BILL ANALYSIS

C.S.H.B. 5499

By: LaHood

Licensing & Administrative Procedures

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that there are many compounding issues regarding nonconsent tow fees regulated by local governments, such as a lack of transparency around how fees are set and a lack of proper regulation that can lead to inflated and unjust fees. The bill author has also informed the committee that without clear fee guidelines, towing companies may be at risk of violating laws. C.S.H.B. 5499 seeks to address these issues and ensure fair pricing that reflects the true value of services by requiring the governing body of a political subdivision that regulates nonconsent tow fees to conduct a study on the fees and adjust the fees accordingly by a specified deadline.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 5499 amends the Occupations Code to replace the requirement for the governing body of a political subdivision that regulates nonconsent tow fees to establish procedures by which a towing company may request that a towing fee study be performed with a requirement for such a governing body to conduct or contract to conduct a study on the fees for nonconsent tows originating in the territory of the political subdivision at least once every two years. The bill sets a deadline for a governing body to establish or amend the allowable fees for nonconsent tows in accordance with the statutorily prescribed criteria at not later than 30 days after receiving the results of such a towing fee study. The bill requires the governing body to publish the results of the towing fee study and the methodology used to conduct the study on the political subdivision's publicly accessible website not later than 30 days after receiving the results of such a study.

C.S.H.B. 5499 establishes that, if a political subdivision in a county with a population of 750,000 or more does not establish or amend the allowable fees for nonconsent tows as required, the amount of fees that may be charged or collected in connection with a nonconsent tow originating in the territory of the political subdivision defaults to the fee for a nonconsent tow established by Texas Commission of Licensing and Regulation (TCLR) rule under applicable state law. The bill prohibits the amount of those fees from being established or amended by the governing body of the political subdivision until another towing fee study is conducted.

C.S.H.B. 5499 authorizes the governing body of a political subdivision to impose an administrative fee for each nonconsent tow originating in the political subdivision in an amount reasonably necessary to cover the political subdivision's cost of conducting a towing fee study and clarifies that this administrative fee is in addition to other authorized fees for such a tow. The bill requires the political subdivision to maintain a separate account for the administrative fees collected and restricts the use of such fees to the coverage of costs associated with conducting or contracting to conduct a towing fee study.

C.S.H.B. 5499 establishes as a defense to prosecution for a towing offense wherein a person charges or collects a fee in a political subdivision that regulates the operation of tow trucks or booting under specified state law that is not authorized or is greater than the authorized amount of the fee that the person charges or collects a fee in a political subdivision that regulates the operation of tow trucks under provisions relating to fees for nonconsent tows in an amount authorized under the following:

· the bill provision providing for fees for nonconsent tows to default to the fee established by TCLR rule under certain circumstances; or

· the bill's provisions regarding administrative fees.

This provision applies only to an offense committed on or after the bill's effective date. An offense committed before the bill's effective date is governed by the law in effect on the date the offense was committed, and the former law is continued in effect for that purpose. For these purposes, an offense was committed before the bill's effective date if any element of the offense occurred before that date.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 5499 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes a requirement that was not in the introduced for the governing body of a political subdivision to publish the results of a towing fee study and the methodology used to conduct the study on the political subdivision's publicly accessible website not later than 30 days after receiving the results of such a study.

Both the introduced and the substitute establish that, if a political subdivision in a county with a specified population does not establish or amend the allowable fees for nonconsent tows as required, the amount of fees that may be charged or collected in connection with a nonconsent tow originating in the territory of the political subdivision defaults to the fee for a nonconsent tow established by TCLR rule under applicable state law. However, whereas the introduced set the population threshold at one million or more, the substitute sets it at 750,000 or more.

The substitute includes provisions not in the introduced that do the following:

· authorize the governing body of a political subdivision to impose an administrative fee for each nonconsent tow originating in the political subdivision in an amount reasonably necessary to cover the political subdivision's cost of conducting a towing fee study;

· require the political subdivision to maintain a separate account for the administrative fees collected;

· restrict the use of such fees to the coverage of costs associated with conducting or contracting to conduct a towing fee study; and

· establish a defense to prosecution for a certain towing offense for a person who charges or collects a fee in an applicable political subdivision in an amount authorized under these administrative fee provisions.