Official Summary Text
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 submit 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 plainti
ff 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 limitation of recovery as an affirmative defense. However, such limitations
o
n 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.
ON APRIL 22, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1667, AS AMENDED.
AMENDMENT #1 rewrites the bill to, instead, prohibit the initial issuance of registration of a motor vehicle if the vehicle has not met the requirements of the Financial Responsibility Law of 1977, which provides insurance and financial responsibility re
quirements for motor vehicle operators. In order to provide satisfactory proof that a vehicle has met the financial responsibility requirements, the following documentation may be submitted: (i) documentation, 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 for at least 30 days; or (ii) a certificate, valid for one year, issued by the commissioner of revenue stating that a cash deposi
t or bond in the required amount has been paid or filed with the commissioner of revenue or the driver has qualified as a self-insurer. Acceptable electronic formats include display of electronic images on a cell phone or another type of portable electro
ni
c device. Every registration and renewal of registration be accompanied by a notice stating vehicle owners and/or operators are required to carry proof of financial responsibility. Such a notice may be incorporated into any other notice required by this
part to accompany the registration and renewal of registration. These provisions are repealed on June 30, 2029.
This amendment prohibits the department of revenue or a county clerk from processing an application for renewal of registration of a motor vehicle until the owner or lessee of the motor vehicle pays all coverage failure fees, and provides proof of financ
ial responsibility, proof of an exemption from financial security requirements, or a statement that the vehicle is not in use on any public road. If the owner or lessee uses a policy of insurance as proof of financial security, then the documentation mus
t
state the policy will be in force for at least 30 days.
NOTICES
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 motor 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 a
n
initial coverage failure fee, and continuing failure to respond to the notice results in increasing additional fees.
If the department of revenue suspend or revokes a motor vehicle registration for failure to respond to a subsequent notice, then the department of revenue must provide notice to the owner or lessee of the motor vehicle of the legal consequences of operat
ing a motor vehicle with a suspended or revoked registration and without proof of financial security. The department of revenue may direct a designated agent to provide such notice.
COVERAGE FAILURE FEES
The James Lee Atwood Jr. Law provides that failure to respond to a notice from the department of revenue, stating that a motor vehicle does not meet financial responsibility requirements, results in an initial $25 coverage failure fee. This amendment inc
reases such coverage failure fee to $500. $200 of the fee must be 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 un
in
sured motorist identification restricted fund. Of the revenue distributed to the county clerk, 20% must be earmarked for the county clerk's work in administration of the vehicle insurance verification program and for other usual and necessary insurance v
erification related expenses.
The James Lee Atwood Jr. Law imposes a $100 continued coverage failure fee on the owner of a motor vehicle that has received an initial notice from the department of revenue and has not paid the initial coverage failure fee and provided proof of financia
l responsibility within 30 days. This amendment increases the continued coverage failure fee to $1,000. $400 of the fee must be distributed to the county clerk of the county in which the motor vehicle is registered, $100 must be distributed to the depar
tm
ent of safety, and the remainder must be deposited into the uninsured motorist identification restricted fund. Of the revenue distributed to the county clerk, 20% must be earmarked for the county clerk's work in administration of the vehicle insurance ve
rification program and for other usual and necessary insurance verification related expenses.
If a motor vehicle is subject to the issuance of a subsequent notice within three years from the date of the first notice, then this amendment requires that a $1,500 repeated coverage failure fee be imposed on the owner or lessee. The subsequent notice
must include a statement that, if the owner or lessee of the motor vehicle fails to comply with the requirements of the notice, then the owner or lessee is subject to a $1,500 repeated coverage failure fee and suspension or revocation of the motor vehicle
r
egistration. Of this $1,500 fee, $600 must be distributed to the county clerk of the county in which the motor vehicle is registered, $150 must be distributed to the department of safety, and the remainder must be deposited into the uninsured motorist id
entification restricted fund. of the revenue distributed to the county clerk, 20% must be earmarked for the county clerk's work in administration of the vehicle insurance verification program and for other usual and necessary insurance verification relat
ed
expenses.
