Democratic lawmakers showed up in force on Thursday for a state agency hearing about new rules on towing that they said don’t match up with the Colorado legislature’s intent.

At issue is House Bill 22-1314, a towing “bill of rights” for consumers.

Consumers have filed hundreds of complaints over the last two years, many lodged against the state’s largest towing operator, Wyatt’s Towing.

The complaints have prompted the Attorney General’s Office to launch an investigation of some of Wyatt’s towing practices as it relates to loans the company issued for people who struggled to pay charges.

The 2022 legislation, which went into effect a year ago, focuses on “nonconsensual” towing. The law requires a 24-hour notice before a nonconsensual tow, with exceptions including a blocked driveway, parking in a handicapped space or fire zone, improperly parking in a “permit-only” zone, or parking after previous warnings.

In addition, a towing company must take pictures of a vehicle’s condition and the reason for the tow. Towing companies can no longer tow a vehicle for expired plates, unless requested to do so by law enforcement. Also, towing companies cannot charge vehicle owners storage fees, except for the first 24 hours, until the owner has been officially notified.

Finally, a towing company must release vehicles when 15% of the overall fees, not to exceed $60, is paid and the owners agrees in writing to pay the remaining balance.

The rulemaking process for the new legislation at the Public Utilities Commission has been going on since February, when the first draft of rules was published. Since then, four public comment hearings have been held, most recently on Thursday and at the behest of Administrative Law Judge Alenka Han. 

The hearing drew state Sen. Julie Gonzales, D-Denver, one of the co-sponsors of HB 22-1314. Gonzales said she experienced an incorrect tow about two weeks ago. 

Joining her were Reps. Steven Woodrow, D-Denver, Andrew Boesenecker, D-Fort Collins and Naquetta Ricks, D-Aurora.

The quartet was part of a group of 19 lawmakers who submitted a letter to the judge, claiming the proposed amendments “exceed the statute’s delegation of authority to the PUC, contradict the intent of the statute, and, if adopted, would interrupt current legislative efforts to take up these issues in the 2024 Session.”

The lawmakers said the rules, as drafted, represent “a wholesale re-write-a literal redline edit – of many provisions in the law we worked to pass,” which they said they found frustrating as they had been very careful with every word of the statute.

The letter also indicated the commission’s draft rules hinted at the loan provision that is now under investigation by the attorney general but that isn’t in the statute.

“Requiring consumers to apply and be approved for a loan for the balance owed to the towing carrier before they may recover their vehicle directly contradicts both the intent and plain language of HB22-1314,” the lawmakers wrote.

Consumers need only pay 15% or $60 and sign the form set up under the law to recover their vehicles, they said. 

“Requiring consumers to take out loans to recover their cars is a clear and direct violation of the law,” they said.

The draft rules don’t specifically address loans, but lawmakers and the attorney general want language spelling out that towing companies cannot require consumers to take out loans to retrieve their vehicles. 

During the hearing, Gonzales said lawmakers are taking the step of addressing the commission and its rulemaking process because of concerns about “the significant role large towing companies are playing” in altering and undermining the bipartisan work of the legislature in 2022. 

Lawmakers took issue with language that sets up a timeline of 30 to 90 days for paying the towing fees, which the lawmakers said isn’t even in the law. Gonzales said the commission’s draft rules on adding payment timelines suggest payment plans, neither of which was intended by the statute.

Han asked Gonzales if it is lawmakers’ intent that, by not setting up a timeline for payment, people not pay the balance of their towing charges. Gonzales replied that the timeline should be up to the towing operator and the individual.

John Connolly of Connolly Towing, who is the state president of the Towing and Recovery Professionals of Colorado, pointed out the lack of guidelines can lead to things like loan programs from “bad actors.” Something should be spelled out in the rules so that businesses will know when they can receive payment.

What’s needed is a happy medium, Connolly said.

Lawmakers also said during the hearing and in their letter that the draft rules set forth what could be on posted signs that contradict what is in the statute.

The draft rules stated the signs could read “Authorized Parking Only” or a “similar statement of parking limitations or restrictions.”

That’s not right, the lawmakers asserted.

The law said the sign could only say “Authorized Parking Only” and nothing else. To suggest some other unspecified language would invite litigation and confusion, the lawmakers said.

The commission’s desire to be flexible on the wording of the signs is inconsistent with the legislative intent, Gonzales said. 

“We had a very specific vision on how to make that signage clear to consumers,” Gonzales added.

Even the sign that was posted where Gonzales’ car was towed did not say “Authorized Parking Only.” The sign said nothing about authorized parking, and simply stated “no overnight parking” allowed. Gonzales said she only parked in the garage for a few hours, not overnight.

Boesenecker, a member of the Transportation Legislative Review Committee, said lawmakers believe further action is necessary “and much needed to protect consumers and to bring industry in line with national best practices.”

“I’d urge the PUC to avoid making rules that conflict … with the clear language,” Boesenecker said.  

As to the timelines for payment, however, Boesenecker said that an interpretation consistent with the legislature’s intent and a clear reading of statute would suggest that the balance is due when the vehicle is picked up.

Towing operators have mechanisms in place for recovering the balance, such as by sending a bill or making a phone call, which they already utilize to recoup any outstanding balance, he said.

A 30 to 90-day timeline is unnecessary, he added.

Lawmakers’ comments indicated they would prefer to see the commission hold off on adopting the amended rules. Woodrow asked the judge to either strike down the proposed amendments “or hit pause on the proceedings” to give the legislature time to change the law.

At the hearing’s conclusion, Han said that, with the need to implement changes to the towing rules, along with the mandate from HB 1314, she would not hold any further public comment hearings.

She recommended the public continue to submit comments to the commission on the proposed rules no later than Friday, Sept. 15, 2023, and that she hopes to render a decision within 30 days.