BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 519
Assemblymember Duvall
As Amended June 26, 2009
Hearing Date: July 14, 2009
Civil Code; Vehicle Code
BCP:jd
SUBJECT
Vehicles: Towing Fees and Access Notice
DESCRIPTION
This bill would require towing companies to provide consumers
with a "Towing Fees and Access Notice," codify the contents of
that notice, and require the tower to provide an itemized
invoice of all towing and storage fees.
This bill would also define "documentation" that would entitle a
person to possession of a vehicle, and provide that a lienholder
(towing company) is not responsible for determining the
authenticity of that documentation.
This bill would further provide that a lienholder that releases
a vehicle in compliance with various sections, or pursuant to a
specified release, has no civil liability for any claim or
dispute arising out of the release of the vehicle.
BACKGROUND
Existing law generally provides for three different types of
tows - public, private property, and owner's request. Towing
companies generally have a lien against the vehicle for costs
related to towing, storage, or labor associated with recovery or
load salvage of the vehicle. The different types of tows are as
follows:
Public tows are done at the request of a peace officer, traffic
control officer, or parking control officer in various
circumstances, such as when the vehicle impedes the flow of
(more)
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traffic or when the driver is arrested or cited for specific
offenses. The charges for towing and storage related to a
public tow are set by the law enforcement agency that requested
the tow.
Private property tows occur when a private property owner has a
vehicle towed because it is illegally or improperly parked on
their property, subject to specified conditions and procedures.
The towing company is currently limited in what they can charge
for towing and storage related to a private property tow by the
rate approved by the law enforcement agency or the towing
company's approved rate from the California Highway Patrol.
Lastly, an owner's request tow occurs when a vehicle owner hires
a tow-truck company to tow his or her vehicle. The rates for
towing and storage related to this type of tow are generally
established by mutual agreement between the requestor and the
towing company but may be dictated by agreements established
between the requestor's motor club and the tower.
As the result of an 18 month collaborative effort, this bill
would require towing companies to provide consumers with a
Towing Fees and Access Notice, an itemized invoice of all towing
and storage fees, and specify who is authorized to retrieve or
inspect a towed vehicle. This bill would also immunize the
towing companies from liability for releases under certain
circumstances, and state that they are not responsible for
determining the authenticity of specified documents.
CHANGES TO EXISTING LAW
1. Existing law provides that every person has a lien
dependent upon possession for the compensation to which the
person is legally entitled for towing, storage, or labor
associated with recovery or load salvage of a vehicle that has
been authorized to be removed by a public agency, a private
property owner, or registered owner of the vehicle. Existing
law provides that no charge exceeding that for one day of
storage may be imposed if, 24 hours or less after the vehicle
is placed in storage, the vehicle is released. (Civ. Code Sec.
3068.1.)
Existing law provides that if a request to release the vehicle
is made and the appropriate fees are tendered and
documentation establishing that the person requesting release
is entitled to possession of the vehicle, or is the owner's
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insurance representative, is presented within the initial 24
hours of storage, and the storage facility fails to comply
with the request or is not open during business hours, then
only one day's charge may be required to be paid until after
the first business day. (Civ. Code Sec. 3068.1(a).)
This bill would state that "documentation" that would entitle
a person to possession of the vehicle includes, but is not
limited to: a certificate of ownership; vehicle registration;
information in possession of the lienholder including
ownership information from the Department of Motor Vehicles
(DMV); a facially valid registration found within the vehicle;
or a notarized letter or statement from the legal or
registered owner providing authorization to release to a
particular person with a government-issued photographic
identification card.
This bill would provide that documentation which establishes
that a person is the owner's insurance representative
includes, but is not limited to, a faxed letter or other
letter form the owner's insurance company.
This bill would provide that a lienholder is not responsible
for determining the authenticity of documentation specifically
described above that establishes either a person's entitlement
to possession or that a person is the owner's insurance
representative.
This bill would provide that if a lienholder releases a
vehicle in compliance with Section 3068.1, various vehicle
code sections, or if the vehicle is authorized for release by
law enforcement or other governmental agency, the lienholder
has no civil liability of any kind for any claim or dispute
arising out of the release of the vehicle.
2. Existing law provides that a lien shall be extinguished and
no lien sale may be conducted if the lienholder, after a
written demand to inspect the vehicle by the legal owner or
lessor, fails to permit the inspection by the legal owner or
lessor, or his or her agent, within a period of time after
that demand. (Civ. Code Sec. 3068.1.(d).)
This bill would define "agent" as including, but not limited
to, any person designated to inspect the vehicle by the
request of the legal owner or lessor, in writing or by
telephone to the lienholder. This bill would provide that a
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lienholder is not responsible for determining the authenticity
of documentation establishing a person's agency for purposes
of inspection of a vehicle.
