BILL NUMBER: AB 2503 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 1, 2014
INTRODUCED BY Assembly Member Hagman
FEBRUARY 21, 2014
An act to amend Section Sections 7502.2,
75.4.4, 7505.3, 7507.3, 7508.1 , and 7508.5 of the
Business and Professions Code, and to amend Sections 28, 4000,
and 9561 , and 22651.1 of, and to
add Section 10856 to, the Vehicle Code, relating to
repossessors.
LEGISLATIVE COUNSEL'S DIGEST
AB 2503, as amended, Hagman. Repossessors.
(1) Under existing law, a financial institution that knowingly
engages a nonexempt unlicensed person to repossess collateral on its
behalf is guilty of a misdemeanor.
This bill would expand the above crime to apply to a dealer, as
defined, that sells collateral that may be secured by a security
agreement and to a buy-here-pay-here dealer, as defined. By expanding
the scope of a crime, this bill would impose a state-mandated local
program.
(2) Existing law requires every office licensed as a repossession
agency to be under the active charge of a qualified certificate
holder. Existing law requires an applicant for a qualification
certificate to meet specified criteria, including a requirement to
pass an examination. If an applicant fails an examination, existing
law requires the applicant to pay a reexamination fee to be eligible
for a subsequent examination.
This bill would require the applicant to also wait 4 months to be
eligible for a subsequent examination.
(3) Existing law allows a repossession business to continue on a
license for 120 days when the qualified certificate holder actively
in charge of the office ceases to be in charge because of the death
of the licenseholder. Existing law requires a written notice to be
made to the Bureau of Security and Investigative Services.
This bill would increase the period to 180 days and would require
the written notice to identify the person in charge of running the
day-to-day operation of the business.
(1)
(4) Existing law authorizes the Director of Consumer
Affairs to assess administrative fines for various prohibited acts,
including using any identification to indicate registration as a
repossessor, other than a registration card issued by the Bureau of
Security and Investigative Services, except an employer
identification card issued by the repossession agency which has
bureau approval. Existing law allows an employee of a repossession
agency to wear a badge, cap insignia, or jacket patch meeting
specified requirements.
This bill would except a badge, cap insignia, or jacket patch from
the prohibition on using any identification to indicate registration
as a repossessor.
(2)
(5) Existing law requires the person taking possession
of a vehicle whenever possession is taken by or on behalf of any
legal owner under the terms of a security agreement or lease
agreement to notify local law enforcement within one hour of the
repossession, as specified. Violation of these provisions is a crime.
This bill would require the repossessor to attempt notification
within one hour, and to accomplish notification within 2 hours of the
repossession, and would specify information that would be required
to be provided in the notification.
By expanding the provisions of existing law, the violation of
which is a crime, this bill would impose a state-mandated local
program.
(3)
(6) Existing law provides that a vehicle repossessed
pursuant to the terms of a security agreement is exempt from
registration solely for the purpose of transporting the vehicle from
the point of repossession to the storage facilities of the
repossessor, and from the storage facilities to the legal owner or a
licensed motor vehicle auction, provided that the repossessor
transports with the vehicle the appropriate documents authorizing the
repossession and makes them available to a law enforcement officer
on request.
This bill would additionally provide that a vehicle repossessed
pursuant to the terms of a security agreement is exempt from
registration solely for the purpose of obtaining release of the
vehicle from a law enforcement entity, impounding authority, tow
yard, storage facility, or any other person or company that has
possession of the vehicle, provided that the repossessor transports
with the vehicle the appropriate documents authorizing the
repossession and makes them available to a law enforcement officer on
request.
(4)
(7) Existing law provides that if the legal owner, or
his or her agent, repossesses a vehicle on which registration renewal
fees are due, the Department of Motor Vehicles is to waive any
renewal penalties that are due for late payment if the fees are paid
within 60 days of taking possession.
This bill would apply those provisions to a repossession by a
repossessor.
(8) Existing law establishes offenses for, among other things,
willfully tampering or injuring a vehicle or its contents, as
specified.
This bill would prohibit a person from interfering with the
transport of a vehicle to a storage facility, auction, or dealer by a
repossessor once repossession is complete, as provided. Violation of
these provisions would be an infraction pursuant to other provisions
of law.
By creating a new crime, this bill would impose a state-mandated
local program.
(9) Existing law requires persons operating or in charge of a
storage facility where vehicles that have been removed by a peace
officer are stored to accept a valid bank credit card or cash for
payment of towing and storage by the registered owner of the vehicle,
and makes the person liable to the owner of the vehicle for 4 times
the amount of the towing and storage charges if the person refuses to
accept a valid bank credit card.
