HB 251-VEHICLE LIENS/TOWING/STORAGE/TRANSPORT  CHAIR FRENCH announced the consideration of HB 251. [CSHB 251(JUD) was before the committee.] 8:55:56 AM REPRESENTATIVE JAY RAMRAS, sponsor of HB 251, said this legislation serves two purposes and will be helpful to both tow truck operators and to consumers who have had a vehicle impounded. First, it gives towing companies first position, in front of the lienholder or lender, for the purpose of recouping costs for contractual vehicular towing and storage. Second, the bill requires tow truck companies to notify the registered owner or primary lienholder within seven working days that the vehicle has been impounded. Currently up to 60 days elapse while the fees add up, leaving the owner stunned by the amount owed to the impound yard. This addition is a consumer protection. 9:00:22 AM CHAIR FRENCH asked for confirmation that the new language in Section 1 means that a tow truck company's charges stand on top of a lienholder's claim. REPRESENTATIVE RAMRAS agreed. SENATOR WIELECHOWSKI asked what would prevent a tow truck operator from charging an exorbitant amount and attaching a lien to secure payment. REPRESENTATIVE RAMRAS replied the legislation doesn't address fees but he believes that there are customary fees in the industry. 9:02:48 AM SENATOR WIELECHOWSKI asked if the bill puts tow truck operators ahead of a bank that holds a home mortgage. REPRESENTATIVE RAMRAS said no; the phrase "on the vehicle" in Section 1 was added by the House Judiciary Committee to address the banking community concern that the original bill might have given priority over real estate. Section 1 now clearly states that the towing company's possessory lien only has priority over other liens on the vehicle. SENATOR COGHILL noted that he received a letter from Jim Carter asking if there could be a public process that allows a dispute on unreasonable fees. He said he agrees that the bill shouldn't address the fee structure, but he doesn't want the process for settling disputes to be ambiguous. 9:05:24 AM REPRESENTATIVE RAMRAS said he hadn't seen the letter but some of these issues came to light in the Senate [State Affairs Committee.] While the bill doesn't address the fee structure, he would encourage the 27th Legislature to consider tightening the relationship between emergency services and consumers. CHAIR FRENCH said it wouldn't be fair to address the fee structure in this bill because that's a highly contentious topic. SENATOR COGHILL observed that some cars now cost more than the house he bought in the '70s and while he believes that the bill is good for tow truck companies and consumers, he isn't sure it's good for the major lienholder. 9:08:03 AM REPRESENTATIVE RAMRAS said the bill wasn't drafted for the benefit of the lienholder, but public testimony repeatedly indicated that vehicle lienholders come to the tow yard with a possessory lien, remove the vehicle, and leave the tow truck operator with no means to recover payment for their services. SENATOR COGHILL said he understands that that has happened but there's also tension over tow companies that have imposed large storage fees in addition to the towing fee. He said he wanted to ask the questions in this venue, but he believes that the seven day notification and giving the tow operator preference in the lien is exactly right. 9:10:07 AM SHAWN HESS, S&S Towing and Recovery, said he supports HB 251. His company often responds to late night calls to pick up vehicles and tow them to their yard only to have the bank send a truck to remove the vehicle from his yard without compensating him for the towing and recovery service. MAGGIE RABY, Alaska Towing Association (ATA), said most members of ATA believe that HB 251 is a good first step in fixing the towing problems in Alaska. It stops lienholders from exploiting tow truck companies and it protects consumers by requiring notification within seven days of towing and storage fees. The bill provides a good balance and is a start in improving the system. 9:13:08 AM ELIZABETH GRISWOLD, Gabe's Towing, said her company recently had a credit union try to take possession of their collateral without paying the bill because the perfected lien stands before the possessory lien. This is a loophole that lienholders exploit to the detriment of tow companies. She and other members of the Fairbanks towing ordinance committee would like the statutes to be updated so that they are fair to both parties. 9:15:46 AM CHAIR FRENCH asked if there has been any pushback from the vehicle lending industry. REPRESENTATIVE RAMRAS said initially some lobbyists were aggressive. He added that he likes the bill because it fixes a problem for the small service provider. CHAIR FRENCH announced he would hold HB 251 in committee.