BILL NUMBER: SB 1004	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 16, 2010

INTRODUCED BY   Senator Huff
    (   Coauthors:   Senators   Cox,
  Denham,   Harman,   and Wyland 
 ) 
    (   Coauthors:   Assembly Members 
 DeVore,   Fuller,   Gilmore,   Silva,
  and Smyth   ) 

                        FEBRUARY 10, 2010

   An act to amend Sections 11709, 11806, 11812, and 11819 of the
Vehicle Code, relating to vehicles.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1004, as amended, Huff. Vehicles: licensed dealers and
salespersons.
   (1) Existing law imposes licensing and regulatory requirements on
vehicle dealers and vehicle salespersons. Existing law requires a
dealer's place of business to have posted the license issued by the
Department of Motor Vehicles to the dealer and to each salesperson
employed by the dealer.
   This bill would instead authorize the dealer to post a true and
exact copy of the license issued by the Department of Motor Vehicles
to the dealer and to each salesperson employed by the dealer and
would make other conforming changes.
   (2) Existing law authorizes the department to refuse to issue, to
suspend, or to revoke a vehicle salesperson's license when it
determines, among other things, that the applicant or licensee has
acted as a vehicle salesperson or engaged in that activity for, or on
behalf of, more than one licensed dealer whose business does not
have identical ownership and structure. Existing law provides that
the law does not preclude a vehicle salesperson from working at more
than one location of one licensed dealer if the business of that
dealer has identical ownership and structure.
   This bill would authorize the department to refuse to issue, to
suspend, or to revoke a vehicle salesperson's license when it
determines, among other things, that the applicant or licensee has
concurrently acted as a vehicle salesperson and engaged in that
activity for, or on behalf of, more than one licensed dealer unless
all of the licensed dealers  share controlling ownership
  , for whom that salesperson works, have the same
controlling ownership  . The bill would also provide that the
law does not preclude a vehicle salesperson from working for more
than one dealer  if each dealer shares controlling ownership
  provided that all of the licensed dealers for whom
that salesperson works have common controlling ownership  , as
defined.
   (3) Existing law requires the salesperson's license to be
displayed continuously during employment and requires that the
license be returned to the salesperson once employment is terminated.
A violation of these requirements is a crime.
   This bill would require the dealer to display the license or a
true and exact copy of the license continuously at each location
where the salesperson is actually engaged in the selling of vehicles.
Once the employment is terminated, this bill would require all
copies used by the dealer for posting or display to be destroyed by
the dealer. By expanding the scope of an existing crime, this bill
would impose a state-mandated local program.
   (4) 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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 11709 of the Vehicle Code is amended to read:
   11709.  (a) A dealer's established place of business, and other
sites or locations as may be operated and maintained by the dealer in
conjunction with his or her established place of business, shall
have posted, in a place conspicuous to the public in each and every
location, the license, or a true and exact copy of the license,
issued by the department to the dealer and to each salesperson
employed by the dealer and shall have erected or posted thereon signs
or devices providing information relating to the dealer's name and
the location and address of the dealer's established place of
business to enable any person doing business with the dealer to
identify him or her properly. A sign erected or posted pursuant to
this subdivision, on an established place of business, shall have an
area of not less than two square feet per side displayed and shall
contain lettering of sufficient size to enable the sign to be read
from a distance of at least 50 feet. This section shall not apply to
a dealer who is a wholesaler involved for profit only in the sale of
vehicles between licensed dealers.
   (b) Notwithstanding Section 11704 and this section, a dealer may
display vehicles at a fair, exposition, or similar exhibit without
securing a branch license, if no actual sales are made at those
events and the display does not exceed 30 days.
   (c) A vehicle displayed pursuant to subdivision (b) or (e) shall
be identified by a sign or device providing information relating to
the dealer's name and the location and address of the dealer's
established place of business.
   (d) This section shall not be applicable to a dealer who deals
only in off-highway vehicles subject to identification, as defined in
Section 38012.
   (e) Notwithstanding Section 11704 and this section, a vessel
dealer may display a trailer and may sell a trailer in conjunction
with the sale of a vessel at a fair, exposition, or similar exhibit
without securing a branch license if the display does not exceed 30
days.
  SEC. 2.  Section 11806 of the Vehicle Code is amended to read:
   11806.  The department, after notice and hearing, may refuse to
issue, or may suspend or revoke, a vehicle salesperson's license when
it makes any of the following findings and determinations:
   (a) The applicant or licensee has outstanding an unsatisfied final
court judgment rendered in connection with an activity licensed
under this division.
   (b) The applicant or licensee has failed to pay funds or property
received in the course of employment to a dealer entitled thereto.
   (c) The applicant or licensee has failed to surrender possession
of, or failed to return, a vehicle to a dealer lawfully entitled
thereto upon termination of employment.
   (d) A cause for refusal, suspension, or revocation exists under
any provision of Sections 11302 to 11909, inclusive.
   (e) The applicant was previously the holder of an occupational
license issued by another state authorizing the same or similar
activities of a license issued under this division and that license
was revoked or suspended for cause and was never reissued, or was
suspended for cause, and the terms of suspension have not been
fulfilled.
   (f) The applicant or licensee has acted as a dealer by purchasing
or selling vehicles while employed by a licensed dealer without
reporting that fact to the dealer or without utilizing the report of
sale documents issued to the dealer.
   (g) The applicant or licensee has concurrently acted as a vehicle
salesperson and engaged in that activity for, or on behalf of, more
than one licensed dealer unless all of the licensed dealers 
share controlling ownership   for whom that salesperson
works have common controlling ownership  . Nothing in this
section restricts the number of dealerships of which a person may be
an owner, officer, or director, or precludes a vehicle salesperson
from working for more than one  dealer if each dealer shares
controlling ownership. For purposes of this subdivision, controlling
ownership means more than 50 percent of all the interests are held in
the dealer.   dealer, provided that all of the licensed
dealers for whom that salesperson works have common controlling
ownership. For purposes of this subdivision, dealers have common
controlling ownership when more than 50 percent of the ownership
interests in each dealer are held by the same person or persons,
either directly or through one or more wholly owned subsidiary
entities. 
   (h) The applicant or licensee has acted as a vehicle salesperson
without having first complied with Section 11812.
   (i) The applicant or licensee was a managerial employee of a
dealer during the time a person under the direction or control of the
managerial employee committed wrongful acts which resulted in the
suspension or revocation of the dealer's license.
   (j) The applicant or licensee has acted as a dealer by purchasing
or selling any vehicle and using the license, report of sale books,
purchase drafts, financial institution accounts, or other supplies of
a dealer to facilitate that purchase or sale, when the applicant or
licensee is not acting on behalf of that dealer.
  SEC. 3.  Section 11812 of the Vehicle Code is amended to read:
   11812.  (a) A vehicle salesperson licensed under this article
shall, at the time of employment, deliver his or her salesperson's
license to his or her employing dealer for the posting of the
 salesperson   salesperson's  license or a
true and exact copy of the salesperson's license in a place
conspicuous to the public at each location where he or she is
actually engaged in the selling of vehicles for the employing dealer.

