SB 157

To amend Sections 32-7A-2, 32-7A-5, 32-7A-8, 32-7A-11, and 32-7A-12, Code of Alabama 1975, Code of Alabama 1975, relating to the Mandatory Liability Insurance Law; to update definitions; to eliminate the four-month suspension of registration for second and subsequent violations; to allow voluntary surrender of vehicle registration and license plate prior to a lapse in liability coverage or within 30 days from the department notice date when the vehicle is inoperable or being stored; to update the due date, cap, and authorized uses for the Special Licensing Officials’ Fund.

Section 1

Sections 32-7A-2, 32-7A-5, 32-7A-8, 32-7A-11, and 32-7A-12, Code of Alabama 1975, are amended to read as follows:

§32-7A-2.

For the purposes of this chapter, the following terms shall have the following meanings respectively ascribed to them in this section, except in those instances where the context clearly indicates a different meaning:

(1) CERTIFICATE OF INSURANCE. A document issued by an insurer or its authorized representative showing that a specific vehicle is insured for no less than the minimum limits of liability coverage for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.

(2) COMMERCIAL AUTOMOBILE LIABILITY INSURANCE POLICY. An insurance policy that:

a. Is written on either a commercial coverage or other commercially rated personal policy form, including, but not limited to, a commercial auto, garage, or truckers form, and is not dependent on the type, number, or ownership of vehicle or entity covered or insured.

b. Insures vehicles that are not identified individually by vehicle identification number on the policy.

(3) COMMISSIONER. The Commissioner of the Department of Revenue or his or her designee.

(4) DEALER. Any person dealing in, buying, selling, exchanging, advertising, or negotiating the sale of motor vehicles and licensed under the provisions of Section 40-12-391.

(5) DECLARATIONS PAGE. That part of an insurance policy showing the name of the insured, insuring company, the vehicle make, the year model, the vehicle identification number (VIN), the policy number, the amount of coverage or coverages, and the effective and expiration dates of the policy.

(6) DEPARTMENT. The Department of Revenue.

(7) DEPOSIT OF CASH. Funds deposited with and held by the State Treasurer as security for payment by the depositor, or by any person responsible for the depositor's motor vehicle with his or her express or implied consent, of all judgments rendered against the depositor or other authorized operator of the depositor's motor vehicle arising from injury, death, or damage sustained through use, operation, maintenance, or control of the motor vehicle within the State of Alabama.

(8) DIRECTOR. The Director of Public Safety of the State of Alabama Secretary of the Alabama Law Enforcement Agency, or his or her designee.

(9) INSURANCE BINDER. A document issued by an insurer or its authorized representative showing that a specific vehicle is insured for no less than the minimum limits of liability coverage for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.

(10) INSURANCE COMMISSIONER. The Commissioner of the Department of Insurance, or his or her designee.

(11) LIABILITY INSURANCE POLICY. An owner's or an operator's personal automobile liability insurance policy, issued by an insurance carrier duly authorized to transact business in this state.

(12) MOTOR VEHICLE. Every self-propelled vehicle that is designed to be operated on the streets and highways of Alabama, but not operated upon rails.

(13) MOTOR VEHICLE LIABILITY BOND. A bond of a surety company duly authorized to transact business in this state, which is conditioned for payments in amounts and under the same circumstances as would be required in a motor vehicle liability insurance policy.

(14) NAIC NUMBER. A unique identification number assigned to the insurance company by the National Association of Insurance Commissioners.

(15) NON-ADMITTED COMPANY. An insurance company not licensed to conduct business in this state which sells coverage that is unavailable from licensed insurers within this state.

(16) NON-OWNER POLICY. An insurance policy issued for persons who drive but do not own the insured vehicle.

(17) ONLINE INSURANCE VERIFICATION SYSTEM. An online insurance verification system using web services as defined in Section 32-7B-2 (6).

(18) OPERATOR. Every person who is in actual physical control of a motor vehicle.

(19) OWNER. Any of the following persons:

a. A person or persons holding the legal title to a motor vehicle, unless paragraph b. or c. is applicable.

b. The mortgagor, debtor, conditional vendee, or lessee of a vehicle that is the subject of a chattel mortgage, lien, agreement for the conditional sale thereof, lease or other like agreement with the right of purchase upon performance of the conditions stated in the agreement and with the immediate right of possession vested in the mortgagor, debtor, conditional vendee, or lessee, in which event the mortgagor, debtor, conditional vendee, or lessee shall be deemed the owner for purposes of this chapter.

c. The lessee of a vehicle owned by the United States of America or any of its agencies or instrumentalities.

