APTO Opposes HB 384
APTO Members and Ohio Towing and Recovery Professionals:
Recently, TRAO had legislation introduced in the Ohio House of Representatives and the Ohio Senate that would remove two of the three certified mailing notifications to vehicle owners/lienholders if a towing company will seek a title to the vehicle. A very small number of PPI towers are pushing this legislation for their personal benefit, not for the entire industry. They are not telling the legislature the whole story, completely mismanaged the effort before the legislature once again, and have now brought “predatory towing” issues back to the legislative forefront. This discussion has NEVER worked out in favor of our industry, it has only caused tougher regulations (recall TRAO supported SB 274: Ohio’s Predatory Towing bill!). APTO has worked hard and tirelessly to repair the damage this bill has done to our industry’s image and reputation and also to make major changes to Ohio laws and regulations in our favor. Now is not the time to move backwards or risk that gains we have made. The APTO board of directors voted recently to strongly oppose this legislation. Here is why:
- The three notifications to vehicle owners were put in to law specifically by legislators as the only consumer protection required of towers if they would consider providing towers access to titles of Private Tow-Away Zone vehicles. Recall the industry had no way to get titles for nearly four years before HB 341 corrected this problem properly. APTO and TRAO agreed to this stipulation. APTO negotiated in good faith and we will keep our word. We suggest that TRAO stop pursuing HB 384 immediately and keep their word as well.
- Because of APTO sponsored HB 341, Ohio towers can now take titles to vehicles from Private Tow-Away Zones AND: get a title to a vehicle with a wholesale value of $3,500 (a $1,000 increase), deduct towing and unlimited storage from the wholesale value, and continue charging a $25 to a vehicle owner when the notifications are still necessary.
- Of utmost importance is that APTO successfully removed statutory price controls for Private Tow-Away Zone towing and storage rates in favor of rates set and regularly reviewed by the PUCO. Several weeks ago, the PUCO voted in favor of a 44% increase in both rates giving all PPI towers a much-needed raise, for the first time in two decades and also increasing the deduction against the wholesale value of the vehicle if the tower pursues the title. When these rates take effect soon, it will be an immediate and significant increase in profitability and your companies’ bottom line.
- APTO created a new “destruction only” title process for inoperable junk vehicles (wholesale value less than $1,500) that requires only one notification.
- APTO negotiated very favorable and extended notification periods now in effect to search the BMV records (3 days) and then send the first vehicle owner/lien holder notice (5 days) from receiving the information from the BMV. The former process ensured all towers were out of compliance because it required near immediate notification, which was impossible to achieve.
- A very small number of towers are now asking the legislature to remove notifications to vehicle owners, even in light of all the gains mentioned above, claiming the notifications cause their business to lose money doing PPI tows. They have described the cost they incurred to lawmakers, but they have not told them the value of the cars they get titles to and sell for profit. We do not agree that towers lose money doing PPI tows and we believe this is a terrible and disingenuous argument with no evidence to support it. No one is forced to perform this service, and it strains credulity to believe towers will continue a practice that loses money, especially considering all that we have gained in the PPI space recently. This argument makes our industry look very bad.
- The same small group of towers also told the legislature that the industry needs relief removing junk vehicles from their storage facilities. What they did not mention is that HB 341 created a new “destruction only” title process in law for inoperable junk vehicles (wholesale value less than $1,500) that requires only one notification to address this issue specifically. APTO believes that TRAO’s deceptive arguments to legislators, that have been made publicly, will only harm our industry.
- APTO strongly believes the notification process can be improved by our continued efforts working with the Ohio BMV to have immediate access to the best vehicle owner information possible that will result in the best chance to actually notify a vehicle owner/lienholder. We believe the best outcome when a vehicle is towed is for the owner to retrieve their property, not take the title and sell the vehicle. We believe towing and recovery professionals should be paid fairly for the services we provide, and we do not support business practices that incentivize towing companies taking titles to vehicles and selling them. That should be the last resort, not a business model.
