House File 604 - Reprinted HOUSE FILE 604 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 170) (As Amended and Passed by the House April 10, 2017 ) A BILL FOR An Act relating to motor vehicle insurance, including the 1 establishment of a motor vehicle insurance verification 2 program, establishing fees, and including penalty and 3 effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 HF 604 (4) 87 ns/nh/md

H.F. 604 Section 1. Section 321.11, subsection 3, Code 2017, is 1 amended to read as follows: 2 3. Notwithstanding other provisions of this section to the 3 contrary, the department shall not release personal information 4 to a person, other than to an officer or employee of a law 5 enforcement agency, an employee of a federal or state agency 6 or political subdivision in the performance of the employee’s 7 official duties, a contract employee of the department of 8 inspections and appeals in the conduct of an investigation, or 9 a licensed private investigation agency or a licensed security 10 service or a licensed employee of either, if the information is 11 requested by the presentation of a registration plate number. 12 However, the department may release personal information to the 13 department’s designated agent for the purposes of chapter 321B. 14 In addition, an officer or employee of a law enforcement agency 15 may release the name, address, and telephone number of a motor 16 vehicle registrant to a person requesting the information by 17 the presentation of a registration plate number if the officer 18 or employee of the law enforcement agency believes that the 19 release of the information is necessary in the performance of 20 the officer’s or employee’s duties. 21 Sec. 2. Section 321.20B, subsection 4, paragraph c, Code 22 2017, is amended to read as follows: 23 c. (1) An owner or driver cited for a violation of 24 subsection 1 , who produces to the clerk of court prior to the 25 date of the person’s court appearance as indicated on the 26 citation proof that financial liability coverage was in effect 27 for the motor vehicle at the time the person was stopped and 28 cited of either of the following , shall not be convicted of 29 such violation and the citation issued shall be dismissed by 30 the court. court: 31 (a) Financial liability coverage was in effect for the motor 32 vehicle at the time the person was stopped and cited. 33 (b) Financial liability coverage was purchased on or after 34 the date the citation was issued, is in effect for the motor 35 -1- HF 604 (4) 87 ns/nh/md 1/ 13

H.F. 604 vehicle, and covers the owner or driver. This subparagraph 1 division (b) shall only apply if the violation is the owner’s 2 or driver’s first violation of subsection 1 occurring on or 3 after the effective date of this Act. 4 (2) Upon dismissal, the court or clerk of court shall assess 5 the costs of the action against the defendant named on the 6 citation. 7 Sec. 3. Section 321.20B, subsection 5, paragraph b, Code 8 2017, is amended to read as follows: 9 b. Issue a citation. 10 (1) An owner or driver who produces to the clerk of court 11 prior to the date of the person’s court appearance as indicated 12 on the citation proof that the financial liability coverage 13 was in effect for the motor vehicle at the time the person was 14 stopped and cited, or if the driver is not the owner of the 15 motor vehicle, proof that liability coverage was in effect for 16 the driver with respect to the motor vehicle being driven at 17 the time the driver was stopped and cited in the same manner 18 as if the motor vehicle were owned by the driver of either of 19 the following , shall be given a receipt indicating that proof 20 was provided, and the citation issued shall be dismissed by the 21 court. court: 22 (a) Financial liability coverage was in effect for the motor 23 vehicle at the time the person was stopped and cited, or if 24 the driver is not the owner of the motor vehicle, proof that 25 liability coverage was in effect for the driver with respect 26 to the motor vehicle being driven at the time the driver was 27 stopped and cited in the same manner as if the motor vehicle 28 were owned by the driver. 29 (b) Financial liability coverage was purchased on or after 30 the date the citation was issued, is in effect for the motor 31 vehicle, and covers the owner or driver. This subparagraph 32 division (b) shall only apply if the violation is the owner’s 33 or driver’s first violation of subsection 1 occurring on or 34 after the effective date of this Act. 35 -2- HF 604 (4) 87 ns/nh/md 2/ 13

