BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015 - 2016 Regular Session
SB 438 (Hill)
Version: April 6, 2015
Hearing Date: April 21, 2015
Fiscal: Yes
Urgency: No
TMW
SUBJECT
Motor vehicles: reportable property damage
DESCRIPTION
This bill would increase the minimum amount of damage to
property resulting from a motor vehicle accident that must be
reported to the Department of Motor Vehicles from $750 to
$1,000. This bill would make corresponding changes to the
minimum judgment amount that qualifies a judgment debtor, found
liable for that damage but who has failed to pay the judgment
rendered thereon, to have his or her driver's license suspended
or revoked.
BACKGROUND
Existing law requires individuals driving in California to
maintain minimum amounts of automobile liability insurance that
would pay for bodily injury or property damage to an injured
party resulting from an automobile accident caused by the
driver. In support of this requirement, existing law also
requires a driver who causes property damage in an amount of
$750 or more or bodily injury or death in any amount to submit
an accident report to the Department of Motor Vehicles (DMV).
Failure to report that accident to the DMV may result in the
suspension or revocation of the driver's license.
Existing law also provides that a driver, who is found liable
for property damage in an amount of $750 or more or bodily
injury or death in any amount due to an automobile accident and
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who fails to pay the judgment creditor, is subject to driver's
license suspension or revocation. This provision helps to
ensure that individuals harmed by drivers with no automobile
insurance will be paid by the at-fault driver.
This bill would increase from $750 to $1,000 the minimum amount
of reportable property damage resulting from an automobile
accident and unpaid judgment debt that may subject an at-fault
driver to license suspension or revocation.
This bill was heard by the Senate Transportation and Housing
Committee on April 7, 2015, and passed out on a vote of 11-0.
CHANGES TO EXISTING LAW
Existing law subjects a judgment debtor to driver's license
suspension or revocation if the judgment debtor fails to satisfy
a judgment that was for damage to property in excess of $750 or
for bodily injury to, or the death of, a person in any amount,
and resulted from the operation of a motor vehicle on a
California highway by the defendant or by any other person for
whose conduct the defendant was liable, unless the liability
resulted from the defendant's signing the application of a minor
for a driver's license. (Code Civ. Proc. Sec. 116.870.)
Existing law provides that if the judgment was for $750 or less,
resulted from a motor vehicle accident occurring on a California
highway caused by the defendant's operation of a motor vehicle,
and has remained unsatisfied for more than 90 days after the
judgment became final, the judgment creditor may file with the
Department of Motor Vehicles (DMV) a notice requesting a
suspension of the judgment debtor's privilege to operate a motor
vehicle. (Code Civ. Proc. Sec. 116.880(a).)
Existing law requires the DMV to prepare and publish a printed
summary describing the penalties for noncompliance financial
responsibility requirements, which shall be included with each
motor vehicle registration, registration renewal, and transfer
of registration and with each driver's license and license
renewal, and that printed summary may contain, but is not
limited to, a provision advising a driver that under existing
California law, if the driver is involved in an accident that
results in damages of over $750 to the property of any person or
in any injury or fatality, the driver must file a report of the
accident with the DMV within 10 days of the accident; if the
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driver fails to file a report or fails to provide evidence of
financial responsibility on the report, the driver's driving
privilege will be suspended for up to four years. (Veh. Code
Sec. 1656.2.)
Existing law authorizes the DMV to refuse to issue or renew, or
may suspend or revoke, the certificate or endorsement, as
specified, of any person who meets any of the following
conditions: (1) within 12 months, has been involved as a driver
in three accidents in which the driver caused or contributed to
the causes of the accidents; or (2) within 24 months, as a
driver, caused or contributed to the cause of an accident
resulting in a fatality or serious injury or serious property
damage in excess of $750. (Veh. Code Sec. 13369(c)(1)-(2).)