This bill would additionally impose this liability on a person
operating or in charge of a storage facility who accepts the card but
requires a copy of the card before releasing the vehicle.
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 7502.2 of the
Business and Professions Code is amended to read:
7502.2. (a) Any A financial
institution , a dealer as defined by Section 285 of the Vehicle
Code that sells collateral that may be secured by a security
agreement as defined in paragraph (73) of subdivision (a) of Section
9102 of the Commercial Code, or a buy-here-pay-here deal as defined
by Section 241 of the Vehicle Code that knowingly engages a
nonexempt unlicensed person to repossess collateral on its behalf is
guilty of a misdemeanor, and is punishable by a fine of five thousand
dollars ($5,000).
(b) Within existing resources, the Commissioner of
Financial Institutions and the Commissioner of Corporations
of Business Oversight may each designate employees to
investigate and report on violations of this section by any of the
licensees of their respective departments the
department . Those employees are authorized to actively
cooperate with the bureau in the investigation of those activities.
(c) A proceeding to impose the fine specified in subdivision (a)
may be brought in any court of competent jurisdiction in the name of
the people of the State of California by the Attorney General or by
any district attorney or city attorney, or with the consent of the
district attorney, by the city prosecutor in any city or city and
county having a full-time city prosecutor, for the jurisdiction in
which the violation occurred. If the action is brought by a district
attorney, the penalty collected shall be paid to the treasurer of the
county in which the judgment is entered. If the action is brought by
a city attorney or city prosecutor, one-half of the penalty
collected shall be paid to the treasurer of the city in which the
judgment was entered and one-half to the treasurer of the county in
which the judgment was entered. If the action is brought by the
Attorney General, all of the penalty collected shall be deposited in
the Private Security Services Fund.
SEC. 2. Section 7504.4 of the Business
and Professions Code is amended to read:
7504.4. If an applicant fails to pass an initial examination
or subsequent examination , he or she shall not be eligible
for any a subsequent examination
for four months and except upon payment of the reexamination
fee for each subsequent examination, accompanied by a completed
application for reexamination filed within the time limits and
conditions relating to applications for initial examinations provided
in Section 7504.3.
SEC. 3. Section 7505.3 of the Business
and Professions Code is amended to read:
7505.3. (a) Whenever a qualified certificate holder actively in
charge of an office ceases to be in charge, the licensee shall file
with the bureau notice, in writing, within 30 days from such
the cessation.
If the notice is filed, the license shall remain in force for a
period of 90 days after the filing of the notice. At the end of the
90-day period or an additional period, not to exceed one year, as
specified by the director, if written notice is not given that a
qualified person is then actively in charge of the office, the agency
license shall be automatically suspended.
If the licensee shall fail to give written notice at the end of
the 30-day period, the agency license shall be automatically
suspended.
A license suspended under this section may be reinstated upon
payment of the reinstatement fee and submission of a reinstatement
application.
A person who performs any act for which a repossession agency
license is required during the period of suspension is subject to the
penal provisions of Article 3 (commencing with Section 7502), in
addition to the provisions of Article 9 (commencing with Section
7508) and Article 10 (commencing with Section 7510).
(b) In case of the death of a person licensed as an individual, a
member of the immediate family of the deceased licensee shall be
entitled to continue the business under the same license for
120 180 days following the death of the
licensee, provided that written notice is made to the bureau within
30 days following the death of the licensee. The notice shall
identify the person in charge of running the day-to-day operations of
the business. At the end of the 120-day
180-day period, the license shall be automatically
canceled. If no request is received within the 30-day period, the
license shall be automatically canceled at the end of that period.
(c) In the case of the death or disassociation of a partner of an
entity licensed as a partnership, the licensee shall notify the
bureau, in writing, within 30 days from the death or disassociation
of the individual. If notice is given, the license shall remain in
force for 90 days following the death or disassociation. At the end
of that period, the license shall be automatically canceled. If the
licensee fails to notify the bureau within the 30-day period, the
license shall be automatically canceled at the end of that period.
(d) A license extended under this section is subject to all other
provisions of this chapter.
SEC. 4 . Section 7507.3 of the
Business and Professions Code is amended to read:
7507.3. A repossession agency shall be required to keep and
maintain adequate records of all transactions, including, but not
limited to, assignment forms; vehicle report of repossession required
by Section 28 of the Vehicle Code; vehicle condition reports,
including odometer readings, if available; personal effects
inventory; and notice of seizure ; and records of
all transactions pertaining to the sale of collateral that has been
repossessed, including, but not limited to, bids solicited and
received, cash received, deposits made to the trust account,
remittances to the seller, and allocation of any moneys not so
remitted to appropriate ledger accounts . Records,
including bank statements of the trust account, shall be retained for
a period of not less than four years and shall be available for
examination by the bureau upon demand. In addition, collateral and
personal effects storage areas shall be made accessible for
inspection by the bureau upon demand. An assignment form may be an
original, a photocopy, a facsimile copy, or a copy stored in an
electronic format.
