Bill Text: IA HF604 | 2017-2018 | 87th General Assembly | Amended
Bill Title: A bill for an act establishing a motor vehicle insurance verification program, establishing fees, and including penalty and effective date provisions. (Formerly HSB 170.)
Sponsorship: Committee Bill
Status: (Engrossed - Dead) 2018-02-07 - Subcommittee reassigned: Bertrand, Allen, and C. Johnson. S.J. 255. [HF604 Detail]
Download: Iowa-2017-HF604-Amended.html
House File 604 - Reprinted HOUSE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 170) (As Amended and Passed by the House April 10, 2017) A BILL FOR 1 An Act relating to motor vehicle insurance, including the 2 establishment of a motor vehicle insurance verification 3 program, establishing fees, and including penalty and 4 effective date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: HF 604 (4) 87 ns/nh/md PAG LIN 1 1 Section 1. Section 321.11, subsection 3, Code 2017, is 1 2 amended to read as follows: 1 3 3. Notwithstanding other provisions of this section to the 1 4 contrary, the department shall not release personal information 1 5 to a person, other than to an officer or employee of a law 1 6 enforcement agency, an employee of a federal or state agency 1 7 or political subdivision in the performance of the employee's 1 8 official duties, a contract employee of the department of 1 9 inspections and appeals in the conduct of an investigation, or 1 10 a licensed private investigation agency or a licensed security 1 11 service or a licensed employee of either, if the information is 1 12 requested by the presentation of a registration plate number. 1 13 However, the department may release personal information to the 1 14 department's designated agent for the purposes of chapter 321B. 1 15 In addition, an officer or employee of a law enforcement agency 1 16 may release the name, address, and telephone number of a motor 1 17 vehicle registrant to a person requesting the information by 1 18 the presentation of a registration plate number if the officer 1 19 or employee of the law enforcement agency believes that the 1 20 release of the information is necessary in the performance of 1 21 the officer's or employee's duties. 1 22 Sec. 2. Section 321.20B, subsection 4, paragraph c, Code 1 23 2017, is amended to read as follows: 1 24 c. (1) An owner or driver cited for a violation of 1 25 subsection 1, who produces to the clerk of court prior to the 1 26 date of the person's court appearance as indicated on the 1 27 citation proofthat financial liability coverage was in effect 1 28 for the motor vehicle at the time the person was stopped and 1 29 citedof either of the following, shall not be convicted of 1 30 such violation and the citation issued shall be dismissed by 1 31 thecourt.court: 1 32 (a) Financial liability coverage was in effect for the motor 1 33 vehicle at the time the person was stopped and cited. 1 34 (b) Financial liability coverage was purchased on or after 1 35 the date the citation was issued, is in effect for the motor 2 1 vehicle, and covers the owner or driver. This subparagraph 2 2 division (b) shall only apply if the violation is the owner's 2 3 or driver's first violation of subsection 1 occurring on or 2 4 after the effective date of this Act. 2 5 (2) Upon dismissal, the court or clerk of court shall assess 2 6 the costs of the action against the defendant named on the 2 7 citation. 2 8 Sec. 3. Section 321.20B, subsection 5, paragraph b, Code 2 9 2017, is amended to read as follows: 2 10 b. Issue a citation. 2 11 (1) An owner or driver who produces to the clerk of court 2 12 prior to the date of the person's court appearance as indicated 2 13 on the citation proofthat the financial liability coverage 2 14 was in effect for the motor vehicle at the time the person was 2 15 stopped and cited, or if the driver is not the owner of the 2 16 motor vehicle, proof that liability coverage was in effect for 2 17 the driver with respect to the motor vehicle being driven at 2 18 the time the driver was stopped and cited in the same manner 2 19 as if the motor vehicle were owned by the driverof either of 2 20 the following, shall be given a receipt indicating that proof 2 21 was provided, and the citation issued shall be dismissed by the 2 22court.court: 2 23 (a) Financial liability coverage was in effect for the motor 2 24 vehicle at the time the person was stopped and cited, or if 2 25 the driver is not the owner of the motor vehicle, proof that 2 26 liability coverage was in effect for the driver with respect 2 27 to the motor vehicle being driven at the time the driver was 2 28 stopped and cited in the same manner as if the motor vehicle 2 29 were owned by the driver. 