Motor Vehicles, Titling and Registration

Plain English Breakdown

The exact impact on uninsured drivers and traffic safety remains uncertain.

Motor Vehicle Financial Responsibility Requirements

This bill requires vehicle owners to provide proof of car insurance before registering or renewing their vehicle registration in Tennessee and increases penalties for non-compliance.

What This Bill Does

• Requires proof of compliance with the Financial Responsibility Law when registering a new vehicle or renewing an existing one.
• Adds a notice to every vehicle registration stating that the owner must meet financial responsibility requirements.
• Increases the fee for not having car insurance from $25 to $50 and adds penalties up to $500 if there are repeated violations within three years.

Who It Names or Affects

• Vehicle owners in Tennessee who need to register or renew their vehicle registration.
• County clerks responsible for processing vehicle registrations and collecting fees.

Terms To Know

Financial Responsibility Law

A law that requires drivers to have car insurance or proof of financial responsibility to cover damages from accidents.

Coverage Failure Fee

A fine imposed on vehicle owners who do not provide proof of car insurance when required.

Limits and Unknowns

• The bill does not specify how the increased fees will be used beyond what is outlined.
• It's unclear if there are any exemptions for low-income individuals or those unable to afford insurance.

Official Summary Text

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.

Current Bill Text

SENATE BILL 1335
By Powers

HOUSE BILL 864
By Hicks T

HB0864
000872
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 55,
Chapter 12 and Title 55, Chapter 4, relative to
motor vehicle financial responsibility.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 55, Chapter 4, Part 1, is amended by
adding the following as a new section:
55-4-144.
(a) The general assembly finds that the Financial Responsibility Law of 1977,
compiled in chapter 12, part 1 of this title, is of utmost importance to the safety of the
citizens of this state.
(b) The commissioner or a county clerk shall not register or renew the
registration of a motor vehicle, unless the vehicle and its owner have met the
requirements of this section and the Financial Responsibility Law of 1977 for the
registration 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 TENNESSEE CODE ANNOTATED, §
55-4-144.
(c) For applications for registration or renewal submitted in person, submission
of the following items constitutes satisfactory proof that a vehicle and its owner have met
the requirements of the Financial Responsibility Law of 1977, as required by subsection
(b):

- 2 - 000872

(1) 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; or
(2) A certificate, valid for one (1) year, issued by the commissioner of
safety, stating that:
(A) 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
(B) The driver has qualified as a self-insurer under § 55-12-111.
(d) For purposes of this section, acceptable electronic formats include display of
electronic images on a cell phone or any other type of portable electronic device.
(e) If an application for registration or renewal is submitted through a website
administered by the department 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 Financial Responsibility Law of 1977 pursuant to subsection (c),
then the commissioner or the county clerk, as applicable, shall utilize the vehicle
insurance verification program, as defined in § 55-12-203, and may rely on the
information provided by the vehicle insurance verification program, for the purpose of
verifying proof that the vehicle and its owner have met the requirements of the Financial
Responsibility Law of 1977.
SECTION 2. Tennessee Code Annotated, Section 55-12-139(b)(2)(A), is amended by
deleting the language "has been issued;" and substituting instead the following:

- 3 - 000872

has been issued and is expected to be in force throughout the motor vehicle's period of
registration or renewal;
SECTION 3. Tennessee Code Annotated, Section 55-12-210(a)(2), is amended by
deleting "twenty-five-dollar coverage failure fee" and substituting instead "fifty-dollar coverage
failure fee" and by deleting "The notice described in subdivision (a)(1)" and substituting instead
"Subject to subsection (h), the notice described in subdivision (a)(1)".
SECTION 4. Tennessee Code Annotated, Section 55-12-210(b)(1)(A), is amended by
deleting the subdivision and substituting instead:
(A) Subject to subsection (h), impose on the owner of the motor vehicle a fifty-
dollar coverage failure fee. Of this fee, twenty-five dollars ($25.00) must be distributed
to the county clerk of the county in which the motor vehicle is registered, five dollars
($5.00) must be distributed to the department of safety, and the remainder must be
deposited into the uninsured motorist identification restricted fund created in § 55-12-
213. Twenty percent (20%) of the 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.
SECTION 5. Tennessee Code Annotated, Section 55-12-210, is amended by adding
the following new subsection:
(h)
(1) If an owner of a motor vehicle becomes eligible for a second notice as
described in subsection (a) within three (3) years from the date of the first notice
the department issued to the owner under subsection (a), then the coverage

- 4 - 000872

failure fee imposed pursuant to subdivision (b)(1)(A) is two hundred fifty dollars
($250). Of this fee, one hundred twenty-five dollars ($125) must be distributed to
the county clerk of the county in which the motor vehicle is registered, fifty dollars
($50.00) must be distributed to the department of safety, and the remainder must
be deposited into the uninsured motorist identification restricted fund created in §
55-12-213. Twenty percent (20%) of the 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.
(2) If an owner of a motor vehicle becomes eligible for a third notice as
described in subsection (a) within three (3) years from the date of the second
notice the department issued to the owner as described in subdivision (h)(1),
then the coverage failure fee imposed pursuant to subdivision (b)(1)(A) is five
hundred dollars ($500). Of this fee, two hundred fifty dollars ($250) must be
distributed to the county clerk of the county in which the motor vehicle is
registered, one hundred dollars ($100) must be distributed to the department of
safety, and the remainder must be deposited into the uninsured motorist
identification restricted fund created in § 55-12-213. Twenty percent (20%) of the
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

- 5 - 000872

by the clerk and handled in the same manner as all other fees collected by the
clerk for the clerk's benefit.
SECTION 6. This act takes effect July 1, 2025, the public welfare requiring it.