AUTOMOBILE THEFT PREVENTION AUTHORITY:
BASE ASSESSMENT ON "WRITTEN CAR YEARS"
Senate Bill 168 as passed by the Senate
Sponsor: Sen. Rick Jones
House Committee: Insurance
Senate Committee: Insurance (Enacted as Public Act 58 of 2017)
Complete to 5-16-17
UPDATED SUMMARY:
Senate Bill 168 would amend the Insurance Code (MCL 500.6107) to base the assessment that an automobile insurance company must pay to the Automobile Theft Prevention Authority (APTA) on "written car years" rather than "earned car years." The APTA was created by Public Act 10 in 1986 and extended by Public Act 174 of 1992, with the goal of reducing automobile theft in Michigan.[1]
(The Authority currently charges assessments on passenger vehicles only. This legislation, in conjunction with Attorney General Opinion No. 7284, is understood to allow the Authority to assess commercial motor vehicles.)
Under current statute, as a condition of their authority to transact insurance, insurers that write automobile insurance in Michigan must pay an APTA assessment that equals $1 multiplied by the insurer's total "earned car years" of insurance providing the security required by law written in Michigan during the preceding calendar year.
SB 168 would change the term "earned car years" to "written car years," and define "written car years" as:
"the portion of a year during which a vehicle is insured as determined by the Catastrophic Claims Association and used to calculate premium charges under Section 3104."
The insurer would be required to pay the APTA $1 multiplied by the insurer's total written car years of insurance providing the security required under the no-fault law written in Michigan during the preceding year.
BRIEF BACKGROUND:
The APTA is required to segregate and deposit money received from this assessment into the Automobile Theft Prevention Fund. Use of the Fund's money is restricted, and generally limited to funding law enforcement, judicial, and community efforts that seek to reduce the incidence of automobile theft.
REVISED FISCAL IMPACT:
Senate Bill 168 codifies the finding of Attorney General Opinion No. 7284, which allows the Auto Theft Prevention Authority—within the Department of State Police—to assess fees on insurers of commercial motor vehicles. The Auto Theft Prevention Authority previously assessed a $1 ($1 per car/per year) fee for each earned car year of insurance for private passenger vehicles registered in Michigan. The ATPA recently began levying assessments on commercial motor vehicles – in addition to the private passenger vehicles that were previously assessed. Thus, this bill would not affect revenues for the ATPA. The language of this bill would also cause the assessment to be levied on "written" car years of insurance, rather than "earned" car years of insurance. The Department of State Police reports that changing this language is not anticipated to have any fiscal impact or result in changes to the department's current practices. The bill would not likely have any fiscal impact for state or local units of government.
Legislative Analyst: Patrick Morris
Fiscal Analyst: Marcus Coffin
Kent Dell
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.