SB 506

Under current law, a person authorized to tow or store a motor vehicle who does

so at the direction of a traffic officer or the vehicle's owner (towing service provider)

has a lien on the motor vehicle for reasonable towing and storage charges and may

retain possession of the vehicle until these charges are paid. A towing service

provider must, within 30 days after taking possession of a motor vehicle, make a

reasonable effort to provide written notice to the vehicle owner and any secured party

whose security interest is noted on the vehicle's certificate of title (secured party) that

they must take steps to obtain the release of the motor vehicle. Current law specifies

that a towing and storage lien has priority over the prior security interest of a secured

party only up to a specified dollar amount (the priority amount). Current law also

specifies that, to reclaim the towed vehicle, the owner or secured party must pay all

towing and storage charges up to the priority amount and all reasonable storage

charges accruing more than 60 days after the vehicle was towed. If a towing service

provider fails to make a reasonable effort to notify the owner and secured party as

required, the towing service provider's lien is void.

Under current law, the procedure for enforcing a towing and storage lien

depends upon the value of the vehicle. Under the procedure applicable to motor

vehicles with a value of $500 or less, a towing service provider must provide at least

20 days notice by registered mail to the owner and any secured party before selling

or junking the vehicle.

This bill makes various changes relating to towing and storage liens, including

all of the following:

1. Under the bill, these liens apply to the towing and storing of any vehicle, not

just motor vehicles. The bill defines a vehicle as any device for moving persons or

property or pulling implements from one place to another on land or rails or in the

air.

2. The bill clarifies the towing service provider's lien rights and the vehicle

owner's payment obligation, a secured party's obligation in repossessing the vehicle,

and the towing service provider's obligation to provide notice of vehicle possession

and lien rights. The bill also requires the towing service provider's notice before

selling or junking the vehicle to be by certified mail, rather than registered mail.

3. The bill increases the priority amount and provides for the priority amount

to be annually adjusted for inflation.

4. The bill increases the trigger amount for determining which lien

enforcement procedure is used and specifies that the lien enforcement procedure

described for lesser value vehicles is the exclusive enforcement procedure.