Legislature(2009 - 2010)CAPITOL 120
03/25/2010 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB60 | |
| HB408 | |
| HB251 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 251 | TELECONFERENCED | |
| + | SB 60 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 408 | TELECONFERENCED | |
HB 251 - PRIORITY OF TOWING LIENS
2:36:37 PM
CHAIR RAMRAS announced that the final order of business would be
HOUSE BILL NO. 251, "An Act relating to liens on vehicles; and
providing for an effective date."
2:36:44 PM
CHAIR RAMRAS [moved to adopt the committee substitute (CS) for
HB 251, Version 26-LS0786\E, Luckhaupt, 3/15/10, as a work
draft.] There being no objection, Version E was before the
committee.
2:37:24 PM
DON HABEGER, Staff, Representative Jay Ramras, Alaska State
Legislature, presented HB 251 on behalf of Representative
Ramras, sponsor. He explained that there have been cases
wherein towing companies have towed vehicles, often under the
authority of a public safety officer, but have not been paid for
their service. Mr. Habeger stated that a court has determined
that towing liens are not a priority over perfected liens, and
banks using the vehicle as a security have priority. He relayed
that there are an increasing number of cases in which banks are
saying they will not pay the towing company because of the court
decision.
MR. HABEGER directed attention to Section 1, in which new
language is added to specify that possessory liens by towing
companies have priority over other liens. He said this
provision would be "directly connected to the vehicle." He then
highlighted another feature of Version E, - a requirement for
notification - that is found in language in Section 2, on page
2, lines 5-11, which read as follows:
Unless a vehicle has already been reclaimed by the
owner, the person possessing the vehicle under this
section shall notify the registered owner or primary
lienholder, if any, of the towing, transporting, or
storage of the vehicle, by certified letter, return
receipt requested, mailed to the registered owner or
primary lienholder, if any, within five working days
after the initial towing, transporting, or storage of
the vehicle.
2:41:25 PM
REPRESENTATIVE HERRON recounted that when he was a city manager,
this problem was prevalent, and local towing companies were
refusing orders from police officers because [they were not
getting reimbursed]; therefore, he said he supports the bill,
because he said he thinks it will benefit everyone.
Notwithstanding that, he asked if, under HB 251, there may be a
chance that towing companies would charge exorbitant rates for
"this special service."
2:42:36 PM
MR. HABEGER offered his understanding that the likelihood of
that happening is lessened because of competition. For example,
he said there are a number of towing companies in Fairbanks,
Alaska, which compete well with one another and charge market
rates. He said the odd situation wherein rates went up because
of non-notification is addressed in Section 2.
CHAIR RAMRAS said, "It's balanced."
2:43:28 PM
MARGARET RABY, Alaska Towing Association (ATA);, Badger Towing,
testified that ATA has no issue with Version E and considers it
to be an excellent idea to give possessory liens priority.
However, she stated that ATA has concerns about Section 2. She
said the association understands the need for consumer
protection, but does not think HB 251 is the appropriate venue
in which to address the issue, which she said is more
complicated than just notifying within five days or not. She
said the vehicle owner may have been arrested or may be in the
hospital following a motor vehicle accident, and "all
notification does is get their lien holder excited to take their
vehicle back," when there is no need for that to happen. She
said Badger Towing just had this situation occur a week ago.
Furthermore, she relayed, notification would drive up the cost
for towing companies; the time and labor involved could result
in an actual mailing cost of over $10 per vehicle. She noted
that Section 2 limits a lien to towing and storage charges, and
does not include compensation for the time and money invested in
notification.
2:46:05 PM
MS. RABY stated that towers are part of a service industry, and
banks are the only part of the process not in partnership with
towers. Moreover, she said banks seem to be in direct
opposition with towing companies. She said it makes good press
to say a towing company held onto a vehicle for a long time to
drive up storage charges; however, she explained, the reality is
that if a vehicle's residual value is less than 30 days worth of
towing storage, it is unlikely that there is a lien against that
vehicle in the first place, unless the vehicle has been
destroyed and the lien holder is looking to dump it.
