Arkansas Lawmakers Pass Measure Banning ‘Accident Tax’

Arkansas lawmakers have approved a new law that stops local governments from billing motorists for accident response services performed by police departments, according to the Property Casualty Insurers Association of America (PCI).

HB 1895, sponsored by Representative Allen Kerr (R-Little Rock) prohibits local governments from levying the so-called “accident tax,” a fee charged for police department response services at the scene of a traffic accident. Such fees are often passed on or charged to accident victims’ insurers.

The bill has passed through the Arkansas House and Senate and will now go to Governor Beebe for his signature before becoming law.

PCI Assistant Vice President and Regional Manager Joe Woods said passage of the bill is a “major consumer victory” as it “will stop local governments from imposing a hidden double tax on consumers for vital emergency services.”

The legislation adds an additional section to Arkansas Code Title 27, Chapter 53, Subchapter 3 to prohibit a local government from levying the accident response fee on the driver or owner of a motor vehicle, the insurance provider or any other person for the response or investigation by a law enforcement agency at the scene of a motor vehicle accident. However, this will not affect ambulance services.

As this issue continues to garner attention at the local level in many states, PCI said. Similar legislation has been signed into law in Pennsylvania, Missouri, Indiana, Georgia, and Tennessee. Efforts to end the accident tax are currently underway in Florida and California.

This has become an important debate for state legislatures as some third-party collection services are attempting to capitalize on the strong pressures many local governments face to balance their budgets without increasing taxes. Local officials are promised large windfalls if they enact a service fee when their police or fire departments are called upon to respond to an automobile accident. However, the services provided by the local police and fire departments are already paid for through property and other local taxes.

“Public safety is a basic role of government and Arkansas residents should not have to pay twice for emergency response services,” said Woods. “With this legislation, local government budgets will not be balanced on the backs of automobile accident victims in Arkansas.”

Source: PCI, www.pciaa.net

Topics Legislation Law Enforcement Arkansas