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NU Online News Service, April 26, 3:56 p.m. EDT
The Alabama legislature, in a move drawing praise from an insurer group, has passed a bill to ban law enforcement from imposing accident response service fees.
According to the Property Casualty Insurers Association of America (PCI), Alabama would become the 10th state to pass such a ban if Governor Bob Riley signs the bill—HB 306—into law.
Calls placed to Gov. Riley’s office were not returned.
Jeffrey Brewer, PCI spokesman, said the association believes the bill will be signed. He said Gov. Riley has until May 6 to take action on the bill.
Mr. Brewer noted there was not much opposition to the bill, and it passed both houses of the legislature unanimously.
Mr. Brewer added he did not know how many states have implemented service fees, as those decisions are usually made by municipalities and counties rather than states.
He said PCI has seen an increase in the number of localities considering such fees in the down economy, and noted that areas in California have been particularly active in bringing up such measures this year.
Monique Kabitzke, PCI's state relations director for Alabama, said in a statement, “Local municipalities calculate their tax structure based on the services provided, so adding charge-backs as a source of revenue amounts to a form of double taxation. This process is ultimately a back-door tax on consumers, and we are very pleased that the Alabama legislature has voted to ban it.”
As insurers pay all appropriate bills and charges associated with an accident, Ms. Kabitzke said the fees could ultimately affect the premiums consumers pay.