Calif., Colorado Consider ‘Crash Tax’ Bans

Legislators in California and Colorado have proposed new laws that would prohibit communities from charging a fee when police and fire personnel respond to motor vehicle accidents.

The city of Sacramento recently adopted just such a “fire recovery charge” on out-of-town automobile drivers. Sacramento’s “crash tax” imposes a fee on out-of-town drivers who get into auto accidents to fund the fire department’s response services. The fee would be imposed on non-resident drivers if insurers find them at fault in the accident. But business owners who live outside the city but have property inside the city are exempt from the tax.

Sen. Tony Strickland, R-Moorpark, who introduced Senate Bill 49, banning such crash taxes, said, “The availability and use of emergency response resources throughout the state is an issue of statewide concern and not a municipal affair,” he said, noting it is unfair to penalize residents who live in surrounding communities but travel to downtowns to work. Thus, his bill would prohibit a city, including a charter city, county, district, municipal corporation, or public authority from charging a fee to any person, regardless of residency, for the expense of an emergency response.

Colorado House Bill 1059 would similarly ban local governments from imposing a fee or seeking reimbursement for costs incurred by police officers, firefighters, and other first responders in connection with responding to a motor vehicle accident, with exceptions for certain costs for cleaning up hazardous materials and costs incurred in connection with providing ambulance service.

A recent poll on crash taxes for the Property Casualty Insurers Association of America found the majority of consumers believe their taxes cover emergency response services.

“There is strong public opposition across the country to this new trend of charging accident response fees,” said Robert Passmore, senior director, personal lines for PCI.