HSB 559 (LSB 5115YC (6) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON JONES)

A BILL FOR

An Act relating to abandoned vehicles, and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.89, subsection 2, Code 2026, is amended to read as follows:
   2.  Authority to take possession of abandoned vehicles.  A police authority, upon the authority’s own initiative or upon the request of any other authority having the duties of control of highways or traffic, shall take into custody an abandoned vehicle on public property and may take into custody an abandoned vehicle on private property. The police authority may employ its own personnel, equipment, and facilities or hire a private entity, equipment, and facilities for the purpose of removing, preserving, storing, or disposing of abandoned vehicles. A property owner or other person in control of private property may employ a private entity who is a garagekeeper, as defined in section 321.90, to dispose of an abandoned vehicle, and the private entity may take into custody the abandoned vehicle without a police authority’s initiative. If a police authority employs a private entity to dispose of abandoned vehicles, the police authority shall provide the private entity with the names and addresses of the registered owners, all lienholders of record, and any other known claimant to the vehicle or the personal property found in the vehicle. The owners, lienholders, or other claimants of the abandoned vehicle shall not have a cause of action against a private entity for action taken under this section if the private entity provides notice as required by subsection 3, paragraphs “a” through “f”.
    Sec. 2.  Section 321.89, subsection 3, paragraph a, Code 2026, is amended to read as follows:
   a.  A police authority or private entity that takes into custody an abandoned vehicle shall send notice by certified mail that the vehicle has been taken into custody no more than twenty ten days after taking custody of the vehicle. Notice shall be sent to the last known address of record of the last known registered owner of the vehicle, all lienholders of record, and any other known claimant to the vehicle.
    Sec. 3.  Section 321.89, subsection 3, paragraph b, subparagraph (3), Code 2026, is amended to read as follows:
   (3)  Information for the persons receiving the notice of their right to reclaim the vehicle and personal property contained therein within ten twenty days after the effective date of the notice. Persons may reclaim the vehicle or personal property upon payment of all towing, preservation, and storage charges resulting from placing the vehicle in custody and upon payment of the costs of notice required pursuant to this subsection. 
    Sec. 4.  Section 321.89, subsection 3, paragraphs e and f, Code 2026, are amended by striking the paragraphs.
    Sec. 5.  Section 321.89, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  Abandoned vehicles in custody.
   a.  A private entity that takes an abandoned vehicle into custody may charge towing, preservation, storage, or other fees during the first twenty-four hours after taking custody of the vehicle. After twenty-four hours, additional towing, preservation, and storage fees shall not accrue until the vehicle owner, lienholders, and any known claimants are notified in accordance with subsection 3. Failure to send notice as required by subsection 3 invalidates any claim by a private entity for payment of all such fees.
   b.  A lienholder or insurance company who receives notice under subsection 3 may request information regarding the condition of the vehicle. The private entity having custody of the vehicle may charge a fee not to exceed one hundred dollars to the lienholder or insurance company for inspection of the vehicle. If such a request is made and when the fee is paid, the private entity with custody of the vehicle may satisfy the request by allowing a representative of the lienholder or insurance company onto the premises to inspect the vehicle, or by providing the lienholder or insurance company with photos of the vehicle sufficient to reasonably ascertain the condition of the vehicle. If requested, the private entity shall provide photos or access to the vehicle prior to the expiration of the twenty-day reclamation period.
   c.  A person may reclaim personal property from within the vehicle, so long as the property is not attached to the vehicle, only once while the vehicle is in custody of a private entity. A person may provide the private entity a list of the personal property to be reclaimed that is inside the vehicle, or the private entity may allow the vehicle owner to reclaim personal property from inside the vehicle during the normal business hours of the private entity. Reclaiming personal property from inside the vehicle does not constitute reclaiming the vehicle.
   d.  If notice is provided as required in subsection 3, and the persons receiving notice do not ask for a hearing before the police authority or reclaim the vehicle or personal property within the twenty-day reclaiming period, the owner, lienholders, or claimants shall not have a right to, title in, claim for, or interest in the vehicle or personal property in the vehicle.
   e.  If notice is not provided as required in subsection 3, and a police authority or private entity takes custody of the vehicle and sells the vehicle at auction, the police authority or private entity, as applicable, shall pay the lienholder from the auction proceeds the remaining amount owed on the vehicle loan, up to the total amount of the proceeds. The police authority or private entity shall then pay the remaining proceeds to the vehicle owner.
