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TDRL’S “BACK DOOR” REGULATION OF INCIDENT MANAGEMENT TOWING FEES

Written By Brian Edward Walters, Attorney at Law

 

Almost every incident management towing company knows that TDLR does not set incident management towing fees. While those fees can be regulated and capped by the county or a city, TDLR generally has deferred to either an “unregulated” view of incident management towing fees or deferred to the city or county to set those rates. However, lately there has been a substantial uptick in TDLR “back door” regulating the prices charged by incident management towing companies.

 

TDLR’s method of enforcement focuses on the , FOR THE REST OF THIS ARTICLE BECOME A SOUTHWEST TOW OPERATOR MEMBER. If your a member it has just been sent to your email.

The Cost of a TDLR Complaint

Written By Brian Edward Walters, Attorney at Law

    TDLR complaints are a frequent hassle when operating a towing company or vehicle storage facility in Texas.  All that is required for a complaint is for a disgruntled customer to log on and find one item to complain about. It could be something serious like an overcharge or an unlicensed operator or it could be as simple as not having the correct website for justices of the peace on your VSF invoice. Either way, one complaint can trigger a full TDLR investigation of your private property or incident management towing practices.

    In private property tows, complaints typically arise from someone who (rightly or wrongly) believes that they had the right to leave their vehicle on property.  When that happens, they will usually do some ad-hoc legal internet research and find the Texas Towing and Booting Act.  Once they find the Texas Towing and Booting Act, they will try to point to every single problem that they believe exists on a parking facility and use that as the reason they should “never have been towed.” 

    The Texas Department of Licensing and Regulation (“TDLR”) is tasked with investigating consumer complaints. Investigators then reach out to your towing company or VSF and ask for a host of documents.  Many times, the documents that are requested are just a boilerplate list of items that may or may not have anything to do with the tow that generated the complaint.  Remember – investigators are not attorneys.  They typically do not know Texas law.  They also do not know that there are limits on what they can ask for and what goes too far.  Given those facts, it is not surprising that you end up with a shotgun-style approach to what should be a simple and limited investigation. An investigator’s only job is to review the facts and see if they believe a violation occurred. However, a prosecutor (an attorney) is the person who determines whether formal charges will be brought against your license. 

If an investigator determines that there is a likely violation (or feels you are not responsive and cooperative), he or she will forward that complaint to a prosecutor who will determine whether TDLR should bring an enforcement action against your company’s license.  Typically, TDLR enforces against the towing company or vehicle storage facility rather than against one employee who made a mistake. Additionally, once TDLR issues a “Notice of Alleged Violation,” you have very limited time to respond to the allegations and work out any possible deal before the allegations are set for a hearing before an administrative law judge.  Thus, time is of the essence at all phases of investigation and prosecution.

At this point, it is clear that a complaint can quickly snowball into a massive financial drain.  Every moment that you spend working on or defending claims (whether good or bad) is time that you cannot spend making money and growing your business.  The real cost of a complaint is not just the fine that you end up with, it is also the time and money you lose defending against those allegations.  Given that most tows involve a relatively small amount of money, you will quickly burn through the profit margin of a tow defending a complaint and end up with a net loss that can be in the thousands of dollars.

The point of this article is not to intimidate folks in the industry. Rather, it is to make you aware of just how much money can be lost based on what one disgruntled customer can do with 10 minutes to spare and an internet connection.  The best defense in this case is a good offense.  That means that you need to be hyper-vigilant when performing private property tows.

Written By Brian Edward Walters, Attorney at Law

 

TDLR complaints are a frequent hassle when operating a towing company or vehicle storage facility in Texas. All that is required for a complaint is for a disgruntled customer to log on and find one item to complain about. It could be something serious like an overcharge or an unlicensed operator or it could be as simple as not having the correct website for justices of the peace on your VSF invoice. Either way, one complaint can trigger a full TDLR investigation of your private property or incident management towing practices.

 

In private property tows, complaints typically arise from someone who (rightly or wrongly) believes that they had the right to leave their vehicle on property. When that happens, they will usually do some ad-hoc legal internet research and find the Texas Towing and Booting Act. Once they find the Texas Towing and Booting Act, they will try to point to every single problem that they believe exists on a parking facility and use that as the reason they should “never have been towed.”