AUTOMOBILE LIABILITY INSURERS
The James Lee Atwood Jr. Law authorizes a liability insurer that chooses not to utilize the IICMVA model to instead provide the department of revenue a full book of business by the seventh day of each month. This amendment generally requires each automo
bile liability insurer to utilize the IICMVA model. However, insurers of commercial motor vehicles and automobile liability insurers writing fewer than 500 noncommercial policies in this state are exempt from the IICMVA requirement. In instances where t
he
liability insurance status is unable to be verified, automobile liability insurers that utilize the IICMVA model must (i) accept unknown carrier requests; and (ii) provide a full book of business upon request.
This amendment requires every liability insurer to provide a full book of revenue to the department of revenue weekly. Such full book of business must include (i) the vehicle identification number of each insured motor vehicle; and (ii) the automobile l
iability insurer's NAIC code, policy number, and effective date of each policy.
LIMITS ON NONECONOMIC DAMAGES
This amendment generally limits the amount of noneconomic damages that may be awarded to a plaintiff in a civil action for injury or death arising out of the use or operation of a motor vehicle to $375,000 if all of the following requirements are met:
The plaintiff seeking noneconomic damages is the owner or lessee of the motor vehicle involved in the collision giving rise to the civil action
.
The motor vehicle owned or leased by the plaintiff and involved in the collision was not covered or otherwise in compliance with financial responsibility requirements at the time of the collision.
The department of revenue or county clerk issued at least three separate written notices of noncompliance to the owner or lessee of the specific motor vehicle owned or leased by the plaintiff involved in the collision that was not in compliance with financial responsibility requirements.
However, this amendment provides that the limitation on noneconomic damages applies only to the owner or lessee of a motor vehicle involved in a collision, and not to any of the following:
An operator of a motor vehicle who is not the owner or lessee of the motor vehicle and who is operating the motor vehicle with the permission of the owner or lessee
.
A passenger, other than the owner or lessee, in the motor vehicle
.
A plaintiff whose alleged noncompliance with the financial responsibility requirements arises from the ownership or operation of a motor vehicle other than the motor vehicle involved in the collision giving rise to the civil action
.
A plaintiff whose claim does not arise from the operation of the motor vehicle that is owned or leased by the plaintiff and involved in the collision that was not in compliance with financial responsibility requirements at the time of the collision.
This amendment raises the limit on noneconomic damages to $750,000, if there is a catastrophic loss or injury. In an action for wrongful death, the limits on noneconomic damages only apply if the decedent was the owner or lessee of the motor vehicle inv
olved in the collision, the motor vehicle owned or leased by the plaintiff involved in the collision was not in compliance with financial responsibility requirements, and the department of revenue or county clerk issued at least three separate written not
ic
e of noncompliance to the owner or lessee. The limits on noneconomic damages apply only to civil actions filed on or after this amendment becomes a law.
This amendment provides that a defendant asserting the limitations on noneconomic damages must plead such limits as an affirmative defense. The defendant bears the burden of proving each statutory prerequisite for applicability of the noneconomic damage
limits. The limitations on noneconomic damages imposed by this amendment must not be disclosed to the jury, but must be applied by the court to any award of noneconomic damages. Further, the limitations do not apply to personal injury and wrongful deat
h
actions if (i) the defendant had a specific intent to inflict serious physical injury; (ii) the defendant intentionally falsified, destroyed, or concealed records containing material evidence; (iii) the defendant was under the influence of alcohol, drugs,
or any other intoxicant or stimulant; or (iv) the defendant's act or omission resulted in the defendant being convicted of a felony.
This amendment requires the trier of fact to make a specific finding of fact, by special verdict, as to whether the plaintiff was in compliance with financial responsibility requirements if the plaintiff claims that the plaintiff was in compliance at the
time of the accident and there is a disputed issue of fact.
PUBLICATION
This amendment requires the department of revenue to publicize the changes to present law made to the James Lee Atwood Jr. Law.