(20) PERSON. Every natural person, firm, partnership, association, estate, trust, corporation, limited liability partnership, limited liability company, or other entity.

(21) REGISTRANT. Vehicle owner or operator, who is issued a registration for a motor vehicle.

(22) REGISTRATION. Certificate or certificates and license plates issued under the laws of this state pertaining to the registration of motor vehicles.

(23) SIGNATURE. A unique mark, process, or verification in a manner prescribed by the department, as provided in Section 40-1-1.

(24) STATE. Any state, territory or possession of the United States, the District of Columbia, any province or territory of the Dominion of Canada, or a state of the Republic of Mexico.

(25) SUSPENSION. The withdrawal by formal action of the department of a vehicle's registration as specified by this chapter.

The terms "liability insurance policy," "deposit of cash," and a "motor vehicle liability bond" are used interchangeably throughout this chapter.

§32-7A-5.

This chapter shall not apply to any of the following vehicles or operators:

(1) Trailers as defined in Section 40-12-240, including, but not limited to, semitrailers, travel trailers, boat trailers, pole trailers, and utility trailers.

(2) Motor vehicles owned and operated by the United States or any agency thereof, the State of Alabama, or any political or governmental subdivision thereof.

(3) Any motor vehicle which is subject to the supervision and regulation of the Federal Motor Carrier Safety Administration or the Alabama Public Service Commission and for which the owner and/or operator has filed evidence of financial responsibility, the liability under which is not less than that required of the operator of a motor vehicle under the terms of this chapter.

(4) Motor vehicles covered by a certificate of self-insurance issued by the director under the provisions of Section 32-7-34.

(5) Other motor vehicles complying with laws which require the vehicles to be insured in amounts meeting or exceeding the minimum amounts required under Section 32-7-6(c).

6) Implements of husbandry as defined in Section 32-8-2 (5).

(7) Any vehicle moved solely by animal power.

(8) Special mobile equipment, as defined in Section 32-8-2 (20).

(9) Inoperable or stored motor vehicles that are not operated, as defined by rules and regulations of the department and not subject to the provisions of Section 32-7A-7 for which the registrant has surrendered the registration and associated license plate in accordance with the rules promulgated by the department prior to the motor vehicle no longer being covered by a liability insurance policy required by this chapter.

(10) Motor vehicles owned by a licensed motor vehicle dealer, wholesaler, or rebuilder, or reconditioner and held in inventory that are covered by a blanket liability insurance policy or commercial automobile liability insurance policy.

(11) Vehicles properly registered in another jurisdiction and not legally required to be registered pursuant to Chapter 12 of Title 40. (12) Vehicles owned by a bank, a subsidiary or affiliate of a bank, or finance company, acquired as an incident to their regular business, that are covered by a blanket liability insurance policy or commercial automobile liability insurance policy.

(13) Vehicles as prescribed by the commissioner that are covered by a blanket liability insurance policy or commercial automobile liability insurance policy.

§32-7A-8.

If When the department determines that an owner has registered or maintained the registration of a motor vehicle without a liability insurance policy or a commercial automobile liability insurance policy in accordance with Section 32-7A-4, the department shall, following the expiration of the 30-day period from the date of the notice provided under Section 32-7A-11, notify the owner that such owner's vehicle registration shall be has been suspended 30 calendar days after the date of the mailing of the notice unless the owner furnishes evidence of insurance in effect on the verification date, as prescribed by the department. The notice shall be in writing and shall be mailed by the U.S. Postal Service, to the registrant's last known address as reflected on the department's motor vehicle registration records. The notice shall set forth the appeal rights available to the registered owner pursuant to Chapter 2A of Title 40.

§32-7A-11.

a) When the department is unable to verify that liability insurance coverage exists for a motor vehicle registered or required to be registered in this state, the department shall send the registrant notice via USPS mail at the last known address as reflected on the department's motor vehicle registration records. The notice shall require that the registrant, within 30 calendar days of the date of the notice, provide evidence of continuous liability insurance coverage for the vehicle for the period specified by the department. The registration will be suspended unless either:

(1) The registrant responds within the required time frame and the response establishes that the registrant has not had a lapse in liability insurance coverage. The department shall then indicate in its records that the insured is in compliance with this chapter.