2 30 (b) Financial liability coverage was purchased on or after 2 31 the date the citation was issued, is in effect for the motor 2 32 vehicle, and covers the owner or driver. This subparagraph 2 33 division (b) shall only apply if the violation is the owner's 2 34 or driver's first violation of subsection 1 occurring on or 2 35 after the effective date of this Act. 3 1 (2) Upon dismissal, the court or clerk of court shall assess 3 2 the costs of the action against the defendant named on the 3 3 citation. 3 4 Sec. 4. Section 321.24, subsection 1, Code 2017, is amended 3 5 to read as follows: 3 6 1. Upon receipt of the application for title and payment of 3 7 the required fees for a motor vehicle, trailer, or semitrailer, 3 8 the county treasurer or the department shall, when satisfied 3 9 as to the application's genuineness and regularity, and, in 3 10 the case of a mobile home or manufactured home, that taxes 3 11 are not owing under chapter 423 or 435, issue a certificate 3 12 of title and, except for a mobile home or manufactured home, 3 13 a registration receipt, and shall file the application, the 3 14 manufacturer's or importer's certificate, the certificate of 3 15 title, or other evidence of ownership, as prescribed by the 3 16 department. The registration receipt shall be delivered to the 3 17 owner and shall contain upon its face the date issued, the name 3 18 and address of the owner, the registration number assigned to 3 19 the vehicle, the amount of the fee paid, the type of fuel used, 3 20 a description of the vehicle as determined by the department, 3 21 and a form for notice of transfer of the vehicle. The name 3 22 and address of any lessee of the vehicle shall not be printed 3 23 on the registration receipt or certificate of title. Up to 3 24 three owners may be listed on the registration receipt and 3 25 certificate of title. The registration receipt shall contain 3 26 upon its face the following notice in boldface, ten point type 3 27 in substantially the following language: 3 28 FAILURE TO CARRY MOTOR VEHICLE INSURANCE MAY RESULT IN THE 3 29 SUSPENSION OF THIS REGISTRATION AND AFFECT YOUR ABILITY TO 3 30 REGISTER A MOTOR VEHICLE. 3 31 Sec. 5. NEW SECTION. 321.492C Use of camera or optical 3 32 device for insurance enforcement prohibited. 3 33 The state or a political subdivision of the state shall not 3 34 use any automated or remote system equipped with a camera or 3 35 other optical device to identify persons operating a motor 4 1 vehicle in violation of section 321.20B or chapter 321A. 4 2 Sec. 6. NEW SECTION. 321B.1 Short title. 4 3 This chapter shall be known and may be cited as the "Motor 4 4 Vehicle Insurance Verification Act". 4 5 Sec. 7. NEW SECTION. 321B.2 Definitions. 4 6 As used in this chapter, unless the context otherwise 4 7 requires: 4 8 1. "Advisory council" means the group established pursuant 4 9 to section 321B.3, subsection 2. 4 10 2. "Database" means the motor vehicle insurance verification 4 11 database created under this chapter. 4 12 3. "Department" means the department of transportation. 4 13 4. "Designated agent" means the third party with which the 4 14 department contracts under section 321B.3. 4 15 5. "Financial institution" means financial institution as 4 16 defined in 18 U.S.C. {20. 4 17 6. "Motor vehicle" means motor vehicle as defined in section 4 18 321.1. 4 19 7. "Program" means the motor vehicle insurance verification 4 20 program created under this chapter. 4 21 8. "Real=time internet services model" means an electronic 4 22 service established by insurers through the internet, the 4 23 world wide web, or a similar proprietary or common carrier 4 24 electronic system that complies with the specifications and 4 25 standards of the insurance industry committee on motor vehicle 4 26 administration and that is available twenty=four hours per 4 27 day, seven days per week, subject to reasonable allowances for 4 28 scheduled maintenance or temporary system failures. 4 29 Sec. 8. NEW SECTION. 321B.3 Motor vehicle insurance 4 30 verification program ==== advisory council. 