PROHIBIT PAYMENT IN EXCHANGE FOR

TOWING SERVICE BUSINESS OR CONTRACTS

Senate Bill 173 as passed by the Senate

Sponsor:  Sen. Jim Stamas

House Committee:  Local Government and Municipal Finance

Senate Committee:  Local Government

Complete to 9-3-19

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 in exchange for securing business for that wrecker, recovery, or towing service. In addition, a wrecker, recovery, or towing 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 wrecker, recovery, or towing service.

The Vehicle Code currently prohibits a local unit of government from contractually requiring a wrecker, recovery, or towing 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.

                                                                                        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.