BILL NUMBER: SB 46 CHAPTERED 07/30/01 CHAPTER 127 FILED WITH SECRETARY OF STATE JULY 30, 2001 APPROVED BY GOVERNOR JULY 30, 2001 PASSED THE SENATE JULY 12, 2001 PASSED THE ASSEMBLY JULY 9, 2001 AMENDED IN ASSEMBLY JUNE 14, 2001 AMENDED IN SENATE APRIL 2, 2001 AMENDED IN SENATE FEBRUARY 14, 2001 AMENDED IN SENATE JANUARY 29, 2001 INTRODUCED BY Senator Polanco (Principal coauthor: Assembly Member Firebaugh) DECEMBER 8, 2000 An act to amend Sections 3071 and 3072 of the Civil Code, and to amend Sections 2430.3, 2432, 21211, and 22851 of, to add Section 1685 to, and to add and repeal Section 2425 of, the Vehicle Code, relating to vehicles, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 46, Polanco. Vehicles: Department of Motor Vehicles: private industry partners: tow trucks. (1) Existing law provides procedures for the sale of a vehicle at a lien sale and requires the lienholder, following the sale of a vehicle at a lien sale to remove and destroy the vehicle's license plates and to submit a completed "Notice of Release of Liability" form to the Department of Motor Vehicles. This bill would require the person who conducts the sale, rather than the lienholder, to perform the duties described above. (2) Existing law authorizes the Department of Motor Vehicles to license private registration services to receive applications for vehicle registration and transmit those applications to the department. This bill would authorize the department, in conformance with certain provisions in existing law relating to personal services contracts with private parties, to establish contracts for electronic programs to join the department with qualified private industry partners to provide title and vehicle registration transactions and would authorize the department to enter into contractual agreements with 3 specified types of private industry partners. The bill would authorize the director to establish the maximum amount that a qualified private industry partner may charge for its services. The bill would authorize the department to establish a transaction fee that it may charge to a qualified private industry partner for the information and services provided. This bill would provide that the private industry partner can pass the transaction fee to the customer. The bill would require all fees collected pursuant to the above to be deposited in the Business Partner Automation Account in the Special Deposit Fund, established by the bill, to be available, upon appropriation, to the Department of Motor Vehicles for the purposes of maintaining, monitoring, and enhancing the above described programs. The bill would require the department to adopt regulations and procedures and to provide a described annual informational report to the Legislature. (3) Existing law authorizes the Commissioner of the California Highway Patrol to enter into service agreements with providers of towing services to determine which providers will be summoned by the department for public assistance. Existing law also requires tow truck drivers to provide certain information as part of a certification process. This bill would, until January 1, 2003, establish the Tow Truck Advisory Committee to develop proposed statewide tow truck standards and report to the Legislature on or before December 31, 2002. (4) Existing law requires every tow truck driver to notify each of his or her employers and prospective employers of an arrest or conviction of any specified crime prior to beginning the next workshift for that employer. This bill would specify that this notification is required to be given by each freeway service patrol tow truck driver and any California Highway Patrol rotation tow truck operator and would require the Department of the California Highway Patrol to be one of the recipients of the notification. Because a violation of this expanded notification requirement would be a crime, this bill would impose a state-mandated local program. (5) Existing law makes it unlawful for a tow truck driver to knowingly provide certain false information on applications for a tow truck driving certification or fail to comply with certain notification requirements. This bill would specify that these provisions apply to California Highway Patrol rotation tow truck operators including freeway service patrol tow truck drivers. (6) Existing law prohibits a person from stopping, standing, sitting, or loitering upon any class I bikeway, as defined, or any other public or private bicycle path or trail, if the stopping, standing, sitting, or loitering impedes or blocks the normal and reasonable movement of any bicyclist, or park a vehicle upon these paths or trails so as to impede or block the normal and reasonable movement of any bicyclist, except as specified. This bill would make these prohibitions inapplicable to the driver of a tow truck vehicle while actually engaged in the towing of a vehicle if certain signal lamps are flashed simultaneously. (7) Existing law prohibits a lien from attaching to any personal property in or on the vehicle that is garaged and requires that personal property to be given to the current registered owner or the owner's authorized agent upon demand. This bill would require the keeper of the garage, upon demand, to give the personal property to the current registered