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Rep. Michael Southworth proposes turning excess proceeds from abandoned-vehicle sales to state treasurer for owners
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Summary
Representative Michael Southworth introduced bill language to require tow companies that sell vehicles with abandoned titles to turn excess sale proceeds, after making themselves whole for towing and storage, over to the state treasurer in the last known owner's name so that owners can reclaim funds.
Representative Michael Southworth proposed new language in the House Transportation committee on April 10 to let owners reclaim excess proceeds when tow companies obtain abandoned-vehicle titles and sell the cars.
Southworth, a member representing Caledonia 2 and a former DMV investigator, told the committee a case from his tenure—where a person in a mental-health emergency lost a vehicle and later received taxpayer restitution—prompted the change. "If it's sold, money in excess of what is owed to the tow company for towing and storage is then turned over to the state treasurer in the last known person's name and it's held there for them to recoup that," he said.
The proposal would require tow companies to be paid first for towing and storage; any sale proceeds above those amounts would be remitted to the state treasurer and held under the last known owner's name for reclamation. Southworth said the drafting was intended to leave tow companies "made whole" while creating an avenue for owners of higher-value vehicles to recover money they otherwise lose under current practice.
Committee members questioned how the timelines and calculations would work in practice. One member asked whether, "once they receive the abandoned title, it is their vehicle to do with" the tow company; Southworth confirmed the title gives the company ownership but said the new language would require any excess after reasonable costs to be reported and remitted. Representative Powers asked whether a 90-day provision in the draft changes current practice; Southworth described the statutory notice process the DMV uses: once an application is received, DMV has three days to send an initial certified letter to the last known owner, waits seven days for a response, then issues a second notice and applies a total 21-day statutory period before a title may be issued to the tow company. Storage fees, he said, stop accruing once the tow company becomes the vehicle owner.
Members also raised practical concerns: whether the remaining proceeds would be meaningful for low-value or junk vehicles, how out-of-state and rental vehicles are handled, and whether valuation should rely on recognized guides. A committee member suggested using public valuation references (noted in discussion as "JD Power/Blue Book") to determine sale value that produces excess funds for state remittance.
Southworth credited legislative counsel Damian Leonard for drafting the language and said he did not intend to change tow companies' ability to recoup their charges. The chair said the committee would ask counsel to walk members through the draft, solicit a DMV review and other stakeholder input, and consider the language at mark-up. No formal motion or vote was taken; the committee adjourned after the discussion.
The draft preserves current tow-company remedies while adding a process for excess proceeds to be held for owners; the committee will seek counsel and DMV feedback before deciding whether to advance the language.