4 31 1. A motor vehicle insurance verification program is 4 32 created within the department to be administered by the 4 33 department. The purposes of the program include all of the 4 34 following: 4 35 a. To establish a motor vehicle insurance verification 5 1 database to verify compliance with the requirements of section 5 2 321.20B. 5 3 b. To assist in reducing the number of uninsured motor 5 4 vehicles on the highways of the state. 5 5 c. To assist in increasing compliance with motor vehicle 5 6 registration requirements and for other law enforcement 5 7 purposes. 5 8 d. To assist in protecting the bona fide security interests 5 9 of financial institutions in motor vehicles. 5 10 2. a. The department shall establish an advisory council, 5 11 chaired by the director of the department or a representative 5 12 of the department appointed by the director, consisting of 5 13 six members including the director of the department or the 5 14 representative of the department appointed by the director, 5 15 a representative of the department of public safety, an 5 16 insurance company representative appointed by the commissioner 5 17 of insurance, an insurance agent appointed by the commissioner 5 18 of insurance, a representative of a trade association of 5 19 property and casualty insurers appointed by the commissioner 5 20 of insurance, and a representative of a vendor with experience 5 21 implementing real=time internet services models and databases 5 22 similar to the database created under this chapter appointed by 5 23 the director of the department. 5 24 b. The advisory council shall do all of the following: 5 25 (1) Make recommendations to the department on the best 5 26 methods and practices for implementing a real=time internet 5 27 services model for insurance verification. 5 28 (2) Assist in the development of a guide for insurers 5 29 detailing the data fields and other information necessary for 5 30 compliance with this chapter. 5 31 (3) Provide an annual report to the department detailing the 5 32 improvements and implementation efforts relating to insurance 5 33 verification in other states for consideration in improving 5 34 compliance and operations in this state. 5 35 3. Following the competitive bidding procedures as provided 6 1 in chapter 8A, subchapter III, the department shall contract 6 2 with a third party to act as the department's designated agent 6 3 for administration of this chapter. For the period of the 6 4 contract, the designated agent shall establish and maintain a 6 5 computer database containing the following information: 6 6 a. Information provided by insurers under section 321B.5. 6 7 b. Information provided by the department under subsection 6 8 6. 6 9 c. Information obtained using a real=time internet services 6 10 model. 6 11 d. Any other information provided by the department pursuant 6 12 to this chapter. 6 13 4. The database shall be developed and maintained, and 6 14 access to a real=time internet services model shall be 6 15 provided, in accordance with guidelines established by the 6 16 department by rule to allow authorized state and local law 6 17 enforcement agencies and financial institutions to efficiently 6 18 access the records of the database and real=time internet 6 19 services model, including reports useful for the implementation 6 20 of this chapter, twenty=four hours per day, seven days 6 21 per week, subject to reasonable allowances for scheduled 6 22 maintenance or temporary system failures. 6 23 a. Database reports shall be in a form and contain 6 24 information approved by the department. 6 25 b. Database reports may be made available through the 6 26 department's internet site or through other electronic media 6 27 if the department determines that sufficient security is 6 28 provided to ensure compliance with the provisions of this 6 29 chapter regarding limitations on disclosure of information in 6 30 the database. 6 31 c. The department shall consult with the chief information 6 32 officer appointed under section 8B.2 for the purpose of 6 33 developing network security requirements for the database. 6 34 5. At least twice monthly, the designated agent shall do the 6 35 following, using information provided by the department: 7 1 a. Update the database with motor vehicle insurance 7 2 information provided by insurers in accordance with section 7 3 321B.5. 