Give

$9.6 million annual car insurance increase moves forward

The Senate Ways and Means Committee took executive action yesterday on SB 6871. Along with increasing court filing fees the proposal would also add a surcharge to car insurance policies to fight auto theft. According to the I-960 fiscal impact statement, the new charge is expected to collect $9.6 million annually from auto policyholders.

State insurers testified against the bill. According to the bill report:

"Progressive Insurance recently implemented something similar to this bill in Arizo! na and found it to be complicated and costly to administer. They had to wait until they had a significant rate revision to incorporate into the fee and they didn't see a lot of results from the program. The current auto theft program has only been in place a few years and there hasn't made a measurable decrease in auto theft. If the committee does move forward with the bill, a sunset clause should be incorporated with reports back to the Legislature on the effectiveness of the auto theft program. Also, the bill should allow for any fee to be specifically called out in the insurance premium statements and the Insurance Commissioner should not receive any portion of the funds. The insurance industry already pays into the general fund and assessments to the Insurance Commissioner. This bill could make insurance companies subject to retaliatory taxes, where they will have to pay higher taxes in other states because of this fee. This fee was looked at before to fund auto! theft prevention and it was decided at the time that law abid! ing citizens shouldn't have to pay for the actions of law breakers. Policy holders and insurance companies already pay taxes. Insurers have to pay a premium tax that is three times higher than the B&O tax rate. The bill is not clear regarding what policies are charged and some carriers have annual policies and the bill needs to be clarified."

Lastyear the Legislature raided millions from the state's "dedicated" auto theft account and changed theauthorized use of the funds. Here are the details from the 2009-11 budget:

Section128 (27) - $300,000 of the Washington auto theft prevention authorityaccount--state appropriation is provided solely for a contract with acommunity group to build local community capacity and economicdevelopment within the state by strengthening political relationshipsbetween economically distressed communities and governmentalinstitutions. The community group shall identify opportunities forcollaboration and initiate activities and events that bring communityorganizations, local governments, and state agencies together toaddress the impacts of poverty, political disenfranchisement, andeconomic inequality on communities of color. These funds must bematched by other nonstate sources on an equal basis.

Section203 (8) - $3,700,000 of the Washington auto theft prevention authorityaccount--state appropriation is provided solely for competitive grantsto community-based organizations to provide at-risk youth interventionservices, including but not limited to, case management, employmentservices, educational services, and street outreach interventionprograms. Projects funded should focus on preventing, intervening, andsuppressing behavioral problems and violence while linking at-riskyouth to pro-social activities. The department may not expend more than$1,850,000 per fiscal year. The costs of administration must not exceedfour percent of appropriated funding for each grant recipient. Eachentity receiving funds must report to the juvenile rehabilitationadministration on the number and types of youth served, the servicesprovided, and the impact of those services upon the youth and thecommunity.

Section945 - RCW 46.66.080 and 2007 c 199 s 27 are each amended to read asfollows: (1) The Washington auto theft prevention authority account iscreated in the state treasury, subject to appropriation. All revenuesfrom the traffic infraction surcharge in RCW 46.63.110(7)(b) and allreceipts from gifts, grants, bequests, devises, or other funds frompublic and private sources to support the activities of the auto theftprevention authority must be deposited into the account. Expendituresfrom the account may be used only for activities relating to motorvehicle theft, including education, prevention, law enforcement,investigation, prosecution, and confinement. During the 2009-2011fiscal biennium, the legislature may appropriate moneys from theWashington auto theft prevention authority account for criminal justicepurposes and community building.

Perhaps if the Legislature hadn't raided the account the funds would be available for the use intended - preventing auto theft.

Sign up for the WPC Newsletter

Share