owner or owner's agent without charge during normal business hours. The bill would specify that normal business are Monday to Friday, inclusive, from 8 a.m. to 5 p.m., inclusive, except state holidays. The bill would allow a specified gate fee to be charged for returning property after normal business hours, weekends, and state holidays. Because a violation of these provisions would be a crime, the bill would impose a state-mandated local program. (8) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (9) The bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 3071 of the Civil Code is amended to read: 3071. (a) A lienholder shall apply to the department for the issuance of an authorization to conduct a lien sale pursuant to this section for any vehicle with a value determined to be over four thousand dollars ($4,000). A filing fee shall be charged by the department and may be recovered by the lienholder if a lien sale is conducted or if the vehicle is redeemed. The application shall be executed under penalty of perjury and shall include all of the following information: (1) A description of the vehicle, including make, year model, identification number, license number, and state of registration. For motorcycles, the engine number also shall be included. If the vehicle identification number is not available, the department shall request an inspection of the vehicle by a peace officer, licensed vehicle verifier, or departmental employee before accepting the application. (2) The names and addresses of the registered and legal owners of the vehicle, if ascertainable from the registration certificates within the vehicle, and the name and address of any person whom the lienholder knows, or reasonably should know, claims an interest in the vehicle. (3) A statement of the amount of the lien and the facts that give rise to the lien. (b) Upon receipt of an application made pursuant to subdivision (a), the department shall do all of the following: (1) Notify the vehicle registry agency of a foreign state of the pending lien sale, if the vehicle bears indicia of registration in that state. (2) By certified mail, send a notice, a copy of the application, and a return envelope preaddressed to the department to the registered and legal owners at their addresses of record with the department, and to any other person whose name and address is listed in the application. (c) The notice required pursuant to subdivision (b) shall include all of the following statements and information: (1) An application has been made with the department for authorization to conduct a lien sale. (2) The person has a right to a hearing in court. (3) If a hearing in court is desired, a Declaration of Opposition form, signed under penalty of perjury, shall be signed and returned to the department within 10 days of the date that the notice required pursuant to subdivision (b) was mailed. (4) If the Declaration of Opposition form is signed and returned to the department, the lienholder shall be allowed to sell the vehicle only if he or she obtains a court judgment, if he or she obtains a subsequent release from the declarant or if the declarant, cannot be served as described in subdivision (e). (5) If a court action is filed, the declarant shall be notified of the lawsuit at the address shown on the Declaration of Opposition form and may appear to contest the claim. (6) The person may be liable for court costs if a judgment is entered in favor of the lienholder. (d) If the department receives the Declaration of Opposition form in the time specified, the department shall notify the lienholder within 16 days of the receipt of the form that a lien sale shall not be conducted unless the lienholder files an action in court within 30 days of the department's notice under this subdivision. A lien sale of the vehicle shall not be conducted unless judgment is subsequently entered in favor of the lienholder or the declarant subsequently releases his or her interest in the vehicle. If a money judgment is entered in favor of the lienholder and the judgment is not paid within five days after becoming final, then the judgment may be enforced by lien sale proceedings conducted pursuant to subdivision (f). (e) Service on the declarant in person or by certified mail with return receipt requested, signed by the declarant or an authorized agent of the declarant at the address shown on the Declaration of Opposition form, shall be effective for the serving of process. If the lienholder has served the declarant by certified mail at the address shown on the Declaration of Opposition form and the mail has been returned unclaimed, or if the lienholder has attempted to effect service on the declarant in person with a marshal, sheriff, or licensed process server and the marshal, sheriff, or licensed process server has been unable to effect service on the declarant, the lienholder may proceed with the judicial proceeding or proceed with the lien sale without a judicial proceeding. The lienholder shall notify the department of the inability to effect service on the declarant and shall provide the department with a copy of the documents with which service on the declarant was attempted. Upon receipt of the notification of unsuccessful service, the department shall send authorization of the