Bill would bar DMV from suspending licenses over private towing/storage debt

Representative Ellen Reed told the House Transportation Committee that House Bill 414 would prohibit the Division of Motor Vehicles from suspending a driver's license on the basis of unpaid private towing or storage charges. Reed said the practice can leave low‑ and moderate‑income residents without a license after an accident in which they had no choice of tow vendor, cutting off work and trapping people in a debt cycle.

Reed described a scenario: a driver involved in a wreck has the vehicle towed by a company chosen by police, lacks insurance and faces storage fees that can total hundreds of dollars. Under current practice, she said, an unpaid balance can be treated as abandonment and lead to a DMV suspension. "This is a privilege the state gives you: to drive. It should not be held hostage to a private debt you had no choice to incur," she said.

Representative Richard Alperin, who identified himself as a Newmarket resident, testified that his son lost his license in 2016 after a tow and has not regained it; Alperin said the towing yard sold the vehicle for scrap and that his son, a low‑wage worker, could not pay the towing and storage fees.

Reed and supporters said the towing company retains remedies — it can sell or scrap a vehicle to recoup costs — and that removing license suspension for this reason would separate private debt collection from the state's licensed driving privilege. She proposed reinstating licenses of anyone suspended solely for this cause if the bill is enacted.

Committee members asked procedural questions about the 14‑day claim period, whether owners can sign over totaled vehicles, and whether extending the DMV's timelines could help. Representative Hamlin and others asked whether towing companies can charge interest or otherwise increase the private debt; proponents said towing companies that have arrangements with police are sometimes able to charge higher rates.

Brandy Casada, Bureau of Financial Responsibilities administrator at the DMV, testified the department was neutral and offered to provide data; she said DMV received roughly 45,000 defaults in 2023 for matters the fiscal note considered, but could not immediately break out how many suspensions specifically were for non‑motor‑vehicle debts. Casada said DMV mails a notice of default to the address on file and that after the notice no further mailings are sent; she said the notice includes the suspension date and an administrative fee.

No committee action was taken during the hearing. Sponsors and witnesses asked the committee to consider statutory drafting changes to separate abandonment definitions from automatic license suspension.