    Sec. 6.  Section 321.89, subsection 4, Code 2026, is amended to read as follows:
   4.  Reclamation of abandoned vehicles.  A private entity with custody of an abandoned vehicle shall provide an itemized account of all fees assessed when the vehicle is reclaimed.

Prior to driving an abandoned vehicle away from the premises, a person who received, or who is reclaiming the vehicle on behalf of a person who received, notice under subsection 3 shall present to the police authority or private entity, as applicable, the person’s valid driver’s license and proof of financial liability coverage as provided in section 321.20B.
    Sec. 7.  Section 321.89, subsection 5, paragraphs b and c, Code 2026, are amended to read as follows:
   b.  (1)  From the proceeds of the sale of an abandoned vehicle after proper notice was provided, the police authority, if the police authority did not hire a private entity, shall reimburse itself for the expenses of the auction, the costs of towing, preserving, and storing which resulted from placing the abandoned vehicle in custody, all notice and publication costs incurred pursuant to subsection 3, the cost of inspection, and any other costs incurred except costs of bookkeeping and other administrative costs.
   (2)  Any remainder from the proceeds of a sale shall be held first for any lienholder of record, if applicable, for thirty days after notice is provided under paragraph “d”, and second for the any owner of the vehicle or entitled lienholder for ninety for an additional sixty days, and shall then be deposited in the road use tax fund. The
   (3)  Any remaining proceeds shall be submitted to the department and deposited in the statutory allocations fund created in section 321.145. Whenever the proceeds from the sale of an abandoned vehicle are insufficient to meet the costs to police authorities of auction, towing, preserving, storage, and all notice and publication costs, and all other costs which result from placing abandoned vehicles in custody, whenever the proceeds from a sale of the abandoned vehicles are insufficient to meet these expenses and costs, shall be paid authorized for reimbursement under subparagraph (1) for a police authority, the department shall pay the remaining reimbursement amount to the police authority from the road use tax statutory allocations fund and are the obligation of the last owner or owners,. The person or persons who owned the vehicle when it was taken into custody are jointly and severally liable for reimbursing the department, to the credit of the statutory allocations fund, the costs paid to a police authority under this subparagraph.
   c.  The director of transportation department shall establish by rule adopt rules pursuant to chapter 17A providing a claims procedure to be followed by police authorities in obtaining expenses and costs from the statutory allocations fund, and procedures for reimbursement of expenses and costs from the statutory allocations fund to a private entity hired by a police authority to take custody of an abandoned vehicle. If a private entity has been hired by a police authority, the police authority shall file a claim with the department for reimbursement of towing fees the private entity’s costs authorized for reimbursement under paragraph “0c”, which shall be paid from the road use tax statutory allocations fund.
    Sec. 8.  Section 321.89, subsection 5, Code 2026, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  0c.  (1)  From the proceeds of the sale of an abandoned vehicle after proper notice was provided, a private entity may reimburse itself only for the expenses of the auction, the costs of towing, preserving, and storing which resulted from placing the abandoned vehicle in custody, all notice and publication costs incurred pursuant to subsection 3, the cost of inspection, and any other costs incurred, except costs of bookkeeping and other administrative costs.
   (2)  Any remainder from the proceeds of a sale shall be held first for any lienholder of record, if applicable, for thirty days after notice is provided under paragraph “d”, and second for any owner of record for an additional sixty days.
