BILL ANALYSIS

 

 

C.S.S.B. 1670

By: Staples

Transportation

Committee Report (Substituted)

 

 

 

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. Other motorists purchase fraudulent proof-of-insurance cards based on nonexistent or deceptive insurance policies. These techniques prevent a proof-of-insurance card from being an effective method of verifying whether a motorist complies with current financial responsibility requirements. C.S.S.B. 1670 establishes a motor vehicle financial responsibility verification program to verify compliance with the Motor Vehicle Safety Responsibility Act

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that rulemaking authority is expressly granted to the Texas Department of Transportation, the Texas Department of Insurance and the Department of Information Resources in SECTIONS 1 and 2 of this bill.

 

ANALYSIS

 

SECTION 1. Defines "implementing agencies" to include the Department of Transportation, Department of Insurance, and Department of Information Resources. Requires the Department of Transportation to establish, in consultation with implementing agencies, a program for the verification of motorists' financial responsibility. Requires implementing agencies to jointly adopt rules for program implementation. Requires implementing agencies to convene a working group of certain representatives to assist in the development of rules and to coordinate verification program's testing phase. Requires the Department of Transportation to select, through a competitive bidding process, an agent to develop, implement, operate, and maintain the financial responsibility verification program. Requires each insurance company providing motor vehicle liability insurance in Texas to provide information so that the agent may implement required program. Establishes a Class B misdemeanor penalty for the misuse of information obtained through the program.

 

SECTION 2. Conforming change to statute; authorizes the Department of Information Resources, one of the implementing agencies, to use revenues generated by program fees and to adopt rules and develop forms in conjunction with the departments of transportation and insurance as necessary.

 

SECTION 3. REPEALER. Repeals 502.1715(b), Transportation Code, which authorizes the Department of Public Safety's use of fee revenues for certain purposes before 31 August 2005.

 

SECTION 4. Transition language requiring the Department of Public Safety to select an agent required under the Act by 31 December 2005. Requires full implementation of financial responsibility verification program for noncommercial vehicles by 31 December 2006, and implementation of verification program for commercial vehicles when the implementing agencies determine that such implementation is feasible.

 

SECTION 5. 1 September 2005 effective date.

 

 

 

EFFECTIVE DATE

 

September 1, 2005.

 

COMPARISON OF ORIGINAL TO SUBSTITUTE

 

SECTION 1. Removes the Department of Public Safety as one of the implementing agencies. Adds requirements for financial responsibility verification program to be the most likely to identify and employ a method of compliance that improves public convenience and to provide information that is accurate and current. Adds requirement that the implementing agencies convene a working group of certain representatives to assist in the development of rules and to coordinate program's testing phase. Removes language granting an authorized agent sufficient access to insurance companies' databases. Replaces the Department of Public Safety with the Department of Transportation as the agency required to select an agent for program implementation.

 

SECTION 2. Strikes reference to the Department of Public Safety as one of the agencies required to jointly adopt rules and develop forms.

 

SECTION 4. Extends deadline in transition language for full implementation of financial responsibility verification program from 1 September 2006 to 31 December 2006. Clarifies that the implementing agencies shall implement the program for noncommercial vehicles by 31 December 2006, and that implementation of a program for commercial vehicles shall be initiated when the implementing agencies determine that it is feasible.