This amendment authorizes the department of transportation, in consultation with the departments of safety and revenue, to use the department of transportation's existing permanent electronic overhead informational displays on the interstate to provide p
eriodic messages discussing financial responsibility requirements for all motor vehicles operated on public highways in this state.
DEPARTMENT REPORTING REQUIREMENTS
This amendment requires the department of commerce and insurance to issue a data call every six months to each insurer authorized to write automobile liability insurance business in this state requesting aggregated data on automobile liability policies t
hat were issued and subsequently cancelled within 60 days of issuance.
Current Bill Text
Read the full stored bill text
HOUSE BILL 1690
By Hicks T
SENATE BILL 1667
By Powers
SB1667
011220
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 29;
Title 55 and Title 56, relative to motor vehicle
financial responsibility.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 55-12-211, is amended by adding
the following new subsection:
(d)
(1) The department of revenue or a county clerk shall not process an
application for initial issuance or renewal of registration of a motor vehicle after
the owner of the motor vehicle becomes subject to issuance of a notice under §
55-12-210(a) until the applicant provides documentation pursuant to subdivision
(a)(3). If the applicant elects to use a policy of insurance and financial
responsibility insurance certificate as proof of financial security under subdivision
(a)(3)(A), then the documentation must state that the policy will be in force for a
period of not less than thirty (30) days.
(2) For purposes of this subsection (d), an owner of a motor vehicle
becomes subject to issuance of a notice under § 55-12-210(a) if the department
has included a designation in the Tennessee Vehicle Title and Registration
System (VTRS) database or other database available to county clerks that
identifies there is evidence based on either the IICMVA model or the full book of
business download process described in § 55-12-207 that the motor vehicle is
not insured and the department has not issued a notice under § 55-12-210(a) to
the owner of the motor vehicle.
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SECTION 2. Tennessee Code Annotated, Section 55-12-210(a)(2), is amended by
deleting "twenty-five-dollar coverage failure fee" and substituting instead "five-hundred-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 3. Tennessee Code Annotated, Section 55-12-210(b)(1)(A), is amended by
deleting the subdivision and substituting instead:
(A) Impose on the owner of the motor vehicle a five-hundred-dollar coverage
failure fee. Of this fee, two hundred dollars ($200) 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.
SECTION 4. Tennessee Code Annotated, Section 55-12-210(b)(2), is amended by
deleting the language "one hundred-dollar continued coverage failure fee" and substituting
instead the language "one thousand-dollar continued coverage failure fee".
SECTION 5. Tennessee Code Annotated, Section 55-12-210(c)(1), is amended by
deleting the subdivision and substituting instead:
(1) Shall impose on the owner of the motor vehicle a one thousand-dollar
continued coverage failure fee, which is in addition to the coverage failure fee imposed
under subdivision (b)(1)(A). Of this continued coverage failure fee, four hundred dollars
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($400) 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 by the clerk and handled in the same manner as all
other fees collected by the clerk for the clerk's benefit.
SECTION 6. Tennessee Code Annotated, Section 55-12-210, is amended by adding
the following as a new subsection:
(h)
(1) If an owner of a motor vehicle becomes subject to issuance of a
second or subsequent 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 only fee imposed under this section is a one thousand
five hundred-dollar repeated coverage failure fee. In lieu of the statement
described in subdivision (a)(2), the notice described in subdivision (a)(1) must
include a statement that if the owner of the motor vehicle fails to comply with the
requirements set forth in the notice, the owner of the motor vehicle is subject to a
one thousand five hundred-dollar repeated coverage failure fee and suspension
or revocation of the owner's motor vehicle registration. The department shall not
provide a request for information under subdivision (a)(3) or notices under
subsections (b) and (c) to owners who become subject to such second and
subsequent notices. The notice described in subdivision (a)(1), which includes
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the statement described in this subdivision (h)(1), and the notice described in
subdivision (h)(2)(C) are the only two (2) notices required to be provided to such
owners.
