Amended in Assembly April 21, 2014

Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 2503


Introduced by Assembly Member Hagman

February 21, 2014


An act to amend Sections 7502.2,begin delete 75.4.4,end delete 7505.3, 7507.3, 7508.1, and 7508.5 of the Business and Professions Code, and to amend Sections 28, 4000, 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 thatbegin delete may beend deletebegin insert isend insert secured by a security agreement and to a buy-here-pay-here dealer, as defined. By expanding the scope of a crime,begin delete thisend deletebegin insert theend insert bill would impose a state-mandated local program.

begin delete

(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.

end delete
begin delete

This bill would require the applicant to also wait 4 months to be eligible for a subsequent examination.

end delete
begin delete

(3) 

end delete

begin insert(2)end insertbegin insertend insert 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-daybegin delete operationend deletebegin insert operationsend insert of the business.

begin delete

(4) 

end delete

begin insert(3)end insertbegin insertend insert 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.

begin delete

(5) 

end delete

begin insert(4)end insertbegin insertend insert 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.

begin delete

(6) 

end delete

begin insert(5)end insertbegin insertend insert 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.

begin delete

(7) 

end delete

begin insert(6)end insertbegin insertend insert 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.

begin delete

(8) 

end delete

begin insert(7)end insertbegin insertend insert 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.

begin delete

(9) 

end delete

begin insert(8)end insertbegin insertend insert 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 vehiclebegin insert, except as specifiedend insert.

begin delete

The

end delete

begin insert(9)end insertbegin insertend insertbegin insertTheend insert 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:

P4    1

SECTION 1.  

Section 7502.2 of the Business and Professions
2Code
is amended to read:

3

7502.2.  

(a) A financial institution, a dealerbegin insert,end insert as defined by
4Section 285 of the Vehicle Code that sells collateral thatbegin delete may beend delete
5begin insert isend insert secured by a security agreement as defined inbegin delete paragraph (73) of
6subdivision (a) ofend delete
Section 9102 of the Commercial Code, or a
7buy-here-pay-herebegin delete dealend deletebegin insert dealer,end insert as defined by Section 241 of the
8Vehicle Codebegin insert,end insert that knowingly engages a nonexempt unlicensed
9person to repossess collateral on its behalf is guilty of a
10misdemeanor, and is punishable by a fine of five thousand dollars
11($5,000).

12(b) Within existing resources, the Commissioner of Business
13Oversight maybegin delete eachend delete designate employees to investigate and report
14on violations of this section by any of the licensees of the
15department. Those employees are authorized to actively cooperate
16with the bureau in the investigation of those activities.

17(c) A proceeding to impose the fine specified in subdivision (a)
18may be brought in any court of competent jurisdiction in the name
19of the people of the State of California by the Attorney General
20or by any district attorney or city attorney, or with the consent of
21the district attorney, by the city prosecutor in any city or city and
22county having a full-time city prosecutor, for the jurisdiction in
23which the violation occurred. If the action is brought by a district
24attorney, the penalty collected shall be paid to the treasurer of the
25county in which the judgment is entered. If the action is brought
26by a city attorney or city prosecutor, one-half of the penalty
27collected shall be paid to the treasurer of the city in which the
28judgment was entered and one-half to the treasurer of the county
29in which the judgment was entered. If the action is brought by the
P5    1Attorney General, all of the penalty collected shall be deposited
2in the Private Security Services Fund.

begin delete
3

SEC. 2.  

Section 7504.4 of the Business and Professions Code
4 is amended to read:

5

7504.4.  

If an applicant fails to pass an initial examination or
6subsequent examination, he or she shall not be eligible for a
7subsequent examination for four months and except upon payment
8of the reexamination fee for each subsequent examination,
9accompanied by a completed application for reexamination filed
10within the time limits and conditions relating to applications for
11initial examinations provided in Section 7504.3.

end delete
12

begin deleteSEC. 3.end delete
13begin insertSEC. 2.end insert  

Section 7505.3 of the Business and Professions Code
14 is amended to read:

15

7505.3.  

(a) Whenever a qualified certificate holder actively
16in charge of an office ceases to be in charge, the licensee shall file
17with the bureau notice, in writing, within 30 days from the
18cessation.

19If the notice is filed, the license shall remain in force for a period
20of 90 days after the filing of the notice. At the end of the 90-day
21period or an additional period, not to exceed one year, as specified
22by the director, if written notice is not given that a qualified person
23is then actively in charge of the office, the agency license shall be
24 automatically suspended.

