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LANSING, Mich., July 16 -- The Michigan State House Republicans issued the following news release on the behalf of Michigan State Rep. Ben Glardon:
Michigan municipal governments could no longer impose a so-called "crash tax" on auto accident victims under legislation introduced today by state Rep. Ben Glardon that bans the controversial practice.
House Bill 5706, authored by Glardon, prohibits any Michigan municipality or county government from charging accident victims for police and fire response services. In what has become a national trend, some municipal governments have been encouraged by out-of-state companies to charge accident victims to help generate additional revenue.
"Crash taxes are a backhanded way to double dip on all hard-working taxpayers, and the practice needs to stop immediately," said Glardon, R-Owosso. "Michigan residents are more than willing to pay for valuable police and fire services through their yearly taxes, but charging them extra if they get into an accident is unacceptable. I've talked with people who are shocked to find a bill in the mail a few weeks after being in an accident."
Glardon said one constituent recently received a bill for close to $2,500 after getting into an accident in Genesee County. The constituent was billed for services that included directing traffic, establishing a safety zone and placing flares/cones.
"People are getting billed whether they're at fault or not," Glardon said.
Out-of-state companies also are profiting because they solicit municipal governments for the collection of these accident response fees in exchange for a percentage of the recovery.
In most cases, insurance companies are first asked to pay for the accident response fee, and if they refuse the accident victim is billed.
Glardon also said imposing a crash tax can have other negative effects including increasing insurance premiums, deterring economic development and reducing tourism revenue.
HB 5706 now goes to the House Local Government Committee for consideration.