H.F. 604 (2) Upon dismissal, the court or clerk of court shall assess 1 the costs of the action against the defendant named on the 2 citation. 3 Sec. 4. Section 321.24, subsection 1, Code 2017, is amended 4 to read as follows: 5 1. Upon receipt of the application for title and payment of 6 the required fees for a motor vehicle, trailer, or semitrailer, 7 the county treasurer or the department shall, when satisfied 8 as to the application’s genuineness and regularity, and, in 9 the case of a mobile home or manufactured home, that taxes 10 are not owing under chapter 423 or 435 , issue a certificate 11 of title and, except for a mobile home or manufactured home, 12 a registration receipt, and shall file the application, the 13 manufacturer’s or importer’s certificate, the certificate of 14 title, or other evidence of ownership, as prescribed by the 15 department. The registration receipt shall be delivered to the 16 owner and shall contain upon its face the date issued, the name 17 and address of the owner, the registration number assigned to 18 the vehicle, the amount of the fee paid, the type of fuel used, 19 a description of the vehicle as determined by the department, 20 and a form for notice of transfer of the vehicle. The name 21 and address of any lessee of the vehicle shall not be printed 22 on the registration receipt or certificate of title. Up to 23 three owners may be listed on the registration receipt and 24 certificate of title. The registration receipt shall contain 25 upon its face the following notice in boldface, ten point type 26 in substantially the following language: 27 FAILURE TO CARRY MOTOR VEHICLE INSURANCE MAY RESULT IN THE 28 SUSPENSION OF THIS REGISTRATION AND AFFECT YOUR ABILITY TO 29 REGISTER A MOTOR VEHICLE. 30 Sec. 5. NEW SECTION . 321.492C Use of camera or optical 31 device for insurance enforcement prohibited. 32 The state or a political subdivision of the state shall not 33 use any automated or remote system equipped with a camera or 34 other optical device to identify persons operating a motor 35 -3- HF 604 (4) 87 ns/nh/md 3/ 13

H.F. 604 vehicle in violation of section 321.20B or chapter 321A. 1 Sec. 6. NEW SECTION . 321B.1 Short title. 2 This chapter shall be known and may be cited as the “Motor 3 Vehicle Insurance Verification Act” . 4 Sec. 7. NEW SECTION . 321B.2 Definitions. 5 As used in this chapter, unless the context otherwise 6 requires: 7 1. “Advisory council” means the group established pursuant 8 to section 321B.3, subsection 2. 9 2. “Database” means the motor vehicle insurance verification 10 database created under this chapter. 11 3. “Department” means the department of transportation. 12 4. “Designated agent” means the third party with which the 13 department contracts under section 321B.3. 14 5. “Financial institution” means financial institution as 15 defined in 18 U.S.C. §20. 16 6. “Motor vehicle” means motor vehicle as defined in section 17 321.1. 18 7. “Program” means the motor vehicle insurance verification 19 program created under this chapter. 20 8. “Real-time internet services model” means an electronic 21 service established by insurers through the internet, the 22 world wide web, or a similar proprietary or common carrier 23 electronic system that complies with the specifications and 24 standards of the insurance industry committee on motor vehicle 25 administration and that is available twenty-four hours per 26 day, seven days per week, subject to reasonable allowances for 27 scheduled maintenance or temporary system failures. 28 Sec. 8. NEW SECTION . 321B.3 Motor vehicle insurance 29 verification program —— advisory council. 30 1. A motor vehicle insurance verification program is 31 created within the department to be administered by the 32 department. The purposes of the program include all of the 33 following: 34 a. To establish a motor vehicle insurance verification 35 -4- HF 604 (4) 87 ns/nh/md 4/ 13

H.F. 604 database to verify compliance with the requirements of section 1 321.20B. 2 b. To assist in reducing the number of uninsured motor 3 vehicles on the highways of the state. 4 c. To assist in increasing compliance with motor vehicle 5 registration requirements and for other law enforcement 6 purposes. 7 d. To assist in protecting the bona fide security interests 8 of financial institutions in motor vehicles. 9 2. a. The department shall establish an advisory council, 10 chaired by the director of the department or a representative 11 of the department appointed by the director, consisting of 12 six members including the director of the department or the 13 representative of the department appointed by the director, 14 a representative of the department of public safety, an 15 insurance company representative appointed by the commissioner 16 of insurance, an insurance agent appointed by the commissioner 17 of insurance, a representative of a trade association of 18 property and casualty insurers appointed by the commissioner 19 of insurance, and a representative of a vendor with experience 20 implementing real-time internet services models and databases 21 similar to the database created under this chapter appointed by 22 the director of the department. 23 b. The advisory council shall do all of the following: 24 (1) Make recommendations to the department on the best 25 methods and practices for implementing a real-time internet 26 services model for insurance verification. 27 (2) Assist in the development of a guide for insurers 28 detailing the data fields and other information necessary for 29 compliance with this chapter. 30 (3) Provide an annual report to the department detailing the 31 improvements and implementation efforts relating to insurance 32 verification in other states for consideration in improving 33 compliance and operations in this state. 34 3. Following the competitive bidding procedures as provided 35 -5- HF 604 (4) 87 ns/nh/md 5/ 13