MS. RABY said Alaska law has created a situation such that both
private vehicle owners and lien holders have the ability to
abandon vehicles - which is unlawful - and the towers "have no
mechanism to take care of it." She continued as follows:
So, if there are towing companies that may be
extending the storage charges on towing a storage
lien, I can tell you just from my own experience,
they're very likely trying to cover charges from
multiple vehicles that have been dumped on them. This
is just one more way of cost-shifting, unfortunately.
It's a practicality of trying to make ends meet when
you're a small mom and pop company. It doesn't make
it right, but that is what happens.
MS. RABY concluded that there are a lot of changes that need to
be made to Alaska towing laws; however, ATA believes suggesting
that the entire bulk of monitoring and ensuring nothing goes
wrong and nobody is harmed should be the responsibility of the
towing companies is putting those companies in an untenable
position.
2:48:29 PM
SHAWN ROSS, President, Alaska Towing Association (ATA); Owner,
Badger Towing, concurred with Ms. Raby that there are a lot of
other costs involved with notification. He questioned whether
"five working days" refers to the towing companies' schedules,
which are 24 hours a day, seven days a week, or the bank's
schedule, which is usually Monday through Friday. He related a
situation in which Badger Towing sent out letters within five
days. He said Badger Towing understood that the vehicle owner
was in good standing with the lienholder, but the lienholder
repossessed the vehicle anyway. The towing company's bill was
approximately $300, but the lienholder ended up charging the
vehicle owner almost $1,100 to get his vehicle back.
CHAIR RAMRAS asked Mr. Ross if he supports the bill "in its
present form."
MR. ROSS responded yes. In response to Chair Ramras, he related
that there are currently approximately 30 members of ATA, and
they range across the state and "part of the Northwest." He
said Sitka, Soldotna, Nenana, and Anderson are included in the
list of those communities with memberships in ATA.
2:51:07 PM
REPRESENTATIVE GATTO noted that Section 2 would require the
aforementioned notification to be given to "the registered owner
or primary lienholder", but sent to "the registered owner and
primary lienholder". He said he finds the change from and to or
confusing.
MR. ROSS concurred, and opined that the word "and" should be
used in both cases.
2:52:08 PM
MR. HABEGER related that the bill drafter said the "or" and
"and" need to be used as is. He reminded the committee that the
notification language is part of the 60-day process. He
explained that currently a towing company has the right to have
a lien against the vehicle for 60 days. Under Version E, if the
towing company wants to have that possessory title past 60 days,
it has to notify the lienholder and owner in five working days.
REPRESENTATIVE GATTO expressed dissatisfaction with that
rationale.
2:53:37 PM
MARK ANTHONY DAVIS, President, Interior Towing & Salvage, Inc.,
testified that he agrees with Section 1, but expressed concern
with language in Section 2, page 2, line 5, which read: "(b) A
lien under this section is limited to towing and storage
charges." He indicated the language needs to specify associated
charges at the end of that sentence, which would cover the cost
of the letters and certification. Further, regarding language
on page 2, line 10, he said he thinks the requirement to send
notification "within five working days" should be changed to
seven working days. He stated his belief that towing companies
need the extra two days, because many vehicles are registered
outside the state, and towing companies would require extra time
to find out what application form is needed to request the
information. Furthermore, the extra two days would help when
the days include a weekend. Mr. Davis concluded, "But other
than that I 100 percent believe that this bill needs to go
forward."
2:55:06 PM
ELISABETH GRISWOLD, Owner/Manager, Gabe's Towing, said towing
companies have been struggling with credit unions not paying the
charges when repossessing vehicles. Credit unions would hire
lawyers that sent the towing companies letters stating that the
credit union would pay "a reasonable tow fee" and storage for
three to five days; however, the reasonable tow fees were way
below market price. Ms. Griswold expressed appreciation for the
language change in Section 1, but concurred with Mr. Davis
regarding the suggested changes to Section 2.