7 4 b. Compare all current motor vehicle registrations against 7 5 the database. If records in the database indicate that a 7 6 registered motor vehicle is not covered under an owner's 7 7 policy of liability insurance, the designated agent shall 7 8 use a real=time internet services model to determine if the 7 9 registered motor vehicle is covered under an owner's policy of 7 10 liability insurance. 7 11 6. On or before the seventh day of each calendar month, the 7 12 department shall provide the designated agent with the make, 7 13 model, year, and vehicle identification number of each vehicle 7 14 in the department's motor vehicle database, and the name and 7 15 address of each person listed on each vehicle's registration. 7 16 7. The department shall adopt rules in accordance with 7 17 chapter 17A establishing procedures for the use of the 7 18 department's motor vehicle database for the purposes of 7 19 administering and enforcing this chapter. 7 20 8. a. The designated agent shall archive database files at 7 21 least semiannually for auditing purposes. 7 22 b. The department shall audit the program at least annually. 7 23 The audit shall include verification of: 7 24 (1) Billings made by the designated agent. 7 25 (2) The accuracy of the designated agent's matching of 7 26 vehicle registration records with insurance data. 7 27 Sec. 9. NEW SECTION. 321B.4 Enforcement of financial 7 28 responsibility requirements ==== penalty. 7 29 1. If records in the database and the real=time internet 7 30 services model used by the designated agent indicate that a 7 31 registered motor vehicle is not covered under an owner's policy 7 32 of liability insurance for three consecutive months, at the 7 33 direction of the department the designated agent shall provide 7 34 notice by first=class mail to the owner of the motor vehicle 7 35 that the owner has fifteen days from the date the notice was 8 1 mailed to provide one of the following: 8 2 a. Proof of financial liability coverage as defined in 8 3 section 321.1, subsection 24B. 8 4 b. Proof that the owner is exempt from the requirement to 8 5 maintain proof of financial liability coverage under section 8 6 321.20B. 8 7 2. If, after fifteen days, the owner of the motor vehicle 8 8 fails to provide satisfactory proof of financial liability 8 9 coverage, the designated agent shall provide a second notice 8 10 by first=class mail to the owner of the motor vehicle allowing 8 11 the owner an additional fifteen days from the date the second 8 12 notice was mailed to provide the information requested under 8 13 subsection 1. 8 14 3. a. The designated agent shall update the database 8 15 regarding each notice sent to a motor vehicle owner under 8 16 subsections 1 and 2, indicating the information provided by the 8 17 motor vehicle owner or the owner's failure to provide proof of 8 18 financial liability coverage, as applicable. 8 19 b. If the owner of a motor vehicle provides proof to the 8 20 department or the designated agent that the owner's motor 8 21 vehicle is covered by an acceptable form of financial liability 8 22 coverage described in section 321.1, subsection 24B, paragraph 8 23 "b", "c", or "d", the information shall be recorded in the 8 24 database. 8 25 c. If the designated agent determines the motor vehicle 8 26 is appropriately insured using a real=time internet services 8 27 model, the information shall be recorded in the database. 8 28 4. a. If the owner of a motor vehicle fails to provide 8 29 proof of financial liability coverage following receipt of the 8 30 second notice under subsection 2, the designated agent shall 8 31 notify the department, and the department shall suspend the 8 32 registration of the motor vehicle. 8 33 b. The department shall provide to the owner of the motor 8 34 vehicle appropriate notice of the suspension, order the owner 8 35 to surrender the registration plates and registration receipt 9 1 for the vehicle to the county treasurer, advise the owner of 9 2 the legal consequences of operating a vehicle with a suspended 9 3 registration and without financial liability coverage, and 9 4 instruct the owner on how to reinstate the vehicle registration 9 5 once the owner has obtained financial liability coverage for 9 6 the vehicle. 9 7 5. a. A person shall not provide a false or fraudulent 9 8 statement to the department or the department's designated 9 9 agent in regard to proceedings under this chapter. 