   (3)  Any remaining proceeds shall be submitted to the department and deposited in the statutory allocations fund created under section 321.145. Whenever the proceeds from the sale of an abandoned vehicle are insufficient to meet the expenses and costs authorized for reimbursement under subparagraph (1) for a private entity hired by a police authority, the department shall pay the remaining reimbursement amount to the private entity from the statutory allocations fund. The person or persons who owned the vehicle when it was taken into custody are jointly and severally liable for reimbursing the department, to the credit of the statutory allocations fund, the costs paid to a private entity under this subparagraph.
   NEW PARAGRAPH.  d.  After the sale of an abandoned vehicle, the private entity or police authority who sold the vehicle at auction shall, within ten days after the sale, send notice by certified mail to the person who owned the vehicle when it was taken into custody and to any lienholders of record detailing the amount of proceeds remaining and the timeline for claiming the proceeds. Notice shall be deemed given when mailed.
    Sec. 9.  Section 321.89, Code 2026, is amended by adding the following new subsections:
   NEW SUBSECTION.  6.  Display of charges.  A private entity that takes custody of an abandoned vehicle shall display at the entity’s place of business in a manner that is readily visible to visitors and on the entity’s internet site, if applicable, the maximum towing, preservation, and storage fees the entity will charge.
   NEW SUBSECTION.  7.  Violations committed by private entities.  A violation of this section committed by a private entity is a prohibited practice or act under section 714H.3.
    Sec. 10.  Section 321.90, subsection 2, paragraph f, Code 2026, is amended to read as follows:
   f.  The owner of an abandoned motor vehicle and all lienholders shall no longer have any right, title, claim, or interest in or to the motor vehicle; and no court in any case in law or equity shall recognize any right, title, claim, or interest of any owner or lienholders after the disposal of the motor vehicle to a demolisher; so long as notice in accordance with section 321.89, subsection 3, was provided.
    Sec. 11.  Section 321.145, subsection 2, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   Revenues derived from trailer registration fees collected pursuant to sections 321.105 and 321.105A, fees charged for driver’s licenses and nonoperator’s identification cards, fees charged for commercial driver’s license driving skills tests pursuant to section 321.187A, fees charged for the issuance of a certificate of title, the certificate of title surcharge collected pursuant to section 321.52A, proceeds from the sale of an abandoned vehicle pursuant to section 321.89, subsection 5, paragraphs “b” and “0c”, and revenues credited pursuant to section 423.43, subsection 2, and section 423C.5 shall be deposited in a fund to be known as the statutory allocations fund under the control of the department and credited as follows:
    Sec. 12.  Section 321.145, subsection 2, paragraph a, Code 2026, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (5)  An amount not to exceed the amount for reimbursement for expenses and costs in a claim filed by a police authority in accordance with section 321.89, subsection 5, paragraph “c”.
    Sec. 13.  Section 714H.3, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0c.  Section 321.89, if the person is a private entity.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Code sections 321.89 and 321.90 regulate the taking into custody and disposal of abandoned vehicles, as defined in Code section 321.89.
   Current law requires an entity that takes custody of an abandoned vehicle to send notice by certified mail to all known claimants of the vehicle no more than 20 days after taking custody of the vehicle. This bill requires such notice to be sent no more than 10 days after taking custody of the vehicle. Under current law and the bill, notice is deemed given when mailed.
   Current law requires a person to ask for a hearing regarding an abandoned vehicle, or reclaim an abandoned vehicle and personal property left inside such vehicle, within 10 days after notice is mailed. The bill extends the reclamation period to 20 days. If notice is not provided and a private entity or police authority takes custody of the vehicle and sells the vehicle at auction, the bill requires payment to the lienholder from the auction proceeds as much as those proceeds can cover of the remainder owed on the vehicle loan before paying the vehicle owner.
   The bill authorizes a private entity that takes a vehicle into custody to charge towing, preservation, storage, or other fees during the first 24 hours after taking custody of a vehicle. After 24 hours, towing, preservation, and storage fees do not accrue until the vehicle owner, lienholders, and any known claimants are notified. A claim by a private entity for payment of all such fees is invalid when a private entity fails to send notice.