Existing law provides that the driver of a motor vehicle who is
in any manner involved in an accident originating from the
operation of the motor vehicle on a street or highway, or is
involved in a reportable off-highway accident, as defined, that
has resulted in damage to the property of any one person in
excess of $750, or in bodily injury, or in the death of any
person shall report the accident, within 10 days after the
accident, either personally or through an insurance agent,
broker, or legal representative, on a form approved by the DMV,
to the office of the DMV at Sacramento. (Veh. Code Sec.
16000(a).)
Existing law includes in the definition of a "reportable
off-highway accident" an accident which results in damages to
the property of any one person in excess of $750, or in bodily
injury or in the death of any person. (Veh. Code Sec.
16000.1(a)(3).)
Existing law provides that suspension provisions do not apply to
a driver or owner until 30 days after the DMV sends to the
driver or owner notice of its intent to suspend his or her
driving privilege and advises the driver or owner of his or her
right to a hearing. If the driver or owner makes a timely
request for a hearing, the DMV is required to hold a hearing
before the effective date of the suspension to determine the
applicability of potential driver's license suspension or
revocation, including the determination of whether the accident
resulted in property damage in excess of $750, or bodily injury,
or death and whether the driver or owner has established
financial responsibility, as specified, was in effect at the
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time of the accident. (Veh. Code Sec. 16075(a), (c).)
Existing law provides that "cause of action" means any cause of
action for damage to property in excess of $750, or for damage
in any amount on account of bodily injury to or death of any
person resulting from the operation by the defendant or any
other person of any motor vehicle upon a highway in this state,
except a cause of action based upon statutory liability by
reason of signing the application of a minor for a driver's
license. (Veh. Code Sec. 16251.)
Existing law provides that every judgment is deemed satisfied:
when $15,000 has been credited, upon any judgment in excess of
that amount, or upon all judgments, collectively, which
together total in excess of that amount, for personal injury
to or death of one person as a result of any one accident;
when, subject to the limit of $15,000 as to one person, the
sum of $30,000 has been credited, upon any judgment in excess
of that amount, or upon all judgments, collectively, which
together total in excess of that amount, for personal injury
to or death of more than one person as a result of any one
accident;
when $5,000 has been credited, upon any judgment in excess of
that amount, or upon all judgments, collectively, each of
which is in excess of $750, and which together total in excess
of $5,000, for damage to property of others as a result of any
one accident; or
when the judgment debtor or a person designated by him or her
has deposited with the department a sum equal to the amount of
the unsatisfied judgment for which the suspension action was
taken and presents proof, satisfactory to the department, of
inability to locate the judgment creditor. (Veh. Code Sec.
16377.)
Existing law defines proof of financial responsibility to mean
proof of financial responsibility resulting from the ownership
or operation of a motor vehicle and arising by reason of
personal injury to, or death of, any one person, of at least
$15,000, and, subject to the limit of $15,000 for each person
injured or killed, of at least $30,000 for the injury to, or the
death of, two or more persons in any one accident, and for
damages to property (in excess of $750), of at least $5,000
resulting from any one accident. (Veh. Code Sec. 16430.)
Existing law provides that proof of financial responsibility may
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be given by a bond, which is conditioned for the payment of
specified amounts, and provides for the entry of judgment on
motion of the state in favor of any holder of any final judgment
on account of damages to property over $750 in amount, or injury
to any person caused by the operation of the person's motor
vehicle. (Veh. Code Sec. 16434.)
This bill would change the above threshold amounts of $750 to
$1,000 and make other technical or clarifying revisions.
COMMENT
1. Stated need for the bill
The author writes:
When a motorist is involved in an accident and the personal
damage exceeds $750, the motorist must file a report with DMV.
The ? amount is set by statue and has not been updated since
2002. The DMV collects at least 54,000 SR1 reports on a
monthly basis.
SB 438 increases the $750 reporting amount to $1,000 on DMV
SR-1 reports.
2. Increasing minimum amount of property damage triggering
driver's license suspension or revocation
Existing law provides that a driver found liable for property
damage in an amount of $750 or more resulting from an automobile
accident that has resulted in an unpaid judgment may be subject
to driver's license suspension or revocation. (Code Civ. Proc.