2:56:35 PM
WILLIAM R. SATTERBERG, JR., Attorney at Law, Satterberg Law
Offices, Fairbanks, Alaska, told the committee that although he
has associations with and/or has served as lawyer to some of the
individuals who have testified, he is testifying on his own
behalf. He said he was involved in the case Ms. Griswold
related, and he confirmed that [Gabe's Towing] had a storage
lien trumped by a credit union, and it was a fight to get the
company paid for the job it did. He said he supports HB 251;
however he said he thinks the towing liens need to take
priority. He concurred with Representative Gatto regarding the
disjointed language in section 2. Finally, he recommended the
requirement for notification be set within "seven days,
excluding weekends and holidays."
2:57:51 PM
REPRESENTATIVE GATTO moved to adopt Conceptual Amendment 1, "to
change the registered owner or primary leaseholder to registered
owner and primary leaseholder in the two places where I see it
and in any other places." There being no objection, Conceptual
Amendment 1 was adopted.
CHAIR RAMRAS moved to adopt Conceptual Amendment 2, so that the
sentence on page 2, line 5 would read, "A lien under this
section is limited to towing, storage, and associated charges."
REPRESENTATIVE GATTO objected. He said he would understand if
the associated charges were specified as mailing fees, but he
expressed concern that without that limitation the language is
too wide open.
CHAIR RAMRAS [treated Representative Gatto's remark as a motion
to adopt a conceptual amendment to Conceptual Amendment 2],
whereby the sentence on page 2, line 5 would read, "A lien under
this section is limited to towing, storage, and associated
mailing charges." He announced that there being no objection,
the Conceptual Amendment to Conceptual Amendment 2 was adopted.
REPRESENTATIVE GATTO removed his objection to Conceptual
Amendment 2, [as amended]. There being no further objection,
Conceptual Amendment 2, [as amended], was adopted.
CHAIR RAMRAS moved to adopt Conceptual Amendment 3, on page 2,
line 10, so that the language would read, "seven working days,
excluding weekends and holidays".
REPRESENTATIVE GATTO objected. He asked if that would mean 7
working days.
CHAIR RAMRAS said he thinks "seven working days, excluding
weekends and holidays" would be the same as seven working days,
but could be as much as 10 days with a weekend.
MR. SATERBERG explained that his previous recommendation
regarding this language is copied from Civil Rule 6. He
explained that the court system will often exclude weekends and
holidays if the time period is less than seven days. He said he
foresees the use of the term "working days" as being
problematic.
3:01:00 PM
REPRESENTATIVE GATTO asked if the act of sending a letter and
asking for a return receipt satisfies all obligations, because
the person to whom the letter is sent may never receive it.
MR. SATTERBERG said that can be a problem. He said presumably a
person who is being served will sign certified mail. He said he
does not know how the problem Representative Gatto described
would be handled.
REPRESENTATIVE GATTO expressed concern that the committee may be
making legislation that would lead to difficulty.
3:02:33 PM
REPRESENTATIVE HOLMES said she has no problem with the part of
Conceptual Amendment 3 that would change "five" to "seven";
however, she expressed concern about the rest of the phrasing.
She said Civil Rule 6 defines the meaning of "days" under the
court system rule. She offered her understanding that Alaska
Statute has similar definitions regarding working days. She
said she thinks it would be better to use the term "working
days" and leave off "except weekends and holidays", and then
rely on Alaska Statute beyond that.
REPRESENTATIVE LYNN questioned what the exact meaning of
"holiday" would be.
3:03:32 PM
CHAIR RAMRAS withdrew Conceptual Amendment 3.
CHAIR RAMRAS moved to adopt Conceptual Amendment 4, to change
"five" to "seven". There being no objection, Conceptual
Amendment 4 was adopted.
3:03:53 PM
REPRESENTATIVE GATTO said the committee has not yet addressed
the issue of whether or not it is sufficient to send the
notification or if proof of its receipt is necessary. He said
he considers the latter sufficient.