sale to the lienholder and send notification of the authorization to the declarant. (f) Upon receipt of authorization to conduct the lien sale from the department, the lienholder shall immediately do all of the following: (1) At least five days, but not more than 20 days, prior to the lien sale, not counting the day of the sale, give notice of the sale by advertising once in a newspaper of general circulation published in the county in which the vehicle is located. If there is no newspaper published in the county, notice shall be given by posting a Notice of Sale form in three of the most public places in the town in which the vehicle is located and at the place where the vehicle is to be sold for 10 consecutive days prior to and including the day of the sale. (2) Send a Notice of Pending Lien Sale form 20 days prior to the sale but not counting the day of sale, by certified mail with return receipt requested, to each of the following: (A) The registered and legal owners of the vehicle, if registered in this state. (B) All persons known to have an interest in the vehicle. (C) The department. (g) All notices required by this section, including the notice forms prescribed by the department, shall specify the make, year model, vehicle identification number, license number, and state of registration, if available, and the specific date, exact time, and place of sale. For motorcycles, the engine number shall also be included. (h) Following the sale of a vehicle, the person who conducts the sale shall do both of the following: (1) Remove and destroy the vehicle's license plates. (2) Within five days of the sale, submit a completed "Notice of Release of Liability" form to the Department of Motor Vehicles. (i) The Department of Motor Vehicles shall retain all submitted forms described in paragraph (2) of subdivision (h) for two years. (j) No lien sale shall be undertaken pursuant to this section unless the vehicle has been available for inspection at a location easily accessible to the public for at least one hour before the sale and is at the place of sale at the time and date specified on the notice of sale. Sealed bids shall not be accepted. The lienholder shall conduct the sale in a commercially reasonable manner. (k) Within 10 days after the sale of any vehicle pursuant to this section, the legal or registered owner may redeem the vehicle upon the payment of the amount of the sale, all costs and expenses of the sale, together with interest on the sum at the rate of 12 percent per annum from the due date thereof or the date when that sum was advanced until the repayment. If the vehicle is not redeemed, all lien sale documents required by the department shall then be completed and delivered to the buyer. (l) Any lien sale pursuant to this section shall be void if the lienholder does not comply with this chapter. Any lien for fees or storage charges for parking and storage of a motor vehicle shall be subject to Section 10652.5 of the Vehicle Code. SEC. 2. Section 3072 of the Civil Code is amended to read: 3072. (a) For vehicles with a value determined to be four thousand dollars ($4,000) or less, the lienholder shall apply to the department for the names and addresses of the registered and legal owners of record. The request shall include a description of the vehicle, including make, year, model, identification number, license number, and state of registration. If the vehicle identification number is not available, the Department of Motor Vehicles shall request an inspection of the vehicle by a peace officer, licensed vehicle verifier, or departmental employee before releasing the names and addresses of the registered and legal owners and interested parties. (b) The lienholder shall, immediately upon receipt of the names and addresses, send, by certified mail with return receipt requested or by United States Postal Service Certificate of Mailing, a completed Notice of Pending Lien Sale form, a blank Declaration of Opposition form, and a return envelope preaddressed to the department, to the registered owner and legal owner at their addresses of record with the department, and to any other person known to have an interest in the vehicle. The lienholder shall additionally send a copy of the completed Notice of Pending Lien Sale form to the department by certified mail on the same day that the other notices are mailed pursuant to this subdivision. (c) All notices to persons having an interest in the vehicle shall be signed under penalty of perjury and shall include all of the following information and statements: (1) A description of the vehicle, including make, year model, identification number, license number, and state of registration. For motorcycles, the engine number shall also be included. (2) The specific date, exact time, and place of sale, which shall be set not less than 31 days, but not more than 41 days, from the date of mailing. (3) The names and addresses of the registered and legal owners of the vehicle and any other person known to have an interest in the vehicle. (4) All of the following statements: (A) The amount of the lien and the facts concerning the claim which gives rise to the lien. (B) The person has a right to a hearing in court. (C) If a court hearing is desired, a Declaration of Opposition form, signed under