(2) The registrant responds within the required time frame that, after the registration date, he or she did not operate the vehicle during the lapse in coverage due to the motor vehicle being stored, inoperable, or otherwise unused as prescribed by the department. The registrant may claim the stored or inoperable exemption provided under this subdivision only if all of the following conditions are satisfied:

a. The registrant surrenders the registration and associated license plate to the registrant’s license plate issuing official within 30 days from the date of the notice sent pursuant to subsection (a).

b. The registrant has not claimed a stored or inoperable exemption under this subdivision during the current registration period for the registered vehicle.

c. During the lapse in coverage, the registered vehicle was not involved in an accident while operated on a public road or highway.

d. During the lapse in coverage, the registrant or a driver of the registered vehicle was not subject to or issued a citation while operating the registered vehicle on a public road or highway.

The If each of these conditions is satisfied, the current registration shallthen be revoked and the department shall update its records to reflect that the registration is revoked for the remainder of the registration period. In the event the motor vehicle for which the registration has been revoked is no longer stored, inoperable, or otherwise unused as prescribed by the department, a new registration and license plate must be obtained prior to operating the vehicle. The department may by establish by rule an extension to the 30 day surrender period if the registrant cannot return the license plate for good cause.

(b) Except as provided in Section 32-7A-11(a)(2), If if the registrant subsequently provides, in a manner as prescribed by the department, proof of subsequent liability insurance coverage for the vehicle during the current registration period then the registration shall be reinstated.

(c) Any operator of a motor vehicle for which the registration has been revoked shall be subject to citation by law enforcement in accordance with Section 32-7A-16.

(d) The notice required under subsection (a) shall include notice of the following:

(1) That the stored or inoperable exemption provided for in subdivision (a)(2) can be claimed only once during a registration period.

(2) That once this exemption is claimed during a registration period, reinstatement of the vehicle’s registration following any further lapse in coverage during the registration period will require the payment of the reinstatement fees provided under Section 32-7A-12.

§32-7A-12.

(a) The department shall suspend the vehicle registration of any motor vehicle determined to be in violation of Section 32-7A-4, including any motor vehicle operated in violation of Section 32-7A-16 by an operator other than the owner of the vehicle. Neither the fact that, subsequent to the date of verification or violation, the owner acquired the required liability insurance policy nor the fact that the owner terminated ownership of the motor vehicle shall have any bearing upon the required suspension.

(b) The registration of any motor vehicle registered in this state shall be suspended upon the department receiving notice of the conviction of the operator of the motor vehicle in another state of an offense which, if committed in this state, would constitute a violation of Section 32-7A-4. Until it is terminated, any suspension under this chapter shall remain in force even if the registration is renewed or a new registration is acquired for the motor vehicle contrary to Section 32-7A-17.

(c) In the case of a first violation, the department shall terminate the suspension upon payment by the owner of a reinstatement fee of two hundred dollars ($200) in a manner as prescribed by the department and submission of proof of current insurance as prescribed by the department to either the department, the vehicle owner's county license plate issuing official, the circuit clerk of any county, or the Administrative Office of Courts. Upon a first violation, the owner's name and identifying information shall be provided to the director by the department, for the purpose of requiring the owner to purchase and maintain insurance pursuant to Section 32-7-13 or Section 32-7-31, or both, for a period of one year.

(d) In the case of a second or subsequent violation by a person having ownership interest in a motor vehicle or vehicles within the preceding four two registration years, or a violation of Section 32-7A-16(b)(2), the department shall terminate the suspension four months after its effective date upon payment by the owner of a reinstatement fee of four hundred dollars ($400) in a manner as prescribed by the department and submission of proof of current insurance as prescribed by the department to either the department or to the vehicle owner's county license plate issuing official, the circuit clerk of any county, or the Administrative Office of Courts. In the case of a second or subsequent violation, the owner's name and identifying information shall be provided to the director by the department, for the purpose of the director requiring the owner to purchase and maintain insurance pursuant to Section 32-7-13 or Section 32-7-31, or both, for a period of three two registration years. Upon conviction of a second offense the violator shall be guilty of a Class B misdemeanor.