3:04:32 PM
MR. SATTERBERG noted that the language in Section 2 would
require the notification to be sent "by certified letter, return
receipt requested". He offered his understanding that once a
towing company has sent notification in that manner, it would
have met the requirement of notification.
REPRESENTATIVE GATTO argued, though, that it is the obligation
of the sender to ensure that the recipient receives the
notification.
MR. SATTERBERG said traditionally the obligation in many of
Alaska's notification statutes is to send [to] the last known
address. He said the Division of Motor Vehicles has that
requirement and sends notification of license withdrawal to the
last known address. He stated, "It would seem to me that if
it's been sent to the proper address ... by registered mail, the
sender's met the obligation."
REPRESENTATIVE DAHLSTROM mentioned that she'd sent something to
someone who had moved without her knowing, and she got the
missive back in the mail. She suggested that the same thing
would happen in this case.
3:06:40 PM
MR. SATTERBERG said it is possible; however, he stated that
there is "an obligation on all of us to make sure we have proper
addresses on record."
REPRESENTATIVE GATTO said typically notices from the phone
company or the Internal Revenue Service (IRS) are 30-day
notices. He indicated that seven days is too short a time for a
recipient to respond. He said not everyone checks his/her mail
daily. He expressed his hope that consideration would be made
to hold the bill over to address this issue further.
3:07:56 PM
JANE PIERSON, Staff, Representative Jay Ramras, Alaska State
Legislature, on behalf of Representative Ramras, sponsor, stated
that current statute allows for 60 days [before storage charges
"cease to be part of the lien"], and sometimes notice is not
sent out until the 59th day. Under the proposed legislation [as
amended], she said, that notice would have to be sent out within
seven days, which provides added security to the person who owns
the vehicle.
REPRESENTATIVE GATTO expressed dissatisfaction with the
language, because he offered his understanding that the people
who are supposed to get the notification will suffer if they
don't check their mail.
MS. PIERSON told Representative Gatto that those people would
actually suffer less, because of the proposed legislation, as
amended.
REPRESENTATIVE GATTO argued, though, that "they're not notified
if they didn't get notified."
MS. PIERSON stated her belief that it is not the obligation of
the towing company to "chase these people down." She said she
would rather receive notification within seven days and only
have to pay seven days worth of storage charges, than have a
$2,000 bill - [resulting from a notice sent out much later] -
which she may not be able to pay.
3:10:14 PM
REPRESENTATIVE DAHLSTROM moved to report the proposed committee
substitute (CS) for HB 251, Version 26-LS0786\E, Luckhaupt,
3/15/10, as amended, out of committee with individual
recommendations and the accompanying fiscal notes.
REPRESENTATIVE GATTO objected.
A roll call vote was taken. Representatives Herron, Lynn,
Holmes, Dahlstrom, and Ramras voted in favor of reporting the
proposed committee substitute (CS) for HB 251, Version 26-
LS0786\E, Luckhaupt, 3/15/10, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
Representative Gatto voted against it. Therefore, CSHB 251(JUD)
was reported out of the House Judiciary Standing Committee by a
vote of 5-1.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB408 Proposed CS version K 3.24.10.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 408 |
| 01 SB60 Sponsor Statement.pdf |
HJUD 3/25/2010 1:00:00 PM |
SB 60 |
| 02 SB60 Bill L&C CS v. S.pdf |
HJUD 3/25/2010 1:00:00 PM |
SB 60 |
| 03 SB60 Sectional Analysis.pdf |
HJUD 3/25/2010 1:00:00 PM |
SB 60 |
| 04 SB60-2-1-021010-LAW-N.pdf |
HJUD 3/25/2010 1:00:00 PM |
SB 60 |
| 01 HB251 Proposed CS version E.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 251 |
| 02 HB251 Sponsor Statement.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 251 |
| 03 HB251-1-1-031110-CED-N.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 251 |
| 04 HB251-2-1-031110-DOT-N.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 251 |
| 05 HB251 version R.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 251 |
| 06 HB251 Support documents.pdf |
HJUD 3/25/2010 1:00:00 PM |
HB 251 |