H.F. 604 in chapter 8A, subchapter III, the department shall contract 1 with a third party to act as the department’s designated agent 2 for administration of this chapter. For the period of the 3 contract, the designated agent shall establish and maintain a 4 computer database containing the following information: 5 a. Information provided by insurers under section 321B.5. 6 b. Information provided by the department under subsection 7 6. 8 c. Information obtained using a real-time internet services 9 model. 10 d. Any other information provided by the department pursuant 11 to this chapter. 12 4. The database shall be developed and maintained, and 13 access to a real-time internet services model shall be 14 provided, in accordance with guidelines established by the 15 department by rule to allow authorized state and local law 16 enforcement agencies and financial institutions to efficiently 17 access the records of the database and real-time internet 18 services model, including reports useful for the implementation 19 of this chapter, twenty-four hours per day, seven days 20 per week, subject to reasonable allowances for scheduled 21 maintenance or temporary system failures. 22 a. Database reports shall be in a form and contain 23 information approved by the department. 24 b. Database reports may be made available through the 25 department’s internet site or through other electronic media 26 if the department determines that sufficient security is 27 provided to ensure compliance with the provisions of this 28 chapter regarding limitations on disclosure of information in 29 the database. 30 c. The department shall consult with the chief information 31 officer appointed under section 8B.2 for the purpose of 32 developing network security requirements for the database. 33 5. At least twice monthly, the designated agent shall do the 34 following, using information provided by the department: 35 -6- HF 604 (4) 87 ns/nh/md 6/ 13

H.F. 604 a. Update the database with motor vehicle insurance 1 information provided by insurers in accordance with section 2 321B.5. 3 b. Compare all current motor vehicle registrations against 4 the database. If records in the database indicate that a 5 registered motor vehicle is not covered under an owner’s 6 policy of liability insurance, the designated agent shall 7 use a real-time internet services model to determine if the 8 registered motor vehicle is covered under an owner’s policy of 9 liability insurance. 10 6. On or before the seventh day of each calendar month, the 11 department shall provide the designated agent with the make, 12 model, year, and vehicle identification number of each vehicle 13 in the department’s motor vehicle database, and the name and 14 address of each person listed on each vehicle’s registration. 15 7. The department shall adopt rules in accordance with 16 chapter 17A establishing procedures for the use of the 17 department’s motor vehicle database for the purposes of 18 administering and enforcing this chapter. 19 8. a. The designated agent shall archive database files at 20 least semiannually for auditing purposes. 21 b. The department shall audit the program at least annually. 22 The audit shall include verification of: 23 (1) Billings made by the designated agent. 24 (2) The accuracy of the designated agent’s matching of 25 vehicle registration records with insurance data. 26 Sec. 9. NEW SECTION . 321B.4 Enforcement of financial 27 responsibility requirements —— penalty. 28 1. If records in the database and the real-time internet 29 services model used by the designated agent indicate that a 30 registered motor vehicle is not covered under an owner’s policy 31 of liability insurance for three consecutive months, at the 32 direction of the department the designated agent shall provide 33 notice by first-class mail to the owner of the motor vehicle 34 that the owner has fifteen days from the date the notice was 35 -7- HF 604 (4) 87 ns/nh/md 7/ 13

