SJR 330 - Joint Subcommittee to Study the Vehicle Towing and Recovery Industry

May 24, 2005

Senator Jay O'Brien was elected chairman and Delegate Benjamin Cline was elected vice-chairman of the joint subcommittee.

Staff provided the members with information on the legislative and historical context of towing-related issues and professional and occupational regulation in general.

Many of the issues before the joint subcommittee have been reviewed in depth by the General Assembly previously. Staff stated that the limitations placed on various towing-related fees and charges have remained unchanged for over a decade.

The joint subcommittee will examine the possibility of regulation of towing operators. Staff explained that not all professions and occupations are subject to the same degree of regulation. Practitioners of some occupations are required only to register, some are required to present certain credentials as evidence of their qualifications, and others are subject to a comprehensive examination, regulation, and monitoring.

The joint subcommittee must determine whether and to what degree the towing and recovery industry and its practitioners should be regulated by the Commonwealth.

Presentations by Agencies and Business Groups

Lee Stevens, representing the Major Incident Heavy Recovery Operators Association (MIHROA), pointed out that while the towing and recovery industry is not "embraced" by the public, it nevertheless performs an important public service.

Mr. Stevens pledged MIHROA's support for reform efforts and asked that the members (i) keep in mind the distinction between "public service tows" (those performed at the direct request of law-enforcement) and "trespass tows" (those performed at the request of property owners and not at the request of vehicle owners), (ii) make it easier for towing businesses to recover from the Commonwealth the costs associated with towing and storing stolen vehicles prior to their being returned to their owners, and (iii) consider reorganizing statutes so that towing-related provisions would appear in one area of the Code of Virginia.

Bruce Keeney, speaking on behalf of the Virginia Association of Towing and Recovery Operators (VATRO), stated his hope that the joint subcommittee's work would lead to uniform, statewide standards for the industry, create a single board to set those standards and handle consumer complaints, and increase statutory fee "caps." He concluded by reminding the members that comprehensive regulation of the industry would be costly, and that most towing businesses are small businesses that operate on slender profit margins.

P. Dale Bennett addressed the panel on behalf of the Virginia Trucking Association. The Association, he explained, was looking for some mechanism outside of the courts by which excessive charges could be disputed and adjudicated.

Speaking on behalf of the Department of State Police, Lt. Steven Chumley stated that if a towing business was found to be price gouging then it was removed from the list of approved operators. There is support for regulation of the towing industry, but not by State Police personnel. Mr. Chumley recommended requiring criminal background checks for tow truck operators and barring violent felons and sex offenders from the industry. If a regulatory board is to be established, the State Police would like to have a representative on the board.

Frank McCormick of the Department of Agriculture and Consumer Services reported that in the past three years the Department received 183 consumer complaints about tows and towing operators. Complaints involved overcharging, illegal tows, failure to provide timely notice of tows, refusal to afford access to personal property in towed vehicles, damage to towed vehicles, charges for processing fees, accident scene clean-up, and rudeness of towing company personnel. The majority of these complaints were referred to and ultimately handled by local government consumer affairs offices.

Jo Anne Maxwell of the Department of Motor Vehicles reviewed for the members the involvement of the Department in providing vehicle owner information to towing and recovery business operators so that they could inform vehicle owners that their vehicles had been towed and afford them an opportunity to reclaim them. She reminded the members that a mechanic's lien on a towed vehicle is an unrecorded lien that is not noted on the vehicle's title.

Thomas A. Lisk stated that the travel and hospitality industry was concerned, almost exclusively, with "trespass tows." These are infractions by vehicle owners who are not patrons, but park in a business parking lot denying access to potential. He hoped that the members would consider options to make "trespass tows" less irksome to vehicle owners, as well as solve the problem without having to impose undue regulation on the towing industry.

J. Christopher LaGow, representing the Virginia insurance industry, expressed concern regarding "public service tows" performed at the request of law-enforcement personnel. He also explained that insurance companies have difficulty obtaining the release of recovered stolen vehicles. Mr. LaGow expressed his expectation that by the end of the study members would agree that implementation of a comprehensive licensure scheme for towing practitioners would remedy many of the problems with the industry, as well as address consumer complaints.

David W. Boling, Director of Governmental Relations for the Virginia Independent Automobile Dealers Association, pointed out that many independent auto dealers finance a large number of the vehicles they sell, and that some of these vehicles end up being towed and stored by operators "… who ignore sections of the Code dealing with time limits for notifying secured parties…and
ignore maximum charge required of a secured party to gain release of the vehicle." He hoped that the present study would recommend mechanisms by which consumer complaints could be addressed and civil penalties assessed for abusive practices by the towing industry.

Federal Legislation

Frank Shafroth, speaking for Arlington County, the Virginia Municipal League, and the Virginia Association of Counties briefly addressed the limitations that federal law presently places upon the ability of states and local governments to impose comprehensive regulatory schemes on the towing and recovery industry. Currently, state and local regulation for the most part is limited to issues directly involving rates, charges and safety.
Pending federal law may permit states and local governments to require, in "trespass tow" situations, prior written authorization by property owners or the presence of the property owner or his agent at the time of the tow. More detail on present federal law and efforts to amend it will be provided at the joint subcommittee's next meeting.

Work Plan/Future Meetings

The joint subcommittee held a public hearing on June 21 at 7:00 p.m. at the Fairfax County Board of Supervisors auditorium. Work groups will be formed to focus on the many issues to be addressed by the study. Two full committee meetings will be held in September and November.

Chairman:
The Hon. Jay O'Brien

For information, contact:
Alan Wambold, Maria Everett, Stephanie Bishop
DLS Staff

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