 

The Texas Department of Licensing and Regulation (“TDLR”) is tasked with investigating consumer complaints. Investigators then reach out to your towing company or VSF and ask for a host of documents. Many times, the documents that are requested are just a boilerplate list of items that may or may not have anything to do with the tow that generated the complaint. Remember – investigators are not attorneys. They typically do not know Texas law. They also do not know that there are limits on what they can ask for and what goes too far. Given those facts, it is not surprising that you end up with a shotgun-style approach to what should be a simple and limited investigation. An investigator’s only job is to review the facts and see if they believe a violation occurred. However, a prosecutor (an attorney) is the person who determines whether formal charges will be brought against your license.

 

If an investigator determines that there is a likely violation (or feels you are not responsive and cooperative), he or she will forward that complaint to a prosecutor who will determine whether TDLR should bring an enforcement action against your company’s license. Typically, TDLR enforces against the towing company or vehicle storage facility rather than against one employee who made a mistake. Additionally, once TDLR issues a “Notice of Alleged Violation,” you have very limited time to respond to the allegations and work out any possible deal before the allegations are set for a hearing before an administrative law judge. Thus, time is of the essence at all phases of investigation and prosecution.

 

At this point, it is clear that a complaint can quickly snowball into a massive financial drain. Every moment that you spend working on or defending claims (whether good or bad) is time that you cannot spend making money and growing your business. The real cost of a complaint is not just the fine that you end up with, it is also the time and money you lose defending against those allegations. Given that most tows involve a relatively small amount of money, you will quickly burn through the profit margin of a tow defending a complaint and end up with a net loss that can be in the thousands of dollars.

 

The point of this article is not to intimidate folks in the industry. Rather, it is to make you aware of just how much money can be lost based on what one disgruntled customer can do with 10 minutes to spare and an internet connection. The best defense in this case is a good offense. That means that you need to be hyper-vigilant when performing private property tows.

APARTMENT PARKING LOT RULES ARE NOT ENFORCEABLE ACCORDING TO TDLR

Written By Brian Edward Walters, Attorney at Law

 

According to the folks at the Texas Department of Licensing and Regulation (“TDLR”), you cannot tow a vehicle that violates “parking rules” or “towing rules,” even if those rules are set out in a lease agreement with a tenant. This means, to answer a question that we get constantly, YOU CANNOT TOW FOR BACK-IN OR DOUBLE OR TRIPLE PARKING ACCORDING TO TDLR. Given that this is a strange position that TDLR has adopted, this article analyzes TDLR’s reasoning on the subject.

 

The ability to tow a vehicle from a private parking lot starts with the concept of an “unauthorized vehicle.” The Texas Towing and Booting Act defines an “unauthorized vehicle” as any vehicle parked, located, or placed on the parking facility without the consent of the parking facility owner. While this definition seems to imply that if you park in a manner that the parking facility owner doesn’t approve the vehicle could be towed, TDLR disagrees.

 

TDLR and, more specifically, the prosecutors (“Staff”) and the Texas Commission for Licensing and Regulation (the “Commission”) have adopted a very broad view of what constitutes an “authorized” vehicle. Their position is that if a vehicle is on… To read more, become a member with STO now and if you are a member you will receive the full article in your email.

Legislative Session Wrap Up

Yesterday, the final deadline passed and Governor Abbott took action on all of the bills that were passed during the legislative session.  As we stated in an earlier email, there were 7,324 pieces of legislation filed by the Legislature.  Of those filed, 1,429 were passed.  Governor Abbott signed 1,323 and vetoed 58.  There were 144 that the governor allowed to become law without his signature.  One of those bills was HB 1140.

 

Even though HB 1140 was not signed, the bill took immediate effect.  This bill amends the Occupations Code which will allow the Texas Department of Licensing and Regulation (TDLR) to change fees for vehicles stored at vehicle storage facilities.  We anticipate that the agency’s towing advisory committee will begin discussions on this issue in one of the upcoming meetings.  The next Advisory Board Meeting will be July 30, 2019.

 

Another important bill was HB 61.  It was signed by the governor in early May.  Although HB 61 authorized escort flag vehicles to use flashing blue and amber lights, the new law will allow for tow trucks to also use flashing blue lights.  This bill will not be effective until September 1, 2019.  We will provide more information in another upcoming update.

 

Private Property Impounds

 

Prior to the legislative session, we met with TDLR staff to discuss the problems that you and others in our industry faced when trying to uphold your contracts with your private property clients.  During the session, we worked with members of the Legislature to resolve the issue through legislation, but time ran out.  In the next month, representatives from Southwest Tow Operators will meet with TDLR staff to see if there is a resolution to this issue. If there is no resolution, Southwest Tow Operators will start the process to request an opinion from the Texas Attorney General.  In this request, we will ask if the agency can enforce the Occupations Code dealing with private property impounds without considering the Private Property Code, too.  Once the agency seeks the request, the Attorney General will have 180 days to issue an opinion.