9 10 b. In addition to any other penalties, a person who violates 9 11 paragraph "a" is guilty of a simple misdemeanor. 9 12 6. A suspension of registration under this chapter is in 9 13 addition to any other penalty imposed by law. This chapter 9 14 does not affect other actions or penalties that may be taken or 9 15 imposed for a violation of section 321.20B or other law. 9 16 7. a. A registration that has been suspended under this 9 17 section shall not be reinstated and a registration shall not be 9 18 issued to the holder of the suspended registration until the 9 19 person does all of the following: 9 20 (1) Pays to the department an administrative reinstatement 9 21 fee of one hundred dollars, in addition to any other penalty 9 22 imposed by law. 9 23 (2) Complies with the requirements of section 321.20B and 9 24 this chapter. 9 25 b. Reinstatement fees collected under this subsection shall 9 26 be retained by the department as repayment receipts as defined 9 27 in section 8.2 and shall be used exclusively to offset the 9 28 costs of administering the program, including payments made by 9 29 the department to the department's designated agent. 9 30 Sec. 10. NEW SECTION. 321B.5 Motor vehicle insurance 9 31 reporting ==== penalty. 9 32 1. a. Except as provided in paragraph "b", each insurer 9 33 that issues a policy to a motor vehicle owner in this state 9 34 that includes motor vehicle liability coverage, uninsured 9 35 motorist coverage, underinsured motorist coverage, or 10 1 personal injury coverage shall, on or before the seventh 10 2 and twenty=first days of each calendar month, submit to the 10 3 department's designated agent a record of each motor vehicle 10 4 insurance policy that was issued by the insurer and in effect 10 5 for a vehicle registered or garaged in this state as of the 10 6 date of the previous submission. 10 7 b. An insurer is not required to provide a record of a motor 10 8 vehicle insurance policy under paragraph "a" if the policy 10 9 covers a vehicle that is registered under chapter 326. 10 10 c. This subsection does not preclude more frequent 10 11 reporting. 10 12 2. A record provided by an insurer under subsection 1, 10 13 paragraph "a", shall include all of the following: 10 14 a. The name, date of birth, and driver's license number, if 10 15 the insured provides a driver's license number to the insurer, 10 16 of each insured owner or operator, and the address of the named 10 17 insured. 10 18 b. The make, year, and vehicle identification number of each 10 19 insured vehicle. 10 20 c. The policy number and effective date of each policy. 10 21 3. An insurer shall provide the information required under 10 22 this section via electronic means or via another means the 10 23 designated agent agrees to accept. 10 24 4. a. The department may assess a civil penalty of not more 10 25 than two hundred fifty dollars for each day an insurer fails to 10 26 comply with this section. 10 27 b. If an insurer shows that the failure to comply with this 10 28 section was inadvertent, accidental, or the result of excusable 10 29 neglect, the department may waive the civil penalty. 10 30 c. An insurer that discloses records to the department's 10 31 designated agent in a reasonable, good=faith effort to comply 10 32 with the requirements of this section shall not be subject to a 10 33 civil penalty under paragraph "a". 10 34 Sec. 11. NEW SECTION. 321B.6 Disclosure of database 10 35 information ==== penalty. 11 1 1. Information provided to the designated agent and 11 2 information contained in the database under this chapter are 11 3 confidential and subject to the provisions and penalties of 18 11 4 U.S.C. {2721. Such information may not be disclosed, except 11 5 as follows: 11 6 a. For the purpose of investigating, litigating, or 11 7 enforcing the financial liability coverage requirements 11 8 of section 321.20B, the designated agent shall provide an 11 9 electronic record to a state or local government agency or 11 10 court verifying motor vehicle financial liability coverage 11 11 information. 11 12 b. For the purpose of investigating, litigating, or 11 13 enforcing the financial liability coverage requirements of 11 14 section 321.20B, the designated agent shall, upon request, 11 15 issue to any state or local government agency or court a 11 16 certificate documenting motor vehicle financial liability 11 17 coverage, according to the database, of a specific individual 11 18 or motor vehicle for the time period designated by the 11 19 government agency or court. 