Bill description: Senate Bill 1077 amends the Idaho regulations that concern Vehicle Insurance Contracts and regulates companies that provide vehicle-theft protection services.

Rating: -5

Analyst’s note: This bill has two primary sections that deal with two different matters, one being a new program. First, it shifts the location of the Motor Vehicle Service Contract Act within the Code As this is done, a few changes are made to it. The biggest change that results is who has final authority. Currently, the Office of the Attorney General maintains the authority. SB 1077 would transfer the administration of this program, to the Department of Insurance.

Secondly, the bill introduces the Idaho Vehicle Theft Protection Program Act. This act largely duplicates the same language of Motor Vehicle Service Contract Act. This new act  however applies to anti-theft services, such as ignition locks, tracking devices, or theft insurance.

Does it directly or indirectly create or increase penalties for victimless crimes or non-restorative penalties for non- violent crimes? Conversely, does it eliminate or decrease penalties for victimless crimes or non-restorative penalties for non-violent crimes? 

Senate Bill 1077 enumerates more penalties for those who commit unfair or deceptive acts. Though most of the language will not be added to the Code, but simply moved, Section 41-6206 is entirely new. This section has new penalties listed for what are deemed unfair or deceptive practices. For the settlement of insurance claims, a penalty for improper practice on behalf of insurance companies would be a fine of up to $10,000 (Page 5, Line 31. Fine listed in Section 41-1329). New fines would also be applied to other business practices, such as defamation of competition, boycotting others, or misinterpreting language. The punishment for these actions could be up to a $5,000 administrative fine, in addition to a $1,000 penalty, as well as six months in jail (Page 5, Line 25. Reference of fines listed in Section 41-1327). This is an exorbitant penalty for such actions. (-1)

These fines would also be applied to new companies, for the same reasons, under the Idaho Vehicle Theft Protection Program Act. (-1)

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

SB 1077 expands the regulation of motor vehicle service contracts by including the following; contracts for tire replacement, cosmetic repairs, windshield repair and replacement, key replacements “and other similar services” (Page 2, lines 25-36). These minor contracts would all now be subject to all the regulation that is put under this Act. (-1)

The new regulation of theft protection program warranties expands the scope of regulation in this industry. Theft protection programs are devices installed on a vehicle and prevents loss or damage from theft, or warranties to protect from theft. These devices and service will be subject to similar regulations that fall upon the aforementioned companies that provide motor vehicle services. (-1)

Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market? 

Increasing regulation on this industry creates a barrier to new entrants. If new companies desire to offer theft protection services, they would have to first meet the regulatory requirements added with this new act. (-1)

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