25If the licensee shall fail to give written notice at the end of the
2630-day period, the agency license shall be automatically suspended.

27A license suspended under this section may be reinstated upon
28payment of the reinstatement fee and submission of a reinstatement
29application.

30A person who performs any act for which a repossession agency
31license is required during the period of suspension is subject to
32the penal provisions of Article 3 (commencing with Section 7502),
33in addition to the provisions of Article 9 (commencing with Section
347508) and Article 10 (commencing with Section 7510).

35(b) In case of the death of a person licensed as an individual, a
36member of the immediate family of the deceased licensee shall be
37entitled to continue the business under the same license for 180
38days following the death of the licensee, provided that written
39notice is made to the bureau within 30 days following the death
40of the licensee. The notice shall identify the person in charge of
P6    1running the day-to-day operations of the business. At the end of
2the 180-day period, the license shall be automatically canceled. If
3no request is received within the 30-day period, the license shall
4be automatically canceled at the end of that period.

5(c) In the case of the death or disassociation of a partner of an
6entity licensed as a partnership, the licensee shall notify the bureau,
7in writing, within 30 days from the death or disassociation of the
8individual. If notice is given, the license shall remain in force for
990 days following the death or disassociation. At the end of that
10period, the license shall be automatically canceled. If the licensee
11fails to notify the bureau within the 30-day period, the license shall
12be automatically canceled at the end of that period.

13(d) A license extended under this section is subject to all other
14provisions of this chapter.

15

begin deleteSEC. 4.end delete
16begin insertSEC. 3.end insert  

Section 7507.3 of the Business and Professions Code
17 is amended to read:

18

7507.3.  

A repossession agency shall be required to keep and
19maintain adequate records of all transactions, including, but not
20limited to, assignment forms; vehicle report of repossession
21required by Section 28 of the Vehicle Code; vehicle condition
22reports, including odometer readings, if available; personal effects
23inventory; and notice of seizure. Records, including bank
24statements of the trust account, shall be retained for a period of
25not less than four years and shall be available for examination by
26the bureau upon demand. In addition, collateral and personal effects
27storage areas shall be made accessible for inspection by the bureau
28upon demand. An assignment form may be an original, a
29photocopy, a facsimile copy, or a copy stored in an electronic
30format.

31

begin deleteSEC. 5.end delete
32begin insertSEC. 4.end insert  

Section 7508.1 of the Business and Professions Code
33 is amended to read:

34

7508.1.  

The director may assess administrative fines for the
35following prohibited acts:

36(a) Knowingly making any false report to his or her employer
37or client for whom information was being obtained. The fine shall
38be one hundred dollars ($100) for the first violation, and five
39hundred dollars ($500) for each violation thereafter.

P7    1(b) Using any identification to indicate registration as a
2repossessor, other than the bureau-issued registration card, except
3an employer identification card issued by the repossession agency
4which has met bureau approval, or a badge, cap insignia, or jacket
5patch as provided in Section 7508.8. A bureau-issued registration
6card shall be carried by those individuals specified by Section
77506.3, and shall be shown on demand to any bureau employee
8or law enforcement officer. The fine shall be twenty-five dollars
9($25) for each violation.

10(c) Using an alias in connection with the official activities of
11the licensee’s business. A notice of warning shall be issued for the
12first violation. Thereafter the fine shall be twenty-five dollars ($25)
13for each violation.

14(d) Appearing as an assignee party in any court proceeding
15involving claim and delivery, replevin, or other possessory court
16action, action to foreclose a chattel mortgage, mechanic’s lien,
17materialman’s lien, or any other lien. This section shall not prohibit
18a licensee from appearing as a defendant in any of the preceding
19actions. The fine shall be one hundred dollars ($100) for each
20violation.

21

begin deleteSEC. 6.end delete
22begin insertSEC. 5.end insert  

Section 7508.5 of the Business and Professions Code
23 is amended to read:

24

7508.5.  

The director may assess administrative fines against
25a repossession agency registrant for the following acts, in addition
26to fines imposed pursuant to any other section in this article. The
27fine shall be twenty-five dollars ($25) for each of the following
28violations:

29(a) Knowingly submit a false report.

30(b) Submitting a report to a client without authorization by his
31or her employer.