- Because a very small number of high volume PPI towers are pushing this legislation, issues of “predatory towing” are now back in the public policy debate. Several House Transportation and Public Safety Committee members are now strongly opposed to the bill because they do not feel one notification is appropriate consumer protection when towers can “take someone’s livelihood”. More legislators are expressing deep concern about making it easier for a tower to get a title and sell someone’s car, especially in light of the new advantageous process passed in HB 341. We are now forced to defend the gains we have made in the PPI space instead of working on positive and productive legislation that will actually help everyone in the industry.
HB 384 is a bad proposal for this industry being pushed by a very small group of PPI towers for their benefit. This legislation should stop immediately and TRAO should keep their word. Recently TRAO initiated a campaign to have their members call APTO members and demand that we support their disastrous bill. Of course, they only need our help when they are in trouble as they made no effort to “unite” the industry before they introduced their bad legislation and have made no attempt to address or include any of APTO’s concerns in their proposal – they only need our help now to pass their bill. To date, we have received no phone calls, emails, or demands from our members. As a matter of fact, all APTO members that have expressed a position publicly have strongly opposed the bill. We are an association that listens to our members and we strive to do what is best for the industry. As a matter of fact, we support the campaign started by TRAO! Following are the email addresses to all APTO Board of Director Members. We invite all APTO members and everyone in the industry to share your thoughts with us. The members of APTO have all the power to shape the direction of the industry and we look forward to hearing from you!
|Sandy Saponari, Rich’s Towing & Services:||Nick LaNeve, A&M Towing and Recovery:|
|David Clark, United Towing Services:||Mike Schoen, World Truck Towing and Recovery:|
|Joe Coram, Canton Towing:||Ron Myers, Pine Tree Towing and Recovery:|
IF YOU ARE NOT A MEMBER OF APTO YET, WHAT ARE YOU WAITING FOR?!!!
If you would like more history on this issue or why we oppose this bill, please continue reading for additional information. Our goal is to arm all Ohio towers with knowledge and facts so that you can make informed decisions about your business.
The three-notification requirement is a result of SB 274 – Ohio’s “Predatory Towing” bill that became law in early 2015, with most towers in Ohio having no idea about all of the negative implications included in bill. These notification requirements were included, very specifically, as the only consumer protection obligation of a towing company IF that company would pursue title to the vehicle and sell it, if the vehicle was ultimately abandoned. Please recall that at this time, the industry lost the ability to gain these titles to vehicles (towed from private tow-away zones only) and the legislature made it clear that these notifications must be included in order for them to agree to allow towers access to the vehicle titles.
TRAO agreed to this stipulation and TRAO supported SB 274. Unfortunately, APTO did not exist when this legislation was passed, but it was the catalyst and the reason why we were created. It was very clear that the industry needed a new direction with a direct and professional focus on Ohio laws and the regulatory structure that simply had not been dealt with in decades, much to the detriment to the industry. These laws and regulations have a direct impact on your business and your bottom line.
The problem is that not only did SB 274 create massive new regulations, civil penalties against towers, estimate requirements, allowed vehicle owners to retrieve personal property for free and many other harmful provisions – the “title fix” turned out to be terrible for the industry. The bill required towers to purchase the vehicle from the State at the wholesale value of the vehicle without deducting the cost of towing and storage. This legislation should have never been agreed to and supported by the industry. It passed each committee and both houses of the legislature unanimously. Every legislator at every step of the process voted against the industry. APTO believes our main purpose as a state trade association is to protect your business and the value of your business at all costs.