   (b) The license, or a true and exact copy of the license, shall be
displayed continuously at each location where he or she is actually
engaged in the selling of vehicles during the employment. If a
vehicle salesperson's employment is terminated, the license shall be
returned to the salesperson and all copies of the license used by the
dealer for posting or display shall be destroyed by the dealer.
   (c)  Every   A  vehicle salesperson
licensed pursuant to this article shall report in writing to the
department every change of residence address within five days of the
change.
   (d)  Any   A  person currently or
previously licensed under this article who no longer resides at the
address last filed with the department may be served with process
issued pursuant to Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code by registered mail
at that residence, unless the person has notified the department in
writing of another address where service may be made.
  SEC. 4.  Section 11819 of the Vehicle Code is amended to read:
   11819.  It is unlawful for  any   a 
person:
   (a) To lend a salesperson's license to any other person or
knowingly permit its use by another.
   (b) To display or represent  any   a 
salesperson's license not issued to the person as being his or her
license.
   (c) To fail or refuse to surrender to the department, upon its
lawful demand,  any   a  salesperson's
license  which   that  has been suspended,
revoked ,  or canceled.
   (d) To permit any unlawful use of a salesperson's license issued
to him or her.
   (e) To photograph, photostat, duplicate, or in any way reproduce
 any   a  salesperson's license or
facsimile thereof in  such  a manner that it could
be mistaken for a valid license, or to display or have in possession
 any such   a  photograph, photostat,
duplicate, reproduction, or facsimile unless for display by a dealer,
or as authorized by this code.
  SEC. 5.  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.