H.F. 604 mailed to provide one of the following: 1 a. Proof of financial liability coverage as defined in 2 section 321.1, subsection 24B. 3 b. Proof that the owner is exempt from the requirement to 4 maintain proof of financial liability coverage under section 5 321.20B. 6 2. If, after fifteen days, the owner of the motor vehicle 7 fails to provide satisfactory proof of financial liability 8 coverage, the designated agent shall provide a second notice 9 by first-class mail to the owner of the motor vehicle allowing 10 the owner an additional fifteen days from the date the second 11 notice was mailed to provide the information requested under 12 subsection 1. 13 3. a. The designated agent shall update the database 14 regarding each notice sent to a motor vehicle owner under 15 subsections 1 and 2, indicating the information provided by the 16 motor vehicle owner or the owner’s failure to provide proof of 17 financial liability coverage, as applicable. 18 b. If the owner of a motor vehicle provides proof to the 19 department or the designated agent that the owner’s motor 20 vehicle is covered by an acceptable form of financial liability 21 coverage described in section 321.1, subsection 24B, paragraph 22 “b” , “c” , or “d” , the information shall be recorded in the 23 database. 24 c. If the designated agent determines the motor vehicle 25 is appropriately insured using a real-time internet services 26 model, the information shall be recorded in the database. 27 4. a. If the owner of a motor vehicle fails to provide 28 proof of financial liability coverage following receipt of the 29 second notice under subsection 2, the designated agent shall 30 notify the department, and the department shall suspend the 31 registration of the motor vehicle. 32 b. The department shall provide to the owner of the motor 33 vehicle appropriate notice of the suspension, order the owner 34 to surrender the registration plates and registration receipt 35 -8- HF 604 (4) 87 ns/nh/md 8/ 13

H.F. 604 for the vehicle to the county treasurer, advise the owner of 1 the legal consequences of operating a vehicle with a suspended 2 registration and without financial liability coverage, and 3 instruct the owner on how to reinstate the vehicle registration 4 once the owner has obtained financial liability coverage for 5 the vehicle. 6 5. a. A person shall not provide a false or fraudulent 7 statement to the department or the department’s designated 8 agent in regard to proceedings under this chapter. 9 b. In addition to any other penalties, a person who violates 10 paragraph “a” is guilty of a simple misdemeanor. 11 6. A suspension of registration under this chapter is in 12 addition to any other penalty imposed by law. This chapter 13 does not affect other actions or penalties that may be taken or 14 imposed for a violation of section 321.20B or other law. 15 7. a. A registration that has been suspended under this 16 section shall not be reinstated and a registration shall not be 17 issued to the holder of the suspended registration until the 18 person does all of the following: 19 (1) Pays to the department an administrative reinstatement 20 fee of one hundred dollars, in addition to any other penalty 21 imposed by law. 22 (2) Complies with the requirements of section 321.20B and 23 this chapter. 24 b. Reinstatement fees collected under this subsection shall 25 be retained by the department as repayment receipts as defined 26 in section 8.2 and shall be used exclusively to offset the 27 costs of administering the program, including payments made by 28 the department to the department’s designated agent. 29 Sec. 10. NEW SECTION . 321B.5 Motor vehicle insurance 30 reporting —— penalty. 31 1. a. Except as provided in paragraph “b” , each insurer 32 that issues a policy to a motor vehicle owner in this state 33 that includes motor vehicle liability coverage, uninsured 34 motorist coverage, underinsured motorist coverage, or 35 -9- HF 604 (4) 87 ns/nh/md 9/ 13

H.F. 604 personal injury coverage shall, on or before the seventh 1 and twenty-first days of each calendar month, submit to the 2 department’s designated agent a record of each motor vehicle 3 insurance policy that was issued by the insurer and in effect 4 for a vehicle registered or garaged in this state as of the 5 date of the previous submission. 6 b. An insurer is not required to provide a record of a motor 7 vehicle insurance policy under paragraph “a” if the policy 8 covers a vehicle that is registered under chapter 326. 9 c. This subsection does not preclude more frequent 10 reporting. 11 2. A record provided by an insurer under subsection 1, 12 paragraph “a” , shall include all of the following: 13 a. The name, date of birth, and driver’s license number, if 14 the insured provides a driver’s license number to the insurer, 15 of each insured owner or operator, and the address of the named 16 insured. 17 b. The make, year, and vehicle identification number of each 18 insured vehicle. 19 c. The policy number and effective date of each policy. 20 3. An insurer shall provide the information required under 21 this section via electronic means or via another means the 22 designated agent agrees to accept. 23 4. a. The department may assess a civil penalty of not more 24 than two hundred fifty dollars for each day an insurer fails to 25 comply with this section. 26 b. If an insurer shows that the failure to comply with this 27 section was inadvertent, accidental, or the result of excusable 28 neglect, the department may waive the civil penalty. 29 c. An insurer that discloses records to the department’s 30 designated agent in a reasonable, good-faith effort to comply 31 with the requirements of this section shall not be subject to a 32 civil penalty under paragraph “a” . 33 Sec. 11. NEW SECTION . 321B.6 Disclosure of database 34 information —— penalty. 35 -10- HF 604 (4) 87 ns/nh/md 10/ 13