So, let’s take a look at the world now, specifically as it relates to Private Tow-Away Zones and access to titles. Make no mistake about this: APTO sponsored, drafted, negotiated and fought hard for HB 341 in the last General Assembly to fix many of the problems created by SB 274, and it was the first positive piece of legislation for the Ohio towing and recovery industry in decades. We worked directly with the sponsor of SB 274, Senator Jim Hughes (now a State Representative and a member of the House Transportation and Public Safety committee), an outstanding bill sponsor Rep. Ron Young and co-sponsor Martin Sweeney, and many other legislators that also sponsored other “predatory towing bills” (that were rolled into SB 274) directly to educate them about the industry and explain why SB 274 was disastrous for the industry. In the end, we received unanimous support in every committee and unanimous support in both the House of Representatives and the Senate. This was a100% difference from SB 274. There was only one opponent of this legislation that testified publicly against the bill: TRAO Director Jim Shriner of Broad & James Towing. Fortunately for the industry, Mr. Shriner had no impact on the legislation and the world now looks like this regarding titles to vehicles, notification and PPI towing:
- Because vehicles were piling up in storage facilities and towers had no access to titles or options to get rid of vehicles, APTO created a new “destruction only” title process for inoperable junk vehicles (wholesale value less than $1,500) that requires only one notification;
- Another harmful aspect of SB 274 (The TRAO supported “predatory towing” bill) created a notification process that put all towing companies out of compliance because it was impossible to complete, so APTO negotiated very favorable and extended notification periods now in effect to search the BMV records (3 days) and then send the first vehicle owner/lien holder notice (5 days) from receiving the information from the BMV. Our intent was to ensure towers could comply, but this new timeline puts the first notification far enough away from the date of the actual tow that most owners would be able to retrieve their vehicle before the first notice is ever sent;
- APTO passed a towing and unlimited storage deduction when accessing a title;
- We dramatically reduced the major violations that incentivize vehicle owners to sue a towing company and can cause the loss of CPCN from 22 (in SB 274) down to 7 common sense business practices;
- We retained a $25 processing fee that towers can charge a vehicle owner when the notifications are still necessary;
- APTO increased the value of a vehicle that a tower has access to a title to by $1,000 to $3,500;
- Maybe most significantly, APTO successfully removed statutory price controls for Private Tow-Away Zone towing and storage rates in favor of rates set and regularly reviewed by the PUCO. Several weeks ago, the PUCO voted in favor of a 44% increase in both rates giving all PPI towers a much-needed raise, for the first time in two decades and also increasing the deduction against the wholesale value of the vehicle if the tower pursues the title. When these rates take effect, it will be an immediate and significant increase in profitability and your companies’ bottom line.
What every tower in Ohio needs to understand is that retaining the three notifications to vehicle owners was a major part of the negotiations to get everything you see above. Legislators, many of whom are still in the legislator, asked the industry to at least make three attempts to notify the vehicle owner and they would support our bill. They made it clear that this was the only consumer protection they wanted to keep in the law to even consider giving access to their constituents’ vehicle titles. APTO agreed, they kept their word and every single legislator voted for our bill. TRAO also agreed to this compromise, which makes it more troubling that they are now willing to go back on their word. We will not do that. APTO has changed the relationship between the towing industry and the legislature and regulatory bodies of this state for the good. We negotiated in good faith and we will keep our word. We suggest that TRAO stop pursuing HB 384 immediately and keep their word as well. Not only is the proposed legislation a bad idea, it is once again tarnishing the reputation of the industry APTO continues to rebuild.
It is no surprise that TRAO will not tell the whole story. Most members of our industry have been in the dark about their activities for a very long time. What is also fact being that this proposal was actually started by TRAO’s lobbyist without direction or approval of the TRAO board of directors or membership. It is also a fact that this legislation is being pushed by very few towers, for the benefit of a very few towers in this State without concern for the rest of the industry. With all of the positive changes made for PPI towers in Ohio, what is the actual motive behind this legislation and is it worth going back on our word with the legislature?
The answer is absolutely not. We would also like to set the record straight regarding recent TRAO comments about uniting the industry and blaming APTO for their bill not getting a vote in committee. This will help to further explain our opposition to the legislation. While TRAO is asking for our help now, when their ill-conceived legislation is in trouble, they made zero effort to contact APTO before introducing their legislation. They did not reach out to our organization to unify the industry before they pushed forward with their bill, nor ask for our thoughts or assistance lobbying the legislature. Instead, they crafted and moved forward with legislation on their own. Now, only when their legislation is in grave danger, do they ask for our support.