Sec. 116.870.) Additionally, a judgment creditor of a judgment
for $750 or more of property damage that has not been paid
within 90 days after the judgment has become final is authorized
to file a request with the Department of Motor Vehicles (DMV)
requesting a suspension of the judgment debtor's privilege to
operate a motor vehicle. (Code Civ. Proc. Sec. 116.880.) This
bill would increase those minimum amounts to $1,000.
The author notes that the current $750 minimum reportable amount
has resulted in more accidents being reported to the DMV and
more license suspensions than intended by the law. The author
argues that this bill will lessen the burden on the DMV in
processing accident reports and lessen the burden on California
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motorists who are involved in minor accidents. The Personal
Insurance Federation of California (PIFC), in support, argues
that "[t]here is currently a discrepancy between the Vehicle
Code and Insurance Regulations for principally at fault
accidents. SB 438 would make [the] Vehicle Code consistent with
the principally at fault accident determinations under the
Insurance Regulations." PIFC states that this bill "could lead
to a better customer experience to have the DMV reporting be
consistent with the principally at fault definitions and
potentially reduce some paperwork for our customers."
The minimum level of property damage was last increased from
$500 to $750 by AB 1718 (Committee on Transportation, Chapter
451, Statutes of 2003). Those increases were enacted to conform
to the provisions of SB 1590 (Karnette, Chapter 766, Statutes of
2002), which increased the minimum motor vehicle accident
property damage limit from $500 to $750 before an accident
report is required to be filed with the DMV. SB 1590 made the
same increases for provisions pertaining to driver's license
suspensions due to unpaid civil judgments in the Vehicle Code
but failed to make the corresponding increases to the Code of
Civil Procedure provisions.
Following the enactment of SB 1590, the California Department of
Insurance proposed amendments, which were subsequently enacted,
to the California Code of Regulations that would increase the
minimum amount from $500 to $750 for determinations of when a
driver may be considered to be principally at fault in an
accident. (See Cal. Code Regs., tit. 10, Sec. 2632.13(c).)
Nine years later, the Department of Insurance issued a final
statement of reasons explaining another update to the Code of
Regulations, which increased the minimum amount from $750 to
$1,000, "in order to rule out de minimis damage, in recognition
of the fact that the damage to more than one person may now be
counted and that inflation has increased the cost of repairs."
(Dept. of Ins., Final Statement of Reasons, Reg-2010-00011 (May
25, 2011).) That statement of reasons also noted that, although
the Insurance Commissioner's authority governing the
determination of a principally at-fault accident is not derived
from the Vehicle Code (which enacted the 2002 increases upon
which the Commissioner relied to update the Code of Regulations
at that time), but rather from Insurance Code Section
1861.025(b)(3), Vehicle Code Section 16000 was no longer
applicable and no longer relied upon to determine at-fault
accidents.
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Notably, the increases proposed by this bill reflect the
appropriate increases for annual California Consumer Price Index
for All Urban Consumers (CPI). The last time the minimum
property damage amounts were increased from $500 to $750 was
2002, with corresponding increases made to the Code of Civil
Procedure in 2003. Based on 2002 figures, the CPI increase for
$750 is $978.55, which is within $25 of the proposed increased
to $1,000 in this bill.
Further, increasing the property damage minimum amount to $1,000
is consistent with the intent of the law, which is to require
every driver and owner of a motor vehicle to establish financial
responsibility. The law requires that motorists and vehicle
owners involved in accidents to be insured, and the DMV is able
to monitor financial responsibility when an accident occurs
involving property damage in an amount of $750 or more. These
are the laws to which the driver's license suspension or
revocation provisions in the Code of Civil Procedure are tied
and are also being increased by this bill.
Support : California State Sheriffs' Association; Personal
Insurance Federation of California
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation :
AB 1718 (Committee on Transportation, Chapter 451, Statutes of
2003) See Comment 2.
SB 1590 (Karnette, Chapter 766, Statutes of 2002) See Comment 2.
Prior Vote : Senate Transporation and Housing Committee: (Ayes
11, Noes 0)
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