   Under the bill, a lienholder or insurance company who receives notice may request information regarding the condition of the vehicle. The private entity having custody of the vehicle may charge an inspection fee not to exceed $100. An inspection may be in person or the private entity is authorized to provide photos of the vehicle sufficient to reasonably ascertain the condition of the vehicle. A private entity must comply with an inspection request prior to the expiration of the 20-day reclamation period.
   The bill authorizes a person to reclaim personal property from within the vehicle without paying reclamation fees, so long as the property is not attached to the vehicle, only once while the vehicle is in custody of a private entity.
   The bill requires a private entity with custody of an abandoned vehicle to provide an itemized account of all fees assessed when the vehicle is reclaimed.
   Under current law, if an abandoned vehicle is not reclaimed, it can be sold at public auction or for junk or scrap if it is determined to not be appropriate for highway use. The bill directs how proceeds of a sold abandoned vehicle are distributed. If proper notice was provided, a private entity or police authority may reimburse itself only for costs incurred, except costs of bookkeeping and other administrative costs. Any remainder from the proceeds of a sale must be held first for any lienholder of record, if applicable, for 30 days after notice of the sale is provided, and second for any owner of record for an additional 60 days. Current law only requires a police authority to hold proceeds from a sale for both the lienholder and owner for 90 days. The bill requires any remaining proceeds to be deposited in the statutory allocations fund (SAF) rather than the road use tax fund. A private entity that was hired by a police authority must be paid from the SAF the amount incurred by the entity that was not otherwise recouped by the entity from the sale. The person or persons who owned the vehicle when it was taken into custody are jointly and severally liable for reimbursing the SAF for those costs. Pursuant to current law, revenues remaining in the SAF at the end of a fiscal year are credited to the road use tax fund.
   After the sale of an abandoned vehicle, the bill requires a private entity or police authority who sold the vehicle at auction, within 10 days after the sale, to send notice by certified mail to the person who owned the vehicle when it was taken into custody and to any lienholders of record detailing the amount of proceeds remaining and the timeline for claiming the proceeds.
   The department of transportation (DOT) is required to adopt administrative rules providing a claims procedure for police authorities to obtain expenses and costs from the SAF, for private entities to remit excess proceeds to the SAF, and for payment from the SAF for expenses and costs incurred by a police authority or private entity hired by a police authority. If a private entity was hired by a police authority, the police authority must file a claim with the DOT for reimbursement of the private entity’s costs.
   A violation of Code section 321.89, as amended by the bill, committed by a private entity is a prohibited practice or act under Code section 714H.3. Pursuant to current law, a consumer who suffers an ascertainable loss of money or property as the result of a prohibited practice or act in violation of Code chapter 714H may bring an action at law to recover actual damages. The court may order such equitable relief, including reasonable attorney fees, as it deems necessary to protect the public from further violations, including temporary and permanent injunctive relief. If the finder of fact finds by a preponderance of clear, convincing, and satisfactory evidence that a prohibited practice or act constitutes willful and wanton disregard for the rights or safety of another, in addition to an award of actual damages, statutory damages up to three times the amount of actual damages may be awarded to a prevailing consumer. A consumer must bring a consumer fraud action within two years of the occurrence of the event giving rise to the cause of action or within two years of the discovery of the violation, whichever is later.
   Because the bill places additional requirements on police authorities and private entities beyond the notice requirements under current law, the bill strikes certain provisions limiting claims or rights when proper notice is provided or after the reclamation period. The bill instead provides that if proper notice is provided and the persons receiving notice do not ask for a hearing before the police authority or reclaim the vehicle or personal property within the 20-day reclaiming period, the owner, lienholders, or claimants shall not have a right to, title in, claim for, or interest in the vehicle or personal property in the vehicle. For disposal to a demolisher under Code section 321.90, such rights and claims are limited only if proper notice is provided.