SB 1667

The James Lee Atwood Jr. Law requires the department of revenue to provide notice to an owner of a motor vehicle if there is evidence that a motor vehicle is not insured. Such notice requires the vehicle owner to provide (i) proof of financial security, (ii) proof of exemption from financial security requirements, (iii) proof that the vehicle is no longer in the owner's possession, or (iv) a statement that the vehicle is not in use on any public road. Failure to respond to the notice results in an init ia l coverage failure fee, and continuing failure to respond results in increasing additional fees. This bill prohibits the department of revenue or a county clerk from processing an application for registration of a motor vehicle after the owner becomes subject to issuance of the above-described notice until the applicant provides proof of financial r esponsibility. If the applicant elects to use a policy of insurance as proof, the documentation must state that the policy will be in force for at least 30 days. This bill clarifies that the owner of a motor vehicle becomes subject to issuance of the abo ve -described notice if the department of revenue has included a designation in the Tennessee Vehicle Title and Registration System database or other available database that there is evidence that a motor vehicle is not insured and the department of revenue has not issued a notice to the owner. INCREASED COVERAGE FAILURE FEES The James Lee Atwood Jr. Law provides that failure to respond to a notice from the department of revenue, as described above, results in an initial $25 coverage failure fee. This bill increases this coverage failure fee to $500. $200 of this fee must b e distributed to the county clerk of the county in which the motor vehicle is registered, $50 must be distributed to the department of safety, and the remainder must be deposited into the uninsured motor identification restricted fund. Further, this bill r equires that 20% of the revenue distributed to the county clerk must be earmarked for the clerk's work in the administration of the vehicle insurance verification program and the remainder of the county clerk's revenue must be used for the clerk's benefit. The James Lee Atwood Jr. Law requires the department of revenue to provide notice to the owner that the owner must pay the initial coverage failure fee and provide satisfactory proof of financial responsibility within 30 days. If the owner fails to comp ly, then the owner is subject to a $100 continued coverage failure fee. This bill increases the continued coverage failure fee to $1,000. $400 of this fee 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 motor identification restricted fund. Further, this bill requires that 20% of the revenue distributed to the county clerk must be earmarked for the c lerk's work in the administration of the vehicle insurance verification program and the remainder of the county clerk's revenue must be used for the clerk's benefit. SUBSEQUENT NOTICES This bill requires that, if an owner of a motor vehicle becomes subject to the issuance of a second notice within three years from the date of issuance of the first notice, then such owner is subject to a repeated coverage failure fee of $1,500 and suspe nsion or revocation of the owner's motor vehicle registration if they do not provide proof of financial responsibility within 30 days. $600 of this fee must be distributed to the county clerk of the county in which the motor vehicle is registered, $150 m us t be distributed to the department of safety, and the remainder must be deposited into the uninsured motor identification restricted fund. Further, this bill requires that 20% of the revenue distributed to the county clerk must be earmarked for the clerk 's work in the administration of the vehicle insurance verification program and the remainder of the county clerk's revenue must be used for the clerk's benefit. The department of revenue must also provide the motor vehicle owner the legal consequences o f operating a motor vehicle with a suspended or revoked registration and without proof of financial responsibility and instructions on how to effect the reinstatement of registration. PUBLICATION This bill directs the department of revenue to publicize the changes made to the James Lee Atwood Jr. Law. REPORTING REQUIREMENTS FOR LIABILITY INSURERS Present law requires automobile liability insurers who choose not to utilize the IICMVA model to provide the department of revenue with a full book of business by the 7th day of each month but does not prevent the insurer from reporting more frequently. This bill, instead, requires insurers to s ubmit a full book of business on a weekly basis and clarifies that insurers may update their book of business with the department of revenue daily. PROHIBITION ON NONECONOMIC DAMAGES This bill prohibits a plaintiff from being awarded noneconomic damages in a civil action for bodily injury, property damage, or death arising out of the use or operation of a motor vehicle if the plaintiff is the owner or operator of a motor vehicle that was not in compliance with financial responsibility laws. If such a plaintiff is awarded economic damages, then the plaintiff must be held liable for all court costs incurred by all parties to the action. A defendant in the civil action may assert this l imitation of recovery as an affirmative defense. However, such limitations on recovery do not apply if any of the following is true:  The defendant was cited for driving while under the influence, reckless driving, or aggravated reckless driving, as a result of the use or operation of the motor vehicle and is subsequently convicted or pleads nolo contendere to the offense.  The defendant acted with the intent to inflict the injury, damage, or death.  The defendant failed to stop at the scene of the accident.  The defendant was in furtherance of the commission of a felony offense under state or federal law. This bill clarifies that its provisions do not preclude a passenger in a motor vehicle from recovering noneconomic damages. However, this bill does not apply to a passenger who is also the owner of the motor vehicle that was not in compliance with finan cial responsibility requirements. Further, an insurer does not lose any rights of subrogation for claims paid for the recovery of noneconomic damages. The provisions under this heading apply to civil actions filed on or after the bill becomes law. PUBLIC NOTICES This bill authorizes the departments of safety, revenue, and transportation to use existing permanent electronic overhead informational displays to provide periodic messages to the public regarding financial responsibility requirements.