penalty of perjury, shall be signed and returned to the department within 10 days of the date the Notice of Pending Lien Sale form was mailed. (D) If the Declaration of Opposition form is signed and returned, the lienholder shall be allowed to sell the vehicle only if he or she obtains a court judgment or if he or she obtains a subsequent release from the declarant or if the declarant cannot be served as described in subdivision (e). (E) If a court action is filed, the declarant shall be notified of the lawsuit at the address shown on the Declaration of Opposition form and may appear to contest the claim. (F) The person may be liable for court costs if a judgment is entered in favor of the lienholder. (d) If the department receives the completed Declaration of Opposition form within the time specified, the department shall notify the lienholder within 16 days that a lien sale shall not be conducted unless the lienholder files an action in court within 30 days of the notice and judgment is subsequently entered in favor of the lienholder or the declarant subsequently releases his or her interest in the vehicle. If a money judgment is entered in favor of the lienholder and the judgment is not paid within five days after becoming final, then the judgment may be enforced by lien sale proceedings conducted pursuant to subdivision (f). (e) Service on the declarant in person or by certified mail with return receipt requested, signed by the declarant or an authorized agent of the declarant at the address shown on the Declaration of Opposition form, shall be effective for the serving of process. If the lienholder has served the declarant by certified mail at the address shown on the Declaration of Opposition form and the mail has been returned unclaimed, or if the lienholder has attempted to effect service on the declarant in person with a marshal, sheriff, or licensed process server and the marshal, sheriff, or licensed process server has been unable to effect service on the declarant, the lienholder may proceed with the judicial proceeding or proceed with the lien sale without a judicial proceeding. The lienholder shall notify the Department of Motor Vehicles of the inability to effect service on the declarant and shall provide the Department of Motor Vehicles with a copy of the documents with which service on the declarant was attempted. Upon receipt of the notification of unsuccessful service, the Department of Motor Vehicles shall send authorization of the sale to the lienholder and shall send notification of the authorization to the declarant. (f) At least 10 consecutive days prior to and including the day of the sale, the lienholder shall post a Notice of Pending Lien Sale form in a conspicuous place on the premises of the business office of the lienholder and if the pending lien sale is scheduled to occur at a place other than the premises of the business office of the lienholder, at the site of the forthcoming sale. The Notice of Pending Lien Sale form shall state the specific date and exact time of the sale and description of the vehicle, including the make, year model, identification number, license number, and state of registration. For motorcycles, the engine number shall also be included. The notice of sale shall remain posted until the sale is completed. (g) Following the sale of a vehicle, the person who conducts the sale shall do both of the following: (1) Remove and destroy the vehicle's license plates. (2) Within five days of the sale, submit a completed "Notice of Release of Liability" form with the Department of Motor Vehicles. (h) The Department of Motor Vehicles shall retain all submitted forms described in paragraph (2) of subdivision (g) for two years. (i) No lien sale shall be undertaken pursuant to this section unless the vehicle has been available for inspection at a location easily accessible to the public at least one hour before the sale and is at the place of sale at the time and date specified on the notice of sale. Sealed bids shall not be accepted. The lienholder shall conduct the sale in a commercially reasonable manner. All lien sale documents required by the department shall be completed and delivered to the buyer immediately following the sale. (j) Any lien sale pursuant to this section shall be void if the lienholder does not comply with this chapter. Any lien for fees or storage charges for parking and storage of a motor vehicle shall be subject to Section 10652.5 of the Vehicle Code. SEC. 3. Section 1685 is added to the Vehicle Code, to read: 1685. (a) In order to continue improving the quality of products and services it provides to its customers, the department, in conformance with Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, may establish contracts for electronic programs to join the department with qualified private industry partners to provide services that include processing and payment programs for vehicle registration and titling transactions. (b) (1) The department may enter into contractual agreements with qualified private industry partners. There are the following three types of private industry partnerships authorized under this section: (A) First-line business partner is an industry partner that receives data directly from the department and uses it to complete registration and