 

 

Next Session

 

While the next legislative session does not begin until January of 2021, the next 18 months will be the most critical in preparing our agenda.  Additionally, TDLR will be undergoing sunset review.  What is sunset? 

 

The Sunset Commission is made up of members from the Senate and House, plus 2 public members.  Every state agency is required to go through a review process by the Texas Sunset Commission every 12 years to ensure that the agency is still needed and is running efficiently.  The agency will perform a “self-evaluation” and submit it to the Commission.  Next, the Sunset staff will do their own review and will meet with industry stakeholders before they issue their report and recommendations to the Commission members.   Representatives from the Southwest Tow Operators will meet with Sunset staff in the upcoming months to provide our input.

 

 

 

Southwest Tow PAC

 

We are currently trying to build our PAC so that we can give contributions to legislators who were industry champions.  We would appreciate your contribution in any amount.  Every bit helps build our overall fund.  While our funds are slim at this time, we would like your involvement when we deliver checks and will be calling on those of you who are constituents of our champions.

 

One way you can help is by becoming a Southwest Tow Operators member.  If you are already  a member, please consider upgrading your membership level.  If you would like to contribute to the Southwest Tow Operators PAC, please contact our office and we will be happy to assist with payment options.

 

Please stay tuned for future legislative updates.  If you have any questions, please do not hesitate to contact us. 

 

Thank you all for the continued support.

10 days remain and only 380 Bills!

With only 10 days remaining, only 380 bills have gone through the entire process and are on the Governor’s desk.  The last time the Texas Legislature passed fewer was in the 1800s.  We filed several bills, but it was really a session that was weighted toward killing bills.

This session, we tracked 80 bills that could have had an impact on the towing and storage industry.   Below are some of which we were actively involved.

HB 61 by James White relating to the use of certain lighting equipment on escort flag vehicles.  While this bill was centered around escort flag vehicles and the lights they use during the course of their work the changes made to this bill will also allow for tow trucks to use amber and blue lights.  We worked with the Texas Municipal Police Association on this measure, and our member Geoff Nienstedt worked hard with local law enforcement officials to gain support in allowing tow truck drivers to use blue lights.  HB 61 was signed by the Governor on May 7th and will become law on September 1, 2019.

HB 625 by Neave relating to notice and request for a hearing regarding a vehicle that has been towed or booted, would have allowed a person to submit a written request for a hearing concerning a towed car within 60 days of the date the vehicle was towed, excluding weekends and holidays, provided that the vehicle that had been released from the vehicle storage facility to which it was towed within 20 days.  We know what you are thinking.  That is extremely convoluted and doesn’t make much sense.  Southwest Tow Operators opposed this bill in committee and member, Tasha Mora, testified in opposition to the bill.

HB 626 by Neave relating to notice of a person’s right to a hearing placed on a sign prohibiting unauthorized vehicles on a parking facility.  Southwest Tow Operators legislative team worked to oppose this bill.  The bill never received a hearing.

HB 1140 by Tracy King relates to fees for vehicles stored at vehicle storage facilities; authorizing fee increases and decreases; eliminating a fee; eliminating a minimum fee.  Southwest Tow Operators was very supportive of this measure as it moved through the process.  HB 1140 would allow TDLR to adjust the storage fee for impounded vehicles.  This bill was passed out of the Senate Business and Commerce Committee today and will be heading to the full Senate for debate and final passage. 

HB 2807 by Guillen relating to regulation and liability of certain vehicles on a highway.  Representative Guillen filed this bill on behalf of Southwest Tow Operators.  HB 2807 would have changed the penalties for move over violations.  This bill was heard in the House Licensing and Administration Committee but was faced by opposition in the Local Calendar Committee by some members.  Representative Guillen amended the language on one of his other bills, but that bill died in the Senate, unfortunately.

The legislative session will conclude on Memorial Day, but our work does not end there.  We will set our agenda for the next 18 months so that we will be ready to fill bills in the next session. 

Southwest Tow Operators will continue to work hard on your behalf in Austin. 

Contact Info

  • Southwest Tow Operators
  • 660 N Central Expressway, Suite 230
  • Plano, Texas 75074
  • Toll Free: (866) 320-9300

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