In Texas, can a towing company give a parking lot the required tow-away warning sign, or is that an illegal kickback?

Plain-English summary

Texas law lets a parking lot tow unauthorized vehicles, but only if the lot first posts a warning sign that meets the statute's specifications: weather-resistant, at least 18 inches by 24 inches, and carrying a phone number answered around the clock so a car owner can find a towed vehicle. In practice the number on the sign is usually the towing company's, and the towing company owns the sign. The Chair of the House Transportation Committee asked the Attorney General two things about that arrangement under article 6701g-2, V.T.C.S.: does a towing company that gives or lends a sign (worth about twenty dollars) to a parking lot owner cross the statute's ban on passing "anything of value," and who has to bear the cost of putting the sign up?

On the first question, the office said the sign is a thing of value. Its value may be small, but it is not zero. The statute would plainly stop a towing company from handing the lot owner a twenty-dollar bill or a twenty-dollar loan, and the office saw no legal difference between cash and a sign that has a cash value. So a tower furnishing the sign to the lot ran into sections 8 and 9, which bar a parking facility from accepting anything of value, directly or indirectly, from a towing company in connection with removing vehicles. The office added, in a footnote, that the "in connection with the removal" language reaches the whole towing arrangement between the lot and the company, not just individual tows, because reading it narrowly would let exactly the kind of kickbacks the statute targets slip through.

On the second question, the office concluded the lot owner, not the towing company, has to post the sign. Sections 3 and 4 of the act make that clear: a parking facility may have unauthorized vehicles towed only when the proper sign is in place, and a towing company may tow only after it gets written verification from the parking facility owner that the owner has caused the signs to be installed. The duty to give drivers notice through a conforming sign falls on the lot.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The towing statute the opinion construed, article 6701g-2, V.T.C.S., has since been repealed, and the rules on towing unauthorized vehicles from parking facilities were recodified into later Texas codes, with the sign specifications and the anti-kickback provisions renumbered and revised along the way. Read this page for how the office analyzed the 1995 statute, and check the current code for the sign requirements and the "anything of value" ban before relying on any section number here.

What the opinion meant for those who asked

For the House Transportation Committee: The opinion answered both questions the committee posed: a furnished sign counted as a "thing of value" under the anti-kickback sections, and the statute already assigned the posting duty to the parking facility owner.

For parking lot owners: Under the opinion, accepting a free or loaned sign from the towing company was treated as accepting a thing of value barred by sections 8 and 9, and the obligation to install a conforming sign rested on the lot owner.

For towing companies: The opinion read the statute to prohibit giving the lot owner the sign (or otherwise passing anything of value in connection with the towing relationship), and it placed the cost and duty of posting on the lot rather than on the tower.

Common questions

Was a free tow-away sign from a towing company an illegal kickback under the statute?
The opinion treated it that way. The sign had a cash value, so giving or lending it to the parking lot was passing a "thing of value," which sections 8 and 9 prohibited between a lot and its towing company.

Did it matter that the sign was only worth about twenty dollars?
No. The office said the value was small but not nonexistent, and there was no legal difference between handing over a twenty-dollar bill and handing over a twenty-dollar sign.

Who had to put up the sign, the lot or the towing company?
The parking lot owner. Sections 3 and 4 let a lot tow only when a proper sign is posted and let a tower act only after written verification that the owner had caused the signs to be installed, so the duty fell on the lot.

Could the tower argue the sign wasn't tied to "the removal of a vehicle"?
The opinion rejected that reading in a footnote. It said the "in connection with the removal" phrase covers the whole arrangement between the lot and the towing company, not just particular tows, because a narrower reading would let the targeted kickbacks through.

Background and statutory framework

Article 6701g-2, V.T.C.S., governed the towing of unauthorized vehicles from parking facilities. Section 3(a) permitted removal when the facility owner had given adequate notice, which could include "a sign or signs prohibiting unauthorized vehicles" installed for at least 24 consecutive hours and still up at the time of towing (§ 3(a)(1)). Section 6 set the sign's specifications, including that it be weather-resistant, at least 18 inches wide and 24 inches tall, and "contain a current telephone number, including the area code, that is answered 24 hours a day to enable the owner or operator of a towed vehicle to locate it" (§ 6(b)(7)).

Sections 8 and 9 were the anti-kickback provisions. They prohibited a towing company from giving, and a parking facility from accepting, "anything of value, directly or indirectly, from a towing company in connection with the removal of a vehicle from a parking facility," and they barred a lot and a tower in that relationship from holding a monetary interest in each other. Because the act did not define "anything of value," the office read the phrase by its ordinary meaning (citing 67 TEX. JUR. 3D Statutes § 100, at 674 (1989)) and concluded a sign with cash value fit.