11 20 c. Upon request, the department or its designated agent 11 21 shall disclose whether an individual is covered under a motor 11 22 vehicle insurance policy, proof of the insurance coverage 11 23 policy, and the insurance company name to: 11 24 (1) The individual or, if the individual is deceased, 11 25 any person who is an interested party in the estate of the 11 26 individual as provided under chapter 633. 11 27 (2) The parent or legal guardian of the individual if the 11 28 individual is an unemancipated minor. 11 29 (3) The legal guardian of the individual if the individual 11 30 is legally incapacitated. 11 31 (4) A person who has power of attorney for the individual. 11 32 (5) A person who submits a notarized release from the 11 33 individual dated no more than ninety days before the date the 11 34 request is made. 11 35 (6) A person suffering loss or injury in a motor vehicle 12 1 accident in which the individual was involved, but only as part 12 2 of an accident report as authorized in section 321.271 relating 12 3 to access to accident reports. 12 4 d. For the purpose of investigating, enforcing, or 12 5 prosecuting laws or issuing citations, information related to a 12 6 motor vehicle owner or operator's financial liability coverage 12 7 under section 321.20B may be provided to state or local law 12 8 enforcement agencies. 12 9 e. Upon request of a peace officer acting in an official 12 10 capacity under the provisions of paragraph "d", the department 12 11 or the designated agent shall, upon request, disclose relevant 12 12 information contained in the database. 12 13 f. For the purpose of the state auditor conducting audits 12 14 of the program. 12 15 g. Upon request of a financial institution for the purpose 12 16 of protecting the financial institution's bona fide security 12 17 interest in a motor vehicle. 12 18 2. a. The department may allow the designated agent to 12 19 prepare and deliver, upon request, a report on the insurance 12 20 information of a person or motor vehicle in accordance with 12 21 this section. The report may be in the form of: 12 22 (1) A certified copy that is considered admissible in any 12 23 court proceeding in the same manner as the original. 12 24 (2) Information accessible through the internet or through 12 25 another electronic medium if the department determines that 12 26 sufficient security is provided to ensure compliance with this 12 27 section. 12 28 b. The department may allow the designated agent to charge a 12 29 fee established by the department for each of the following: 12 30 (1) Authenticating a document, including preparation and 12 31 delivery of a certified copy. 12 32 (2) Accessing a record through the internet or through 12 33 another electronic medium. 12 34 (3) Providing a record to a financial institution under 12 35 subsection 1, paragraph "g". 13 1 3. The designated agent or any other person who knowingly 13 2 releases or discloses information from the database for a 13 3 purpose other than those authorized in this section or to a 13 4 person who is not entitled to such information is guilty of a 13 5 class "D" felony. 13 6 4. Neither the state nor the department's designated agent 13 7 shall be liable to any person for gathering, managing, or 13 8 using the information in the database in compliance with this 13 9 chapter. 13 10 5. The designated agent shall be responsible for 13 11 maintaining and securing the information in the database 13 12 provided by the department and insurers under sections 321B.3 13 13 and 321B.5. 13 14 6. An insurer acting in compliance with this chapter shall 13 15 not be liable to any person for the disclosure of information 13 16 supplied to the department or designated agent. The designated 13 17 agent shall indemnify an insurer against any loss arising from 13 18 the disclosure of information supplied to the department or 13 19 designated agent, provided the insurer supplied the information 13 20 to the department or designated agent in a manner that complies 13 21 with this chapter and rules adopted pursuant to this chapter. 13 22 Records provided by an insurer under this chapter shall be 13 23 deemed evidence of insurance and not a guarantee of insurance. 13 24 Sec. 12. EFFECTIVE DATE. This Act takes effect July 1, 13 25 2019. HF 604 (4) 87 ns/nh/md
