibility under Section 502.153, the applicant shall pay a fee
(b) Fees collected under this section shall be deposited to
the credit of the state highway fund. The department shall use
money appropriated from the state highway fund that represents
those fees to administer Subchapter N, Chapter 601, and Section
601.081 and to reimburse the Department of Public Safety for
expenses in administering those provisions.
(c) The department and the Department of Public Safety shall
adopt rules and develop forms necessary to administer this section.
SECTION 7. (a) Not later than December 31, 2003:
(1) the State Council on Competitive Government shall
select and the Department of Public Safety shall contract with an
entity to serve as the designated agent under Subchapter N, Chapter
601, Transportation Code, as added by this Act; and
(2) the Department of Public Safety shall adopt any
rules necessary to implement Subchapter N, Chapter 601,
Transportation Code, as added by this Act.
(b) A motor vehicle insurance company, the Department of
Public Safety, and the Texas Department of Transportation are not
required to report under Section 601.445, 601.446, or 601.447,
Transportation Code, as added by this Act, before the date on which
the Department of Public Safety declares that the motor vehicle
financial responsibility verification database is ready to receive
(c) The contract entered into under Subsection (a) must
require that the designated agent ensure that:
(1) the motor vehicle financial responsibility
verification database is operational and ready to compare evidence
of financial responsibility against motor vehicle registrations
not later than July 1, 2004; and
(2) the number of notices mailed by the designated
agent under Section 601.444(b), Transportation Code, as added by
this Act, is not less than:
(A) 50,000 in the state fiscal year ending August
(B) 880,000 in the state fiscal year ending
August 31, 2005;
(C) 840,000 in the state fiscal year ending
August 31, 2006;
(D) 720,000 in the state fiscal year ending
August 31, 2007; and
(E) 720,000 in the state fiscal year ending
August 31, 2008.
SECTION 8. At the time of initiation of the motor vehicle
financial responsibility verification program established under
Subchapter N, Chapter 601, Transportation Code, as added by this
Act, the Department of Public Safety and the Texas Department of
Transportation shall, to the extent money is appropriated for this
purpose, conduct a program to inform the motoring public throughout
the state of the existence and requirements of the program.
SECTION 9. The governor shall appoint a committee to
investigate the factors that determine motor vehicle liability
insurance rates in this state. The committee must include
representatives of insurers who provide motor vehicle liability
policies in this state, consumers, and persons with actuarial and
economic expertise. Not later than December 31, 2004, the
committee shall submit a report of its findings and recommendations
for making motor vehicle liability insurance more affordable to the
governor, the lieutenant governor, the speaker of the house of
representatives, the Texas Department of Insurance, the Department
of Public Safety, and the Texas Department of Transportation.
SECTION 10. This Act takes effect September 1, 2003.