BILL NUMBER: AB 523 CHAPTERED 10/09/03 CHAPTER 724 FILED WITH SECRETARY OF STATE OCTOBER 9, 2003 APPROVED BY GOVERNOR OCTOBER 8, 2003 PASSED THE ASSEMBLY SEPTEMBER 13, 2003 PASSED THE SENATE SEPTEMBER 11, 2003 AMENDED IN SENATE SEPTEMBER 10, 2003 AMENDED IN SENATE SEPTEMBER 8, 2003 AMENDED IN SENATE JULY 22, 2003 AMENDED IN SENATE JULY 1, 2003 AMENDED IN SENATE JUNE 19, 2003 AMENDED IN SENATE JUNE 2, 2003 AMENDED IN ASSEMBLY MARCH 25, 2003 INTRODUCED BY Assembly Member Calderon FEBRUARY 18, 2003 An act to amend Section 7507.9 of the Business and Professions Code, relating to collateral recovery. LEGISLATIVE COUNSEL'S DIGEST AB 523, Calderon. Collateral recovery. Existing law, the Collateral Recovery Act, requires a licensed repossession agency to make an inventory of personal property recovered that is not covered by a debtor's security agreement. Existing law requires a licensee to provide the inventory to the debtor within a certain timeframe. This bill would require a licensee to keep the inventory document confidential and restrict its disclosure. Because this bill would place additional requirements on a person licensed under the Collateral Recovery Act, the violation of which is a crime, the bill would impose a state-mandated local program. 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. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 7507.9 of the Business and Professions Code is amended to read: 7507.9. If personal effects or other personal property, not covered by a security agreement, are contained in or on collateral at the time it is recovered, the effects shall be removed from the collateral subject to the security interest, a complete and accurate inventory shall be made, and the personal effects shall be labeled and stored by the licensee for a minimum of 60 days in a secure manner, except those personal effects removed by or in the presence of the debtor or the party in possession of the collateral at the time of the repossession. (a) The date and time the inventory is made shall be indicated and shall be signed by the repossession agency registrant or employee who performs the inventory. (b) The following items of personal effects are items determined to present a danger or health hazard when recovered by the licensee and shall be disposed of in the following manner: (1) Deadly weapons and dangerous drugs shall be turned over to a local law enforcement agency for retention. These items shall be entered on the inventory and a notation shall be made as to the date and the time and the place the deadly weapon or dangerous drug was turned over to the law enforcement agency, and a receipt from the law enforcement agency shall be maintained in the records of the repossession agency. (2) Combustibles shall be inventoried and noted as "disposed of, dangerous combustible," and the item shall be disposed of in a reasonable and safe manner. (3) Food and other health hazard items shall be inventoried and noted as "disposed of, health hazard," and disposed of in a reasonable and safe manner. (c) Personal effects may be disposed of after being held for at least 60 days. The inventory, and adequate information as to how, when, and to whom the personal effects were disposed of, shall be filed in the permanent records of the licensee. (d) The inventory shall include the name, address, business hours, and phone number of the person at the repossession agency to contact for recovering the personal effects and an itemization of all personal effects removal and storage charges that will be made by the repossession agency. The inventory shall also include the following statement: "Please be advised that the property listed on this inventory will be disposed of by the repossession agency after being held for 60 days from the date of this notice IF UNCLAIMED." (e) The inventory shall be provided to a debtor not later than 48 hours after the recovery of the collateral, except that if: (1) The 48-hour period encompasses a Saturday, Sunday, or postal holiday, the inventory shall be provided no later than 72 hours after the recovery of the collateral. (2) The 48-hour period encompasses a Saturday or Sunday and a postal holiday, the inventory shall be provided no later than 96 hours after the recovery of the collateral. (3) Inventory resulting from repossession of a yacht, motorhome, or travel trailer is such that it shall take at least four hours to inventory, then the inventory shall be provided no later than 96 hours after the recovery of the collateral. When the 96-hour period encompasses a Saturday, Sunday, or postal holiday, the inventory shall be provided no later than 120 hours after the recovery of the collateral. (f) Environmental, Olympic, special interest, or other license plates issued pursuant to Article 8 (commencing with Section 5000), Article 8.4 (commencing with Section 5060) or Article 8.5 (commencing with Section 5100) of Chapter 1 of Division 3 of the Vehicle Code that remain the personal effects of the debtor shall be removed from the collateral and inventoried pursuant to this section. If the plates are not claimed by the debtor within 60 days, they shall be effectively destroyed and the licensee shall, within 30 days thereafter, notify the Department of Motor Vehicles of their effective destruction on a form promulgated by the chief which has been approved as to form by the Director of the Department of Motor Vehicles. (g) The notice may be given by regular mail addressed to the last known address of the debtor or by personal service at the option of the repossession agency. (h) The debtor may waive the preparation and presentation of an inventory if the debtor redeems the personal effects or other personal property not covered by a security interest within the time period for the notices required by this section and signs a statement that he or she has received all the property. (i) If personal effects or other personal property not covered by a security interest are to be released to someone other than the debtor, the repossession agency may request written authorization to do so from either the debtor or the legal owner. (j) The inventory shall be a confidential document. A licensee shall only disclose the contents of the inventory under the following circumstances: (1) In response to the order of a court having jurisdiction to issue the order. (2) In compliance with a lawful subpoena issued by a court of competent jurisdiction. (3) When the debtor has consented in writing to the release and the written consent is signed and dated by the debtor subsequent to the repossession and states the entity or entities to whom the contents of the inventory may be disclosed. SEC. 2. It is the intent of the Legislature that nothing in this act restricts the ability of a licensed repossession agency to provide the legal owner of the collateral with a condition report, provided that the condition report does not include the inventory of personal effects or that any information regarding personal effects is redacted. SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.