titling activities for that partner's own business purposes. (B) First-line service provider is an industry partner that receives information from the department and then transmits it to another authorized industry partner. (C) Second-line business partner is a partner that receives information from a first-line service provider. (2) The private industry partner contractual agreements shall include the following minimum requirements: (A) Filing of an application and payment of an application fee, as established by the department. (B) Submission of information, including, but not limited to, fingerprints and personal history statements, focusing on and concerning the applicant's character, honesty, integrity, and reputation as the department may consider necessary. (C) Posting a bond in an amount consistent with the Section 1815. (3) The department shall, through regulations, establish any additional requirements for the purpose of safeguarding privacy and protecting the information authorized for release under this section. (c) The director may establish, through the adoption of regulations, the maximum amount that a qualified private industry partner may charge its customers in providing the services authorized under subdivision (a). (d) The department may establish a transaction fee that may be charged by the department to a qualified private industry partner for the information and services provided in support of the processing and payment programs authorized under subdivision (a). The private industry partner may pass the transaction fee to the customer, but the total charge to a customer may not exceed the amount established by the director under subdivision (c). (e) All fees collected by the department pursuant to subdivision (d) shall be deposited in the Business Partner Automation Account in the Special Deposit Fund, that is hereby established. Funds in the account shall be available, upon appropriation, to the Department of Motor Vehicles for the purpose of maintaining, monitoring, and enhancing the programs authorized under this section. (f) The department shall adopt regulations and procedures that ensure adequate oversight and monitoring of qualified private industry partners to protect vehicle owners from the improper use of vehicle records. These regulations and procedures shall include provisions for qualified private industry partners to periodically submit records to the department, and the department shall review those records as necessary. The regulations shall also include provisions for the dedication of department resources to program monitoring and oversight; the protection of confidential records in the department's files and data bases; and the duration and nature of the contracts with qualified private industry partners. (g) The department shall, annually, by January 10, provide a report to the Legislature that shall include all of the following information gathered during the calendar year immediately preceding the report date: (1) Listing of all qualified private industry partners, including names and business addresses. (2) Volume of transactions, by type, completed by business partners. (3) Total amount of funds, by transaction type, collected by business partners. (4) Total amount of funds received by the department. (5) Detailed listing of funds expended from the Special Deposit Fund. (6) Description of any fraudulent activities identified by the department. (7) Evaluation of the benefits of the program. (8) Recommendations for any administrative or statutory changes that may be needed to improve the program. (h) Nothing in this section impairs or limits the authority provided in Section 4610 or Section 12155 of the Insurance Code. SEC. 4. Section 2425 is added to the Vehicle Code, to read: 2425. (a) The Tow Truck Advisory Committee is hereby established. The committee shall comprise 10 members who shall be appointed by the commissioner to represent the following groups: (1) Two members from the department. (2) Two members representing the California Tow Truck Association, with one member representing northern California and one member representing southern California. (3) One member from the Department of Transportation. (4) One member representing road service organizations. (5) One member representing transit authorities. (6) One member from the California Trucking Association. (7) One member from the Department of Motor Vehicles. (8) One member representing the League of California Cities. (b) The committee shall review all relevant laws affecting tow trucks with a goal of improving tow truck industry safety and shall develop proposed statewide tow truck industry standards, including, but not limited to, all of the following: (1) Training. (2) Criminal history disqualification. (3) Appeal processes. (4) Minimum safe gross vehicle weight ratings for tow trucks. (c) The committee shall function only during the life of this project and shall submit a report of its findings and recommendations to the Legislature on or before December 31, 2002. (d) This section shall remain in effect only until January 1, 2003, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2003, deletes or extends that date. SEC. 5. Section 2430.3 of the Vehicle Code is amended to read: 2430.3. (a) Every freeway service patrol