3. Existing law allows a peace officer or a regularly employed
and salaried public agency employee who is engaged in
directing traffic or enforcing parking laws and regulations,
to remove a vehicle located within the territorial limits in
which the officer or employee may act, under any of several
specified circumstances. These circumstances include a
vehicle being left unattended and constituting an obstruction
to traffic, a vehicle that has been reported as stolen or
embezzled, and a vehicle that is illegally parked and is
blocking a private driveway or is preventing access by
firefighting equipment to a fire hydrant. (Veh. Code. Sec.
22651.)
This bill would codify the language of a "Towing Fees and
Access Notice," which generally would inform consumers of the
amounts a towing company may charge, rights they have prior to
paying any towing or storage-related fees, the right to have
their vehicle released, and other related information. The
notice must be a standardized document plainly printed in no
less than 10-point type.
This bill would require a person that charges for towing to:
post the Towing Fees and Access Notice in the office
area and have copies readily available to the public;
provide, upon request, a copy of the Towing Fees and
Access Notice to any owner or operator of a towed or stored
vehicle; and
provide a distinct notice on an itemized invoice for any
towing or storage charges that states "Upon request, you
are entitled to receive a copy of the Towing Fees and
Access Notice."
This bill would provide that prior to receiving payment for
any towing, recovery, or storage-related fees, a person shall
provide an itemized invoice of actual charges to the vehicle
owner or their agent. This bill would define "itemized
invoice" as a document that contains specified information,
including the name and identification number of the towing
company, date service was initiated, vehicle description, the
hourly rate, and a clear, itemized, detailed explanation of
any additional services or fees.
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This bill would state that prior to paying any towing,
recovery, or storage-related fees, a vehicle owner or their
agent shall have the right to all of the following:
receive their personal property at no charge during
normal business hours;
receive their vehicle during the first 72 hours of
storage and not pay a lien fee;
request a copy of the Towing Fees and Access Notice; and
be permitted to pay by cash or credit card, as
specified.
This bill would provide that any person who violates the above
provisions is civilly liable to a registered owner or legal
owner of the vehicle, or a registered owner's insurer, for up
two times the amount charged, but limit liability at $500.
This bill would exempt the towing or storage of a repossessed
vehicle pursuant to the Collateral Recovery Act from its
scope, and provide that the section does not relieve a person
from the obligation to comply with the provision of any other
law.
COMMENT
1. Stated need for the bill
According to the author,
Towers are not licensed or professionally regulated in any
way in California. Anyone with a business license and
appropriate classification of drivers license can do tows.
For those towers who elect to be on rotation lists for local
law enforcement or CHP to use to find towers for accidents
and other non-consensual tows, these towers need to abide by
the provisions of their given contract.
This bill attempts to put some predictability into the
practices of and billing for towing, as well as penalties
for noncompliant towers. This will help to clean up the
industry, as bad actors are sullying the name of good ones.
2. Documentation required for release
To provide greater clarity to towing companies and consumers,
this bill would specify the documentation required for release
of a vehicle, define agent, and provide that a lienholder is not
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responsible for determining the authenticity of documents.
a. Documentation and immunity
Under existing law, every person who tows, stores, or
otherwise contributes labor to the recovery of a vehicle is
entitled to a lien on that vehicle for the compensation to
which they are legally entitled. That lien is dependent upon
possession, and existing law permits the lienholder to sell
the vehicle at a lien sale if the lien is not satisfied within
a period of time.
When requesting the release of a vehicle from a lienholder,
the requesting individual must present documentation
establishing that they are entitled to possession. In an
attempt to both protect consumers and provide greater
direction to towing companies, this bill seeks to clarify what
types of documentation are appropriate for the release of a
vehicle.
Specifically, this bill would provide that "documentation"
that entitles a person to possession of a vehicle includes,
but is not limited to, certain documents including a
certificate of ownership, and that documentation which
establishes that a person is the owner's insurance
representative includes, but is not limited to, a faxed letter
or other letter from the owner's insurance company. Staff
notes that as of the writing of this analysis, the list of
documents remains under discussion with the interested
stakeholders involved in the formulation of this bill. Given
the implications of adding additional documents to the list of
"approved" documentation, the author should continue to work
with the committee to ensure that the documents are indeed
appropriate in light of the proposed immunity discussed below.
To address liability concerns of tow operators as a result of
the list of documentation that is deemed sufficient to release
a vehicle, this bill would provide that a lienholder who
releases a vehicle in compliance with various sections, or in
compliance with a release by law enforcement or other
governmental agency, has no civil liability for any claim or
dispute arising out of the release. In support of that
immunity provision, the bill's proponents state:
The need for [the provision] arises from the conduct of
rogue, tow-truck operators. These operators game the
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system by erecting barriers to the release of towed
vehicles. They demand documentation in certain forms or
require the registered owner to appear, refusing to
release the vehicle to spouses, children, or designated
agents. Delay earns these operators more storage fees.
Insurance companies pay these fees for vehicles damaged
in accidents. Unjustified charges increase claims costs
and apply pressure to increase insurance premiums.
