Department of Finance and Administration
Legislative Impact Statement
Bill: HB1237
Bill Subtitle: TO REGULATE THE BUSINESS OF TAXICAB, AUTOMOBILE, OR SIMILAR
VEHICLE ENGAGED IN CARRYING PASSENGERS FOR HIRE.
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Basic Change :
Sponsor: Rep. L. Johnson
HB1237 amends the liability insurance requirements imposed on a business that operates a taxicab or
similar vehicle used for hire (operator). Under current law, an operator may satisfy their liability
insurance requirements by providing the Department of Finance and Administration (DFA) with a
contract or certificate of insurance, posting a $50,000 bond, posting collateral of $50,000, or by
self-insuring.
For an operator meeting their insurance requirements by filing a bond, HB1237 increases the required
bond amount from $50,000 to $500,000. The bill eliminates the operator's authority to satisfy the
liability insurance requirement by posting collateral or self-insuring. The bill also requires any entity
making application to operate a taxicab or similar vehicle for hire to file an annual disclosure statement
with DFA identifying each business name used by the applicant over the previous 10 years, disclosing
any judgments entered or liens filed against the applicant, and reporting any bankruptcy proceedings
where the applicant was a named debtor.
Where a municipality imposes additional insurance requirements, the operator must comply with those
requirements or face a maximum fine of $1,000, which is increased from $500, and a Class B
misdemeanor sentence of not more than 90 days.
HB1237 also alters the self-insurance requirements for certain individuals and religious organizations.
Current law allows a religious denomination, a person with 25 vehicles registered in the state, or a
political subdivision or municipality to obtain a certificate of self-insurance issued by the Office of Motor
Vehicle (OMV) for purposes of complying with the motor vehicle liability insurance requirements in the
state. HB1237 requires those vehicle owners to apply for a certificate annually and annually provide
DFA with proof of their ability to pay judgments against them.
Revenue Impact :
None.
Taxpayer Impact :
An owner operating a vehicle to hire will no longer be able to apply for self-insured status and will have
to acquire a standard liability insurance policy. If the owner files for a bond from a surety company, the
amount will have to be in the amount of $500,000. Owners who violate the law and who are found
guilty could be fined between $500.00 and $1,000.00. In addition, a person or religious denomination
applying for self-insured status must apply annually and provide proof of their ability to pay any
judgements against them.
Resources Required :
No system modifications needed for the Arkansas Integration System (AIRS). All self-insured policies
are entered into the Arkansas Online Insurance Verification System (AOIVS) by Motor Vehicle
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 Department of Finance and Administration
Legislative Impact Statement
Bill: HB1237
Bill Subtitle: TO REGULATE THE BUSINESS OF TAXICAB, AUTOMOBILE, OR SIMILAR
VEHICLE ENGAGED IN CARRYING PASSENGERS FOR HIRE.
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personnel.
Time Required :
Adequate time has been provided for implementation.
Procedural Changes :
Update manual pages and website on changes. Review and train State Revenue office clerks and
Motor Vehicle Staff.
Other Comments :
None.
Legal Analysis :
None.
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