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F I S C A L I M P A C T R E P O R T

SPONSOR Stewart

DATE TYPED 02/25/05 HB HJM 52

SHORT TITLE Motor Vehicle Insurance Study

SB

ANALYST Ford

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Minimal – see

narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Joint Memorial 52 makes findings related to the disproportionately high cost of motor ve-

hicle insurance and requests legislative council to direct the appropriate legislative interim com-

mittee to study the “pay at the pump” system of motor vehicle insurance, along with other op-

tions for lowering the cost of liability insurance and increasing the percentage of insured motor-

ists. The recommendations are to be reported to the second session of the 47

th

legislature.

Significant Issues

While pay at the pump proposals can vary, the general idea is that drivers pay for their insurance

through a fee added to the price of gasoline. The effect is that drivers pay for insurance based

roughly on the number of miles they drive instead of through the current lump-sum method.

Since every driver pays for the insurance through the gasoline they use, they all pay for insur-

ance through some method. Ideally, this reduces the number of drivers without insurance and

lowers general insurance costs.

FISCAL IMPLICATIONS

The bill will result in minimal costs for the appropriate interim legislative committee to conduct

the required study.

EF/lg