AB 519 describes the kinds of documentation that should
result in tow-truck operators releasing vehicles to
individuals and insurance companies. The documentation
described is designed to minimize anyone scamming a
tow-truck operator to release a vehicle to an
unauthorized person. While the possibility of a scam has
been minimized, it cannot be totally eliminated. For
that reason, a tow-truck operator who releases a vehicle
based on a document described is to be immune from
liability for the release. Without immunity, the rogue
operators will continue to insist on greater
documentation to run up the charges.
Granting immunity to tow-truck operators means that in
most instances the risk of a vehicle being released to an
unauthorized person falls on the insurance company that
provides theft coverage. Those companies have concluded
that on the benefit-risk continuum, securing the release
with the described documents falls clearly on the benefit
side. In fact, they state that the benefit, in terms of
reduced storage fees and convenience for consumers,
outweighs the risk by several orders of magnitude.
The following amendment is suggested to clarify the immunity
provision to ensure that it narrowly addresses the above issue
of documentation.
Clarifying amendment:
On page 5, strike out lines 8 through 13, inclusive, and
insert:
(e) A lienholder shall not be liable for any claim or
dispute directly arising out of the reliance on
documentation specifically described in subdivision (a)(2)
for purposes of releasing a vehicle.
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b. Definition of agent
Existing law further provides that a lien is extinguished if a
lienholder fails to permit a vehicle to be inspected by the
legal owner, lessor, or their agents, as specified. Similar
to the above definitions, this bill would also provide that an
"agent" includes any person designated to inspect the vehicle
by the request of the legal owner or lessor, in writing or by
telephone, to the lienholder.
c. No responsibility to determine authenticity
This bill would also provide that a lienholder (storage yard)
is not responsible for determining the authenticity of
documentation that establishes either a person's entitlement
to possession, that a person is the owner's insurance
representative, or an agent. Staff notes that that while tow
operators and their storage yards are able to determine
whether a document actually appears to be a certificate of
ownership or a vehicle registration, those same entities may
not be trained, or have the resources, to determine whether
the document presented to them is completely authentic.
3. Statutory notice and itemized invoice
In response to reports of frustration experienced by consumers
and the towing and insurance companies, the author notes that
various interested stakeholders have worked for 18 months to
draw up and provide a "Towing Fees & Access Notice" to
California consumers. This bill would require that notice to be
posted in the office area of a storage facility, be provided
upon request, and contain the language codified by this bill.
The notice itself must be printed in no less than 10-point type
and inform consumers about the amounts a towing company may
charge, how to complain about a towing company, and would list
the rights that a consumer has in the process.
The Automobile Club of Southern California and AAA of Northern
California, in support, contend that the notice represents a
significant step forward in developing a comprehensive list of
rights for consumers when their vehicle is towed or stored and
that the information "will help alleviate the frustration felt
by consumers who do not currently know the laws applicable to
towing." The author similarly contends that as a result of the
notice, "[c]onsumers will know exactly what to expect, exactly
what questions to ask, and where to go to seek redress of any
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improprieties."
In addition to requiring the above notice to be provided, this
bill would allow a vehicle owner or their agent, prior to paying
any fees, to receive their personal property at no charge,
retrieve their vehicle during the first 72 hours and not pay a
lien fee, and pay by cash or credit card.
This bill would also provide that prior to receiving payment for
any towing, recovery, or storage-related fees, a person that
charges for towing and storage must provide an itemized invoice
of actual charges to the vehicle owner or their agent. That
invoice must include specific information, including the
location and description of the vehicle, service dispatch and
completed time, separate line items for various fees, and a
clear, itemized, and detailed explanation of any additional fees
or services.
4. Opposition's concerns
The California New Car Dealers Association (CNCDA), in
opposition, state that their opposition would be removed if the
bill were amended to eliminate the requirement that entities who
"merely pay for a tow on behalf of a consumer, but who do not
themselves provide a tow, provide the required notice." CNDA
further states:
While we greatly appreciate the author's willingness to hear
our concerns, we regretfully have not resolved our issue
which boils down to the following: should entities that
merely pay for towing as a convenience for their repair
customers-such as new car dealers and auto body shops-be put
in the same position as towing companies when it comes to
the posting and notice requirements of AB 519? We believe
that the answer to this question is no.
5. Amendments
The following amendments were accepted in the Senate
Transportation and Housing Committee but were omitted due to an
error by Legislative Counsel.
a) On page 7, line 16, after "storage facility" insert:
, at no charge,
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b) On page 8, line 39, strike out "and any" and insert:
. Any
Support : Allstate Insurance Company; Association of California
Insurance Companies; State Farm; Personal Insurance Federation
of California; Automobile Club of Southern California; AAA of
Northern California
Opposition : California New Car Dealers Association
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Transportation Committee (Ayes 14, Noes 0)
Assembly Appropriations Committee (Ayes 16, Noes 0)
Assembly Floor (Ayes 77, Noes 0)
Senate Transportation and Housing Committee (Ayes 11, Noes 0)
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