HBA-TBM H.B. 718 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 718
By: Chavez
Insurance
3/15/2001
Introduced



BACKGROUND AND PURPOSE 

Current law mandates that a person must show proof of motor vehicle
liability insurance when applying to obtain or renew a driver's license,
motor vehicle registration, or a safety inspection sticker.  However, since
a registration and an inspection sticker only have to be renewed annually,
and a driver's license even less often, it is possible for a motorist to
show proof of insurance at the time of application and then cancel his or
her insurance policy rather than pay for the policy for a full year, and
bypass the liability insurance requirement.  Since most insurance companies
issue a card to an insured motorist as proof of insurance, a motorist may
have false evidence of being insured that is presentable and acceptable to
a law enforcement officer.  House Bill 718 provides for the creation of a
motor vehicle liability insurance database that would serve as an
informational resource for law enforcement officers, Department of Public
Safety officials, or other authorized personnel to provide incontrovertible
proof of insurance for a motorist.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Department of Public Safety in
SECTION 1 (Section 601.024, Government Code) of this bill.  

ANALYSIS

House Bill 718 amends the Transportation Code to require the Department of
Public Safety (DPS) to establish and maintain a motor vehicle liability
insurance database (database) no later than September 1, 2002 that contains
information about liability policies that have expired or been canceled.
The bill requires DPS on request of a law enforcement agency or other
person that DPS by rule determines has a legitimate need for the
information to provide information about whether a specific policy has
expired or been canceled.  The bill requires DPS to adopt rules requiring
motor vehicle insurers to provide information necessary to maintain the
database.  The bill creates the motor vehicle liability account in the
general revenue fund for the purpose of maintaining the database.  The bill
requires the comptroller to collect an annual assessment that is imposed on
each motor vehicle insurer at a rate of 50 cents for each policy of motor
vehicle liability insurance issued, delivered, or renewed by the insurer to
a resident of this state.   

EFFECTIVE DATE

September 1, 2001.