On the posting duty, the office relied on sections 3 and 4. Section 3 let the parking facility owner cause towing only when the proper sign was in place, and section 4 let the towing company tow only after receiving "written verification from the parking facility owner that the owner has caused signs to be installed" (§ 4(a)(1)). Together these placed the obligation to provide notice by a conforming sign on the lot owner.

Citations

Statutory provisions discussed:

• V.T.C.S. art. 6701g-2, § 3(a)(1) (notice by posted sign as precondition to towing)
• V.T.C.S. art. 6701g-2, § 6(b)(7) (sign specifications, including 24-hour telephone number)
• V.T.C.S. art. 6701g-2, §§ 8, 9 (prohibition on passing "anything of value" and on shared monetary interest)
• V.T.C.S. art. 6701g-2, § 4(a)(1) (towing permitted after written verification that owner caused signs to be installed)

Other authority:

• 67 TEX. JUR. 3D Statutes § 100, at 674 (1989)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0330
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1995/dm0330.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain (including footnote numbering) — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

March 10, 1995

Honorable Clyde Alexander
Chair
Committee on Transportation
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910

Opinion No. DM-330

Re: Whether a statutorily mandated sign furnished by a towing company to a parking facility constitutes "anything of value" in contravention of article 6701g-2, V.T.C.S., and a related question (RQ-696)

Your predecessor asked us to interpret the meaning of the phrase "anything of value" as it is used in article 6701g-2, sections 8 and 9, V.T.C.S.

Article 6701g-2 is generally concerned with the towing of unauthorized vehicles from parking facilities. Section 3(a) of the act permits the removal of such vehicles if the parking facility owner has given the vehicle's owner or operator adequate notice, which may include that "a sign or signs prohibiting unauthorized vehicles have been installed on the parking facility for at least 24 consecutive hours and remain installed at the time of towing." V.T.C.S. art. 6701g-2, § 3(a)(1).

Section 6 of the act provides the specifications for such a sign, which inter alia must be weather-resistant, at least 18 inches wide and 24 inches tall, and "contain a current telephone number, including the area code, that is answered 24 hours a day to enable the owner or operator of a towed vehicle to locate it." Id. § 6(b)(7). It is our understanding that generally the telephone number posted is that of the towing company which has arranged with the parking facility owner to tow unauthorized vehicles from that lot.

Sections 8 and 9 of the act prohibit the towing company from giving, and the parking facility owner from accepting, "anything of value, directly or indirectly, from a towing company in connection with the removal of a vehicle from a parking facility." Id. § 8. These sections also prohibit parking facilities and towing companies which have such a relation from having a monetary interest in each other.

Ordinarily, your predecessor informed us, the signs mandated by the legislation, which cost approximately twenty dollars, are owned by the towing company whose telephone number is on them. Your predecessor therefore asked two questions: first, whether the giving and/or loaning of such signs by the towing company to the parking facility owner constitutes the offer of "anything of value" under the statute; and second, whether the parking facility owner or the towing company should bear the cost of installing the signs.

The act does not define "anything of value." We are therefore charged to read these words in accordance with their natural, ordinary, and popular meaning. 67 TEX. JUR. 3D Statutes § 100, at 674 (1989). We think it clear that, though the value of such a sign as that at issue here may be small, it is not nonexistent. The statute would plainly prevent a towing company owner from giving the parking lot owner a twenty-dollar bill, or a twenty dollar loan. There is no legal difference between the bill or loan, and the sign. A sign of this sort has a cash value, and is therefore a thing of value for the purposes of the statute.[1]

As to your predecessor's second question, in our view the responsibility for placing the sign at the lot belongs to the lot's owner. Sections 3 and 4 of the act make this clear. Section 3 permits the parking facility owner to cause unauthorized vehicles to be towed if the proper sign is in place. Section 4 allows the towing company to tow unauthorized vehicles away if, inter alia, "the towing company has received written verification from the parking facility owner that the owner has caused signs to be installed." V.T.C.S. art. 6701g-2, § 4(a)(1).

The law imposes on the lot owner the obligation of providing notice to vehicle owners or operators by signs that meet its specifications.

SUMMARY

A sign of the sort required to be posted at a parking facility by article 6701g-2, V.T.C.S. is a thing of value for the purposes of sections 8 and 9 of that statute. The responsibility for posting such a sign rests, pursuant to sections 3 and 4 of the statute, on the owner of the parking facility concerned, rather than upon the towing company.

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by James Tourtelott
Assistant Attorney General

[1] It has been suggested that the gift or loan of such a sign may not be "in connection with the removal of a vehicle from a parking facility." We decline to read this phrase to refer to particular removals. In our view, it refers to the whole contract between the facility owner and the towing company and the arrangements incident thereto. To read the phrase otherwise would permit the sort of kickbacks the statute was designed to prevent, on the theory that they did not relate to particular removals. Obviously, this is not what the legislature intended.