(2) If the owner of the motor vehicle fails to provide satisfactory proof or a
statement as described in subsection (a), then the department of revenue:
(A) Shall impose on the owner of the motor vehicle a one
thousand five hundred-dollar ($1,500) repeated coverage failure fee. Of
this repeated coverage failure fee, six hundred dollars ($600) must be
distributed to the county clerk of the county in which the motor vehicle is
registered, one hundred fifty dollars ($150) 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;
(B) Shall suspend or revoke the motor vehicle owner's
registration; and
(C)
(i) Shall provide notice to the motor vehicle owner of the
legal consequences of operating a motor vehicle with a
suspended or revoked registration and without owner or operator's
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proof of financial security as required by this chapter, and
instructions on how to effect the reinstatement of the motor vehicle
owner's registration; or
(ii) May direct a designated agent to provide the notice
and instructions described in this subdivision (h)(2)(C).
SECTION 7. The Department of Revenue shall publicize the changes made to the
James Lee Atwood Jr. Law in SECTIONS 1 through 6.
SECTION 8. Tennessee Code Annotated, Section 55-12-207, is amended by deleting
the language "a full book of business by the seventh day of each calendar month" in subsection
(a) and substituting instead the language "a full book of business on a weekly basis" and by
inserting the language ", including daily" at the end of subdivision (b)(2) after the language
"frequent reporting".
SECTION 9. Tennessee Code Annotated, Title 29, is amended by adding the following
as a new chapter:
29-44-101.
Except as provided in this chapter, a plaintiff shall not be awarded noneconomic
damages, as defined in § 29-39-101, 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 the financial responsibility
requirements of title 55, chapter 12, part 1 at the time of the use or operation. If the
plaintiff is awarded economic damages, as defined in § 29-39-101, in the civil action,
then the plaintiff must be assessed and held liable for all court costs incurred by all
parties to the action. A defendant in the civil action may assert as an affirmative defense
the limitation of recovery in this section.
29-44-102.
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The limitation of recovery in § 29-44-101 does not apply if the defendant who is
the operator of the motor vehicle causing the injury, damage, or death:
(1) Was cited for driving while under the influence of an intoxicant in
violation of § 55-10-401 or reckless driving or aggravated reckless driving in
violation of § 55-10-205 or § 55-10-209 as a result of the use or operation of the
vehicle and is subsequently convicted of or pleads nolo contendere to the
offense;
(2) Acted with the intent to inflict the injury, damage, or death;
(3) Failed to stop at the scene of an accident in violation of § 55-10-101;
or
(4) Was in furtherance of the commission of a felony offense under state
or federal law.
29-44-103.
(a) This chapter does not preclude a passenger in a motor vehicle from
asserting a claim to recover noneconomic damages in a civil action for bodily injury,
property damage, or death that the passenger incurred, in whole or in part, by the acts or
omissions of another person arising out of the operation or use of a motor vehicle.
(b) Subsection (a) does not apply to a passenger who is also the owner of the
motor vehicle at the time of the use or operation and who was not in compliance with the
financial responsibility requirements of title 55, chapter 12, part 1 at the time of the use
or operation.
29-44-104.
Notwithstanding a law to the contrary, an insurer does not lose any rights of
subrogation for claims paid under the applicable insurance policy for the recovery of
noneconomic damages.
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29-44-105.
This chapter applies to civil actions filed on or after the effective date of this act.
SECTION 10. In consultation with the Departments of Safety and Revenue, the
Department of Transportation is authorized to use the Department's existing permanent
electronic overhead informational displays located on the interstate system to provide periodic
messages to the motoring public as to the requirement of financial responsibility under
Tennessee Code Annotated, Title 55, Chapter 12, Part 1 for all motor vehicles operated on
public highways in this state. The Department may develop guidelines for the content, length,
and frequency of any message to be placed on the displays.
SECTION 11. Sections 1 through 8 take effect July 1, 2027, the public welfare requiring
it. All remaining sections of this act take effect upon becoming a law, the public welfare
requiring it.