tow truck driver and any California Highway Patrol rotation tow truck operator shall notify each of his or her employers and prospective employers and the Department of the California Highway Patrol of an arrest or conviction of any crime specified in paragraph (1), (2), (3), or (4) of subdivision (a) of Section 13377 prior to beginning the next workshift for that employer. (b) For the purpose of conducting criminal history and driver history checks of any California Highway Patrol rotation tow truck operator, the commissioner may utilize the California Law Enforcement Telecommunications System (CLETS). SEC. 6. Section 2432 of the Vehicle Code is amended to read: 2432. (a) It is unlawful for a freeway service patrol tow truck driver to knowingly provide false information on the application prepared and submitted to the department pursuant to subdivision (b) of Section 2431. (b) It is unlawful for a California Highway Patrol rotation tow truck operator, including, but not limited to, a freeway service patrol tow truck driver, to fail to comply with the notification requirements in Section 2430.3. (c) A violation of this section is punishable as a misdemeanor. SEC. 7. Section 21211 of the Vehicle Code is amended to read: 21211. (a) No person may stop, stand, sit, or loiter upon any class I bikeway, as defined in subdivision (a) of Section 890.4 of the Streets and Highways Code, or any other public or private bicycle path or trail, if the stopping, standing, sitting, or loitering impedes or blocks the normal and reasonable movement of any bicyclist. (b) No person may place or park any bicycle, vehicle, or any other object upon any bikeway or bicycle path or trail, as specified in subdivision (a), which impedes or blocks the normal and reasonable movement of any bicyclist unless the placement or parking is necessary for safe operation or is otherwise in compliance with the law. (c) This section does not apply to drivers or owners of utility or public utility vehicles, as provided in Section 22512. (d) This section does not apply to owners or drivers of vehicles who make brief stops while engaged in the delivery of newspapers to customers along the person's route. (e) This section does not apply to the driver or owner of a rubbish or garbage truck while actually engaged in the collection of rubbish or garbage within a business or residence district if the front turn signal lamps at each side of the vehicle are being flashed simultaneously and the rear turn signal lamps at each side of the vehicle are being flashed simultaneously. (f) This section does not apply to the driver or owner of a tow vehicle while actually engaged in the towing of a vehicle if the front turn signal lamps at each side of the vehicle are being flashed simultaneously and the rear turn signal lamps at each side of the vehicle are being flashed simultaneously. SEC. 8. Section 22851 of the Vehicle Code is amended to read: 22851. (a) (1) Whenever a vehicle has been removed to a garage under this chapter and the keeper of the garage has received the notice or notices as provided herein, the keeper shall have a lien dependent upon possession for his or her compensation for towage and for caring for and keeping safe the vehicle for a period not exceeding 60 days or, if an application for an authorization to conduct a lien sale has been filed pursuant to Section 3068.1 of the Civil Code within 30 days after the removal of the vehicle to the garage, 120 days and, if the vehicle is not recovered by the owner within that period or the owner is unknown, the keeper of the garage may satisfy his or her lien in the manner prescribed in this article. The lien shall not be assigned. Possession of the vehicle is deemed to arise when a vehicle is removed and is in transit, or when vehicle recovery operations or load salvage operations that have been requested by a law enforcement agency have begun at the scene. (2) Whenever a vehicle owner returns to a vehicle that is in possession of a towing company prior to the removal of the vehicle, the owner may regain possession of the vehicle from the towing company if the owner pays the towing company the towing charges. (b) No lien shall attach to any personal property in or on the vehicle. The personal property in or on the vehicle shall be given to the current registered owner or the owner's authorized agent upon demand and without charge during normal business hours. Notwithstanding any other provision of law, normal business hours are Monday to Friday, inclusive, from 8 a.m. to 5 p.m., inclusive, except state holidays. A gate fee may be charged for returning property after normal business hours, weekends, and state holidays. The maximum hourly charge for nonbusiness hours releases shall be one-half the hourly tow rate charged for initially towing the vehicle, or less. The lienholder is not responsible for property after any vehicle has been disposed of pursuant to this chapter. SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. SEC. 10. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to authorize the implementation, at the earliest possible time, of provisions relating to the Department of Motor Vehicles, the Department of the California Highway Patrol, and tow trucks, it is necessary that this act take effect immediately.