SB 1335

This bill prohibits the commissioner of revenue or a county clerk from registe ring or renew ing the registration of a motor vehicle, unless the vehicle and its owner have met the requirements of this bill and the Financial Responsibility Law of 1977 for the registra tion or renewal period. Every registration or renewal of registration must be accompanied by the following notice: THE OWNER AND/OR OPERATOR OF THIS VEHICLE ARE REQUIRED TO MEET THE REQUIREMENTS OF THE TENNESSEE FINANCIAL RESPONSIBILITY LAW PURSUANT TO T ENNESSEE CODE ANNOTATED, § 55-4-144. For applications for registration or renewal submitted in person, submission of either of the following items constitutes satisfactory proof that a vehicle and its owner have met the requirements of the Financial Resp onsibility Law of 1977:  Documentation, such as the declaration page of an insurance policy, an insurance binder, or an insurance card from an insurance company authorized to do business in this state, whether in paper or electronic format, stating that a policy of insurance meeting the requirements of the Financial Responsibility Law of 1977 has been issued and will be in force throughout the motor vehicle's period of registration or renewal .  A certificate, valid for one year, issued by the commissioner of safety, stating that (i) a cash deposit or bond in the amount required by the Financial Responsibility Law of 1977 has been paid or filed with the commissioner of revenue; or (ii) the driver has qualified as a self-insurer. If an application for regist ration or renewal is submitted through a website administered by the department of revenue or a county clerk, or, if an applicant fails to submit to the commissioner or a county clerk proof that the vehicle and its owner have met the requirements of the Fi nancial Responsibility Law of 1977, then this bill requires the commissioner or the county clerk, as applicable, to utilize the vehicle insurance verification program and to rely on the information provided by the vehicle insurance verification program, fo r the purpose of verifying proof that the vehicle and its owner have met the requirements of the Financial Responsibility Law of 1977. For purposes of the above provisions , acceptable electronic formats include display of electronic images on a cell phon e or any other type of portable electronic device. EVIDENCE OF FINANCIAL RESPONSIBILITY Present law provides that one form of evidence of financial responsibility is d ocumentation, such as the declaration page of an insurance policy, an insurance binder, or an insurance card from an insurance company authorized to do business in this state, whether in paper or electronic format, stating that a policy of insurance meeti n g financial responsibility requirements has been issued . This bill revises this provision to require such documentation to not only have been issued but also to be expected to be in force throughout the motor vehicle's period of registration or renewal . COVERAGE FAILURE FEE FOR FIRST NOTICE Present law provides that i f there is evidence based on either the IICMVA model or the full book of business download process that a motor vehicle is not insured, then the department of revenue must , or must direct i ts designated agent to, provide notice to the owner of the motor vehicle that the owner has 30 days from the date of the notice to provide to the department of revenue with any of the following: ( i ) t he owner or operator's proof of financial security in a form approved by the department of revenue; ( ii ) p roof of exemption from the owner or operator's financial security requirements; ( iii ) p roof that the motor vehicle is no longer in the owner's possession; or ( iv ) a statement, under penalty of perjury, that the vehicle is not in use on any public road. If an owner of a motor vehicle fails to provide satisfactory proof or a statement as described above , then present law requires the department of revenue to i mpose on the owner of the motor vehicle a $25 cov erage failure fee. Of this fee, $5 must be distributed to the county clerk of the county in which the motor vehicle is registered, $5 must be distributed to the department of safety, and the remainder must be deposited into the uninsured motorist identifi cation restricted fund. The revenues distributed to the county clerk must be earmarked for the county clerk's work in administration of the vehicle insurance verification program and must not revert to the general fund at the end of the budget year if une xpended . This bill revises these provisions to, instead, generally authorize a $50 coverage failure fee to be distributed as follows:  $25 must be distributed to the county clerk of the county in which the motor vehicle is registered. 20% of th is revenue distributed to the county clerk must be earmarked for the county clerk's work in administration of the vehicle insurance verification program and must not revert to the county general fund at the end of the budget year if unexpended, and the remainder of the revenue distributed to the county clerk must be retained by the clerk and handled in the same manner as all other fees collected by the clerk for the clerk's benefit.  $5 must be distributed to the department of safety .  The remainder must be deposited into the uninsured motorist identification restricted fund. COVERAGE FAILURE FEE FOR SUBSEQUENT NOTICES If an owner of a motor vehicle becomes eligible for a second notice within three years from the date of the first notice the department issued to th e owner, then the coverage failure fee is increased to $250. Of this fee, $125 must be distributed to the county clerk of the county in which the motor vehicle is registered, $5 0 must be distributed to the department of safety, and the remainder must be d eposited into the uninsured motorist identification restricted fund. If an owner of a motor vehicle becomes eligible for a third notice within three years from the date of the second notice the department issued to the owner, then the coverage failure fee is increased to $500. Of this fee, $250 must be distributed to the county clerk of the county in which the motor vehicle is registered, $100 must be distributed to the department of safety, and the remainder must be deposited into the uninsured motori st identification restricted fund.