32(c) Failing to carry a bureau-issued identification card and failing
33to show that card upon demand to a bureau employee or a law
34 enforcement officer.

35(d) Failing to register.

36(e) Failing to return his or her registration card to the employer
37upon termination.

38(f) Failing to report a violent act involving the registrant to the
39licensee or the licensee’s qualified certificate holder within 24
40hours.

P8    1

begin deleteSEC. 7.end delete
2begin insertSEC. 6.end insert  

Section 28 of the Vehicle Code is amended to read:

3

28.  

(a) Whenever possession is taken of any vehicle by or on
4behalf of any legal owner thereof under the terms of a security
5agreement or lease agreement, the person taking possession shall
6attempt to notify, within one hour, and shall notify, within two
7hours, after taking possession of the vehicle, by the most
8expeditious means available, the city police department where the
9taking of possession occurred, if within an incorporated city, or
10the sheriff’s department of the county where the taking of
11possession occurred, if outside an incorporated city, or the police
12department of a campus of the University of California or the
13California State University, if the taking of possession occurred
14on that campus, and shall within one business day forward a written
15notice to the city police or sheriff’s department.

16(b) If possession is taken of more than one vehicle, the
17possession of each vehicle shall be considered and reported as a
18separate event.

19(c) Any person failing to notify the city police department,
20sheriff’s department, or campus police department as required by
21this section is guilty of an infraction, and shall be fined a minimum
22of three hundred dollars ($300), and up to five hundred dollars
23($500). The district attorney, city attorney, or city prosecutor shall
24promptly notify the Bureau of Security and Investigative Services
25of any conviction resulting from a violation of this section.

26(d) For the notification required by this section, the person shall
27report all of the following:

28(1) The location of the repossession.

29(2) The registered owner as provided on the assignment.

30(3) The individual, company, or legal owner requesting the
31repossession.

32(4) The vehicle year, make, and model.

33(5) The last six digits of the vehicle identification number.

34(6) The repossession agency name.

35(7) The repossession agency telephone number.

36

begin deleteSEC. 8.end delete
37begin insertSEC. 7.end insert  

Section 4000 of the Vehicle Code is amended to read:

38

4000.  

(a) (1) A person shall not drive, move, or leave standing
39upon a highway, or in an offstreet public parking facility, any
40motor vehicle, trailer, semitrailer, pole or pipe dolly, or logging
P9    1dolly, unless it is registered and the appropriate fees have been
2paid under this code or registered under the permanent trailer
3identification program, except that an off-highway motor vehicle
4which displays an identification plate or device issued by the
5department pursuant to Section 38010 may be driven, moved, or
6left standing in an offstreet public parking facility without being
7registered or paying registration fees.

8(2) For purposes of this subdivision, “offstreet public parking
9facility” means either of the following:

10(A) Any publicly owned parking facility.

11(B) Any privately owned parking facility for which no fee for
12the privilege to park is charged and which is held open for the
13common public use of retail customers.

14(3) This subdivision does not apply to any motor vehicle stored
15in a privately owned offstreet parking facility by, or with the
16express permission of, the owner of the privately owned offstreet
17parking facility.

18(4) Beginning July 1, 2011, the enforcement of paragraph (1)
19shall commence on the first day of the second month following
20the month of expiration of the vehicle’s registration. This paragraph
21shall become inoperative on January 1, 2012.

22(b) No person shall drive, move, or leave standing upon a
23highway any motor vehicle, as defined in Chapter 2 (commencing
24with Section 39010) of Part 1 of Division 26 of the Health and
25Safety Code, which has been registered in violation of Part 5
26(commencing with Section 43000) of that Division 26.

27(c) Subdivisions (a) and (b) do not apply to off-highway motor
28vehicles operated pursuant to Sections 38025 and 38026.5.

29(d) This section does not apply, following payment of fees due
30for registration, during the time that registration and transfer is
31being withheld by the department pending the investigation of any
32use tax due under the Revenue and Taxation Code.

33(e) Subdivision (a) does not apply to a vehicle that is towed by
34a tow truck on the order of a sheriff, marshal, or other official
35acting pursuant to a court order or on the order of a peace officer
36 acting pursuant to this code.

