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78R3392 DWS-D
By: Fraser S.B. No. 916
A BILL TO BE ENTITLED
AN ACT
relating to motor vehicle financial responsibility; providing
penalties.
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
subchapter.
(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
subchapter.
Sec. 601.442. ESTABLISHMENT OF PROGRAM. (a) The
department shall establish a motor vehicle financial
responsibility verification program to verify compliance with this
chapter.
(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.).
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
monthly:
(1) update the database with the motor vehicle
insurance information provided by insurers under Section 601.445;
and
(2) compare all current motor vehicle registrations
provided by the Texas Department of Transportation against the
database.
(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:
(1) before a date stated in the notice, the owner must
provide:
(A) proof of the owner's financial
responsibility in a form described by Section 601.053;
(B) 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);
(C) proof of an exemption from the owner's
financial responsibility under Section 601.052; or
(D) 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; and
(2) if the owner does not timely comply with
Subdivision (1), the owner is liable to the state for a civil
penalty of $250.
(c) The date provided in the notice under Subsection (b)(1)
shall be determined according to department rule, and may not be
earlier than the 90th day or later than the 150th day after the date
the notice is sent.
(d) If the owner of the motor vehicle has not provided proof
of financial responsibility to the designated agent by the date
specified in the notice:
(1) the owner is liable to the state for a civil
penalty of $250; and
(2) the designated agent shall mail to the owner a
final warning stating that:
(A) the owner has 30 days to provide the proof of
financial responsibility; and
(B) if the owner does not timely comply with
Paragraph (A), the registration of the motor vehicle will be
terminated.
(e) If an owner of a motor vehicle has not provided proof of
financial responsibility to the designated agent by the 30th day
after the date the final warning is sent, the designated agent shall
notify the Texas Department of Transportation of the owner's
failure, and the Texas Department of Transportation shall terminate
the registration for the motor vehicle. A motor vehicle for which
registration has been terminated may not be registered by the owner
or another person unless the civil penalty provided by this section
has been paid.
(f) The state has a lien on the motor vehicle to secure
payment of a civil penalty under this section. The lien is
automatically perfected when liability for the penalty arises.
Subchapter F, Chapter 501, does not apply to a lien under this
subsection.
(g) Each notice or final warning 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.
(h) A civil penalty collected under this chapter shall be
delivered to the comptroller for deposit to the credit of the
general revenue fund.
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
the information.
(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
agent.
(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
date.
(c) The department shall notify the designated agent of:
(1) the cancellation of a bond filed under Section
601.121;
(2) the cancellation of a deposit made under Section
601.123; or
(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
the department.
(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
Transportation's records:
(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
the vehicle.
(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. REGISTRATION OF MOTOR VEHICLE FOR WHICH
REGISTRATION TERMINATED. (a) Except as provided by Subsection
(b), a motor vehicle for which registration is terminated under
Section 601.444(e) may not be registered unless the owner submits
with the application for registration:
(1) the $250 civil penalty provided by Section
601.444(d), if the civil penalty has not been previously paid; and
(2) the registration fee applicable to the vehicle and
any other fee required by law for registration of the vehicle.
(b) The department shall reinstate the terminated
registration of a motor vehicle without payment of any fee under
Subsection (a)(2) if before the end of the registration period
during which the registration was terminated the owner of the motor
vehicle presents proof of financial responsibility that:
(1) complies with Section 601.051; and
(2) was in effect on the date of comparison under
Section 601.444(a)(2) and is in effect on the date of application
for reinstatement.
Sec. 601.449. 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
chapter.
Sec. 601.450. 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:
(1) a state or local governmental entity enforcing
this chapter in relation to the vehicle;
(2) the vehicle's owner;
(3) the parent or legal guardian of the owner if the
owner is an unemancipated minor;
(4) the legal guardian of the owner if the owner is
legally incapacitated;
(5) a person who has power of attorney for the owner;
(6) a person who has a notarized release from the owner
that is dated not earlier than the 90th day before the date of the
request for disclosure;
(7) a person suffering loss or injury in a motor
vehicle accident in which the person is involved, but only for the
purposes of an accident report under Chapter 550; or
(8) the state auditor, for the purposes of an audit
authorized by law.
(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. 601.451. REVIEW OF PROGRAM. (a) After January 1,
2008, and before January 1, 2009, 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, 2009, 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, 2009.
SECTION 2. (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
data.
(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
31, 2004;
(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 3. 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 4. 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 5. This Act takes effect September 1, 2003.