SECTION 1. SEC. 5. Section 7508.1 of
the Business and Professions Code is amended to read:
7508.1. The director may assess administrative fines for the
following prohibited acts:
(a) Knowingly making any false report to his or her employer or
client for whom information was being obtained. The fine shall be one
hundred dollars ($100) for the first violation, and five hundred
dollars ($500) for each violation thereafter.
(b) Using any identification to indicate registration as a
repossessor, other than the bureau-issued registration card, except
an employer identification card issued by the repossession agency
which has met bureau approval, or a badge, cap insignia, or jacket
patch as provided in Section 7508.8. A bureau-issued registration
card shall be carried by those individuals specified by Section
7506.3, and shall be shown on demand to any bureau employee or law
enforcement officer. The fine shall be twenty-five dollars ($25) for
each violation.
(c) Using an alias in connection with the official activities of
the licensee's business. A notice of warning shall be issued for the
first violation. Thereafter the fine shall be twenty-five dollars
($25) for each violation.
(d) Appearing as an assignee party in any court proceeding
involving claim and delivery, replevin, or other possessory court
action, action to foreclose a chattel mortgage, mechanic's lien,
materialman's lien, or any other lien. This section shall not
prohibit a licensee from appearing as a defendant in any of the
preceding actions. The fine shall be one hundred dollars ($100) for
each violation.
SEC. 6. Section 7508.5 of the Business
and Professions Code is amended to read:
7508.5. The director may assess administrative fines against a
repossession agency registrant for the following acts, in addition to
fines imposed pursuant to any other section in this article. The
fine shall be twenty-five dollars ($25) for each of the following
violations:
(a) Knowingly submit a false report to his or her
employer .
(b) Submitting a report to a client without authorization by his
or her employer.
(c) Failing to carry a bureau-issued identification card and
failing to show that card upon demand to a bureau employee or a law
enforcement officer.
(d) Failing to register.
(e) Failing to return his or her registration card to the employer
upon termination.
(f) Failing to report a violent act involving the registrant to
the licensee or the licensee's qualified certificate holder within 24
hours.
SEC. 2. SEC. 7. Section 28 of the
Vehicle Code is amended to read:
28. (a) Whenever possession is taken of any vehicle by or on
behalf of any legal owner thereof under the terms of a security
agreement or lease agreement, the person taking possession shall
attempt to notify, within one hour, and shall notify, within two
hours, after taking possession of the vehicle, by the most
expeditious means available, the city police department where the
taking of possession occurred, if within an incorporated city, or the
sheriff's department of the county where the taking of possession
occurred, if outside an incorporated city, or the police department
of a campus of the University of California or the California State
University, if the taking of possession occurred on that campus, and
shall within one business day forward a written notice to the city
police or sheriff's department.
(b) If possession is taken of more than one vehicle, the
possession of each vehicle shall be considered and reported as a
separate event.
(c) Any person failing to notify the city police department,
sheriff's department, or campus police department as required by this
section is guilty of an infraction, and shall be fined a minimum of
three hundred dollars ($300), and up to five hundred dollars ($500).
The district attorney, city attorney, or city prosecutor shall
promptly notify the Bureau of Security and Investigative Services of
any conviction resulting from a violation of this section.
(d) For the notification required by this section, the person
shall report all of the following:
(1) The location of the repossession.
(2) The registered owner as provided on the assignment.
(3) The individual, company, or legal owner requesting the
repossession.
(4) The vehicle year, make, and model.
(5) The last six digits of the vehicle identification number.
(6) The repossession agency name.
(7) The repossession agency telephone number.
SEC. 3. SEC. 8. Section 4000 of the
Vehicle Code is amended to read:
4000. (a) (1) A person shall not drive, move, or leave standing
upon a highway, or in an offstreet public parking facility, any motor
vehicle, trailer, semitrailer, pole or pipe dolly, or logging dolly,
unless it is registered and the appropriate fees have been paid
under this code or registered under the permanent trailer
identification program, except that an off-highway motor vehicle
which displays an identification plate or device issued by the
department pursuant to Section 38010 may be driven, moved, or left
standing in an offstreet public parking facility without being
registered or paying registration fees.
(2) For purposes of this subdivision, "offstreet public parking
facility" means either of the following:
(A) Any publicly owned parking facility.