37(f) Subdivision (a) applies to a vehicle that is towed from a
38highway or offstreet parking facility under the direction of a
39highway service organization when that organization is providing
40emergency roadside assistance to that vehicle. However, the
P10   1operator of a tow truck providing that assistance to that vehicle is
2not responsible for the violation of subdivision (a) with respect to
3that vehicle. The owner of an unregistered vehicle that is disabled
4and located on private property, shall obtain a permit from the
5department pursuant to Section 4003 prior to having the vehicle
6towed on the highway.

7(g) A vehicle repossessed pursuant to the terms of a security
8agreement is exempt from registration solely for the purpose of
9obtaining release of the vehicle from a law enforcement entity,
10impounding authority, tow yard, storage facility, or any other
11person or company that has possession of the vehicle, provided
12that the repossessor transports with the vehicle the appropriate
13documents authorizing the repossession and makes them available
14to a law enforcement officer on request.

15(h) For purposes of this section, possession of a California
16driver’s license by the registered owner of a vehicle shall give rise
17to a rebuttable presumption that the owner is a resident of
18California.

19

begin deleteSEC. 9.end delete
20begin insertSEC. 8.end insert  

Section 9561 of the Vehicle Code is amended to read:

21

9561.  

(a) When a legal owner, his or her agent, or a repossessor
22who is licensed pursuant to Chapter 11 (commencing with Section
237500) of Division 3 of the Business and Professions Code
24repossesses a vehicle on which renewal fees are due, the department
25shall waive any renewal penalties that are due for late payment if
26the fees are paid within 60 days of taking possession.

27(b) Notwithstanding any other provisions of this code, when a
28 repossessed vehicle is sold through a dealer conducting a wholesale
29motor vehicle auction as provided in subdivision (b) of Section
304456 and Article 5 (commencing with Section 6100) of Chapter
312 of Division 3, any penalties that may be due are waived, if all
32renewal fees that are due are paid not later than 60 days after the
33date of sale at the auction.

34

begin deleteSEC. 10.end delete
35begin insertSEC. 9.end insert  

Section 10856 is added to the Vehicle Code, to read:

36

10856.  

A person shall not interfere with the transport of a
37vehicle to a storage facility, auction, or dealer by a repossessor
38who is licensed pursuant to Chapter 11 (commencing with Section
397500) of Division 3 of the Business and Professions Code once
P11   1repossession is complete as provided in Section 7507.12 of the
2Business and Professions Code.

3

begin deleteSEC. 11.end delete
4begin insertSEC. 10.end insert  

Section 22651.1 of the Vehicle Code is amended to
5read:

6

22651.1.  

begin insert(a)end insertbegin insertend insert Persons operating or in charge of any storage
7facility where vehicles are stored pursuant to Section 22651 shall
8accept a valid bank credit card or cash for payment of towing and
9storage by the registered owner, legal owner, or the owner’s agent
10claiming the vehicle. A credit card shall be in the name of the
11person presenting the card. “Credit card” means “credit card” as
12defined in subdivision (a) of Section 1747.02 of the Civil Code,
13except, for the purposes of this section, credit card does not include
14a credit card issued by a retail seller. A person operating or in
15charge of any storage facility who refuses to accept a valid bank
16credit card, or who accepts the card but requires a copy of the card
17before releasing the vehicle, shall be liable to the owner of the
18vehicle or to the person who tendered the fees for four times the
19amount of the towing and storage charges, but not to exceed five
20hundred dollars ($500). In addition, persons operating or in charge
21of the storage facility shall have sufficient funds on the premises
22to accommodate and make change in a reasonable monetary
23transaction.

begin delete

24 Credit

end delete
begin insert

25(b) Subdivision (a) shall not apply to transactions in which the
26sole means of recording the person’s credit card account number
27is by handwriting or by an imprint of the credit card.

end insert

28begin insert(c)end insertbegin insertend insertbegin insertCreditend insert charges for towing and storage services shall comply
29with Section 1748.1 of the Civil Code. Law enforcement agencies
30may include the costs of providing for payment by credit when
31agreeing with a towing or storage provider on rates.

32

begin deleteSEC. 12.end delete
33begin insertSEC. 11.end insert  

No reimbursement is required by this act pursuant to
34Section 6 of Article XIII B of the California Constitution because
35the only costs that may be incurred by a local agency or school
36district will be incurred because this act creates a new crime or
37infraction, eliminates a crime or infraction, or changes the penalty
38for a crime or infraction, within the meaning of Section 17556 of
39the Government Code, or changes the definition of a crime within
P12   1the meaning of Section 6 of Article XIII B of the California
2Constitution.



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