Towing companies are on notice to change their towing practices under a bill approved Tuesday by the state House Transportation, Housing and Local Government Committee.

House Bill 1051 is the work of the Transportation Legislative Review Committee from last fall and the result of attention to what some described as predatory towing that lawmakers thought they fixed a year ago.

Small business owners, apartment owners and homeowners’ association representatives are raising concerns that the bill’s intent to put the onus on property owners to pay for most tows will result in “towing anarchy” and could drive up the costs of affordable and low-income housing.

The issue caught fire last summer when Sen. Julie Gonzales, D-Denver, found her car had been towed and believed it was an illegal tow.

She said she went to Wyatt’s Towing to get her car and learned the law she sponsored in 2022 that banned nonconsensual tows and required towing operators to provide payment plans were not being followed. She made payment arrangements, but her money was refunded the next day, she said. 

Rep. Andrew Boesenecker told the transportation committee Tuesday that tens of thousands of cars are towed from private property at the direction of tow truck operators. The price to recover a vehicle is out of reach for many consumers and creates an unnecessary financial burden, he said.

Large, non-consensual tow operators continue to engage in predatory practices to the detriment of those who can least afford a non-consensual tow, the Fort Collins Democrat said.

On top of that, he added, investors have combined parking lot management, towing and vehicle removal, auction houses and car dealerships into a single integrated entity, making them judge, jury and executioner with the power to sell a car at their discretion, Boesenecker said, adding it’s not a best practice in the industry.

Attorney General Phil Weiser investigated the state’s largest towing operator, Wyatt’s, last fall and in December negotiated a $1 million settlement over the company’s failure to obtain lawful permits, unlawful fees, and engaging in deceptive business practices, Boesenecker noted.

“The office of the Attorney General has done its job,” he said, adding that now it’s time for the legislature to do the same. “We must dis-incentivize the current system” while ensuring tows can happen when necessary.

Under House Bill 1051, towing companies would not be allowed to patrol lots, cruise for cars and tow without discretion.

In addition, the bill as introduced says:

? Towing carriers would be required to submit fingerprint-based criminal background checks.

? Tows would be paid for by certain property owners requesting the tow, not the vehicle owner. Property owners would also be on the hook for the first 30 days of storage fees.

? Members of the state Towing Task Force would be required to recuse themselves if they are a towing operator and the task force is making decisions on towing fees.

? The Public Utilities Commission would be authorized to deny, suspend, revoke, or refuse towing carrier permits for certain carrier violations.

The bill garnered opposition from homebuilders, apartment building owners, and commercial building owners, including shopping centers largely because of its provision that puts the financial responsibility for the tow on the property owner under certain circumstances.

The bill was amended to address some but not all those financial concerns, reducing the time the property owner would be responsible for storage fees from 30 days to five days. But the onus is still on the property owner to pay for the tow, which led one HOA representative to call it “parking anarchy.”

Another amendment clarified the bill only applies to residential parking, not for parking for commercial buildings.

Drew Hamrick, general counsel for the Colorado Apartment Association, said that in Colorado there are 500,000 rental units, and about 1.5 parking spaces per unit.

Transferring the cost of towing from the vehicle owner to the property owner will incentivize “bad parking,” said Hamrick, who argued it would drive up rental costs since that’s the only way property owners will be able to recoup costs.

The bill doesn’t consider repossession, parking handicapped spots, tows related to court orders, or tows for vehicles that block entrances, access or even fire lanes, Hamrick told the committee.

Hamrick also noted that the amendment limiting the bill to residential parking does not consider mixed-use developments, where businesses may be on the first floor of a building and residences above it.

Tayo Nikolai, who owns small low-income housing, including Section 8 units, said shifting the cost of towing improperly parked cars to the property owner is counterproductive to one of the most pressing public policy issues the state faces: affordable housing.

Forcing housing owners to pay for those cars’ towing will hurt the ability of those owners to provide affordable housing, he said. The bill is punitive to property owners and their renters, he added.

The committee also heard from Coloradans, including low-income residents, who said they are dealing with predatory towing companies that aren’t following the law.

Rosa Acosta of Commerce City, speaking through an interpreter, said her family has just one vehicle for four people, and they are on a fixed income. Last August, her car was towed for an expired permit, despite noting that she had tried to get it renewed through her landlord for weeks. It was scary – a $395 charge, she said. She could get her car back under the 2022 law with 15% down and a payment plan. The company, which she didn’t identify, said they did not do that, despite the law that mandates it.

The company then said she must pay it in full or face paying interest, so her family paid it, she said. That left them without money for rent and food, and she lost a day’s work, she said. 

Another witness relayed a similar story, telling the committee he had lost two cars to Wyatt’s Towing. The most recent was tied to a permit that had expired 12 hours earlier. When he asked Wyatt’s for the PUC form or for the payment plan, the staff “acted like they didn’t know what I was talking about,” he said.

He was unable to get his car back. he said. 

“This isn’t vigilantism,” where residents are fighting over parking spots – this is 2:30 a.m. in the morning when tow operators creeping through the lot, he said.

“It is clear additional legislation is needed to protect Coloradans from bad actors in the towing community and to hold those actors accountable,” said Catherine Ordoñez with Americans for Civil Liberties Colorado.

The bill, which won a 7-3 party-line vote from the committee, now moves on to the House Finance Committee.

While no one from the towing industry testified Tuesday, the Towing and Recovery Professionals of Colorado is largely on board with the legislation, which Boesenecker noted during the hearing.