This is in sharp contrast to the last major legislative victory for the industry, also sponsored by APTO, the recent heavy-duty size and weight limits exemption. APTO reached out directly to TRAO, we explained our idea, asked for their support, and then introduced our legislation and went to work. TRAO did not respond and did not attend a single hearing, nor offer support or testimony for this very significant legislation. The difference with these two scenarios is clear: we reached out to TRAO in an effort to actually work together on important legislation and they refused. But, APTO did not and does not need their help to represent the industry and get things done. We rallied major industry vendors, lobbied the legislature, made good arguments, and secured another major victory for the industry. Their talk of uniting the industry is cheap with their back against the wall because their actions consistently prove that uniting the industry is not their priority.
Further, TRAO has created an extremely false narrative to support HB 384. Please read their public testimony in support of the bill. They describe a financial burden of the two additional notifications and their inability to clear their lots of junk vehicles as why they want to remove two notification attempts to vehicle owners and disregard the consumer protections we all agreed to with the legislature. These arguments are weak, narrow minded, and are crumbling with each committee hearing of the bill because they are false. Many legislators are not fooled by the real motivation of the very few towers that are pushing this bill: their business model is based on getting titles to vehicles that can be sold for profit, not being paid a fair rate for towing, recovery and storage. Our position is very clear: we believe that the best outcome when a vehicle is towed is that the owner retrieves their property in a timely manner. It is not to take ownership of someone’s property. That should be a last resort, not a business model. As an association dedicated to professionalism in the industry, APTO will not support efforts that reduce our chances to notify a vehicle owner that their vehicle was towed and is being stored and the likelihood it will be retrieved. This is not a best practice for industry.
Further, simple math and common-sense show that TRAO’s arguments simply hold no water. They would have learned this lesson if they were involved with the PUCO during the rate increase process, but they were not there. You cannot make an argument that the notifications cause you to lose money while you continue to perform the towing. No one believes that a business will continue a practice to lose money. Worse, no one believes that you will lose money after a %44 percent raise in the rates, deductions for towing and unlimited storage from the wholesale vale, and an increased vehicle value of $3,500. As an industry, we have absolutely no data to support TRAO’s claims. TRAO supporters of the bill are quick to talk about the cost of the additional notices, but they are silent on the value and profit of the vehicles they will sell. This type of deceptive public argument puts our industry in a bad light and rightfully makes the legislature question the motives of those asking for this legislation. Especially when you consider all of the tools we gained in HB 341 to make our businesses profitable. All that is required is three notifications. That is a very fair deal. These are more reasons APTO opposes this legislation and why TRAO should stop pursuing HB 384 immediately and keep their word to the legislature.
In addition, APTO conducted proper due diligence and actually researched the issue of notifications to respond to the TRAO proposal appropriately. While the notification process is far from perfect, the problems are simply not the three notifications. While we have identified and expressed several solutions we feel would balance consumer protections and aid the industry – even to TRAO directly – TRAO has made no effort accommodate these solutions in their legislation. That is a major mistake and a huge flaw in their strategy. Creating carefully thought out solutions to present to the legislature would have bolstered arguments about the number of notifications. Just asking for notifications to be removed is an awful strategy that hints to predatory towing practices. HB 384 will not fix these issues; it will only make it worse and eventually lead to more regulation.
In the last committee hearing for this legislation in the House Transportation and Public Safety Committee the worst-case scenario started to happen. Several committee members are now strongly opposed to the bill because they do not feel one notification is appropriate consumer protection when towers can “take someone’s livelihood”. More legislators are expressing deep concern about making it easier for a tower to get a title and sell someone’s car, especially in light of the new advantageous process passed in HB 341. PREDATORY TOWING IS BACK and so far in Ohio, as in the rest of the country, this discussion NEVER ends well for towing industry.
This is happening as TRAO has completely mismanaged the legislative process. TRAO has not identified actual problems with the notification process or proposed solutions that work for the industry and consumers to incentivize the best outcomes when a vehicle is towed. Rather, they continue to pursue a process that that will benefit a very few in the industry. Instead of pursuing beneficial and productive legislation that can help all in the industry, we are now forced to spend time, effort, and our association’s financial resources to defend the gains we have already made in the PPI space. TRAO should immediately withdraw HB 384 and do what is best for the industry. They should keep their word and work on positive solutions to the notification process like those we have proposed. For these reasons, APTO will not support their legislation, and we ask all Ohio Towers to join us opposing HB 384.