H.F. 604 1. Information provided to the designated agent and 1 information contained in the database under this chapter are 2 confidential and subject to the provisions and penalties of 18 3 U.S.C. §2721. Such information may not be disclosed, except 4 as follows: 5 a. For the purpose of investigating, litigating, or 6 enforcing the financial liability coverage requirements 7 of section 321.20B, the designated agent shall provide an 8 electronic record to a state or local government agency or 9 court verifying motor vehicle financial liability coverage 10 information. 11 b. For the purpose of investigating, litigating, or 12 enforcing the financial liability coverage requirements of 13 section 321.20B, the designated agent shall, upon request, 14 issue to any state or local government agency or court a 15 certificate documenting motor vehicle financial liability 16 coverage, according to the database, of a specific individual 17 or motor vehicle for the time period designated by the 18 government agency or court. 19 c. Upon request, the department or its designated agent 20 shall disclose whether an individual is covered under a motor 21 vehicle insurance policy, proof of the insurance coverage 22 policy, and the insurance company name to: 23 (1) The individual or, if the individual is deceased, 24 any person who is an interested party in the estate of the 25 individual as provided under chapter 633. 26 (2) The parent or legal guardian of the individual if the 27 individual is an unemancipated minor. 28 (3) The legal guardian of the individual if the individual 29 is legally incapacitated. 30 (4) A person who has power of attorney for the individual. 31 (5) A person who submits a notarized release from the 32 individual dated no more than ninety days before the date the 33 request is made. 34 (6) A person suffering loss or injury in a motor vehicle 35 -11- HF 604 (4) 87 ns/nh/md 11/ 13

H.F. 604 accident in which the individual was involved, but only as part 1 of an accident report as authorized in section 321.271 relating 2 to access to accident reports. 3 d. For the purpose of investigating, enforcing, or 4 prosecuting laws or issuing citations, information related to a 5 motor vehicle owner or operator’s financial liability coverage 6 under section 321.20B may be provided to state or local law 7 enforcement agencies. 8 e. Upon request of a peace officer acting in an official 9 capacity under the provisions of paragraph “d” , the department 10 or the designated agent shall, upon request, disclose relevant 11 information contained in the database. 12 f. For the purpose of the state auditor conducting audits 13 of the program. 14 g. Upon request of a financial institution for the purpose 15 of protecting the financial institution’s bona fide security 16 interest in a motor vehicle. 17 2. a. The department may allow the designated agent to 18 prepare and deliver, upon request, a report on the insurance 19 information of a person or motor vehicle in accordance with 20 this section. The report may be in the form of: 21 (1) A certified copy that is considered admissible in any 22 court proceeding in the same manner as the original. 23 (2) Information accessible through the internet or through 24 another electronic medium if the department determines that 25 sufficient security is provided to ensure compliance with this 26 section. 27 b. The department may allow the designated agent to charge a 28 fee established by the department for each of the following: 29 (1) Authenticating a document, including preparation and 30 delivery of a certified copy. 31 (2) Accessing a record through the internet or through 32 another electronic medium. 33 (3) Providing a record to a financial institution under 34 subsection 1, paragraph “g” . 35 -12- HF 604 (4) 87 ns/nh/md 12/ 13

H.F. 604 3. The designated agent or any other person who knowingly 1 releases or discloses information from the database for a 2 purpose other than those authorized in this section or to a 3 person who is not entitled to such information is guilty of a 4 class “D” felony. 5 4. Neither the state nor the department’s designated agent 6 shall be liable to any person for gathering, managing, or 7 using the information in the database in compliance with this 8 chapter. 9 5. The designated agent shall be responsible for 10 maintaining and securing the information in the database 11 provided by the department and insurers under sections 321B.3 12 and 321B.5. 13 6. An insurer acting in compliance with this chapter shall 14 not be liable to any person for the disclosure of information 15 supplied to the department or designated agent. The designated 16 agent shall indemnify an insurer against any loss arising from 17 the disclosure of information supplied to the department or 18 designated agent, provided the insurer supplied the information 19 to the department or designated agent in a manner that complies 20 with this chapter and rules adopted pursuant to this chapter. 21 Records provided by an insurer under this chapter shall be 22 deemed evidence of insurance and not a guarantee of insurance. 23 Sec. 12. EFFECTIVE DATE. This Act takes effect July 1, 24 2019. 25 -13- HF 604 (4) 87 ns/nh/md 13/ 13