PROHIBIT PAYMENT IN EXCHANGE FOR

TOWING SERVICE BUSINESS OR CONTRACTS

Senate Bill 173 as referred to second House committee

Sponsor:  Sen. Jim Stamas

1st House Committee:  Local Government and Municipal Finance

2nd House Committee:  Ways and Means

Senate Committee:  Local Government

Complete to 10-8-19

SUMMARY:

Senate Bill 173 would amend the Michigan Vehicle Code to prohibit a local unit of government from accepting a payment, commission, or portion of service fees from a wrecker, recovery, or towing service (“service”) in exchange for securing business for that service. In addition, a service could not offer a local unit a payment, fee, or commission to induce the local unit to enter into a contract with, or secure business for, the service.

The Code currently prohibits a local unit of government from contractually requiring a service to pay a fee to that local unit for providing services at the scene of an impound, accident, or disabled or abandoned vehicle. The bill would retain this prohibition.

The bill would take effect 90 days after its enactment.

MCL 257.676d

FISCAL IMPACT:

To the extent that local units of government were accepting service fees in exchange for securing business for a wrecker, recovery, or towing service or were accepting payments, fees, or commissions in exchange for a contract with a wrecker, recovery, or towing service company, the bill would reduce local revenues by prohibiting this activity. It is unknown which, if any, local units of government were engaging in this activity.

POSITIONS:

Representatives of the Michigan Towing Association testified in support of the bill. (9-4-19)

The following entities indicated support for the bill (9-4-19):

·         National Federation of Independent Business

·         Michigan Municipal League

The Michigan Department of Transportation indicated a neutral position on the bill. (9-4-19)

                                                                                         Legislative Analyst:   Nick Kelly

                                                                                                 Fiscal Analyst:   Ben Gielczyk

■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations and does not constitute an official statement of legislative intent.