(B) Any privately owned parking facility for which no fee for the
privilege to park is charged and which is held open for the common
public use of retail customers.
(3) This subdivision does not apply to any motor vehicle stored in
a privately owned offstreet parking facility by, or with the express
permission of, the owner of the privately owned offstreet parking
facility.
(4) Beginning July 1, 2011, the enforcement of paragraph (1) shall
commence on the first day of the second month following the month of
expiration of the vehicle's registration. This paragraph shall
become inoperative on January 1, 2012.
(b) No person shall drive, move, or leave standing upon a highway
any motor vehicle, as defined in Chapter 2 (commencing with Section
39010) of Part 1 of Division 26 of the Health and Safety Code, which
has been registered in violation of Part 5 (commencing with Section
43000) of that Division 26.
(c) Subdivisions (a) and (b) do not apply to off-highway motor
vehicles operated pursuant to Sections 38025 and 38026.5.
(d) This section does not apply, following payment of fees due for
registration, during the time that registration and transfer is
being withheld by the department pending the investigation of any use
tax due under the Revenue and Taxation Code.
(e) Subdivision (a) does not apply to a vehicle that is towed by a
tow truck on the order of a sheriff, marshal, or other official
acting pursuant to a court order or on the order of a peace officer
acting pursuant to this code.
(f) Subdivision (a) applies to a vehicle that is towed from a
highway or offstreet parking facility under the direction of a
highway service organization when that organization is providing
emergency roadside assistance to that vehicle. However, the operator
of a tow truck providing that assistance to that vehicle is not
responsible for the violation of subdivision (a) with respect to that
vehicle. The owner of an unregistered vehicle that is disabled and
located on private property, shall obtain a permit from the
department pursuant to Section 4003 prior to having the vehicle towed
on the highway.
(g) A vehicle repossessed pursuant to the terms of a security
agreement is exempt from registration solely for the purpose of
obtaining release of the vehicle from a law enforcement entity,
impounding authority, tow yard, storage facility, or any other person
or company that has possession of the vehicle, provided that the
repossessor transports with the vehicle the appropriate documents
authorizing the repossession and makes them available to a law
enforcement officer on request.
(h) For purposes of this section, possession of a California
driver's license by the registered owner of a vehicle shall give rise
to a rebuttable presumption that the owner is a resident of
California.
SEC. 4. SEC. 9. Section 9561 of the
Vehicle Code is amended to read:
9561. (a) When a legal owner, his or her agent, or a repossessor
who is licensed pursuant to Chapter 11 (commencing with Section 7500)
of Division 3 of the Business and Professions Code repossesses a
vehicle on which renewal fees are due, the department shall waive any
renewal penalties that are due for late payment if the fees are paid
within 60 days of taking possession.
(b) Notwithstanding any other provisions of this code, when a
repossessed vehicle is sold through a dealer conducting a wholesale
motor vehicle auction as provided in subdivision (b) of Section 4456
and Article 5 (commencing with Section 6100) of Chapter 2 of Division
3, any penalties that may be due are waived, if all renewal fees
that are due are paid not later than 60 days after the date of sale
at the auction.
SEC. 10. Section 10856 is added to the
Vehicle Code , to read:
10856. A person shall not interfere with the transport of a
vehicle to a storage facility, auction, or dealer by a repossessor
who is licensed pursuant to Chapter 11 (commencing with Section 7500)
of Division 3 of the Business and Professions Code once repossession
is complete as provided in Section 7507.12 of the Business and
Professions Code.
SEC. 11. Section 22651.1 of the Vehicle
Code is amended to read:
22651.1. Persons operating or in charge of any storage facility
where vehicles are stored pursuant to Section 22651 shall accept a
valid bank credit card or cash for payment of towing and storage by
the registered owner, legal owner, or the owner's agent claiming the
vehicle. A credit card shall be in the name of the person presenting
the card. "Credit card" means "credit card" as defined in subdivision
(a) of Section 1747.02 of the Civil Code, except, for the purposes
of this section, credit card does not include a credit card issued by
a retail seller. A person operating or in charge of any storage
facility who refuses to accept a valid bank credit card , or who
accepts the card but requires a copy of the card before releasing
the vehicle, shall be liable to the owner of the vehicle or to
the person who tendered the fees for four times the amount of the
towing and storage charges, but not to exceed five hundred dollars
($500). In addition, persons operating or in charge of the storage
facility shall have sufficient funds on the premises to accommodate
and make change in a reasonable monetary transaction.
Credit charges for towing and storage services shall comply with
Section 1748.1 of the Civil Code. Law enforcement agencies may
include the costs of providing for payment by credit when agreeing
with a towing or storage provider on rates.
SEC. 5. SEC. 12. 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.