(e) The registrant shall not be subject to the reinstatement fees provided by subsections (c) and (d) and the department shall terminate the suspension if the department or official establishes that, upon presentation of proof of liability insurance coverage for the insurance verification date, the registrant did not have a lapse in liability insurance coverage.

(e) (f)In accepting the reinstatement fee and proof of current insurance, the owner's county license plate issuing official, the circuit clerk of any county, or the Administrative Office of Courts shall be responsible for notifying and forwarding, not later than the next business day, any required documentation concerning the reinstatement of motor vehicle registration or registrations to the department in the manner prescribed by the department.

(f) (g) Except as provided in subsections (g) (h) and (i), (j) a portion of the fees received under this section by the department shall be used by the department exclusively for the operation and management of the mandatory liability insurance law and this article. After the payment of the expenses, the remaining funds shall be deposited into the General Fund; provided, if the fees are collected by the owner's county license plate issuing official, the official shall remit the fee to the department, except for 10 (15) percent of the fee, which shall be retained by the official and distributed 50 percent to the county license plate issuing official and 50 percent to the county general fund. The retained fees distributed to the county license plate issuing official shall be deposited into a special fund designated as the Special Licensing Officials' Fund. The special fund shall be used for taxpayer education of the requirements of Title 32, Chapter 7A, the improvement of the equipment and operations in the office of the licensing official charged with motor vehicle registration and titling responsibilities and shall be in addition to the amount budgeted for the office of the official. Fees deposited into the special fund shall be disbursed at the sole discretion of the license plate issuing official and shall be audited by the Examiners of Public Accounts. Such moneys in the special fund shall not accumulate in excess of ten thousand dollars ($10,000) during exceed twenty-five thousand dollars (25,000 at the end of any fiscal year, provided however that balances in excess of the twenty-five thousand ($25,000 cap may be carried over on a monthly basis prior to the close of each fiscal year. Any excess moneys shall accrue to the county general fund. License plate issuing officials shall remit the balance of the funds to the department in the manner prescribed by the department by the 10th on or before the 20th day of the month following the month of collection.

(g) (h) If the reinstatement fees are collected by the Administrative Office of Courts, it shall remit the fee to the department, except for 15 percent of the fee, which shall be retained in its entirety by the Administrative Office of Courts. If the reinstatement fees are collected by the circuit clerk, it shall remit the fee to the department, except for 15 percent of the fee, which shall be retained by the circuit clerk and distributed evenly between the circuit clerk's office and the Administrative Office of Courts. Any portion of the reinstatement fee due to the Administrative Office of Courts shall be deposited into the Advanced Technology and Data Exchange Fund established pursuant to Section 12-19-290. Any portion of the reinstatement fee due to the circuit clerk shall be deposited into the Clerk's Fund established pursuant to Section 12-17-225.4(2).

(h) (i) Refunds of reinstatement fees, less the retained fees, shall be granted in cases of duplicate payment, or as approved by the department. Anyone who is denied a refund of the reinstatement fee may appeal the denial to the administrative law judge Alabama Tax Tribunal pursuant to Section 40-2A-7.

(i) (j) Notwithstanding the provisions of subsection (f) (g), 15 percent of the net proceeds received by the department shall be deposited by the department into the Alabama Peace Officers' Annuity and Benefit Fund, as authorized by Section 36-21-66.

(j) (k)It shall be unlawful for the vehicle owner's county license plate issuing official to fail to collect such reinstatement fees, when due. Additionally, the reinstatement fee shall not be waived by the court when the vehicle owner cannot produce evidence that a valid liability insurance policy was in effect on the date a citation was issued for violation of the provisions of this chapter.

(k) (l)The terms circuit clerk and circuit clerk's office as used in any part of this chapter shall also include any district clerk or district clerk's office that functions separately from the office of the circuit clerk pursuant to Section 12-17-161."

Section 2

The department shall provide the licensing plate issuing official the ability to dispose of unused and surrendered license plates in a uniform manner as prescribed by the department and provide guidance to registrants on the disposal and surrender of a license plate when a license plate transfer is not an available option.

Section 3

This act shall become effective January 1, 2020, following its passage and approval by the Governor, or upon its otherwise becoming law.